BECAUSE FAILURE IS NOT AN OPTION®
Lewis Machine & Tool Co,
d/b/a LMT Defense
PURCHASE ORDER TERMS AND CONDITIONS
Effective February 2, 2026
This purchase order (“Order”) is subject to the specifications, terms, conditions, and documents expressly incorporated herein. Unless otherwise provided in this Order, Seller accepts this Order by written acknowledgment or by commencing performance. Acceptance is expressly limited to the terms of this Order, and Lewis Machine & Tool Co., d/b/a LMT Defense, and its affiliates (“Buyer”) reject any additional or different terms proposed by Seller. Any conflict among the documents comprising this Order shall be resolved in accordance with Section 28, Order of Precedence. This Order constitutes the entire agreement between Seller and Buyer concerning its subject matter and may be modified only by a written instrument signed by Buyer’s authorized representative.
1. Governing Law and Jurisdiction.
The parties acknowledge and agree that any offer and acceptance by the parties shall be a contract made in the United States, State of Iowa. All questions pertaining to the validity, construction, execution and performance of this agreement shall be construed and governed in accordance with the domestic laws of the State of Iowa, without giving effect to principles of (i) comity of nations or (ii) conflicts of law. If the Goods purchased hereunder are purchased by a Buyer residing in a country other than the United States, then the parties agree that the United Nations Convention on Contracts for the International Sale of Goods is hereby excluded in its entirety from this agreement. Seller agrees that the Iowa state courts located in Scott County, Iowa, U.S.A (or if there is exclusive federal jurisdiction, the United States District Court for the Eastern District of Iowa) shall have exclusive jurisdiction and venue over any dispute arising out of this agreement and purchase. Any action commenced in connection with this agreement and purchase shall only be brought in such courts and, to the extent not otherwise subject to the jurisdiction of such courts, Seller hereby agrees to the jurisdiction of such courts, hereby agrees to waive any objection to jurisdiction and to subject itself to the jurisdiction of such courts, and to accept service of process by U.S. certified or registered mail, return receipt requested, or by any other means authorized by Iowa or federal law.
2. Price.
The price shall not be higher than that appearing on the face of this Order. Unless otherwise stated on face of Order, all prices are in United States Dollars (USD).
3. Packing and Shipment.
No charge will be allowed for packaging, crating, cartage or storage unless otherwise designated in this Order. Goods purchased under this Order (the “Goods”) shall be suitably
packed by Seller to protect the contents, to secure the lowest transportation costs, and to conform to the requirements of common carriers and any applicable specifications. Seller shall place Buyer’s Order number on the outside of each shipment hereunder and on all documents relating to such shipment. Seller shall be liable to Buyer for any increase in transportation charges resulting from Seller’s failure to utilize the specified method of shipment or carrier. Shipment shall be made in accordance with Buyer instructions on the face of this Order. When “Best Ground” or “Best Air” is specified, the Seller is authorized to select the method of shipment required to meet the delivery schedule and carrier.
4. Warranties.
Seller expressly warrants that all Goods shall conform to the specifications, drawings, or other descriptions referred to in this Order, shall be merchantable and free from defect in workmanship, materials and design; shall perform as specified; and, to the extent that the Seller has reason to know the purpose for which the Goods are intended, shall be fit for such purpose. If Goods do not meet the above warranties, Seller shall promptly notify Buyer in writing within the applicable warranty period. Seller shall thereupon repair or replace the defective Goods, at Buyer’s option, and re-perform any defective services. These warranties extend to Buyer, Buyer’s customers, and the users of Buyer’s Goods, shall be in addition to any other warranties specified herein or implied by law, shall survive inspection, delivery, acceptance and payment, and shall continue for the longer of (a) the warranty period applicable to Buyer’s sale to its customers of the Goods or of products which incorporate the Goods, (b) one year after the Goods are accepted by Buyer, or (c) such greater period as may be specified elsewhere in this Order.
5. Inspection and Acceptance.
Buyer reserves the right to inspect all Goods prior to shipment by Seller at Buyer expense. Seller shall permit employees or representatives of Buyer and Buyer’s customers to have access to Seller’s facilities at all reasonable hours. Seller shall make available to such representatives copies of all drawings, specifications and other technical data applicable to the Goods ordered. Buyer shall nevertheless receive all Goods subject to final inspection and approval after delivery at destination. Defective Goods may be returned at Buyer’s option for refund, credit, or replacement at Seller’s expense. At Buyer’s option, inspection may be performed on a statistical sampling basis. If the number of defects in the selected sample exceeds the allowable defects, the entire lot of Goods will be rejected. The rejected Goods may at Buyer’s option be 100% inspected at Seller’s expense. Buyer’s inspection, or lack of inspection, shall not affect any expressed or implied warranties, nor shall Buyer waive any rights to return Goods that contain latent defects discovered in the testing of Buyer’s products containing such Goods or following acceptance. Seller will allow Buyer, Buyer’s customer, and/or applicable regulatory agencies to determine/verify quality of work, records affecting work, and/or material being supplied to Buyer at any place, including any subcontractor of the Seller.
6. Counterfeit Prevention
Seller shall not furnish Counterfeit Parts, which are defined as unauthorized copies, imitation, substitute or modified parts (e.g. materials, parts, components, subassemblies) which are misrepresented as a specified genuine part(s) of an original or authorized manufacturer. Counterfeit Parts can include, but are not limited to, the false identification of marking or labeling, grade, serial number, lot number, date code, documentation or performance characteristics, including used parts represented as new. Counterfeit and Suspect Counterfeit Parts shall be deemed nonconforming to this Contract. A Suspect Counterfeit Part is a part for which there is objective and credible evidence indicating that it is likely counterfeit.
Seller shall plan, implement and control processes appropriate to the organization and the products for the prevention of Counterfeit or Suspect Counterfeit Part use and their inclusion in Goods. Seller’s Counterfeit Parts prevention processes shall address the following:
If Seller provides Electronic, Electrical or Electromechanical (EEE) parts or assemblies containing EEE parts, Seller shall implement a counterfeit electronic parts detection and avoidance system compliant with the requirements of SAE standard AS5553 (revision as of the effective date of this Contract).
If Seller becomes aware or suspects that it has furnished Counterfeit or Suspect Counterfeit Parts to LMT, Seller promptly, but in no case later than thirty (30) days from discovery, shall notify LMT and replace, at Seller’s expense, such Counterfeit Parts or Suspect Counterfeit Parts with Goods that conform to the requirements of this Contract. For confirmed Counterfeit Parts or Suspect Counterfeit Parts, GIDEP notification shall also be made no later than sixty (60) days after discovery. Seller shall be liable for all costs related to the delivery or replacement of Counterfeit Parts or Suspect Counterfeit Parts including any testing or validation costs necessitated by the installation of Goods in replacement of Counterfeit Parts or Suspect Counterfeit Parts.
Seller bears responsibility for procuring authentic parts or items from its subcontractors and shall ensure that all such subcontractors comply with the requirements of this Article. Seller shall include the substance of this Article, including this flow-down requirement, in all subcontracts awarded by Seller for work under this Contract.7. Delivery and Risk of Loss.
Buyer’s production schedules and warranties to its customers are dependent upon the agreement that deliveries of the Goods covered by this Order will occur on the required delivery date shown on the face hereof. Therefore, time is of the essence. Seller shall be responsible for all damages of any kind incurred or suffered by the Buyer that were caused by a delay of Seller in meeting delivery schedules. Seller shall also be responsible for all costs resulting from Seller’s inability to meet delivery schedules. This includes all transportation cost incurred in getting Goods to the Buyer. Seller agrees to notify Buyer immediately in the event it appears that Seller may not meet the delivery schedule and shall set forth the reasons for the delay (actual or potential), the steps being taken to remedy the delay, and the schedule that Seller believes it will be able to meet. Buyer’s receipt of notice shall not constitute approval of the delay or the proposed revised delivery schedule or a waiver of the delivery schedule in the Order. In case of delayed delivery except for Force Majeure cases, the Seller shall pay the Buyer for every week of delay penalty amounting to 0.5% of the total value of the Order whose delivery has been delayed. Any fractional part of the week is to be considered a full week. The total penalty amount shall not, however, exceed 10% of the total value of the Order involved in late delivery. If the delay is more than 4 weeks, the Buyer is entitled to terminate this Contract. However, the Seller will still be responsible for the above-mentioned penalties. Vise versa, in case the Buyer delays the payment or issue of L/C due to the Buyer’s reason, the Seller will not be responsible for late delivery. Unauthorized advance shipments and shipments other than for the quantity ordered are returnable at Seller’s expense. Delivery shall not be deemed complete until the Goods have been actually received by Buyer at its facility. The risk of loss and damage in transit shall be upon Seller and shall not pass to Buyer until received at Buyer’s facility in a condition in accordance with the terms of this Order. The cost of return shipments shall be borne by Seller. Unless otherwise agreed in writing, Seller shall not make any material commitments or production arrangements in excess of the amount or in advance of the time necessary to meet Buyer’s delivery schedule, except at Seller’s own risk. It is Seller’s responsibility to comply with this schedule, but not to anticipate Buyer’s requirements.
8. Taxes and Surcharges.
Except as may be otherwise provided in this Order, the price includes all applicable national, federal, state, and local taxes, except sales taxes. Tax and surcharge fees shall appear as separate lines on this Order and subsequent invoice. However, Buyer shall reimburse Seller only in those cases where it does not have a valid exemption certificate.
9. Changes.
Buyer may, at any time, issue a written change to the drawings, specifications, quantities, delivery schedule, method of shipment, packaging, or other requirements of this Order. If an authorized change increases or decreases Seller’s cost or the time required for performance, Buyer shall make an equitable adjustment to the price or delivery schedule, as applicable. Seller must submit any request for an adjustment, together with supporting cost and schedule information, within ten (10) working days after Seller receives Buyer’s written change. Failure to agree on an adjustment shall not excuse or delay Seller’s performance of the Order as changed. Buyer may direct the disposition of material made obsolete or excess by an authorized change for which Seller submits a claim. Information, advice, approvals, or instructions from Buyer’s technical personnel or other representatives shall not modify this Order unless documented in a writing signed by Buyer’s authorized purchasing representative that expressly states it is an amendment or change to this Order.
10. Confidentiality.
Seller shall not publish, distribute, or use any information developed under or about the existence of the purchase order, or use the LMT Defense name (or the name of any division or affiliate thereof), logo, trademark, service mark, or trade dress for the purpose of advertising, making a news release, creating a business reference, creating a website content or for products or service endorsement without prior written approval of Buyer. Seller shall not, without first obtaining written consent of Buyer, advertise, publish or issue any news release or make any public announcement of denial or confirmation concerning the fact that the Seller has furnished or has contracted to furnish to the Buyer the Goods. All drawings, specifications and data furnished by Buyer to Seller shall remain the property of the Buyer and shall be disclosed to others by Seller only as (and to the extent) required for performance of this Order and pursuant to a confidentiality agreement that protects the confidentiality of Buyer’s information. Upon completion of the work, Seller shall return any such drawings, specifications or data, together with all copies, and make no further use either directly or indirectly of any such drawings, specifications, data or information derived there from without Buyer’s prior consent.
11. Intellectual Property.
Seller warrants that the sale, use, or incorporation into manufactured products of all machines, parts, components, services, devices, material, and rights furnished or licensed hereunder which are not of Buyer’s design, composition, or manufacture shall be free and clear of infringement of any valid patent, copyright, trade mark, or other proprietary rights. Seller shall indemnify and save Buyer and its customers harmless from any and all expenses, liability, and loss of any kind (including all costs and expenses including attorney’s fees) growing out of claims, suits, or actions alleging such infringement, which claims, suits, or actions Seller, hereby agrees to defend. Seller may replace or modify infringing goods with comparable goods acceptable to Buyer of substantially same form, fit, and function so as to remove the source of infringement, and shall extend this provision thereto. If the use or sale of any of the above items is enjoined as a result of such claim, suit or action, Seller, at no expense to Buyer, shall obtain for Buyer and its customers the right to use and sell said item.
12. Compliance with Laws.
(a) Seller and all persons furnished by Seller shall comply at their own expense with all applicable laws, ordinances, regulations and codes, including the identification and procurement of required permits, certificates, licenses, insurance, approvals and inspections (collectively “Laws”) in performance under this Order. Seller agrees to provide Buyer with a certificate affirming compliance with applicable Laws that the Buyer shall request, and the Seller further agree to indemnity Buyer against and to hold harmless from any loss or expense raising from Seller’s noncompliance with any applicable Law.
(b) Seller warrants that the materials to be furnished and the services to be rendered under this Order shall be manufactured, sold, and used in compliance with all relevant federal, state, local laws and regulations and applicable international prohibitions on child labor as embodied in SA8000 as developed and overseen by Social Accountability International and based on the UN Universal Declaration of Human Rights, Convention on the Rights of the Child and various International Labour Organization conventions. Seller certifies that with respect to the production of the articles and/or the performance of the services covered by this Order it has fully complied with the Fair Labors Standards Act of 1938, as amended, and of regulations and orders of the United States Department of Labor.
(c) Seller warrants that all equipment and materials delivered under the Order are in conformance with the latest OSHA requirements.
(d) The Seller warrants that in the performance of this Order, it will comply with all applicable U.S. Department of Transportation regulations on hazardous materials and any other pertinent Federal, state, or local statutes, laws, rules, or regulations; and Seller further agrees to save Buyer harmless from any loss, damage, fine, penalty, or expense whatsoever that Buyer may suffer as a result of Seller’s failure to comply with this certification. The foregoing is in addition to and not in mitigation of any other requirements of this Order.
(e) Seller warrants that it has not offered or given and will not offer or give to any employee, agent, or representative of Buyer any gratuity or any kickback within the meaning of the Anti-Kickback Act of 1986 with a view toward securing any business from Buyer or influencing such person with respect to the terms, conditions, or performance of any contract with or Order from Buyer. Any breach of this warranty shall be a material breach of each and every contract between Buyer and Seller.
13. Force Majeure.
Neither party shall be held responsible for any delay or failure in performance of any part of this Order to the extent such delay or failure is caused by flood, strike, civil unrest, government or military authority, act of God or other similar causes beyond its control and without the fault or negligence of the delayed or non-performing party or its sub-contractors provided that (a) such party gives prompt notice and (b) takes reasonable steps to mitigate the duration of the delay or failure of performance. In the event a party’s delay or nonperformance continues for a period of at least fifteen (15) calendar days, the other party may terminate this Order without liability. Seller’s liability for loss or damage to Buyer’s material in Seller’s possession or control shall not be modified by this clause.
14. Termination for Convenience.
In addition to all other rights and remedies, Buyer shall have the right to terminate this Order, in whole or in part, without cause, without liability, upon notice in writing to the Seller.
(a), Seller shall immediately cease work, terminate any subcontracts, and deliver to the Buyer all completed and partially completed Goods or raw material and work-in-process, or otherwise dispose of such Goods in accordance with the Buyer’s instruction. Buyer’s liability to Seller shall be limited to: (i) the price provided in the Order for all Goods that have been completed prior to termination, plus (ii) per equitable agreement, actual expenditures on the uncompleted portion of this Order including cancellation charges paid by the Seller on account of commitments made under this Order, provided that Seller has taken all reasonable steps to mitigate costs resulting from termination. Notwithstanding the foregoing, Buyer’s liability to Seller shall not exceed the total price provided for herein for finished Goods delivered under this Order.
(c) Seller shall submit to Buyer within ten (10) calendar days of notification of Buyer’s termination any and all costs resulting from Buyer’s termination. No cost submitted beyond that date shall be compensable to Seller.
15. Termination for Default.
In addition to the rights conferred in paragraph 13, Buyer may terminate this Order for default, without any Buyer liability to Seller, if Seller fails to make any delivery in accordance with the schedule set forth herein, or for failure to comply with any of the other requirements on terms and conditions of this Order, or for failure to make progress under this Order so as to endanger performance of this Order. In the event of termination for Seller’s default, Buyer may procure elsewhere Goods that are similar to those terminated, and on such terms as Buyer deem appropriate, and Seller shall be liable for excess re-procurement costs. Further, Seller shall be liable to Buyer for any other remedies prescribed by law or equity.
16. Assignment.
Seller may not assign any rights or obligations due or to become due under this Order without the prior written consent of Buyer. Any purported assignment by Seller without such consent shall be void. Buyer may assign this Order to (a) any affiliated company, (b) any successor in interest, or (c) Buyer’s customer. Buyer shall have the right at any time to set off any amount owing from Seller to Buyer or Buyer’s affiliates against any amount due and owing to Seller or any of its affiliates pursuant to this Order or any other contractual agreement between Buyer and Seller or their respective affiliates.
17. Waiver.
Failure of Buyer to insist upon performance of any terms of this Order or to exercise any rights hereunder shall not be construed as a waiver or relinquishment of the future performance of any such term or condition, or the future exercise of such right.
18. Set-Off.
Seller agrees that Buyer shall have the right to set-off against any amount which may become payable by Buyer to Seller under this Order or otherwise, any amounts which Seller may owe Buyer.
19. Hold Harmless.
Seller shall to the fullest extent permitted by law, indemnify, defend and hold Buyer harmless from and against all potential claims, liabilities, demands, penalties, forfeitures, suits, judgments, and the associated costs and expense (including attorney’s fees) which Buyer may hereafter incur, become responsible for or pay out as a result of death or personal injury (including bodily injury) to any person, destruction or damage to any property, contamination of or adverse effects on the environment and any clean up costs in connection therewith, or any violation of governmental law, regulation, or orders, caused, in whole or in part, by (a) Seller’s breach of any term or provision of this Order, (b) any negligent or willful acts, errors, or omissions by Seller, its employees, officers, agents, representatives or subcontractors in the performance of this Order, or (c) Seller’s Goods. Notwithstanding Seller’s immunities under applicable state worker’s compensation and industrial insurance acts, Seller will undertake to indemnify, defend, and hold Buyer harmless from potential claims or liabilities asserted against Buyer by Seller’s employees.
20. Buyer’s Property.
Except as otherwise specified by Buyer in writing, all tools, fixtures, or other means required to execute this Order shall be supplied by Seller. Any such items paid for by Buyer or furnished to Seller without cost to Seller shall be the property of Buyer, shall be used only in filling orders from Buyer, shall be kept separate from all of Seller’s other material or tools, and shall be clearly identified as property of Buyer. Seller assumes all maintenance while property is in their possession; as well as, liability for loss or damage to Buyer’s property save normal wear and tear. Seller shall maintain full insurance coverage against loss or damage of such Buyer property and provide a detailed statement of such property upon request by Buyer. Seller will not remove, dispose, or pledge as security any of Buyer’s property without Buyer’s prior written consent. Seller shall return all such Buyer property to Buyer promptly upon Buyer’s request and instruction.
21. Payment.
Invoice shall be paid on delivered and accepted Goods in accordance with the terms of this Order; due dates for payments shall be computed from the later of the date on which (i) Buyer receives a correct invoice, or (ii) Buyer receives the Goods described in such invoice. For purposes of determining discounts, the date of payment shall be the date the check is mailed to Seller. Payment of the invoice shall not constitute acceptance of the product and shall be subject to an appropriate adjustment for failure of Seller to meet the requirements of this Order. Any cash in advance payments are fully refundable upon Seller’s failure to meet delivery schedule.
22. Customs Charges and Duty Drawback.
Buyer is responsible for customs charges incurred by the transportation of Goods from Seller to Buyer’s location of manufacture. This Order is subject to Duty Drawback at the request of Buyer. Upon receipt, Seller shall supply to Buyer all information to support U.S. Customs requirements for Duty Drawback. The Seller shall comply in an expeditious manner.
23. Gratuities.
Seller warrants that neither it nor any of its employees, agents, or representatives has offered or given any gratuity to Buyer’s employees, agents, or representatives with a view towards accruing favorable treatment with respect therein.
24. Delivery Terms.
Unless otherwise provided on the face of this Order, transportation from all domestic (U.S.) shipping points is F.O.B. destination to the Buyer’s facility at the address shown on the Order. The term “F.O.B. destination” as used in this clause, means free of expense to the Buyer, on board the carrier’s conveyance, at a specified delivery point where the Buyer’s facility is located.
25. Insolvency.
Buyer may cancel this Order without liability in the event of (i) insolvency of the Seller, (ii) filing of a voluntary petition in bankruptcy by Seller, (iii) filing of any involuntary petition in bankruptcy against Seller, (iv) appointment of a receiver or trustee for Seller, or (v) an execution of any assignment for the benefit of creditors by Seller, provided that such petition, appointment or assignment is not vacated or nullified within fifteen (15) calendar days of such event.
26. Hazardous Material and Safety.
Seller shall comply with all applicable provisions of the Hazardous Materials Transportation Act (49 U.S.C. 1801, at seq.), the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Toxic Substance Control Act of 1976 (15 U.S.C. 2601 et seq.), the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.), the Occupational Safety and Health Act of 1970, and any other applicable Federal, State, and local laws and regulations governing Hazardous materials or safety.
27. Remedies.
The rights of both parties hereunder shall be in addition to their rights and remedies at law or in equity. Failure of either party to enforce any of its rights shall not constitute a waiver of such rights of any other rights.
28. Order of Precedence.
(a) In the event of any inconsistency or conflict between or amount the provisions of this Order, such inconsistency or conflict shall be resolved by the following descending order of preference: 1. Typed provisions set forth in the Order; 2. Documents incorporated by reference on the Order; 3. Preprinted or standard terms and conditions either referenced herein and/or set forth on the reverse side of the Order; 4. Statement of Work; and 5. Specifications attached hereto or incorporated by reference. Buyer’s specifications shall prevail over those of the Seller.
(b) In the event of conflict between specifications, drawings, samples, designated type, part number, or catalog description, the specifications shall govern over drawings, drawings over samples, whether or not approved by Buyer, and samples over designated type, part number, or catalog description. In cases of ambiguity in the specifications, drawings, or other requirements of this Order, Seller must, before proceeding, consult Buyer, whose written interpretation shall be final.
29. International Transactions
(a) Payment will be in United States dollars unless otherwise agreed to by specific reference in the Order.
(b) Seller agrees that the Buyer or its designees may exclusively use the value of the Order to satisfy any of its international offset obligations with Seller’s country, subject to the offset qualifying laws, rules and regulations of that country.
30. Export/Import Controls
(a) Seller shall control the disclosures of and access to technical data, information and other items received under this Order in accordance with U.S. export control laws and regulations. Seller shall indemnify Buyer for all liabilities, penalties, losses, damages, costs or expenses that may be imposed on or incurred by Buyer in connection with any violations of such laws and regulations by Seller.
(b) Information furnished by Seller under this Order may contain technical data, as defined in the U.S. Department of Commerce, Bureau of Export Administration (BXA), Export Administration Regulations (EAR) Part 772 (15 CFR 772) relating to export controlled items appearing on the Commerce Control List (CCL) at EAR Part 774 (15 CFR 774). Seller is advised and acknowledges that such technical data may not be exported out of the U.S. or to a foreign national in the U.S. without complying with all relevant requirements of U.S. export control laws.
31. Other Provisions.
Seller shall comply with all applicable policies and procedures of Buyer provided to Seller by Buyer.
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