EXHIBIT 10.8
PARTS SALES AGREEMENT
BETWEEN
RAYTHEON AIRCRAFT PARTS INVENTORY & DISTRIBUTION COMPANY
AND
RAYTHEON AEROSPACE COMPANY
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THIS PART SALES AGREEMENT ("Agreement") is made and entered into as of the 27th
day of June, 2001 ("Effective Date"), by and between Raytheon Aircraft Parts
Inventory & Distribution Company, a corporation organized and existing under the
laws of the State of Kansas, with principal offices located at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("RAPID") and Raytheon Aerospace Company, a
corporation organized and existing under the laws of the State of Kansas, with
principal offices located at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
("RA") (each of whom may be referred to hereafter as a "Party", or collectively
as the "Parties").
Recitals:
WHEREAS, RAPID is engaged in the business of aircraft spare and replacement
parts sales and related services;
WHEREAS, RA is engaged in the business of providing aircraft maintenance,
support and related services to government and commercial customers;
WHEREAS, RA desires to obtain from RAPID certain price terms for spare and
replacement parts in connection with those programs that, as of the Effective
Date of this Agreement, RA is contractually obligated to perform, or will become
contractually obligated to perform if RA's customers exercise options contained
in existing contracts ("Pending Programs"); and,
WHEREAS, RAPID is willing to provide such price terms in connection with Pending
Programs, subject to the terms and conditions contained herein.
NOW THEREFORE, for and in consideration of the foregoing and the mutual promises
contained herein, and for other good and valuable consideration, the sufficiency
of which is acknowledged by the Parties, the Parties agree as follows:
1.0 PURPOSE.
1.1 The purpose of this Agreement is to set forth certain price terms between
RAPID and RA which shall apply in connection with Pending Programs.
2.0 PRICE AND PAYMENT TERMS.
2.1 COMMERCIAL SPARES PRICING. In connection with Pending Programs, RAPID
agrees to sell RA commercial spare and replacement parts at a price that
shall not exceed that which it is then offering to Raytheon Aircraft
Company Authorized Service Centers for similar quantities under similar
contractual terms and conditions.
2.2 MILITARY UNIQUE PARTS. In connection with Pending Programs, RAPID agrees
to sell RA military unique parts at a price that shall not exceed that
which it is then offering to the U.S. government (using the then
applicable RAPID military pricing formula) for similar quantities under
similar contractual terms and conditions.
2.3 T-1A PROGRAM PARTS. In connection with the T-1A CLS Pending Program,
RAPID will rebate a total of $120,000 per contract year to RA (not to
exceed an aggregate total of $1,200,000 during the 10 potential years of
the contract); provided that, RA, not later than November 1 of each
one-year option period, places a single order for its total program
requirements for those fabricated parts identified in Schedule B that
will be required during that option period. Those fabricated parts
identified in Schedule B shall be priced in accordance with paragraphs
2.1 or 2.2, as applicable. The intent of this requirement is to allow
RAPID to obtain the benefit of certain manufacturing and related
efficiencies associated with an annual requirements order. The foregoing
notwithstanding, in the event the total dollar amount of any annual
requirements order placed by RA is eighty percent (80%) or less than the
total dollar amount of the annual requirements order last entered into
before the Effective Date of this Agreement, RA shall not be entitled to
the total rebate amount for any such reduced annual requirements order
and will be entitled only to that portion of the total rebate amount that
the Parties shall, in good faith, mutually agree upon.
2.4 FOLLOW-ON PROGRAMS. RAPID shall, subject to a mutually agreeable
sucontract or subcontracts, make available to RA commercial spare parts
and military unique parts at those prices established by paragraphs 2.1
and 2.2, respectively, in the event RA is the successful offeror in any
recompetition of the Navy T-34/T-44 CLS Program (Item 1in Schedule A) or
the JPATS T-6A CLS Program (Item 5 in Schedule A) which is conducted by
the U.S. government on or before December 31, 2005.
2.5 PAYMENT TERMS. The following payment terms shall apply to all sales under
this agreement, (a) all invoices sent to RA during the period beginning
on the date hereof and ending on the date that is 18 months from the date
hereof, shall be promptly paid in cash within 60 days of the receipt of
such invoices, (b) all invoices sent to RA during the period beginning on
the day that following the date that is 18 months from the date hereof
and ending on the date that is 90 days from
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the date that is 18 months from the date hereof, shall be promptly paid
in cash within 45 days of the receipt of such invoices, and (c) all other
invoices shall be promptly paid in cash within 30 days of the receipt of
such invoices.
3.0 PENDING PROGRAMS.
3.1 The Pending Programs to which this Agreement shall apply are set forth in
Schedule A, hereto.
4.0 TERM AND EXPIRY.
4.1 This Agreement shall commence as of the Effective Date set forth above.
4.2 This Agreement shall expire with respect to each Pending Program upon the
expiration or termination of said Pending Program. Upon the expiration or
termination of the last executory Pending Program, this Agreement shall
be deemed expired in its entirety.
5.0 INSPECTION AND AUDIT.
5.1 RAPID may, upon reasonable notice to RA, inspect and audit RA's books and
records as may be necessary to determine that those parts sold to RA at
price terms established by this Agreement have been utilized only in
connection with Pending Programs. RA agrees to make such books and
records available to RA for inspection and audit at reasonable times and
places and to otherwise cooperate with any such inspection and audit.
6.0 LIMITATION OF LIABILITY.
6.1 IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NONBREACHING PARTY
SHALL BE ENTITLED TO COMPENSATORY DAMAGES ONLY. NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY, AS A RESULT OF ANY BREACH OF THIS AGREEMENT,
FOR INCIDENTAL, CONSEQUENTIAL, MULTIPLE, PUNITIVE OR EXEMPLARY DAMAGES,
WHETHER SUCH DAMAGES ARISE IN CONTRACT, TORT OR OTHERWISE.
7.0 DISPUTES.
7.1 In the event of any dispute arising under this Agreement, each Party's
business unit or department most responsible for its company's
performance under this Agreement shall endeavor in good faith to amicably
resolve the dispute. In the event the dispute cannot be resolved by such
efforts, resolution of the dispute shall be escalated to senior
management within each company in the effort to reach an amicable
conclusion.
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7.2 In the event the dispute cannot be resolved as set forth in paragraph
7.1, the dispute shall be finally settled in accordance with the
Commercial Rules, then prevailing, of the American Arbitration
Association ("AAA").
7.3 Each Party expressly agrees not to institute any litigation or
proceedings (whether judicial, administrative or otherwise) against the
other Party except as specifically provided herein; provided however,
nothing herein shall be construed as preventing or limiting either Party
from seeking injunctive relief to preserve any right or benefit under
this Agreement until arbitration can be concluded.
7.4 Arbitration shall be conducted by a panel of three arbitrators. Each
Party shall nominate one arbitrator. If a Party fails to nominate an
arbitrator within sixty (60) days from the date when a claimant's request
for arbitration has been communicated by the other Party, such
appointment shall be made by the AAA. The two arbitrators thus appointed
shall attempt to agree on a third arbitrator who shall act as Chair. If
the two arbitrators fail to nominate a Chair within sixty (60) days from
the date of appointment of the latter arbitrator, the Chair will be
selected by the AAA.
7.5 The location of the arbitration shall be Wichita, Kansas U.S.A.
Arbitration shall be conducted the English language.
7.6 The arbitrators may award compensatory damages to either Party, BUT UNDER
NO CIRCUMSTANCES SHALL THEY AWARD INCIDENTAL, CONSEQUENTIAL, MULTIPLE,
PUNITIVE OR EXEMPLARY DAMAGES.
7.7 Judgment on the award made by the arbitrators may be entered in any court
having jurisdiction thereof or having jurisdiction over one or more of
the Parties or their assets.
8.0 COMPLIANCE WITH LAW.
8.1 The Parties understand and acknowledge that sale and delivery of aircraft
spare and replacements is or may be subject to the export laws and
regulations of the United States. RA shall comply with all applicable
export laws and regulations and shall handle, safeguard and protect such
parts from unauthorized export.
8.2 In the event that RAPID reasonably believes that the providing of spare
or replacement parts will or may violate any law or regulation of the
United States, RAPID shall notify RA and RAPID shall thereupon have no
obligation to provide such parts until and unless RA demonstrates or
provides evidence reasonable under the circumstances that any such law or
regulation would not be violated by the providing of such parts.
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9.0 TERMINATION.
9.1 Either Party may terminate this Agreement prior to expiration, upon the
other Party's substantial and material breach of any obligation arising
hereunder, and such other Party's failure to cure said breach within
thirty (30) days following the receipt of written notice, or such longer
period of time as may be required to cure a breach which cannot
reasonably be cured within thirty (30) calendar days.
9.2 Upon the termination of this Agreement pursuant to paragraph 9.1, either
Party may seek redress in accordance with the provisions of section 7.0,
DISPUTES.
10.0 EXCUSABLE NONPERFORMANCE.
10.1 Neither Party shall be liable for any delay in the performance of its
obligations under this Agreement when such delay is caused or created by
circumstances beyond its control. Such circumstances include, but are not
limited to: acts of force majeure; inability to obtain or retain
government licenses, permits or approvals; interruption of essential
services; or, any action or inaction by either Party which creates a
delay in the other Party meeting any schedule required by this Agreement.
10.2 In the event either Party is delayed by any of the causes set forth in
paragraph 10.1, its period of performance shall be extended as may be
reasonably necessary under the circumstances.
11.0 ADDITIONAL PROVISIONS.
11.1 The Parties shall perform all efforts under this Agreement as independent
contractors. Nothing in this Agreement shall be interpreted or construed
as creating any form of partnership, agency, joint venture or other
formal business arrangement whatsoever. Neither Party is authorized to
represent, bind or act for the other Party.
11.2 Any notice required or permitted to be given hereunder shall be deemed
sufficiently given if sent by certified mail, commercial courier,
personal delivery or telefacsimile. Notice sent by certified mail or
commercial courier shall be deemed delivered as of the date received by
the recipient, as evidenced by a postal receipt or the records of the
commercial courier. Notice by personal delivery shall be deemed delivered
on the date of receipt by the employee of the recipient identified in
this paragraph 11.2. Notice by telefacsimile shall be deemed delivered
twenty-four (24) hours after being successfully transmitted to the
telefacsimile number indicated in this paragraph 11.2. Either Party may
change its notification information by providing the other Party with
written notice thereof. Until and unless changed by such written notice,
the addresses of the Parties shall be as follows:
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For RAPID:
RAYTHEON AIRCRAFT PARTS INVENTORY &
DISTRIBUTION COMPANY
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇,
Telefax Number: ▇▇▇-▇▇▇-▇▇▇▇,
For RA:
RAYTHEON AEROSPACE COMPANY
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇,
Telefax Number: ▇▇▇-▇▇▇-▇▇▇▇,
11.3 This Agreement shall be governed, interpreted and construed in accordance
with the laws of the State of Kansas, except for any provision thereof
specifying the application of the laws of another jurisdiction.
11.4 The failure of either Party to enforce at any time any of the provisions
of this Agreement shall not be construed as a waiver of such provisions,
nor affect the validity of this Agreement, nor the right of either Party
to thereafter enforce each and every provision hereof.
11.5 This Agreement shall not give either Party any title, interest or other
rights in intellectual property, proprietary information or trade secrets
owned or controlled by the other Party.
11.6 The headings to various sections and paragraphs of this Agreement are for
convenience of reference only and shall not in any way affect the
interpretation hereof.
11.7 The Parties acknowledge that this Agreement is the product of negotiation
and joint effort. Accordingly, the language, terms and conditions of this
Agreement
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shall not be construed more strictly against either of the Parties in the
event a question of interpretation, construction or meaning should
hereafter arise.
11.8 Time is of the essence with respect to all obligations set forth herein.
11.9 If any provision of this Agreement is found to be invalid by any
judicial, quasi-judicial or administrative body, the invalidity of such
provision shall not affect the remainder of this Agreement.
11.10 This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and together constitute one and the
same instrument. Copies signed and transmitted by facsimile shall be
legally binding as if they were signed in person.
11.11 Nothing in this Agreement shall be interpreted or construed as creating
any rights in favor of third parties.
11.12 No right or interest in this Agreement shall be assigned, and no duty
hereunder shall be delegated by either Party without the prior written
permission of the other Party; provided however, either Party may, upon
notice to the other Party, assign this Agreement to its successor upon
the merger, consolidation, sale or transfer of substantially all of that
Party's assets. Any such assignment or delegation shall be void unless
made in conformity with this paragraph 11.12.
11.13 All Schedules to this Agreement are by this reference incorporated into
this Agreement for all purposes as if they were fully set forth herein.
11.14 The terms and conditions herein contained shall take precedence over and
will not be varied by any conflicting or differing terms contained in any
purchase order or subcontract relating to the subject matter hereof.
11.15 This Agreement constitutes the entire agreement and understanding between
the Parties with respect to the subject matter hereof. There are no
verbal understandings, agreements, representations or warranties between
the Parties which are not expressly set forth herein. This Agreement
supersedes all prior agreements, whether written, oral or otherwise,
between the Parties with respect to the subject matter set forth herein.
The Agreement may not be modified except by a written amendment signed by
both Parties.
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WHEREFORE, the Parties have caused this Agreement to be entered into by their
duly authorized representatives as of the Effective Date set forth above.
RAYTHEON AIRCRAFT PARTS INVENTORY &
DISTRIBUTION COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: VP-Comptroller
Date:
RAYTHEON AEROSPACE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
Date: