SUPPLIER CODE OF CONDUCT

Introduction:

At Loran Aerospace Incorporated (Loran, Loran Aerospace), we stand firmly behind the five core values that shape and guide us in our daily operations and relationships:

ü  Do What’s Right,

ü  Perform with Excellence,

ü  Unconditionally provide trustful Data Security,

ü  Product Safety with uninterrupted traceability,

ü  Respect Others.

These simple but professional essential values ensure that we conduct ourselves with the utmost integrity, delivering secure and traceable products while following all applicable regulations, product requirements and regulatory standards.

This Supplier Code of Conduct (SCC) expresses the expectations Loran Aerospace hold for our suppliers and mirrors the standards we set for Quality Management System requirements. Thank you for your shared commitment to meeting these principles.

This SCC document is aligned with the recommendations of the OEMs and sets forth our expectation that suppliers will:

ü  conduct business ethically and in compliance with all applicable laws and regulations,

ü  support the human rights of workers,

ü  treat people with respect,

ü  maintain safe and healthy working conditions,

ü  safeguard assets and property entrusted to them,

ü  protect the natura,

ü  establish healthy communication

Supplier Classification

Loran divides its suppliers into 3 main classes:

Approved Supplier: Suppliers whose have a score depending on the on-time delivery and product quality with a minimum of 70 or Maximum 1 product rejection within a year.

Conditionally Approved Supplier: They are the suppliers classified as supplier can supply the products of Purchase Exceptional or the supplier whose newly starts the work with Loran and will deliver their first products. Their supplier score is between 50-69.

Purchasing Exception: If the product is not available from another company in the market, or the product is "hard to find", or the customer has a special supplier request for the product, Loran carries out the product order subject to the approval of the Senior Management, except for the supplier being an "approved" supplier. These suppliers are classified as "Conditionally Approved" suppliers for Loran. If traceability is unavailable, or the documentation is suspected of being falsified, Loran discontinues efforts to procure the part.

Cancelled Supplier: Suppliers whose scores are below 50. The cancelled supplier term covers all companies that provide counterfeit products and or forge traceability documents, and or cannot provide adequate technical support and warranty.

 In case of non-conformity, the supplier company is given the right to replace the product at most twice. The score of the supplier who is not successful in both product changes is reduced to 50, and the company is marked as a "Canceled Supplier". The prerequisite for product replacement in case of non-conformity is customer approval, which depends on Loran's product delivery period. The supplier is changed, and the Supplier Evaluation Criteria is checked and updated.

Supplier Code of Conduct Requirements:

1.    We expect our suppliers to maintain full compliance with this SCC and all legal and standard regulations applicable to their supplying capabilities and to ensure extension of these requirements to all sub-tier suppliers they employ on our behalf.

2.    Suppliers must comply with Loran purchase order terms, legal regulatory restrictions, product technical specifications.

3.    Who is the Supplier for Loran Aerospace: “Supplier” term is defined as any third party that directly or indirectly sells, or seeks to sell, any kind of fastener products to Loran, including suppliers, contractors, subcontractors, distributors.

4.    This SCC is in no way intended to conflict with or modify the terms and conditions of Loran Purchase Order.

5.    In the event of a conflict, suppliers must first adhere to legal regulatory and product requirements, then the contract terms, followed by this SCC.

Consequences for Violating this SCC:

6.    In the event of a violation of any of the above expectations, we may pursue corrective action to remedy the situation.

7.    In the case of a violation of law or regulation, we may be required to report those violations to the proper authorities.

8.    We reserve the right to terminate our relationship with any supplier under the terms of the existing procurement contract.

Ethics and Compliance:

9.    We expect our suppliers to maintain an ethics and compliance program that is commensurate with the importance and discipline of the aerospace of their business.

10. We also encourage our suppliers to be familiar with the business practices of their suppliers and subcontractors to ensure compliance with the law and the SCC for any activity performed on behalf of our company; and to proactively manage and mitigate risk in their supply chain and, where appropriate, report risk back to us to ensure that those risks are appropriately mitigated.

Whistleblower Protection:

11. We expect our suppliers to provide their employees with avenues for raising legal or ethical issues or concerns without fear of retaliation.

12. We expect our suppliers to take action to prevent, detect, and correct any retaliatory actions.

13. Suppliers may also ask questions or raise concerns directly to our company as indicated in the Resources section of this SCC.

14. We prohibit retaliation against anyone for raising a concern in good faith or for participating in an investigation of possible wrongdoing.

Human Rights:

15. ensure all employment is freely chosen and prohibit all forms of modern slavery and human trafficking,

16. prohibit the use of child labor or labor by anyone under the minimum legal age for employment where the work is performed,

17. comply with all applicable laws in the countries in which they operate, including those related to wages, benefits and working hours,

18. respect the right of workers to form and join trade unions of their own choosing, to bargain collectively and to engage in peaceful assembly, as well as respect the right of workers to refrain from such activities; and

19. refrain from violating the human rights of others.

20. destroy, conceal, or confiscate identity or immigration documents,

21. use recruiters that do not comply with local labor laws of the country in which the recruiting takes place,

22. use misleading or fraudulent tactics in recruiting,

23. charge employee recruitment fees or provide inadequate housing based on local standards, laws and directives,

24. fail to provide employment contracts and other documentation in the employee’s native language,

25. fail to provide return transportation upon the end of employment for employees brought to the country for the purpose of working on a U.S. Government contract or subcontract; or

26. fail to investigate and protect employees suspected of being trafficking victims.

27. Suppliers must educate employees on prohibited trafficking activities, discipline employees found to have violated the law or rules and notify the contracting officer of violations and action taken against employees.

Respectful Thread:

28. Suppliers should treat their employee with respect and dignity, encourage diversity, promote equal opportunity for all, and foster an inclusive and ethical culture.

29. value the differences that make people unique,

30. be inclusive, support others and remain open and receptive to different ideas and opinions,

31. provide a work environment that is free from discrimination and all forms of harassment or other abusive conduct, and

32. provide equal employment opportunities to employees and applicants for employment, without regard to race, ethnicity, religion, color, sex, national origin, age, military veteran status, ancestry, sexual orientation, gender identity or expression, marital status, family structure, genetic information, or mental or physical disability, so long as the essential functions of the job can be competently performed with or without reasonable accommodation.

Safe and Healthy Workplace:

33. Suppliers should protect the health, safety, and welfare of their people, visitors, and others who may be affected by their activities.

34. maintain safe, healthy, and humane working conditions at all locations,

35. comply with all applicable environmental, health and safety laws, regulations, and directives, and

36. maintain a workplace free from the illegal use, possession, sale, or distribution of controlled substances.

Foreign Corrupt Practices:

37. do not directly or indirectly enter any transaction processes to the sanctioned country,

38. refrain from offering or making any payments of money or anything of value (including kickbacks, favors, gifts, gratuities, entertainment, travel, political contributions, charitable donations or other business courtesies) to customers, government officials, political parties, candidates for public office, charities, or other business-related parties that could be considered to improperly influence a business decision,

39. prohibit facilitating payments intended to expedite or secure performance of a routine governmental action like obtaining a visa or customs clearance, except in situations where there is an imminent threat to personal health or safety, and

40. conduct appropriate due diligence and monitoring activities to prevent and detect corruption in all business arrangements, including partnerships, joint ventures, offset agreements, and the engagement of third parties, including consultants.

Source Responsibility:

41. US located suppliers must adhere to federal laws and regulations regarding conflict minerals (gold, tantalum, tin, and tungsten) when sourcing materials,

42. conduct due diligence on the source and chain of custody of these minerals, and

43. support efforts to eradicate the use of conflict minerals which directly or indirectly finance or benefit armed groups in the blacklisted countries.

Compete Fairly:

44. Suppliers must compete on the merits of their products rather than by any illegal or unethical business practice.

45. comply with competition and antitrust laws,

46. never make agreements with competitors to fix prices, rig bids, allocate customers or markets, or exchange any pricing information, and

47. never use the exchange of business gifts and hospitality to gain an unfair competitive advantage. 

Comply with International Rules: