4XXX -- MATERIAL/DATA

Seller accountability of all MDC furnished material (including any MDC authorized scrap allowance material) issued against this purchase order is mandatory. Accountability of all MDC furnished material must be in the form of:

1. Finished parts (acceptable type)

In addition to the purchase order quantity, Seller is hereby authorized to ship additional, acceptable parts, fabricated from authorized MDC furnished material scrap allowance; and/or,

2. Unused material and details of an assembly Unused authorized MDC furnished material scrap allowance and/or completed (acceptable) details of an assembly which were realized from MDC furnished scrap allowance material.

Contact the supervisor of Outside Production Services for instructions relating to the disposition of parts and material that fall in these categories; and/or,

3. Scrapped material/parts

Accountability of all parts/material scrapped is mandatory. Accordingly, all parts (materials determined by your Quality Control organization and/or MDC Source Inspection and/or Engineering to be unusable) must be scrapped in one of the following manners:

a. Mutilating the part(s) or material(s) to such an extent that it could not possibly be used for its original intended purpose.

b. Cutting the part(s) or material(s) in two (2) or more segments.

c. Any other method that effectively destroys the part(s) or material(s).

Relief from accountability will be honored only if a Vendor Information Request (VIR) or scrap tag (Seller or MDC) with the scrap disposition annotated on the document by duly authorized personnel and a Seller's Certification of Scrap and Disposal, Form DAC 26-798, is executed by an officer of your company, and forwarded to the MDC Purchasing Representative indicated on the Purchase Order/Contract. Failure to strictly adhere to the requirements of this Clause may result in the loss of your MDC Seller approval.

Seller accountability for MDC furnished material scrap allowance issued against this Purchase Order/Contract is required either by finished parts (accepted by MDC Source Inspection) and/or a Scrap Tag (MDC or Seller) verified by MDC Source Inspection. Parts fabricated in excess of this Purchase Order/Contract quantity (from authorized material scrap allowance) are to be presented to MDC Source Inspection for acceptance along with the Purchase Order/Contract quantity.

Authority to ship parts (MDC Source Inspection accepted) in excess of Purchase Order quantity, requires the MDC Purchasing Representative's authorization prior to shipping.

Prior to shipment of chemical substances under this Purchase Order/Contract, Seller shall provide a copy of the Material Safety Data Sheet (MSDS) for each such substance to McDonnell Douglas Corporation, Douglas Aircraft Company, 3855 Lakewood Blvd. Long Beach, CA 90846, ATTN: Safety, Health and Environmental Affairs, Mail Code C1-Q6C (74-41).

A "chemical substance" (including mixtures, solids, liquids, cryogenic liquids, gases, etc.) is any chemical or mixture which (a) is defined as a hazardous chemical by OSHA, DOT, EPA, ICAO, or any other federal, state, or local environmental or health agency, or (b) in the course of normal operations or foreseeable emergencies may produce dust, gases, vapors, mists, fumes or smoke.

Each MSDS shall contain or have attached thereto all of the following information:

1. The data described in 29 CFR Part 1910.1200(g).

2. The Chemical Abstract Service (CAS) number (if available) of the chemical substance and/or each component constituent of a mixture.

3. A statement whether or not the chemical substance or constituent thereof is:

a. Listed on the TSCA Chemical Inventory.

b. Listed on TSCA 12(b) Export Notification List.

c. Subject to a Significant New Use Rule (40 CFR 721, sub. B).

4. Volatile Organic Compound (VOC) content and vapor pressure information, as required by applicable EPA, SCAQMD, and other air agency rules and regulations.

5. Identification of any EPA-SARA constituents.

All inside and outside shipping containers shall comply in all respects with 49 CFR Parts 100-199. All such containers shall utilize HM 181 Final Rule, Performance Oriented Packaging Requirements.

1. Seller represents and warrants that all work to be performed by Seller under this Purchase Order/Contract (PO/Contract) shall be conducted in full compliance with all Federal, State and local statutes, ordinances and regulations relating to protection of public health and safety of the environment.

2. Seller understands and agrees that if performance of the services under this PO/Contract requires the application of coatings or solvents which do not comply with emission limitations under South Coast Air Quality Management District (SCAQMD) Rules 1107 and 1124, Seller will perform the services hereunder pursuant to an Alternate Emission Control Plan (AECP).

3. Seller further represents and warrants that it will obtain the approval of the AECP by the executive officer of the SCAQMD prior to the time that performance of services under this PO/Contract commences including submitting a copy of the approved AECP to the MDC Purchasing Representative. Seller agrees that it shall be solely responsible for developing, obtaining approval of and maintaining compliance with the AECP.

4. Seller agrees to indemnify, save harmless and defend MDC, its directors, officers, employees, agents, successors, and assigns, from and against any and all liabilities, claims, suits, losses, damages, fines, penalties, forfeitures, and the costs and expenses incident thereto (including costs of defense, settlement and reasonable attorney's fees), which it or they may hereafter incur, become responsible for or pay out as a result of or arising out of the breach by Seller or Seller's failure to perform any of the representations, warranties and agreements set forth in this contract condition. Seller agrees that it will promptly notify the MDC Purchasing Representative of any alleged or anticipated noncompliance with SCAQMD Rules 1107 or 1124 relating to or which may affect the performance under this PO/Contract.

1. Seller will be responsible for performing any and all work under this Purchase Order/Contract (PO/Contract) in full compliance with all applicable federal, state, and local environmental laws and regulations.

2. Seller will take all necessary precautions to prevent and mitigate discharges, spills or releases of hazardous substances or materials while performing work under this PO/Contract. Any known or suspected discharge, spill, or release will be immediately reported to the MDC Purchasing Representative by Seller.

3. Seller will promptly, and at its own expense, undertake and complete all corrective and remedial actions as may be reasonably necessary to remedy any existing or threatened discharges, spills, or releases of hazardous substances or materials caused, directly or indirectly, by Seller or its subcontractor(s). Prior to initiating any corrective or remedial action, Seller will submit to the MDC Purchasing Representative for approval a written plan specifically outlining its proposed actions. If obtaining MDC approval would substantially impede necessary mitigating or emergency measures, Seller will initiate these measures immediately and subsequently provide the MDC Purchasing Representative a written report of actions taken.

4. Seller will handle, store, transport, and dispose of all hazardous waste generated by Seller's (or Seller's subcontractor(s)) activities in accordance with all applicable laws and regulations, including but not limited to, the California Hazardous Waste Control Law, Health and Safety Code Sections 25100, et seq., and the federal Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sections 6901, et seq. Prior to transporting any hazardous waste off MDC's premises, Seller will submit to the MDC Purchasing Representative, for review and approval, completed hazardous waste manifests and any other documents deemed necessary by the MDC Purchasing Representative to evidence compliance with the terms and conditions of this PO/Contract and applicable laws and regulations. No hazardous substance or hazardous waste resulting from Seller's (or Seller's subcontractor(s)) activities will be left at MDC's premises after completion of work under the PO/Contract, except as may be specifically provided for by this PO/Contract.

5. Seller shall have title to all hazardous waste generated by Seller's (or Seller's subcontractor(s)) activities in the performance of work under this PO/Contract and must use its own EPA ID number for waste disposal purposes. In the event Seller does not dispose of hazardous waste generated by Seller (or its subcontractor(s)), pursuant to the requirements of this PO/Contract, MDC will dispose of Seller generated hazardous waste at Seller's expense. MDC reserves the right to either withhold payment from any balance owed to Seller or submit a separate invoice to Seller for the cost(s) incurred to dispose of Seller generated hazardous waste.

6. Seller will obtain written approval from the MDC Purchasing Representative prior to any storage of hazardous waste at MDC's premises.

7. Seller shall release, indemnify and hold MDC, its directors, officers, agents, and employees harmless from all claims, actions, damages, liabilities and expenses, including counsel fees and expenses, as a result of (i) injury to or death of any person; (ii) loss of or damage to property of any person; (iii) contamination of or adverse effect on the environment or natural resources, or (iv) any violation of any governmental laws, regulations, permits, or orders caused in whole or in part by the acts or omissions of Seller, Seller's subcontractor(s), or anyone directly or indirectly employed by them, arising out of or in any way connected with the performance or breach of this PO/Contract. This indemnification of MDC by Seller shall survive the termination of this PO/Contract.

8. Any violation of this clause may be grounds for termination of this PO/Contract by MDC.

The rights to forging dies required for performance of this Purchase Order/Contract shall be vested jointly in MDC and Seller. MDC shall have the right to order forgings made on such dies without incurring duplicate die service charges. Seller agrees to incorporate the provisions hereof concerning MDC's die rights in its Purchase Orders placed with forging suppliers and to furnish MDC copies of such executed Purchase Orders within ninety (90) days after placement.

In the event this order is placed under a Government Contract and the full cost of the die is charged thereto, MDC may exercise the foregoing right on behalf of the Government.

Seller shall be responsible for and pay any and all taxes, duties, Governmental fees, and other like charges in connection with the manufacturing, sale and exporting of the supplies ordered hereunder from its country to the United States of America. MDC shall, as the importer of record, be responsible for and pay any and all duties, brokerage fees and other like charges in connection with importing the supplies into the United States and such charges to be paid by MDC shall not be included in Seller's prices.

Seller shall, as requested by MDC, furnish any documentation and establish any administrative controls or invoicing procedures which may be required to properly and economically import and export the supplies and to obtain any refund of monies paid in connection therewith.

MDC's approval of Seller's request for approval to subcontract to a foreign third party a portion of the goods ordered hereunder is contingent upon the following:

1. Seller must have on file a "rate of drawback" request with the United States Bureau of Customs (a copy of which will be furnished to MDC) and shall pay all United States Custom Duties, using the "drawback" method, on all supplies which will be used on aircraft to be exported from the United States by MDC or an MDC customer;

2. Seller will maintain and furnish MDC with records of all such imports incorporated into the supplies ordered hereunder; and

3. MDC will file for drawback, using Seller's record of imports, upon exportation of the aircraft and retain the refund as a price reduction of the supplies ordered hereunder.

In addition to furnishing the documentation specified above, Seller shall, as requested by MDC, furnish any other documentation and establish any administrative controls or invoicing procedures which may be required to properly and economically import and to allow MDC to export any aircraft utilizing the supplies furnished hereunder and to obtain the refund of monies paid in connection therewith. Seller shall also be responsible for assuring that its subcontractors furnish any documentation which may be required to carry out the intent of this Clause.