GENERAL TERMS AGREEMENT
between
THE BOEING COMPANY
and
▇▇▇▇▇▇▇'▇ METAL, INC.
Number
BCA-65323-0221
GENERAL TERMS AGREEMENT
GENERAL TERMS AGREEMENT
TABLE OF CONTENTS
SECTION TITLE
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1.0 DEFINITIONS
2.0 ISSUANCE OF PURCHASE ORDERS
AND APPLICABLE TERMS
2.1 Issuance of Purchase Orders
2.2 Acceptance of Purchase Orders
2.3 Written Authorization to Proceed
2.4 Rejection of Purchase Orders
3.0 TITLE AND RISK OF LOSS
4.0 DELIVERY
4.1 Requirements
4.2 Delay
4.3 Notice of Labor Disputes
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
5.1 Review
5.2 Resident Representatives
6.0 INVOICE AND PAYMENT
7.0 PACKING AND SHIPPING
8.0 QUALITY ASSURANCE, INSPECTION
REJECTION AND ACCEPTANCE
8.1 Controlling Document
8.2 Seller's Inspection
8.3 Boeing's Inspection and Rejection
8.4 Federal Aviation Administration or
Equivalent Government Agency Inspection
8.5 Retention of Records
8.6 Source Inspection
8.7 Language for Technical Information
9.0 EXAMINATION OF RECORDS
10.0 CHANGES
10.1 General
10.2 Model Mix
11.0 PRODUCT ASSURANCE
12.0 TERMINATION FOR CONVENIENCE
13.0 EVENTS OF DEFAULT AND REMEDIES
14.0 EXCUSABLE DELAY
15.0 SUSPENSION OF WORK
16.0 TERMINATION OR CANCELLATION: INDEMNITY AGAINST
SUBCONTRACTOR'S CLAIMS
17.0 ASSURANCE OF PERFORMANCE
18.0 RESPONSIBILITY FOR PROPERTY
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS
20.0 PROPRIETARY INFORMATION AND ITEMS
21.0 COMPLIANCE WITH LAWS
22.0 INTEGRITY IN PROCUREMENT
23.0 INFRINGEMENT
24.0 BOEING'S RIGHTS IN SELLER'S, PATENTS COPYRIGHTS,
TRADE SECRETS AND TOOLING
SECTION TITLE
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25.0 NOTICES
25.1 Addresses
25.2 Effective Date
25.3 Approval or Consent
26.0 PUBLICITY
27.0 PROPERTY INSURANCE
27.1 Insurance
27.2 Certificate of Insurance
27.3 Notice of Damage or Loss
28.0 RESPONSIBILITY FOR PERFORMANCE
28.1 Subcontracting
28.2 Reliance
28.3 Assignment
29.0 NON-WAIVER
30.0 HEADINGS
31.0 PARTIAL INVALIDITY
32.0 APPLICABLE LAW
33.0 AMENDMENT
34.0 LIMITATION
35.0 TAXES
35.1 Inclusion of Taxes in Price
35.2 Litigation
35.3 Rebates
36.0 FOREIGN PROCUREMENT OFFSET
37.0 ENTIRE AGREEMENT/ORDER OF PRECEDENCE
37.1 Entire Agreement
37.2 Incorporated By Reference
37.3 Order of Precedence
37.4 Disclaimer
AMENDMENT
AMENDMENT
NUMBER DESCRIPTION DATE APPROVAL
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GENERAL TERMS AGREEMENT
RELATING TO
BOEING PRODUCTS
THIS GENERAL TERMS AGREEMENT ("Agreement") is entered into as of August
______, 1998, by and between ▇▇▇▇▇▇▇'▇ Metal, Inc., a Missouri corporation, with
its principal office in St. ▇▇▇▇▇▇▇, Missouri, ("Seller"), and The Boeing
Company, a Delaware corporation with its principal office in Seattle, Washington
acting by and through its division the Boeing Commercial Airplane Group
("Boeing").
RECITALS
A. Boeing produces commercial airplanes.
B. Seller manufactures and sells certain goods and services for use in the
production and support of such aircraft.
C. Seller desires to sell and Boeing desires to purchase certain of
Seller's goods and services in accordance with the terms set forth in
this Agreement.
Now therefore, in consideration of the mutual covenants set forth
herein, the parties agree as follows:
AGREEMENTS
1.0 DEFINITIONS
The definitions set forth below shall apply to the following terms as
they are used in this Agreements, any Order, or any related Special
Business- Provisions ("SBP"). Words importing the singular number shall
also include the plural number and vice versa.
(a) "Customer" means any owner, operator or user of Products and
any other individual, partnership, corporation or entity which
has or acquires any interest in the Products from, through or
under Boeing.
(b) "Derivative" means any new model airplane designated by Boeing
as a derivative of an existing Model airplane and which: (1)
has the same number of engines as the existing model airplane;
(2) utilizes essentially the same aerodynamic and propulsion
design, major assembly components, and systems as the existing
model airplane and (3) achieves other payload/range
combinations by changes in body length, engine thrust, or
variations in certified gross weight.
(c) "Drawing" means an automated or manual depiction of graphics
or technical information representing a Product or any part
thereof and which includes the parts list and specifications
relating thereto.
(d) "End Item Assembly" means any Product which is described by a
single part number and which is comprised of more than one
component part.
(e) "FAA" means the United States Federal Aviation Administration
or any successor agency thereto.
(f) "FAR" means the Federal Acquisition Regulations in effect on
the date of this Agreement.
(g) "Materiel Representative" means the individual designated from
time to time, by Boeing as being primarily responsible for
interacting with Seller regarding this Agreement and any
Order.
(h) "Order" means each purchase order issued by Boeing and
accepted by Seller under the terms of this Agreement. Each
Order is a contract between Boeing and Seller.
(i) "Product" means goods, including components and parts thereof,
services, documents, data, software, software documentation
and other information or items furnished or to be furnished to
Boeing under any Order, including Tooling except for Rotating
Use Tools.
(j) "Purchased on Assembly Production Detail Part (POA)" means a
component part of an End Item Assembly.
(k) "Shipset" means the total quantity of a given part number or
material necessary for production of one airplane.
(1) "Spare" means any Product, regardless of whether the Product
is an End Item Assembly or a Purchased on - Assembly
Production Detail Part, which is intended for use or sale as a
spare part or a production replacement.
(m) "Tooling" means all tooling, as defined in Boeing Document
M31-24, "Boeing Suppliers Tooling Manual," and/or described on
any Order, including but not limited to Boeing-Use Tooling,
Supplier-Use Tooling and Common-Use Tooling as defined in
Boeing Document D649004, "Operations General Requirements for
Suppliers," and Rotating-Use Tooling as defined in Boeing
Document M31-13, "Accountability of Inplant/Outplant Special
(Contract) Tools." For purposes of this Agreement, in the
documents named in this subparagraph, the term "Supplier Use
Tooling" shall be changed to Seller Use Tooling.
2.0 ISSUANCE OF ORDERS AND APPLICABLE TERMS
2.1 Issuance of Orders
Boeing may issue Orders to Seller from time to time. Each Order shall
contain a description of the Products ordered, a reference to the
applicable specifications and Drawings, the quantities and prices, the
delivery schedule, the terms and place of delivery and any special
conditions.
Each Order which incorporates this Agreement shall be governed by and
be deemed to include the provisions of this Agreement. Purchase Order
Terms and Conditions, Form D14100-4045, Form P252T and any other
purchase order terms and conditions which may conflict with this
Agreement, do not apply to the Orders.
2.2 Acceptance of Orders
Each Order is Boeing's offer to Seller and acceptance is strictly
limited to its terms. Boeing will not be bound by and specifically
objects to any term or condition which is different from or in addition
to the provisions of the Order, whether or not such term or condition
will materially alter the Order. Seller's commencement of performance
or acceptance of the Order in any manner shall conclusively evidence
Seller's acceptance of the Order as written. Boeing may revoke any
Order prior to Boeing's receipt of Seller's written acceptance or
Seller's commencement of performance.
2.3 Written Authorization to Proceed
Boeing's Materiel Representative may give written authorization to
Seller to commence performance before Boeing issues an Order. If Boeing
in its written authorization specifies that an Order will be issued,
Boeing and Seller shall proceed as if an Order had been issued. This
Agreement, the applicable SBP and the terms stated in the written
authorization shall be deemed to be a part of Boeing's offer and the
parties shall promptly agree on any open Order terms. If Boeing does
not specify in its written authorization that an Order shall be issued,
Boeing's obligation is strictly limited to the terms of the written
authorization. For purposes of this Section 2.3 only, written
authorization includes electronic transmission chosen by Boeing.
If Seller commences performance before an Order is issued or without
receiving Boeing's prior authorization to proceed, such performance
shall be at Seller's expense.
2.4 Rejection of Purchase Order
Any rejection by Seller of an Order shall specify the reasons for
rejection and any changes or additions that would make the Order
acceptable to Seller; provided, however, that Seller may not reject any
Order for reasons inconsistent with the provisions of this Agreement or
the applicable SBP.
3.0 TITLE AND RISK OF LOSS
Title to and risk of any loss of or damage to the Products shall pass
from Seller to Boeing at the F.O.B. point as specified in the
applicable Order, except for loss or damage thereto resulting from
Seller's fault or negligence. Passage of title on delivery does not
constitute Boeing's acceptance of Products.
4.0 DELIVERY
4.1 Requirements
Deliveries shall be strictly in accordance with the quantities, the
schedule and other requirements specified in the applicable Order.
Seller may not make early or partial deliveries without Boeing's prior
written authorization. Deliveries which fail to meet Order requirements
may be returned to Seller at Seller's expense.
4.2 Delay
Seller shall notify Boeing immediately, of any circumstances that may
cause a delay in delivery, stating the estimated period of delay and
the reasons therefor. If requested by Boeing, Seller shall use
additional effort, including premium effort, and shall ship via air or
other expedited routing to avoid or minimize delay to the maximum
extent possible. All additional costs resulting from such premium
effort or premium transportation shall be borne by Seller with the
exception of such costs attributable to delays caused directly by
Boeing. Nothing herein shall prejudice any of the rights or remedies
provided to Boeing in the applicable Order or by law.
4.3 Notice of Labor Disputes
Seller shall immediately notify Boeing of any actual or potential labor
dispute that may disrupt the timely performance of an Order. Seller
shall include the substance of this Section 4.3, including this
sentence, in any subcontract relating to an Order if a labor dispute
involving the subcontractor would have the potential to delay the
timely performance of such Order. Each subcontractor, however, shall
only be required to give the necessary notice and information to its
next higher-tier subcontractor.
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
5.1 Review
At Boeing's request, Seller shall provide at Boeing's facility or at a
place designated by Boeing, a review explaining the status of the
Order, actions taken or planned relating to the Order and any other
relevant information. Nothing herein may be construed as a waiver of
Boeing's rights to proceed against Seller because of any delinquency.
Boeing's authorized representatives may enter Seller's plant at all
reasonable times to conduct preliminary inspections and tests of the
Products and work-in-process. Seller shall include in its subcontracts
issued in connection with an Order a like provision giving Boeing the
right to enter the premises of Seller's subcontractors. When requested
by Boeing, Seller shall accompany Boeing to Seller's subcontractors.
5.2 Resident Representatives
Boeing may in its discretion and for such periods as it deems necessary
assign resident personnel at Seller's facilities. Seller shall furnish,
free of charge, all office space, secretarial service and other
facilities and assistance reasonably required by Boeing's
representatives at Seller's plant. The resident team will function
under the guidance of Boeing's manager. The resident team will provide
communication and coordination to ensure timely performance of the
Order. Boeing's resident team shall be allowed access to all work
areas, Order status reports and management review necessary to assure
timely performance and conformance with the requirements of each Order.
Notwithstanding such assistance, Seller remains solely responsible for
performing in accordance with each Order.
6.0 INVOICE AND PAYMENT
Unless otherwise provided in the applicable Order, invoicing and
payment shall be in accordance with SBP Section 7.0.
7.0 PACKING AND SHIPPING
Seller shall (a) prepare for shipment and suitably pack all Products to
prevent damage or deterioration, (b) where Boeing has not identified a
carrier, secure lowest transportation rates, (c) comply with the
appropriate carrier tariff for the mode of transportation specified by
Boeing and (d) comply with any special instructions stated in the
applicable Order. Boeing shall pay no charges for preparation, packing,
crating or cartage unless stated in the applicable Order. Unless
otherwise directed by Boeing, all standard routing shipments forwarded
on one day must be consolidated. Each container must be consecutively
numbered and marked as set forth below. Container and Order numbers
must be indicated on the applicable ▇▇▇▇ of lading. Two copies of the
packing sheets must be attached to the No. 1 container of each shipment
and one copy in each individual container. Each pack sheet must include
as a minimum the following: a) Seller's name, address and phone number;
b) Order and item number; c) ship date for the Products; d) total
quantity shipped and quantity in each container, if applicable; e)
legible pack slip number; f) nomenclature; g) unit of measure; h) ship
to if other than Boeing; i) warranty data and certification, as
applicable; j) rejection tag, if applicable; k) Seller's certification
that Products comply with Order requirements; and, l) identification of
optional material used, if applicable. Products sold F.O.B. place of
shipment must be forwarded collect. Seller may not make any declaration
concerning the value of the Products shipped, except on Products where
the tariff rating or rate depends on the released or declared value,
and in such event the value shall be released or declared at the
maximum value for the lowest-tariff rating or rate.
The following markings shall be included on each unit container: a)
Seller's name; b) Seller's part number, if applicable; c) Boeing part
number, if applicable; d) part nomenclature; e) Order number; f)
quantity of Products in container; g) unit of measure; h) serial
number, if applicable; i) date (quarter/year) identified as assembly or
rubber cure date, if applicable; j) precautionary handling instructions
or marking as required.
In addition, the following markings/labels shall be included on each
shipping container: a) Name and address of consignee; b) Name and
address of consignor; c) Order number; d) Part number as shown on the
Order; e) Quantity of Products in container; f) Unit of measure; g) Box
number; h) Total number of boxes in shipment; and, i) Precautionary
handling, labeling or marking as required.
8.0 QUALITY ASSURANCE, INSPECTION, REJECTION, & ACCEPTANCE
8.1 Controlling Document
The controlling quality assurance document for Orders shall be as set
forth in the SBP Section 4.0.
8.2 Seller's Inspection
Seller shall inspect or otherwise verify that all Products and
components thereof, including those procured from or furnished by
subcontractors or Boeing, comply with the requirements of the Order
prior to shipment to Boeing or Customer. Seller shall be responsible
for all tests and inspections of the Product and any component thereof
during receiving, manufacture and Seller's final inspection. Seller
shall include on each packing sheet a certification that the Products
comply with the requirements of the Order.
8.2.1 Seller's Disclosure
Seller will immediately notify Boeing when discrepancies in Seller's
processes or Product are discovered or suspected for Products Seller
has delivered.
8.3 Boeing's Inspection and Rejection
Unless otherwise specified on an Order, Products shall be subject to
final inspection and acceptance by Boeing at destination,
notwithstanding any payment or prior inspection. Boeing may reject any
Product which does not strictly conform to the requirements of the
applicable Order. Boeing shall by notice, rejection tag or other
communication notify Seller of such rejection. Whenever possible,
Boeing may coordinate with Seller prior to disposition of the rejected
Product(s), however, Boeing shall retain final disposition authority
with respect to all rejections. At Seller's risk and expense, all such
Products will be returned to Seller for immediate repair, replacement
or other correction and redelivery to Boeing; provided, however, that
with respect to any or all of such Products and at Boeing's election
and at Seller's risk and expense, Boeing may: (a) hold, retain, or
return such Products without permitting any repair, replacement or
other correction by Seller; (b) hold or retain such Products for repair
by Seller or, at Boeing's election, for repair by Boeing with such
assistance from Seller as Boeing may require; (c) hold such Products
until Seller has delivered conforming replacements for such Products;
(d) hold such Products until conforming replacements are obtained from
a third party; (e) return such Products with instructions to Seller as
to whether the Products shall be repaired or replaced and as to the
manner of redelivery or (f) return such Products with instructions that
they be scrapped. Upon final disposition by Boeing that the
non-conforming Product(s) are not subject to repair and prior to the
Products being scrapped, Seller shall render the Product(s) unusable.
Seller shall also maintain, pursuant to their quality assurance system,
records certifying destruction of the applicable Products. Said
certification shall state the method and date of mutilation and
destruction of the subject Product(s). Boeing shall have the right to
review and inspect these records at any time it deems necessary.
Failure to comply with these requirements shall be a material breach of
this Agreement and grounds for default pursuant to GTA Section 13.0.
All repair, replacement and other corrections and redelivery shall be
completed within such time as Boeing may require. All costs and
expenses, loss of value and any other damages incurred as a result of
or in connection with nonconformance and repair, replacement or other
correction may be recovered from Seller by an equitable price
reduction, set-off or credit against any amounts that may be owed to
Seller under the applicable Order or otherwise.
Boeing may revoke its acceptance of any Products and have the same
rights with regard to the Products involved as if it had originally
rejected them.
8.4 Federal Aviation Administration or Equivalent Government Agency
Inspection
Representatives of Boeing, the FAA or any equivalent government agency
may inspect and evaluate Seller's plant including, but not limited to,
Seller's and subcontractor's facilities, systems, data, equipment,
inventory holding areas, procedures, personnel, testing, and all
work-in-process and completed Products. For purposes of this Section
8.4, equivalent government agency shall mean those governmental
agencies so designated by the FAA or those agencies within individual
countries which maintain responsibility for assuring aircraft
airworthiness.
8.5 Retention of Records
Quality assurance records shall be maintained on file at Seller's
facility and available to Boeing's authorized representatives. Seller
shall retain such records for a period of not less than seven (7) years
from the date of final payment under the applicable Order.
8.6 Source Inspection
If an Order contains a notation that " 100% Source Inspection" is
required, the Products shall not be packed for shipment until they have
been submitted to Boeing's quality assurance representative for
inspection. Both the packing list and Seller's invoice must reflect
evidence of this inspection.
8.7 Language for Technical Information
All reports, drawings and other technical information submitted to
Boeing for review or approval shall be in English and shall employ the
units of -measure customarily used by Boeing in the U.S.A.
9.0 EXAMINATION OF RECORDS
Seller shall maintain complete and accurate records showing the sales
volume of all Products. Such records shall support all services
performed, allowances claimed and costs incurred by Seller in the
performance of each Order, including but not limited to those factors
which comprise or affect direct labor hours, direct labor rates,
material costs, burden rates and subcontracts. Such records and other
data shall be capable of verification through audit and analysis by
Boeing and be available to Boeing at Seller's facility for Boeing's
examination and audit at all reasonable times from the date of the
applicable Order until three (3) years after final payment under such
Order. Seller shall provide assistance to interpret such data if
requested by Boeing. Such examination shall provide Boeing with
complete information regarding Seller's performance for use in price
negotiations with Seller relating to existing or future orders for
Products, including but not limited to negotiation of equitable
adjustments for changes and termination/obsolescence claims pursuant to
GTA Section 10.0. Boeing shall treat all information disclosed under
this Section as confidential.
10.0 CHANGES
10.1 General
Boeing's Materiel Representative may at any time by written change
order make changes within the general scope of an Order in any one or
more of the following: drawings, designs, specifications, shipping,
packing, place of inspection, place of delivery place of acceptance,
adjustments in quantities, adjustments in delivery schedules, or the
amount of Boeing furnished material. Seller shall proceed immediately
to perform the Order as changed. If any such change causes an increase
or decrease in the cost of or the time required for the performance of
any part of the work, whether changed or not changed by the change
order, an equitable adjustment shall be made in the price of or the
delivery schedule for those Products affected, and the applicable Order
shall be modified in writing accordingly. Any claim by Seller for
adjustment under this Section 10. 1 must be received by Boeing in
writing no later than (60) days from the date of receipt by Seller of
the written change order or within such further time as the parties may
agree in writing or such claim shall be deemed waived. Nothing in this
Section 10.1 shall excuse Seller from proceeding with an Order as
changed, including failure of the parties to agree on any adjustment to
be made under this Section 10.1.
If Seller considers that the conduct of any of Boeing's employees has
constituted a change hereunder, Seller shall immediately notify
Boeing's Materiel Representative in writing as to the nature of such
conduct and its effect on Seller's performance. Pending direction from
Boeing's Materiel Representative, Seller shall take no action to
implement any such change.
10.2 Model Mix
In the event any Derivative aircraft(s) is introduced by Boeing, Boeing
may (but is not obligated to) direct Seller within the scope of the
applicable Order and in accordance with the provisions of GTA Section
10.0 to supply Boeing's requirements for Products for such Derivative
aircraft(s) which correspond to those Products being produced under the
applicable Order.
11.0 PRODUCT ASSURANCE
Boeing's acceptance of any Product does not alter or affect the
obligations of Seller or the rights of Boeing and its customers under
the document referenced in the SBP Section 6.0 or as provided by law.
12.0 TERMINATION FOR CONVENIENCE
12.1 Basis for Termination; Notice
Boeing may, from time to time and at Boeing's sole discretion,
terminate all or part of any Order issued hereunder, by written notice
to Seller. Any such written notice of termination shall specify the
effective date and the extent of any such termination.
12.2 Termination Instructions
On receipt of a written notice of termination pursuant to GTA Section
12.1, unless otherwise directed by Boeing, Seller shall:
A. Immediately stop work as specified in the notice;
B. Immediately terminate its subcontracts and purchase orders relating
to work terminated;
▇. ▇▇▇▇▇▇ any termination claims made by its subcontractors or
suppliers; provided, that Boeing shall have approved the amount of
such termination claims prior to such settlement;
D. Preserve and protect all terminated inventory and Products;
E. At Boeing's request, transfer title (to the extent not previously
transferred) and deliver to Boeing or Boeing's designee all
supplies and materials, work-in-process, Tooling and manufacturing
drawings and data produced or acquired by Seller for the
performance of this Agreement and any Order, all in accordance with
the terms of such request;
F. Take all reasonable steps required to return, or at Boeing's option
and with prior written approval to destroy, all Boeing Proprietary
Information and Items in the possession, custody or control of
Seller;
G. Take such other action as, in Boeing's reasonable opinion, may be
necessary, and as Boeing shall direct in writing, to facilitate
termination of this Order; and
H. Complete performance of the work not terminated.
12.3 Seller's Claim
If Boeing terminates an Order in whole or in part pursuant to Section
12.1 above, Seller shall have the right to submit a written termination
claim to Boeing in accordance with the terms of this Section 12.3. Such
termination claim shall be submitted to Boeing not later than six (6)
months after Seller's receipt of the termination notice and shall be in
the form prescribed by Boeing. Such claim must contain sufficient
detail to explain the amount claimed, including detailed inventory
schedules and a detailed breakdown of all costs claimed separated into
categories (e.g., materials, purchased parts, finished components,
labor, burden, general and administrative), and to explain the basis
for allocation of all other costs. Seller shall be entitled to be
compensated in accordance with and to the extent allowed under the
terms of FAR 52-249-2(e)-(m) excluding (i), (as published in 48 CFR ss.
52.249-2) which is incorporated herein by this reference except
"Government" and "Contracting Officer" shall mean Boeing, "Contractor"
shall mean Seller and "Contract" shall mean Order.
12.4 Failure to Submit a Claim
Notwithstanding any other provision of this Section 12.0, if Seller
fails to submit a termination claim within the time period set forth
above, Seller shall be barred from submitting a claim and Boeing shall
have no obligation for payment to Seller under this Section 12.0 except
for those Products previously delivered and accepted by Boeing.
12.5 Partial Termination
Any partial termination of an Order shall not alter or affect the terms
and conditions of the Order or any Order with respect to Products not
terminated.
12.6 Product Price
Termination under any of the above paragraphs shall not result in any
change to unit prices for Products not terminated.
12.7 Exclusions or Deductions
The following items shall be excluded or deducted from any claim
submitted by Seller:
A. All unliquidated advances or other payments made by Boeing to
Seller pursuant to a terminated Order;
B. Any claim which Boeing has against Seller;
C. The agreed price for scrap allowance;
D. Except for normal spoilage and any risk of loss assumed by Boeing,
the agreed fair value of property that is lost, destroyed, stolen
or damaged.
12.8 Partial Payment/Payment
Payment, if any, to be paid under this Section 12.0 shall be made
thirty (30) days after settlement between the parties or as otherwise
agreed to between the parties. Boeing may make partial payments and
payments against costs incurred by Seller for the terminated portion of
the Order, if the total of such payments does not exceed the amount to
which Seller would be otherwise entitled. If the total payments exceed
the final amount determined to be due, Seller shall repay the excess to
Boeing upon demand.
12.9 Seller's Accounting Practices
Boeing and Seller agree that Seller's "normal accounting practices"
used in developing the price of the Product(s) shall also be used in
determining the allocable costs at termination. For purposes of this
Section 12.9, Seller's "normal accounting practices" refers to Seller's
method of charging costs as either a direct charge, overhead expense,
general administrative expense, etc.
12.10 Records
Unless otherwise provided in this Agreement or by law, Seller shall
maintain all records and documents relating to the terminated portion
of the Order for three (3) years after final settlement of Seller's
termination claim.
13.0 EVENTS OF DEFAULT AND REMEDIES
13.1 Events of Default
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
A. Any failure by Seller to deliver, when and as required by this
Agreement or any Order, any Product, except as provided in GTA
Section 14.0; or
B. Any failure by Seller to provide an acceptable Assurance of
Performance within the time specified in GTA Section 17.0, or
otherwise in accordance with applicable law; or,
C. Any failure by Seller to perform or comply with any obligation set
forth in GTA Section 20.0; or
D. Seller is or has participated in the sale, purchase or manufacture
of airplane parts without the required approval of the FAA.
E. Any failure by Seller to perform or comply with any obligation
(other than as described in the foregoing Sections 13.1.A, 13.1.B,
13.1.C and 13.1.D) set forth in this Agreement and such failure
shall continue unremedied for a period of thirty (30) days or more
following receipt by Seller of notice from Boeing specifying such
failure; or
F. (a) the suspension, dissolution or winding-up of Seller's business,
(b) Seller's insolvency, or its inability to pay debts, or its
nonpayment of debts, as they become due, (c) the institution of
reorganization, liquidation or other such proceedings by or against
Seller or the appointment of a custodian, trustee, receiver or
similar Person for Seller's properties or business, (d) an
assignment by Seller for the benefit of its creditors, or (e) any
action of Seller for the purpose of effecting or facilitating any
of the foregoing.
13.2 Remedies
If any Event of Default shall occur:
A. Cancellation
Boeing may, by giving written notice to Seller, immediately cancel
this Agreement and/or any Order, in whole or in part, and Boeing
shall not be required after such notice to accept the tender by
Seller of any Products with respect to which Boeing has elected to
cancel this Agreement.
B. Cover
Boeing may manufacture, produce or provide, or may engage any other
persons to manufacture, produce or provide, any Products in
substitution for the Products to be delivered or provided by Seller
hereunder with respect to which this Agreement or any Order has
been canceled and, in addition to any other remedies or damages
available to Boeing hereunder or at law or in equity, Boeing may
recover from Seller the difference between the price for each such
Product and the aggregate expense, including, without limitation,
administrative and other indirect costs, paid or incurred by Boeing
to manufacture, produce or provide, or engage other persons to
manufacture, produce or provide, each such Product.
C. Rework or Repair
Boeing may rework or repair any Product in accordance with GTA
Section 8.3;
D. Setoff
Boeing shall, at its option, have the right to set off against and
apply to the payment or performance of any obligation, sum or
amount owing at any time to Boeing hereunder or under any Order,
all deposits, amounts or balances held by Boeing for the account of
Seller and any amounts owed by Boeing to Seller, regardless of
whether any such deposit, amount, balance or other amount or
payment is then due and owing.
E. Tooling and other Materials
As compensation for the additional costs which Boeing will incur as
a result of the actual physical transfer of production capabilities
from Seller to Boeing or Boeing's designee, Seller shall upon the
request of Boeing, transfer and deliver to Boeing or Boeing's
designee title to any or all (i) Tooling, (ii) Boeing-furnished
material, (iii) raw materials, parts, work-in-process, incomplete
or completed assemblies, and all other Products or parts thereof in
the possession or under the effective control of Seller or any of
its subcontractors (iv) Proprietary Information and Materials of
Boeing including without limitation planning data, drawings and
other Proprietary Information and Materials relating to the design,
production, maintenance, repair and use of Tooling, in the
possession or under the effective control of Seller or any of its
subcontractors, in each case free and clear of all liens, claims or
other rights of any person.
Seller shall be entitled to receive from Boeing reasonable
compensation for any item accepted by Boeing which has been
transferred to Boeing pursuant to this Section 13.2.E (except for
any item the price of which shall have been paid to Seller prior to
such transfer); provided, however, that such compensation shall not
be paid directly to Seller, but shall be accounted for as a setoff
against any damages payable by Seller to Boeing as a result of any
Event of Default.
F. Remedies Generally
No failure on the part of Boeing in exercising any right or remedy
hereunder, or as provided by law or in equity, shall impair,
prejudice or constitute a waiver of any such right or remedy, or
shall be construed as a waiver of any Event of Default or as an
acquiescence therein. No single or partial exercise of any such
right or remedy shall preclude any other or further exercise
thereof or the exercise of any other right or remedy. No acceptance
of partial payment or performance of any of Seller's obligations
hereunder shall constitute a waiver of any Event of Default or a
waiver or release of payment or performance in fall by Seller of
any such obligation. All rights and remedies of Boeing hereunder
and at law and in equity shall be cumulative and not mutually
exclusive and the exercise of one shall not be deemed a waiver of
the right to exercise any other. Nothing contained in this
Agreement shall be construed to limit any right or remedy of Boeing
now or hereafter existing at law or in equity.
14.0 EXCUSABLE DELAY
If delivery of any Product is delayed by unforeseeable circumstances
beyond the control and without the fault or negligence of Seller or of
its suppliers or subcontractors (any such delay being hereinafter
referred to as "Excusable Delay"), the delivery of such Product shall
be extended for a period to be determined by Boeing after an assessment
by Boeing of alternate work methods. Excusable Delays may include, but
are not limited to, acts of God, war, riots, acts of government, fires,
floods, epidemics, quarantine restrictions, freight embargoes, strikes
or unusually severe weather, but shall exclude Seller's noncompliance
with any rule, regulation or order promulgated by any governmental
agency for or with respect to environmental protection. However, the
above notwithstanding, Boeing expects Seller to continue production,
recover lost time and support all schedules as established under this
Agreement or any Order. Therefore, it is understood and agreed that (i)
delays of less than two (2) days' duration shall not be considered to
be Excusable Delays unless such delays shall occur within thirty (30)
days preceding the scheduled delivery date of any Product and (ii) if
delay in delivery of any Product is caused by the default of any of
Seller's subcontractors or suppliers, such delay shall not be
considered an Excusable Delay unless the supplies or services to be
provided by such subcontractor or supplier are not obtainable from
other sources in sufficient time to permit, Seller to meet the
applicable delivery schedules. If delivery of any Product is delayed by
any Excusable Delay for more than three (3) months, Boeing may, without
any additional extension, cancel all or part of any Order with respect
to the delayed Products, and exercise any of its remedies in accordance
with GTA Section 13.2 provided however, that Boeing shall not be
entitled to monetary damages or specific performance to the extent
Seller's breach is the result of an Excusable Delay.
15.0 SUSPENSION OF WORK
Boeing may at any time, by written order to Seller, require Seller to
stop all or any part of the work called for by this Agreement hereafter
referred to as a "Stop Work Order" issued pursuant to this Section
15.0. On receipt of a Stop Work Order, Seller shall promptly comply
with its terms and take all reasonable steps to minimize the occurrence
of costs arising from the work covered by the Stop Work Order during
the period of work stoppage. Within the period covered by the Stop Work
Order (including any extension thereof) Boeing shall either (i) cancel
the Stop Work Order or (ii) terminate or cancel the work covered by the
Stop Work Order in accordance with the provisions of GTA Section 12.0
or 13.0. In the event the Stop Work Order is canceled by Boeing or the
period of the Stop Work Order (including any extension thereof)
expires, Seller shall promptly resume work in accordance with the terms
of this Agreement or any applicable Order.
16.0 TERMINATION OR CANCELLATION AND INDEMNITY AGAINST SUBCONTRACTOR CLAIMS
Boeing shall not be liable for any loss or damage resulting from any
termination pursuant to GTA Section 12.1, except as expressly provided
in GTA Section 12.3 or any cancellation under GTA Section 13.0 except
to the extent that such cancellation shall have been determined by
Boeing and Seller to have been wrongful, in which case such wrongful
cancellation shall be deemed a termination pursuant to GTA Section 12.1
and therefore shall be limited to the payment to Seller of the amount
or amounts identified in GTA Section 12.3. As subcontractor claims are
included in Seller's termination claim pursuant to GTA Section 12.3,
Seller shall indemnify Boeing and hold Boeing harmless from and against
(i) any and all claims, suits and proceedings against Boeing by any
subcontractor or supplier of Seller in respect of any such termination
and (ii) and any and all costs, expenses, losses and damages incurred
by Boeing in connection with any such claim, suit or proceeding.
17.0 ASSURANCE OF PERFORMANCE
A. Seller to Provide Assurance
If Boeing determines, at any time or from time to time, that it is
not sufficiently assured of Seller's fall, timely and continuing
performance hereunder, or if for any other reason Boeing has
reasonable grounds for insecurity, Boeing may request, by notice to
Seller, written assurance (hereafter an "Assurance of Performance")
with respect to any specific matters affecting Seller's performance
hereunder, that Seller is able to perform all of its respective
obligations under this Agreement when and as specified herein. Each
Assurance of Performance shall be delivered by Seller to Boeing as
promptly as possible, but in any event no later than 15 calendar
days following Boeing's request therefore and each Assurance of
Performance shall be accompanied by any information, reports or
other materials, prepared by Seller, as Boeing may reasonably
request. Boeing may suspend all or any part of Boeing's performance
hereunder until Boeing receives an Assurance of Performance from
Seller satisfactory in form and substance to Boeing.
B. Meetings and Information
Boeing may request one or more meetings with senior management or
other employees of Seller for the purpose of discussing any request
by Boeing for Assurance of Performance or any Assurance of
Performance provided by Seller. Seller shall make such persons
available to meet with representatives of Boeing as soon as may be
practicable following a request for any such meeting by Boeing and
Seller shall make available to Boeing any additional information,
reports or other materials in connection therewith as Boeing may
reasonably request.
18.0 RESPONSIBILITY FOR PROPERTY
On delivery to Seller or manufacture or acquisition by it of any
materials, parts, Tooling or other property, title to any of which is
in Boeing, Seller shall assume the risk of and shall be responsible for
any loss thereof or damage thereto. In accordance with the provisions
of an Order, but in any event on completion thereof, Seller shall
return such property to Boeing in the condition in which it was
received except for reasonable wear and tear and except to the extent
that such property has been incorporated in Products delivered under
such Order or has been consumed in the normal performance of work under
such Order.
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS
Seller warrants to Boeing that it has good title to all inventory,
work-in-process, tooling and materials to be supplied by Seller in the
performance of its obligations under any Order ("Inventory"), and that
pursuant to the provisions of such Order, it will transfer to Boeing
title to such Inventory, whether transferred separately or as part of
any Product delivered under the Order, free of any liens, charges,
encumbrances or rights of others.
20.0 PROPRIETARY INFORMATION AND ITEMS
Boeing and Seller shall each keep confidential and protect from
disclosure all (a) confidential, proprietary, and/or trade secret
information; (b) tangible items containing, conveying, or embodying
such information; and (c) tooling obtained from and/or belonging to the
other in connection with this Agreement or any Order (collectively
referred to as "Proprietary Information and Materials"). Boeing and
Seller shall each use Proprietary Information and Materials of the
other only in the performance of and for the purpose of this Agreement
and/or any Order. Provided, however, that despite any other obligations
or restrictions imposed by this Section 20.0, Boeing shall have the
right to use and disclose of Seller's Proprietary Information and
Materials for the purposes of testing, certification, use, sale, or
support of any item delivered under this Agreement, an Order, or any
airplane including such an item; and any such disclosure by Boeing
shall, whenever appropriate, include a restrictive legend suitable to
the particular circumstances. The restrictions on disclosure or use of
Proprietary Information and Materials by Seller shall apply to all
materials derived by Seller or others from Boeing's Proprietary
Information and Materials. Upon Boeing's request at any time, and in
any event upon the completion, termination or cancellation of this
Agreement, Seller shall return all of Boeing's Proprietary Information
and Materials, and all materials derived from Boeing's Proprietary
Information and Materials to Boeing unless specifically directed
otherwise in writing by Boeing. Seller shall not, without the prior
written authorization of Boeing, sell or otherwise dispose of (as scrap
or otherwise) any parts or other materials containing, conveying,
embodying, or made in accordance with or by reference to any
Proprietary Information and Materials of Boeing. Prior to disposing of
such parts or materials as scrap, Seller shall render them unusable.
Boeing shall have the right to audit Seller's compliance with this
Section 20.0. Seller may disclose Proprietary Information and Materials
of Boeing to its subcontractors as required for the performance of an
Order, provided that each such subcontractor first assumes, by written
agreement, the same obligations imposed upon Seller under this Section
20.0 relating to Proprietary Information and Materials; and Seller
shall be liable to Boeing for any breach of such obligation by such
subcontractor. The provisions of this Section 20.0 are effective in
lieu of, and will apply notwithstanding the absence of, any restrictive
legends or notices applied to Proprietary Information and Materials;
and the provisions of this Section 20.0 shall survive the performance,
completion, termination or cancellation of this Agreement or any Order.
This Section 20.0 supersedes and replaces any and all other prior
agreements or understandings between the parties to the extent that
such agreements or understandings relate to Boeing's obligations
relative to confidential, proprietary, and/or trade secret information,
or tangible items containing, conveying, or embodying such information,
obtained from Seller and related to any Product, regardless of whether
disclosed to the receiving party before or after the effective date of
this Agreement.
21.0 COMPLIANCE WITH LAWS
21.1 Seller's Obligation
Seller shall be responsible for complying with all laws, including, but
not limited to, any statute, rule, regulation, judgment, decree, order,
or permit applicable to its performance under this Agreement. Seller
further agrees (1) to notify Boeing of any obligation under this
Agreement which is prohibited under applicable environmental law, at
the earliest opportunity but in all events sufficiently in advance of
Seller's performance of such obligation so as to enable the
identification of alternative methods of performance, and (2) to notify
Boeing at the earliest possible opportunity of any aspect of its
performance which becomes subject to additional environmental
regulation or which Seller reasonably believes will become subject to
additional regulation during the performance of this Agreement.
21.2 Government Requirements
If any of the work to be performed under this Agreement is performed in
the United States, Seller shall, via invoice or other form satisfactory
to Boeing, certify that the Products covered by the Order were produced
in compliance with Sections 6, 7, and 12 of the Fair Labor Standards
Act (29 U. S. C. 201-291), as amended, and the regulations and orders
of the U. S. Department of Labor issued thereunder. In addition, the
following Federal Acquisition Regulations are incorporated herein by
this reference except "Contractor" shall mean "Seller":
FAR 52.222-26 "Equal Opportunity"
FAR 52.222-35 "Affirmative Action for Special Disabled and Vietnam Era
Veterans"
FAR 52.222-36 "Affirmative Action for Handicapped Workers".
22.0 INTEGRITY IN PROCUREMENT
Boeing's policy is to maintain high standards of integrity in
procurement. Boeing's employees must ensure that no favorable treatment
compromises their impartiality in the procurement process. Accordingly,
Boeing's employees must strictly refrain from soliciting or accepting
any payment, gift, favor or thing of value which could improperly
influence their judgment with respect to either issuing a Order or
administering this Agreement. Consistent with this policy, Seller
agrees not to provide or offer to provide any employees of Boeing any
payment, gift, favor or thing of value for the purposes of improperly
obtaining or rewarding favorable treatment in connection with any Order
or this Agreement. Seller shall conduct its own procurement practices
and shall ensure that its suppliers conduct their procurement practices
consistent with these standards. If Seller has reasonable grounds to
believe that this policy may have been violated, Seller shall
immediately report such possible violation to the appropriate Director
of Materiel or Ethics Advisor of Boeing.
23.0 INFRINGEMENT
Seller shall indemnify, defend, and save Boeing and Customers harmless
from all claims, suits, actions, awards (including but not limited to
awards based on intentional infringement of patents known to Seller at
the time of such infringement, exceeding actual damages, and/or
including attorneys' fees and/or costs), liabilities, damages, costs
and attorneys' fees related to the actual or alleged infringement of
any United States or foreign intellectual property right (including but
not limited to any right in a patent, copyright, industrial design or
semiconductor mask work, or based on misappropriation or wrongful use
of information or documents) and arising out of the manufacture, sale
or use of Products by Boeing or Customers. Boeing and/or Customers
shall duly notify Seller of any such claim, suit or action; and Seller
shall, at its own expense, fully defend such claim, suit or action on
behalf of Boeing and/or Customers. Seller shall have no obligation
under this Section 23.0 with regard to any infringement arising from:
(i) Seller's compliance with formal specifications issued by Boeing
where infringement could not be avoided in complying with such
specifications or (ii) use or sale of Products in combination with
other items when such infringement would not have occurred from the use
or sale of those Products solely for the purpose for which they were
designed or sold by Seller. For purposes of this Section 23.0 only, the
term Customer shall not include the United States Government; and the
term Boeing shall include The Boeing Company (Boeing) and all Boeing
subsidiaries and all officers, agents, and employees of Boeing or any
Boeing subsidiary.
24.0 BOEING'S RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS, AND
TOOLING
Seller hereby grants to Boeing an irrevocable, nonexclusive, paid-up
worldwide license to practice and/or use, and license others to
practice and/or use on Boeing's behalf, all of Seller's patents,
copyrights, trade secrets (including, without limitation, designs,
processes, drawings, technical data and tooling), industrial designs,
semiconductor mask works, and tooling (collectively hereinafter
referred to as "Licensed Property") related to the development,
production, maintenance or repair of Products. Boeing hereafter retains
all of the aforementioned license rights in Licensed Property, but
Boeing hereby covenants not to exercise such rights except in
connection with the making, having made, using and selling of Products
or products of the same kind, and then only in the event of any of the
following:
a. Seller discontinues or suspends business operations or the
production of any or all of the Products;
b. Seller is acquired by or transfers any or all of its rights to
manufacture any Product to any third party, whether or not related;
c. Boeing cancels this Agreement or any Order for cause pursuant to
GTA Section 13.0 herein;
d. in Boeing's judgment it becomes necessary, in order for Seller to
comply with the terms of this Agreement or any Order, for Boeing to
provide support to Seller (in the form of design, manufacturing, or
on-site personnel assistance) substantially in excess of that which
Boeing normally provides to its suppliers;
e. Seller's trustee in bankruptcy (or Seller as debtor in possession)
fails to assume this Agreement and all Orders by formal entry of an
order in the bankruptcy court within sixty (60) days after entry of
an order for relief in a bankruptcy case of the Seller, or Boeing
elects to retain its rights to Licensed Property under the
bankruptcy laws;
f. Seller is at any time insolvent (whether measured under a balance
sheet test or by the failure to pay debts as they come due) or the
subject of any insolvency or debt assignment proceeding under state
or non-bankruptcy law; or
g. Seller voluntarily becomes a debtor in any case under bankruptcy
law or, in the event an involuntary bankruptcy petition is filed
against Seller, such petition is not dismissed within thirty (30)
days.
As a part of the license granted under this Section 24.0, Seller shall,
at the written a request of Boeing and at no additional cost to Boeing,
promptly deliver to Boeing any and all Licensed Property considered by
Boeing to be necessary to satisfy Boeing's requirements for Products
and their substitutes.
25.0 NOTICES
25.1 Addresses
Notices and other communications shall be given in writing by personal
delivery, mail, telex, teletype, telegram, facsimile, cable or other
electronic transmission addressed to the respective party as set forth
in the SBP Section 9.0.
25.2 Effective Date
The date on which any such communication is received by the addressee
is the effective date of such communication.
25.3 Approval or Consent
With respect to all matters subject to the approval or consent of
either party, such approval or consent shall be requested in writing
and is not effective until given in writing. With respect to Boeing,
authority to grant approval or consent is limited to Boeing's Materiel
Representative.
26.0 PUBLICITY
Seller will not, and will require that its subcontractors and suppliers
of any tier will not, (i) cause or permit to be released any publicity,
advertisement, news release, public announcement, or denial or
confirmation of the same, in whatever form, regarding any Order or
Products, or the program to which they may pertain, or (ii) use, or
cause or permit to be used, the Boeing name or any Boeing trademark in
any form of promotion or publicity without Boeing's prior written
approval.
27.0 PROPERTY INSURANCE
27.1 Insurance
Seller shall maintain continuously in effect a property insurance
policy covering loss or destruction of or damage to all property in
which Boeing does or could have an insurable interest pursuant to this
Agreement, including but not limited to Tooling, Boeing-furnished
property, raw materials, parts, work-in process, incomplete or
completed assemblies and all other products or parts thereof, and all
drawings, specifications, data and other materials relating to any of
the foregoing in each case to the extent in the possession or under the
effective care, custody or control of Seller, in the amount of full
replacement value thereof providing protection against all perils
normally covered in an "all risk" property insurance policy (including
without limitation fire, windstorm, explosion, riot, civil commotion,
aircraft, earthquake, flood or other acts of God). Any such policy
shall be in the form and with insurers acceptable to Boeing and shall
(i) provide for payment of loss thereunder to Boeing, as loss payee, as
its interests may appear and (ii) contain a waiver of any rights of
subrogation against Boeing, its subsidiaries, and their respective
directors, officers, employees and agents.
27.2 Certificate of Insurance
Prior to commencement of this Agreement, Seller shall provide to
Boeing's Materiel Representative, for Boeing's review and approval,
certificates of insurance reflecting full compliance with the
requirements set forth in GTA Section 27. 1. Such certificates shall be
kept current and in compliance throughout the -period of this Agreement
and shall provide for thirty (30) days advanced written notice to
Boeing's Material Representative in the event of cancellation,
non-renewal or material change adversely affecting the interests of
Boeing.
27.3 Notice of Damage or Loss
Seller shall give prompt written notice to Boeing's Materiel
Representative of the occurrence of any damage or loss to any property
required to be insured herein. If any such property shall be damaged or
destroyed, in whole or in part, by an insured peril or otherwise, and
if no Event of Default shall have occurred and be continuing, then
Seller may, upon written notice to Boeing, settle, adjust, or
compromise any and all such loss or damage not in excess of Two Hundred
Fifty Thousand Dollars ($250,000) in any one -occurrence and Five
Hundred Thousand Dollars ($500,000) in the aggregate. Seller may
settle, adjust or compromise any other claim by Seller only after
Boeing has given written approval, which approval shall not be
unreasonably withheld.
28.0 RESPONSIBILITY FOR PERFORMANCE
Seller shall be responsible for the requirements of this Agreement and
any Order referencing this Agreement. Seller shall bear all risks of
providing adequate facilities and equipment to perform each Order in
accordance with the terms thereof. Seller shall include as part of its
subcontracts those elements of the Agreement which protect Boeing's
rights including but not limited to right of entry provisions,
proprietary information and rights provisions and quality control
provisions. In addition, Seller shall provide to its subcontractors
sufficient information to clearly document that the work being
performed by Seller's subcontractor is to facilitate performance under
this Agreement or any Order. Sufficient information may include but is
not limited to Order number, GTA number or the name of Boeing's
Materiel Representative. No subcontracting by Seller shall relieve
Seller of its obligation under the applicable Order.
28.1 Subcontracting
Seller may not procure any Product, as defined in the applicable Order,
from a third party in a completed or a substantially completed form
without Boeing's prior written consent. Where required by the
requirements of the Order, no raw material and/or material process may
be incorporated in a Product unless: (a) Seller uses an approved source
or (b) Boeing has surveyed and qualified Seller's receiving inspection
personnel and laboratories to test the specified raw materials an/or
material process. No waiver of survey and qualification requirements
will be effective unless granted by Boeing's Engineering and Quality
Control Departments. Utilization of a Boeing-approved raw material
source does not constitute a waiver of Seller's responsibility to meet
all specification requirements.
28.2 Reliance
Boeing's entering into this Agreement is in part based upon Boeing's
reliance on Seller's ability, expertise and awareness of the intended
use of the Products. Seller agrees that Boeing and Boeing's customers
may rely on Seller as an expert, and Seller will not deny any
responsibility or obligation hereunder to Boeing or Boeing's customers
on the grounds that Boeing or Boeing's customers provided
recommendations or assistance in any phase of the work involved in
producing or supporting the Products, including but not limited to
Boeing's acceptance of specifications, test data or the Products.
28.3 Assignment
Each Order shall inure to the benefit of and be binding on each of the
parties hereto and their respective successors and assigns, provided
however, that no assignment of any rights or delegation of any duties
under such Order is binding on Boeing unless Boeing's written consent
has first been obtained. Notwithstanding the above, Seller may assign
claims for monies due or to become due under any Order provided that
Boeing may recoup or setoff any amounts covered by any such assignment
against any indebtedness of Seller to Boeing, whether arising before or
after the date of the assignment or the date of this Agreement, and
whether arising out of any such Order or any other agreement between
the parties. Boeing may settle all claims arising out of any Order,
including termination claims, directly with Seller. Boeing may
unilaterally assign any rights or title to property under the Order to
any wholly-owned subsidiary of The Boeing Company.
29.0 NON-WAIVER
Boeing's failure at any time to enforce any provision of an Order does
not constitute a waiver of such provision or prejudice Boeing's right
to enforce such provision at any subsequent time.
30.0 HEADINGS
Section headings used in this Agreement are for convenient reference
only and do not affect the interpretation of the Agreement.
31.0 PARTIAL INVALIDITY
If any provision of any Order is or becomes void or unenforceable by
force or operation of law, the other provisions shall remain valid and
enforceable.
32.0 APPLICABLE LAW, JURISDICTION
Each Order, including all matters of construction, validity and
performance, shall in all respects be governed by, and construed and
enforced in accordance with, the law as set forth in SBP Section 5.0.
33.0 AMENDMENT
Oral statements and understandings are not valid or binding. Except as
otherwise provided in GTA Section 10.0 and SBP Section 12.0, no Order
may be changed or modified except by a writing signed by Seller and
Boeing's Materiel Representative.
34.0 LIMITATION
Seller may not (except to provide an inventory of Products to support
delivery acceleration and to satisfy reasonable replacement and Spares
requirements) manufacture or fabricate Products or procure any goods in
advance of the reasonable flow time required to comply with the
delivery schedule in the applicable Order. Notwithstanding any other
provision of an Order, Seller is not entitled to any equitable
adjustment or other modification of such Order for any manufacture,
fabrication, or procurement of Products not in conformity with the
requirements of the Order, unless Boeing's written consent has first
been obtained. Nothing in this Section 34.0 shall be construed as
relieving Seller of any of its obligations under the Order.
35.0 TAXES
35.1 Inclusion of Taxes in Price
All taxes, including but not limited to federal, state and local income
taxes, value added taxes, gross receipt taxes, property taxes, and
custom duties taxes are deemed to be included in the Order price,
except applicable sales or use taxes on sales to Boeing ("Sales Taxes")
for which Boeing has not supplied a valid exemption certificate or
unless otherwise indicated on the applicable Order. Any taxes
applicable to tooling acquired by Buyer under this Order will be paid
by Seller to the appropriate government taxing authority. Additionally,
Buyer shall reimburse Seller for all personal property taxes applicable
to the Tooling after receipt by Buyer of Seller's invoice for such
taxes for the amount of tax imposed by the state or local taxing
authority.
35.2 Litigation
In the event that any taxing authority has claimed or does claim
payment for Sales Taxes, Seller shall promptly notify Boeing, and
Seller shall take such action as Boeing may direct to pay or protest
such taxes or to defend against such claim. The actual and direct
expenses, without the addition of profit and overhead, of such defense
and the amount of such taxes as ultimately determined as due and
payable shall be paid directly by Boeing or reimbursed to Seller. If
Seller or Boeing is successful in defending such claim, the amount of
such taxes recovered by Seller, which had previously been paid by
Seller and reimbursed by Boeing or paid directly by Boeing, shall be
immediately refunded to Boeing.
35.3 Rebates
If any taxes paid by Boeing are subject to rebate or reimbursement,
Seller shall take the necessary actions to secure such rebates or
reimbursement and shall promptly refund to Boeing any amount recovered.
36.0 FOREIGN PROCUREMENT OFFSET
With respect to work covered by the Order, Seller shall use its best
efforts to cooperate with Boeing in the fulfillment of any foreign
offset program obligation that Boeing may have accepted as a condition
of the sale of Boeing's products. In the event that Seller solicits
bids or proposals for, or procures or offers to procure any goods or
services relating to the work covered by an Order from any source
outside of the United States, Boeing shall be entitled, to the
exclusion of all others, to all industrial benefits and other "offset"
credits which may result from such solicitations, procurements or
offers to procure. Seller agrees to take any actions that may be
required on its part to assure that Boeing receives such credits.
37.0 ENTIRE AGREEMENT ORDER OF PRECEDENCE
37.1 Entire Agreement
The Order sets forth the entire agreement, and supersedes any and all
other prior agreements understandings and communications between Boeing
and Seller related to the subject matter of an Order. The rights and
remedies afforded to Boeing or Customers pursuant to any provisions of
an Order are in addition to any other rights and remedies afforded by
any other provisions of this Order, by law or otherwise.
37.2 Incorporated by Reference
In addition to the documents previously incorporated herein by
reference, the documents listed below are by this reference made a part
of this Agreement:
A. Engineering Drawing by Part Number and Related Outside Production
Specification Plan (OPSP).
B. Any other exhibits or documents agreed to by the parties to be a
part of this Agreement.
37.3 Order of Precedence
In the event of a conflict or inconsistency between any of the terms of
the following documents, the following order of precedence shall
control:
A. SBP (excluding the Administrative Agreement identified in E below)
B. This General Terms Agreement (excluding the documents identified in
D and F below)
C. Order (excluding the documents identified in A and B above)
D. Engineering Drawing by Part Number and, if applicable, related
Outside Production Specification Plan (OPSP).
E. Administrative Agreement (If Applicable)
F. Any other exhibits or documents the parties agree shall be part of
the Agreement.
37.4 Disclaimer
Unless otherwise specified on the face of the applicable Order, any
CATIA Dataset or translation thereof (each or collectively "Data)
furnished by Boeing is furnished as an accommodation to Seller. It is
the Seller's responsibility to compare such Data to the comparable two
dimensional computer aided design drawing to confirm the accuracy of
the Data.
BOEING HEREBY DISCLAIMS, AND SELLER HEREBY WAIVES, ALL WARRANTIES AND
LIABILITIES OF BOEING AND ALL CLAIMS AND REMEDIES OF SELLER, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT IN ANY
CATIA DATASET OR TRANSLATION THEREOF, INCLUDING, WITHOUT LIMITATION,
ANY (A) IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A
PARTICULAR PURPOSE, (B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
DEALING OR PERFORMANCE OR USAGE OF TRADE, (C) RECOVERY BASED UPON TORT,
WHETHER OR NOT ARISING FROM BOEING'S NEGLIGENCE, AND (D) ANY RECOVERY
BASED UPON DAMAGED PROPERTY, OR OTHERWISE BASED UPON DAMAGED PROPERTY,
OR OTHERWISE BASED UPON LOSS OF USE OR PROFIT OR OTHER INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
EXECUTED in duplicate as of the date and year first written above by
the duly authorized representatives of the parties.
THE BOEING COMPANY ▇▇▇▇▇▇▇'▇ Metal, Inc.
By and Through its Division
Boeing Commercial Airplane Group
_________________________________ ______________________________________
Signature Signature
_________________________________ ______________________________________
Name: Name:
_________________________________ ______________________________________
Title: Title:
_________________________________ ______________________________________
Date: Date:
POP
SPECIAL BUSINESS PROVISIONS
between
THE BOEING COMPANY
and
▇▇▇▇▇▇▇'▇ METAL, INC.
Number
POP-65323-0235
SPECIAL BUSINESS PROVISIONS
TABLE OF CONTENTS
Section Item
------- ----
1.0 DEFINITIONS
2.0 PURCHASE ORDER NOTE
3.0 PRICES
3.1 Product Pricing
3.2 Manufacturing Configuration Baseline
3.3 Packaging
4.0 GOVERNING QUALITY ASSURANCE REQUIREMENT
5.0 APPLICABLE LAW/JURISDICTION
6.0 PRODUCT ASSURANCE
7.0 PAYMENT
7.1 Recurring Cost
7.2 Non-Recurring Cost
8.0 ACCEL/DECEL AT NO COST
9.0 NOTICES
9.1 Addresses
10.0 OBLIGATION TO PURCHASE AND SELL
11.0 COST AND FINANCIAL PERFORMANCE VISIBILITY
12.0 CHANGES
12.1 Changes to the Statement of Work
12.2 Computation of Equitable Adjustment
12.3 Obsolescence
12.4 Change Absorption
12.5 Planning Schedule
12.6 Value Engineering
12.7 Reduction in Quantity to be Delivered
13.0 SPARES AND OTHER PRICING
13.1 Spares
13.2 Short Flow Production Requirements
13.3 Tooling
13.4 Pricing of Boeing's Supporting Requirements
13.5 Pricing of Requirements for Modification or Retrofit
13.6 Similar to Pricing
14.0 STATUS REPORTS/REVIEWS
15.0 FOREIGN PROCUREMENT REPORT
16.0 SUPPLIER FURNISHED MATERIEL
17.0 ASSIGNMENT
18.0 INVENTORY AT CONTRACT COMPLETION
19.0 OWNERSHIP OF INTELLECTUAL PROPERTY
19.1 Technical Work Product
19.2 Inventions and Patents
19.3 Works of Authorship and Copyrights
19.4 Pre-Existing Inventions and Works of Authorship
20.0 ADMINISTRATIVE AGREEMENT
21.0 GUARANTEED WEIGHT REQUIREMENTS
22.0 SUPPLIER DATA REQUIREMENTS
23.0 DEFERRED PAYMENT TERMS
24.0 SOFTWARE PROPRIETARY INFORMATION RIGHTS
Attachment I Work Statement and Pricing
Attachment 2 Foreign Procurement Report
Attachment 3 Rates and Factors
Attachment 4 Boeing AOG Coverage
Attachment 5 Boeing AOG/Critical Shipping Notification
AMENDMENTS
AMENDMENT
NUMBER DESCRIPTION DATE APPROVAL
--------- ----------- ---- --------
SPECIAL BUSINESS PROVISIONS
THESE SPECIAL BUSINESS PROVISIONS are entered into as of August _____, 1998 by
and between ▇▇▇▇▇▇▇'▇ Metal, Inc., a Missouri corporation with its principal
office in St ▇▇▇▇▇▇▇, Missouri ("Seller"), and The Boeing Company, a Delaware
corporation with an office in Seattle, Washington acting by and through its
division the Boeing Commercial Airplane Group ("Boeing").
RECITALS
A. Boeing and Seller entered into a General Terms Agreement GTA #
BCA-65323-0221, dated August __, 1998 (the "Agreement") which is
incorporated herein and made a part hereof by this reference, for the
sale by Seller and purchase by Boeing of Products.
B. Boeing and Seller desire to include these Special Business Provisions
("SBP") relating to the sale by Seller and purchase by Boeing of
Products.
Now, therefore, in consideration. of the mutual covenants set forth herein, the
parties agree as follows:
PROVISIONS
1.0 DEFINITIONS
The definitions used herein shall be the same as used in the Agreement.
2.0 PURCHASE ORDER NOTE
The following note shall be contained in any Order to which these SBP
are applicable:
This Order is subject to and incorporates by this reference SBP
POP-65323-0235 between The Boeing Company and LMI Aerospace, Inc. dated
August ___, 1998.
Each Order bearing such note shall be governed by and be deemed to
include the provisions of these SBP.
3.0 PRICES
3.1 Product Pricing
The prices and applicable period of performance of Products scheduled
for delivery under this SBP are set forth in Attachment 1. Prices are
in United States dollars, F.O.B. St. ▇▇▇▇▇▇▇, Missouri; Auburn,
Washington or Wichita, Kansas, as appropriate.
3.1.1 Option Pricing
NOT APPLICABLE
3.1.2 Exercise of Option
NOT APPLICABLE
3.2 Manufacturing Configuration Baseline
Unit pricing for each Product or part number shown in Attachment I is
based on the latest revisions of the engineering drawings or
specifications at the time of the signing of this SBP.
3.3 Packaging
The prices shown in Attachment I include packaging costs and all
materials and labor required to package Products identified in
Attachment 1. Packaging shall be furnished by the Seller in accordance
with Document M6-1025, Volume II, "Supplier Part Protection Guide" or
Document D200-10038-2 "Supplier Packaging Requirements" as applicable.
In the case of Products to be shipped directly to Customers, A.T.A.
Specification 300 "Specification for Packaging of Airline Supplies"
shall apply unless otherwise directed by Boeing.
4.0 GOVERNING QUALITY ASSURANCE REQUIREMENT
All work performed under this SBP shall be in accordance with the
following document which is incorporated herein and made a part hereof
by this reference:
Document D1-9000, "Advanced Quality System for Boeing Suppliers," as
amended from time to time.
5.0 APPLICABLE LAW JURISDICTION
Each Order, including all matters of construction, validity and
performance, shall in all respects be governed by, and construed and
enforced in accordance only with the law of the State of Washington as
applicable to contracts entered into and to be performed wholly within
such State between citizens of such State, without reference to any
rules governing conflicts of law. Seller hereby irrevocably consents to
and submits itself exclusively to the jurisdiction of the applicable
courts of the State and the federal courts therein for the purpose of
any suit, action or other judicial proceeding arising out of or
connected with any Order or the performance or subject matter thereof.
Seller hereby waives and agrees not to assert by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any
claim that (a) Seller is not personally subject to the jurisdiction of
the above-named courts, (b) the suit, action or proceeding is brought
in an inconvenient forum or (c) the venue of the suit, action or
proceeding is improper.
6.0 PRODUCT ASSURANCE
6.1 Governing Document
Seller acknowledges that Boeing and Customers must be able to rely on
each Product performing as specified and that Seller will provide all
required support. Accordingly, the following provisions and document(s)
are incorporated herein and made a part hereof:
"Boeing Designed, Sub-Contracted Products Manufacturers Warranty"
Boeing Document M6-1124-3.
7.0 PAYMENT
7.1 Recurring Price
Unless otherwise provided in the applicable Order, payment of the
recurring price shall be made in accordance with Form X-27981 "Pay From
Receipt - Additional Terms and Conditions Regarding Invoicing and
Payment". Payment terms shall be net thirty (30) days except as
otherwise agreed to by the parties. All payments are subject to
adjustment for shortages, credits and rejections.
7.2 Non-Recurring Price/Special Charges
Unless otherwise provided in the applicable Order, any non-recurring
price payable by Boeing under Attachment 1 shall be paid within the
term discount period or thirty (30) calendar days (whichever is later)
after receipt by Boeing of both acceptable Products and a correct
invoice.
8.0 ACCELERATION/DECELERATION AT NO COST
Notwithstanding GTA Section 10.0, and subject to the provisions of SBP
Section 13.2, Boeing may make changes in the delivery schedule without
additional cost or change to the unit price stated in the applicable
Order if (a) the delivery date of the Product under such Order is on or
before the last date of contract, if applicable, and (b) Boeing
provides Seller with written notice of such changes.
Upon receipt of written notice of the change, Seller shall make its
best effort to implement the change as soon as possible, but in no
event shall the change be implemented later than eight (8) weeks after
notification of a schedule acceleration.
9.0 NOTICES
9.1 Addresses
Notices and other communications shall be given in writing by personal
delivery, United States mail, telex, teletype, telegram, facsimile,
cable or electronic transmission addressed to the respective party as
follows:
To Boeing: Attention: Buyer: ▇▇▇ ▇▇▇▇▇ M/S 38-KX
BOEING COMMERCIAL AIRPLANE GROUP
MATERIEL DIVISION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
To Seller: Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ Metals, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
10.0 OBLIGATION TO PURCHASE AND SELL
Boeing and Seller agree that in consideration of the prices set forth
under Attachment 1, Boeing shall issue Orders for Products from time to
time to Seller for Boeing's requirements. Such Products shall be
shipped at any scheduled rate of delivery, as determined by Boeing, and
Seller shall sell to Boeing Boeing's requirements of such Products,
provided that, without limitation on Boeing's right to determine its
requirements, Boeing shall not be obligated to issue any Orders for any
given Product if:
A. Any of Boeing's customers specify an alternate product;
B. Such Product is, in Boeing's reasonable judgment, not
technologically competitive at any time, for reasons including
but not limited to the availability of significant changes in
technology, design, materials, specifications, or
manufacturing processes which result in a reduced price or
weight or improved appearance, functionality, maintainability
or reliability;
C. Boeing gives reasonable notice to Seller of a change in any of
Boeing's aircraft which will result in Boeing no longer
requiring such Product for such aircraft;
D. Seller has materially defaulted in any of its obligations
under any Order, whether or not Boeing has issued a notice of
default to Seller pursuant to GTA Section 13.0; or,
E. Boeing reasonably determines that Seller cannot support
Boeing's requirements for Products in the amounts and within
the delivery schedules Boeing requires.
11.0 COST AND FINANCIAL PERFORMANCE VISIBILITY
Seller shall provide all necessary cost support data, source documents
for direct and indirect costs, and assistance at the Seller's facility
for cost performance reviews performed by Boeing pursuant to any Order.
Furthermore, Seller shall provide financial data, on a quarterly basis,
or as requested, to Boeing's Credit Office for credit and financial
condition reviews. Said data shall include but not be limited to
balance sheets, schedule of accounts payable and receivable, major
lines of credit, creditors, income statements (profit and loss), cash
flow statements, firm backlog, and headcounts. Copies of such data are
to be made available within 72 hours of any written request by Boeing.
This data is required in addition to the cost data provided pursuant to
GTA Section 9.0. All such information shall be treated as confidential
in accordance with GTA Section 20.0.
12.0 CHANGES
12.1 Changes to the Statement of Work
Boeing may direct Seller within the scope of the applicable Order and
in accordance with the provisions of GTA Section 10.0, to increase or
decrease the work to be performed by the Seller in the manufacture of
any Product.
12.2 Computation of Equitable Adjustment
The Rates and Factors set forth in Attachment 3, which by this
reference is incorporated herein, shall be used to determine the
equitable adjustment, if any, (including equitable adjustments, if any,
in the prices of Products to be incorporated in Derivative Aircraft),
to be paid by Boeing pursuant to SBP Section 12.1 and GTA Section 10.0
for each individual change.
12.3 Obsolescence
Claims for obsolete or surplus material and work-in-process created by
change orders issued pursuant to this Section shall be subject to the
procedures set forth in GTA Section 12.0, except that Seller may not
submit a claim for obsolete or surplus material resulting from an
individual change order that has a total claim value of Two Thousand
Five Hundred Dollars ($2,500.00) or less. Payment for obsolete or
surplus materials shall be made by check deposited as first class mail
to the address designated by Seller in SBP Section 9.1. Payment will be
made on the tenth (10th) day of the month following the month of the
obsolescence claim settlement.
12.4 Change Absorption
12.4.1 Prior to 100% Engineering Release (Drawing Revision Level New)
12.4.1.1 Generally
Notwithstanding the provisions of GTA Section 10.0 and SBP Section
12.1, no equitable adjustment in the prices or schedules of any Order
shall be made for any change initiated by Boeing made prior to the date
on which all engineering drawings that change the technical
requirements, descriptions, specifications, statement of work, drawing
or designs ("Technical Change(s)") have been released by Boeing ("100%
Engineering Release") provided, that an equitable adjustment shall be
made for:
a. Any Technical Change which is a change between raw material
classifications such as a change from aluminum to steel or titanium to
plastic. Not included as a Technical Change for purposes of this
Section are changes within a raw material classification such as a
change from 7050 Aluminum to 7075 Aluminum;
b. Any Technical Change which adds or deletes a process
specification including but not limited to chem milling, chrome
plating, anodizing, painting, priming and heat treating.
12.4.1.2 Claims
Claims for equitable adjustment for Technical Changes shall be
submitted in writing within thirty (3 0) days after 100% Engineering
Release.
12.4.2 Subsequent to 100% Engineering Release
12.4.2.1 Generally
Notwithstanding the provisions of GTA Section 10.0 and SBP Section
12.1, no equitable adjustment shall be made to the recurring or
non-recurring prices after the date of 100% Engineering Release for any
change initiated by Boeing unless the value of such change (debit or
credit) is greater than or equal to two percent (2%) of the then
current unit price for the Product (recurring) or is greater than or
equal to two percent (2%) of the total then current non-recurring price
as set forth in Attachment 1. For purposes of this Section, the then
current unit price or total non-recurring price shall be the price
identified in Attachment I plus any and all price adjustments agreed to
previously by the parties.
12.4.2.2 Claims
Claims shall be made individually for each Product and for each change.
Each claim shall be considered separately for application of the two
percent (2%) threshold. Changes may not be combined for the purposes of
exceeding the two percent (2%) threshold set forth herein.
12.5 Planning Schedule
Any planning schedule or quantity estimate provided by Boeing shall be
used solely for production planning. Boeing may purchase Products in
different quantities and specify different delivery dates as necessary
to meet Boeing's requirements. Such planning schedule and quantity
estimate shall be subject to adjustment from time to time. Any such
adjustment is not a change under GTA Section 10.0.
12.6 Value Engineering
Seller may from time to time submit proposals to Boeing to change
drawings, designs, specifications or other requirements that:
a. decrease Seller's performance costs; or
b. produce a net reduction in the cost to Boeing of installation,
operation, maintenance or production of the Product.
Provided, that such change shall not impair any essential functions or
characteristics of the Products or Tooling.
12.6.1 Submission of Proposal
Proposals shall be submitted to Boeing's Materiel Representative.
Boeing shall not be liable for any delay in acting upon a proposal.
Boeing's decision to accept or reject any proposal shall be final. If
there is a delay and the net result in savings no longer justifies the
investment, Seller will not be obligated to proceed with the change.
Seller has the right to withdraw, in whole or in part, any proposal not
accepted by Boeing within the time period specified in the proposal.
Seller shall submit, as a minimum, the following information with the
proposal:
a. description of the difference between the existing requirement
and the proposed change, and the comparative advantages and
disadvantages of each;
b. the specific requirements which must be changed if the
proposal is adopted;
c. the cost savings and Seller's implementation costs;
d. Each proposal shall include the need dates for engineering
release and the time by which a proposal must be approved so
as to obtain the maximum cost reduction.
12.6.2 Acceptance and Cost Sharing
Boeing may accept, in whole or in part, any proposal by issuing a
change order. Until such change has been issued, Seller shall remain
obligated to perform in accordance with the terms and requirements of
the original Order as written. Boeing and Seller shall share the
savings as follows:
(50%) savings to Boeing; (50%) savings to Seller.
Seller shall include with each proposal verifiable cost records and
other data as required by Boeing for proposal review and analysis.
Each party shall be responsible for its own implementation costs,
including but not limited to non-recurring costs.
12.6.3 Cost Savings Computation
A change order shall be issued by Boeing and the unit price shall be
reduced in an amount equal to the savings portion attributable to
Boeing as set forth above. The applicable unit price as set forth in
Attachment 1 Statement of Work shall be amended to reflect such change.
EXAMPLE:
Current Price: $600.00
Proposed Cost Savings: $ 1 00.00/unit
Boeing's Percentage: 50.0%
Seller's Percentage: 50.0%
Step by Step Computation:
1. $100.00 unit savings x 50.0% Boeing's percentage of
savings = $50.00 Boeing savings.
2. $100.00 unit savings x 50.0% Seller's percentage of
savings = $50.00 Seller savings.
3. Net affect to the unit cost = $50.00
New Unit Price For Units = $550.00
12.6.4 Weight Reduction Proposals
Seller is encouraged to submit proposals to Boeing that reduce the
Product's weight without impairing any essential functions or
characteristics of the Product.
Seller shall submit such proposals in accordance with SBP Section
12.6.1 above. The amount of any costs or savings that result from a
weight reduction proposal shall be agreed by Boeing and Seller. Seller
shall include with each proposal verifiable cost records and other data
as required by Boeing for proposal review and analysis.
Boeing may accept in whole or in part, any such proposal by issuing a
change order to the applicable Order.
12.6.5 Process Improvement
Boeing and Seller agree to work together to identify areas of
improvement which affect the manufacturing and assembly process at
Seller's facility, Seller's subcontractor's facilities and Boeing's
facilities. Manufacturing and assembly processes include but are not
limited to inventory turn rates, lead time reductions, contracting
strategies, setup reductions and lot size reductions. Boeing and Seller
agree to use the following metrics to evaluate improvement:
1. Inventory Turns - defined as annual Costs of Goods
Sold/Inventory value.
2. Productivity - defined as Annual Sales/Average
Employee Count
3. Asset Utilization - defined as Total Assets/Annual
Sales
Additional metrics may be added and evaluated as agreed to by the
parties. Where Boeing and Seller can identify areas of improvement, the
parties will determine the amount of savings which will result from the
improvements and share the savings as set forth in 12.6.2 above. Where
a savings is identified and documented, the parties agree to reduce the
Product unit price by that amount apportioned to Boeing as identified
above.
12.6.6 Raw Material Cost Improvement
Boeing is currently in the process of reviewing raw material lead
times, costs and their impact on the subcontractor base. Seller agrees
to support Boeing in its efforts to identify areas of improvement
involving raw materials. When requested by Boeing, Seller shall
identify usage, lead time, contractual impediments or any other factor
which may affect Boeing's ability to implement raw material program
improvements. Boeing's program to improve lead time and price for raw
material is intended to support all divisions, subsidiaries and
affiliates of The Boeing Company.
Where Boeing is able to implement a program and savings are identified
and documented, the parties agree to reduce the Product's unit price by
the corresponding reduction in raw material price plus the applicable
reduction in the corresponding markups. These reductions shall be
incorporated on the first delivery of applicable Product(s) which
incorporate the revised pricing for raw material or as otherwise agree
to by the parties in writing.
The implementation of these programs by Boeing and Seller's
participation in these programs shall not impair, prejudice or relieve
Seller of its obligations under any applicable Order.
12.7 Reduction in Quantity to be Delivered
NOT APPLICABLE
13.0 SPARES AND OTHER PRICING
13.1 Spares
For purposes of this Section, the following definitions shall apply:
A. AIRCRAFT ON GROUND (AOG) - means the highest Spares priority.
Seller will expend best efforts to provide the earliest
possible delivery of any Spare designated AOG by Boeing. Such
effort includes but is not limited to working twenty-four (24)
hours a day, seven days a week and use of premium
transportation. Seller shall specify the delivery date and
time of any such AOG Spare within two (2) hours of receipt of
an AOG Spare request.
B. CRITICAL - means an imminent AOG work stoppage. Seller will
expend best efforts to provide the earliest possible delivery
of any Spare designated Critical by Boeing. Such effort
includes but is not limited to working two (2) shifts a day,
five (5) days a week and use of premium transportation. Seller
shall specify the delivery date and time of any such Critical
Spare within the same working day of receipt of a Critical
Spare request.
C. EXPEDITE (CLASS 1) - means a Spare required in less than
Seller's normal lead time. Seller will expend best efforts to
meet the requested delivery date. Such effort includes but is
not limited to working overtime and use of premium
transportation.
D. ROUTINE (CLASS III) - means a Spare required in Seller's
normal lead time.
E. POA REQUIREMENT (POA) - means any detail component needed to
replace a component on an End Item Assembly currently in
Boeing's assembly line process.
Seller shall expend best efforts feasible to provide the
earliest possible delivery of any Spare designated as POA by
Boeing. Such effort includes but is not limited to working
twenty-four (24) hours a day, seven days a week and use of
premium transportation. Seller shall specify the delivery date
and time of any such POA within two (2) hours of an AOG Spare
request.
F. IN-PRODUCTION - means any Spare with a designation of AOG,
Critical, Expedite, Routine, POA or End Item Assembly which is
in the current engineering configuration for the Product and
is used on a model aircraft currently being manufactured by
Boeing.
G. NON-PRODUCTION REQUIREMENTS - means any Spare with a
designation of AOG, Critical, Expedite and Routine
requirements which is used on model aircraft no longer being
manufactured by Boeing (Post Production) or is in a
non-current engineering configuration for the Product (Out of
Production).
H. BOEING PROPRIETARY SPARE - means any Spare which is
manufactured (i) by Boeing, or (ii) to Boeing's detailed
designs with Boeing's authorization or (iii) in whole or in
part using Boeing's Proprietary Materials.
13.1.1 Spares Support
Seller shall provide Boeing with a written Spares support process
describing Seller's plan for supporting AOG and Critical commitments
and manufacturing support. The process must provide Boeing with the
name and number of a twenty-four (24) hour contact for coordination of
AOG and Critical requirements. Such contact shall be equivalent to the
coverage provided by Boeing to its Customers as outlined in Attachment
4 "Boeing AOG Coverage" which is incorporated herein and made a part
hereof by this reference.
Seller shall notify Boeing as soon as possible via fax, telecon, or as
otherwise agreed to by the parties of each AOG and Critical requirement
shipment using the form identified in Attachment 5 "Boeing AOG and
Critical Shipping Notification". Such notification shall include time
and date shipped, quantity shipped, Order, pack slip, method of
transportation and air ▇▇▇▇ if applicable. Seller shall also notify
Boeing immediately upon the discovery of any delays in shipment of any
requirement and identify the earliest revised shipment possible.
13.1.2 Reclassification or Re-exercises
Boeing may on occasion, instruct Seller to re-prioritize or reclassify
an existing requirement in order to improve or otherwise change the
established shipping schedule. Seller shall expend the effort required
to meet the revised requirement as set forth above in the definitions
of the requirements. Seller's commitment of a delivery schedule shall
be given in accordance with that set forth above for the applicable
classification but in no case shall it exceed twenty-four (24) hours
from notification by Boeing.
13.1.3 Spare Pricing
Except as set forth in subsections 13.1.3.1 and 13.1.3.2 below, the
price for {{Boeing Proprietary}} Spare(s) shall be the same as the
production price for the Products as listed on Attachment 1, in effect
at the time the Spare(s) are ordered. POA parts shall be priced so that
the sum of the prices for all POA parts of an End Item Assembly equals
the applicable recurring portion of the End Item Assembly.
13.1.3.1 Aircraft On Ground (AOG), Critical Spares and POA Requirements
The price for AOG, Critical Spares and POA requirements shall be the
price for such Products listed on Attachment I in effect when such
Spares are ordered, multiplied by a factor of 1.07 when the date of the
Order is four weeks or less before the scheduled delivery date.
13.1.3.2 Expedite Spares (Class 1)
The price for Expedite Spares shall be the price for such Products
listed on Attachment I in effect when such Spares are ordered,
multiplied by a factor of 1.05 when the date of the Order is between
eight weeks and four weeks before the scheduled delivery date.
13.1.4 Special Handling
The price for all effort associated with the handling and delivery of
Spare(s) is deemed to be included in the price for such Spare(s).
Provided, that if Boeing directs delivery of Spares to an F.O.B. point
other than Seller's plant, Boeing shall reimburse Seller for shipping
charges, including insurance, paid by Seller from the plant to the
designated F.O.B. point. Such charges shall be shown separately on all
invoices.
13.2 Short Flow Production Requirements
Expedite charges, if any, to be paid for short flow production
requirements shall not exceed the amount payable under SBP Sections
13.1.3.1 and 13.1.3.2 above for that portion of the Order which is
released short flow except as otherwise agreed to in writing by Boeing.
In the event Boeing agrees to pay an amount in excess of that set forth
in SBP Section 13.1.3.1 above, Seller shall provide data to verify
expedite charges requested. If Seller fails to meet the required
delivery, Boeing shall not be obligated to pay the agreed upon amount.
13.3 Tooling
13.3.1 Responsible Party
Where Boeing agrees to pay to Seller for Tooling to support the
manufacture and delivery of applicable Product(s) identified herein,
the amount shall be set forth in Attachment 1. The costs of necessary
repair and maintenance to the Tooling is included in such amount. In
addition to the requirements set forth in SBP Section 7.2 of this SBP,
the Seller shall comply with the Terms and Conditions applicable to the
Blanket Tooling Purchase Control Order established with Seller who
possess or controls Tooling. Furthermore, Seller must include a
properly prepared certified tool list, where applicable, as specified
in the M31-24 Document, "Boeing Supplier Tooling Manual." Invoices
received with incorrect, improperly prepared or incomplete certified
tool lists will be returned for correction prior to payment. Invoices
shall be dated concurrent with, or subsequent to, shipment of the
Products.
13.3.2 Boeing Furnished Tooling
In the event Boeing furnishes Tooling to Seller to support the d6livery
of Product(s), Seller shall comply with the Terms and Conditions
applicable to the Blanket Tooling Purchase Control Order established
with Seller who possess or controls Tooling. No repair, replacement or
rework required shall be performed without Boeing's prior written
consent. Boeing shall notify Seller of, what if any, action shall be
required for all discrepant Tooling.
13.4 Pricing of Boeing's Supporting Requirements
Any Products required to assist Boeing's supporting requirements,
including but not limited to requirements for color and appearance
samples, Boeing-owned simulators, test requirements, factory support,
flight test spares will be provided for not more than the applicable
price as set forth in Attachment 1.
13.5 Pricing of Requirements for Modification or Retrofit
Any Products required by Boeing to support a modification or retrofit
program shall be provided for not more than the applicable price as set
forth in Attachment 1.
13.6 Similar Pricing
New Products ordered by Boeing that are similar to or within Product
families of Products currently being manufactured by Seller shall be
priced using the same methodology or basis as that used to price the
existing Product(s).
14.0 STATUS REPORTS/REVIEWS
When requested by Boeing, Seller shall update and submit, as a minimum,
monthly status reports on data requested by Boeing using a method
mutually agreed upon by Boeing and Seller.
When requested by Boeing, Seller shall provide to Boeing a
manufacturing milestone chart identifying the major purchasing,
planning and manufacturing operations for the applicable Product(s).
Upon request by Boeing, a program review may be held between the
parties. The location of such review shall be mutually agreed to by the
parties. The purpose of the review is to improve communication and
understanding between the parties to ensure program success.
15.0 PROVISIONS FOR OFFSET/BUSINESS STRATEGIES FOREIGN PROCUREMENT REPORT
Seller agrees to cooperate with Boeing in identifying possible
subcontractors for work under any Order that support Boeing's offset or
business strategies. Prior to releasing any request for proposal to a
subcontractor to support Boeing's offset or business strategy, Seller
shall coordinate with Boeing.
Seller shall document on Attachment 2 all offers to contract and
executed contracts with such subcontractors including the dollars
contracted. Seller shall provide to Boeing with an updated copy of
Attachment 2 for the six-month periods ending June 30 and December 31
of each year. The reports shall be submitted on the 1st of August and
the 1st of February respectively.
Furthermore, Boeing and Seller agree that in the event it becomes
necessary for Boeing to purchase Products from a third party(s) to
facilitate an offset commitment or business strategy, Boeing and Seller
agree to work together to develop and implement a plan for the removal
of such Product or Products from this SBP. Upon settlement of this
plan, Boeing shall not be obligated to buy from Seller and Seller shall
not be obligated to sell to Boeing the applicable Product(s)
notwithstanding SBP Section 10.0.
16.0 BOEING FURNISHED MATERIAL
Material, including but not limited to raw material, standards, detail
components and assemblies, furnished to Seller by Boeing shall be
administered in accordance with a bonded stores agreement between
Boeing and Seller.
Seller shall provide Boeing with required on-dock dates for all
material. Seller's notice shall provide Boeing with sufficient time to
competitively bid the material if, in its sole and absolute discretion,
it desires to do so.
17.0 ASSIGNMENT
Boeing and Seller agree that Boeing may, in its discretion, assign, in
part or in whole, its purchasing obligations under the Agreement or any
Order, as applicable, at the prices set forth in Attachment I thereof
Boeing reserves the right to rescind its assignment at anytime.
Boeing's assignment of purchasing obligation includes scheduling,
issuance of Order(s), receipt and inspection of Products, acceptance or
rejection of Products, payment for accepted Products, and ensuring
conformance to the quality assurance system requirements.
Boeing shall retain all other rights and obligations pursuant to the
applicable terms and conditions. In addition, Boeing reserves the
right, where necessary, to coordinate with and mediate between Seller
and any assignee regarding such assignment.
18.0 INVENTORY AT CONTRACT COMPLETION
Subsequent to Seller's last delivery of Product(s), Products which
contain, convey, embody or were manufactured in accordance with or by
reference to Boeing's Proprietary Materials including but not limited
to finished goods, work-in-process and detail components (hereafter
"Inventory") which are in excess of Order quantity shall be made
available to Boeing for purchase. In the event Boeing, in its sole
discretion, elects not to purchase the Inventory, Seller may scrap the
Inventory. Prior to scrapping the Inventory, Seller shall mutilate
and/or render it unusable. Seller shall maintain, pursuant to their
quality assurance system, records certifying destruction of the
applicable Inventory. Said certification shall state the method and
date of mutilation and destruction of the subject Inventory. Boeing
shall have the right to review and inspect these records at any time it
deems necessary. In the event Seller elects to maintain the Inventory,
Seller shall not sell or provide the Inventory to any third party
without prior specific written authorization from Boeing. Failure to
comply with these requirements shall be a material breach and grounds
for default pursuant to GTA Section 13.0.
19.0 OWNERSHIP OF INTELLECTUAL PROPERTY
19.1 Technical Work Product
NOT APPLICABLE
19.2 Inventions and Patents
NOT APPLICABLE
19.3 Works of Authorship and Copyrights
NOT APPLICABLE
19.4 Pre-Existing, Inventions and Works of Authorship
NOT APPLICABLE
20.0 ADMINISTRATIVE AGREEMENTS
NOT APPLICABLE
21.0 GUARANTEED WEIGHT REQUIREMENTS NOT APPLICABLE
22.0 SUPPLIER DATA REQUIREMENTS
NOT APPLICABLE
23.0 DEFERRED PAYMENT
NOT APPLICABLE
24.0 SOFTWARE PROPRIETARY INFORMATION RIGHTS
NOT APPLICABLE
EXECUTED in duplicate as of the date and year first set forth above by the duly
authorized representatives of the parties.
THE BOEING COMPANY ▇▇▇▇▇▇▇'▇ Metal, Inc.
By and Through its Division
Boeing Commercial Airplane Group
________________________________ ______________________________________
Signature Signature
________________________________ ______________________________________
Name: Name:
________________________________ ______________________________________
Title: Title:
________________________________ ______________________________________
Date: Date:
ATTACHMENT 1 TO
SPECIAL BUSINESS PROVISIONS
WORK STATEMENT AND PRICING
The price for Products to be delivered on or before December 31, 2003 shall be
as follows:
PART NUMBER MODEL NOMENCLATURE UNIT PRICE
----------- ----- ------------ ----------
[See attached listing.]
ATTACHMENT 2 TO
SPECIAL BUSINESS PROVISIONS
FOREIGN PROCUREMENT REPORT FORM
(Seller to Submit)
(Reference Section 15.0)
COMMODITY/ BID CONTRACTED
SUPPLIER NAME COUNTRY NOMENCLATURE DOLLARS DOLLARS
------------- ------- ------------ ------- ----------
ATTACHMENT 3 TO
SPECIAL BUSINESS PROVISIONS
RATES AND FACTORS
The following Rates and Factors shall be used on all price change negotiations
during the period of performance of these SBP:
Tool Fabrication
Production And Rework
---------- ----------------
Direct Labor Rate $10.00/hr. $15.50/hr.
Manufacturing Burden 32.00 32.00
G&A (Gen. Admin. Expense) 9.00 9.00
Profit 6.00 6.50
--------- ---------
TOTAL $57.00/hr. $63.00/hr.
ATTACHMENT 4 TO
SPECIAL BUSINESS PROVISIONS
BOEING AOG COVERAGE
NORMAL HOURS BOEING'S MATERIEL REPRESENTATIVE (MATERIEL DIVISION)
Approximately 6:30 a.m. - 4:00 p.m. (Seattle time)
Performs most functions of procurement process.
Manages formal communication with Seller.
SECOND SHIFT - AOG PROCUREMENT SUPPORT (MATERIEL DIVISION)
3:00 p.m. - 11:00 p.m.
May place order and assist with commitment and shipping information,
working with several suppliers on a priority basis.
Provides a communication link between Seller and Boeing.
24 HOUR AOG SERVICE - AOG CUSTOMER REPRESENTATIVE (CUSTOMER SERVICE
DIVISION) 544-9000 Support commitment information particularly with
urgent orders.
Customer Service Representative needs (if available):
Part Number
Boeing Purchase Order
Airline Customer & customer purchase order number
Boeing S.I.S.
If Seller is unable to contact any of the above, please provide AOG/Critical
shipping information notification via FAX using Boeing AOG/Critical shipping
notification form (Attachment 5).
ATTACHMENT 5 TO
SPECIAL BUSINESS PROVISIONS
BOEING
AOG/CRITICAL
SHIPPING NOTIFICATION
--------------------------------------------------------------------------------
To: FAX: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------- ----------------------
Buyer Name: Phone:
------------------------------- ----------------------
From: Today's Date:
------------------------------- ------------------
--------------------------------------------------------------------------------
Part Number: Customer PO:
---------------------------- ------------------
Customer: Ship Date:
---------------------------- ------------------
Qty Shipped: *SIS Number:
---------------------------- ------------------
Boeing PO: Pack Sheet
---------------------------- ------------------
*Airway ▇▇▇▇: or Invoice:
---------------------------- ------------------
Carrier: *Flight #:
---------------------------- ------------------
Freight
Forwarder:
----------------------------
*If Applicable
Shipped To: (Check One) Boeing
----------
Direct Ship to Customer
----------
Direct Ship to Supplier
----------
Remarks:
--------------------------------------------------------------------
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IF UNABLE TO CONTACT BUYER,
PLEASE USE THIS FORM TO FAX SHIPPING INFORMATION.