EXHIBIT 10.30
POP
SPECIAL BUSINESS PROVISIONS
between
THE BOEING COMPANY
and
CASHMERE MANUFACTURING
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SPECIAL BUSINESS PROVISIONS
TABLE OF CONTENTS
1.0 DEFINITIONS.............................................................1
2.0 PURCHASE ORDER NOTE.....................................................1
3.0 PRICES..................................................................2
3.1 Produce Pricing..................................................2
3.2 Manufacturing Configuration Baseline.............................2
3.3 Packaging........................................................2
4.0 GOVERNING QUALITY ASSURANCE REQUIREMENT.................................3
5.0 APPLICABLE LAW JURISDICTION.............................................3
6.0 PRODUCT ASSURANCE.......................................................3
6.1 Governing Document...............................................3
7.0 PAYMENT.................................................................4
7.1 Recurring Price..................................................4
7.2 Non-Recurring Price/Special Charges..............................4
8.0 ACCELERATION/DECELERATION AT NO COST....................................4
9.0 NOTICES.................................................................4
9.1 Addresses........................................................4
10.0 OBLIGATION TO PURCHASE AND SELL.........................................5
11.0 COST AND FINANCIAL PERFORMANCE VISIBILITY...............................6
11.1 Quarterly Reviews................................................6
11.2 Cost Performance Reviews (CPR)...................................6
12.0 CHANGES.................................................................7
12.1 Changes to the Statement of Work.................................7
12.2 Computation of Equitable Adjustment..............................7
12.3 Obsolescence.....................................................7
12.4 Change Absorption................................................7
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12.5 Planning Schedule................................................8
12.6 Value Engineering................................................9
12.7 Reduction in Quantity to be Delivered...........................12
13.0 SPARES AND OTHER PRICING...............................................12
13.1 Spares..........................................................12
13.2 Short Flow Production Requirements..............................15
13.3 Tooling.........................................................15
13.4 Pricing of Boeing's Supporting Requirements.....................16
13.5 Pricing of Requirements for Modification or Retrofit............16
13.6 Similar Pricing.................................................16
14.0 STATUS REPORTS/REVIEW..................................................16
15.0 PROVISIONS FOR OFFSET/BUSINESS STRATEGIES
FOREIGN PROCUREMENT REPORT.............................................16
16.0 BOEING FURNISHED MATERIAL..............................................17
17.0 ASSIGNMENT.............................................................17
18.0 INVENTORY AT CONTRACT COMPLETION.......................................18
19.0 OWNERSHIP OF INTELLECTUAL PROPERTY.....................................18
19.1 Technical Work Product..........................................18
19.2 Inventions and Patents..........................................18
19.3 Works of Authorship and Copyrights..............................18
19.4 Pre-Existing Inventions and Works of Authorship.................18
20.0 ADMINISTRATIVE AGREEMENTS..............................................18
21.0 GUARANTEED WEIGHT REQUIREMENTS.........................................18
22.0 SUPPLIER DATA REQUIREMENTS.............................................18
23.0 DEFERRED PAYMENT.......................................................18
24.0 SOFTWARE PROPRIETARY INFORMATION RIGHTS................................19
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AMENDMENTS
AMEND
NUMBER DESCRIPTION DATE APPROVAL
1 Buyer Name Change 2-20-98
1 Addition of Paragraphs 2-20-98
11.1 and 11.2
(Qrtly Cost Performance Review)
1 Revised Rates & Factors 2-20-98
Attachmate 3
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SPECIAL BUSINESS PROVISIONS
THESE SPECIAL BUSINESS PROVISIONS are entered into as of 06-11-97, by and
between Cashmere Manufacturing, a (Washington) corporation, with its principal
office in Wenatchee, Washington ("Seller"), and The Boeing Company, a Delaware
corporation with an office in Lynnwood, 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-65311-0140 dated 06-11-97 (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 number
▇-▇▇▇▇-▇▇▇▇ between The Boeing Company and Cashmere Manufacturing dated
06-11-97.
Each Order bearing such note shall be governed by and be deemed to include
the provisions of these SBP.
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3.0 PRICES
3.1 Produce 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. Seller's Plant.
3.1.1 Option Pricing
Seller irrevocably grants to Boeing the option to purchase additional
quantities of Products on the terms and conditions set forth in this SBP
at the prices set forth herein, increased or decreased by any equitable
adjustments provided herein.
3.1.2 Exercise of Option
Boeing may exercise such option by written notice to Seller at any time
prior to the last delivery of the Product(s) to Boeing; provided however,
that such option must be exercised in sufficient time to permit Seller to
support Boeing's required deliveries. Seller agrees to provide Boeing with
written notice at least sixty (60) days prior to the date when, in
Seller's opinion, the option must be exercised. Boeing may extend the
option exercise date by purchasing long lead materials, or authorizing
Seller to purchase such materials on terms acceptable to Boeing, if such
purchase would have the effect of extending the date for assuring
production continuity.
Boeing reserves the right to (a) not exercise the option and commence new
negotiations with Seller for additional quantities of Products; or (b)
purchase such additional quantities of Products from third parties. The
purchase of such additional quantities of Products from third parties
shall not abrogate any of Seller's obligations to Boeing pursuant to the
Agreement.
3.2 Manufacturing Configuration Baseline
Unit pricing for each Product or part number shown in Attachment 1 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 1 include packaging costs and all materials
and labor required to package Products identified in Attachment 1.
Packaging shall be
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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, Revision A. "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.
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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, 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.
9.0 NOTICES
9.0.1 Notification of Capacity/Raw Material Constraints
Seller shall provide Boeing with written notification of potential delays
to Seller's manufacturing start schedule, at least two weeks prior to
Seller's manufacturing start schedule.
Seller agrees to provide Boeing with weekly status/milestone charts
tracking the progress to the Boeing load date.
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:
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To Boeing: Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Buyer: M/S 38-LH
BOEING COMMERCIAL AIRPLANE GROUP
MATERIEL DIVISION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
To Seller: Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
CASHMERE MANUFACTURING
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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.
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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.
11.1 Quarterly Reviews
Quarterly Program Reviews will be held between the parties, alternating
between Boeing and supplier locations at a mutually agreed upon time. The
topics of these reviews may include raw material and component part
status, production status, Boeing supplied components inventory, Boeing
requirements, changes, forecasts and other issues pertinent to the
program. Reviews will allow formal presentation and discussion of Status
Reports, as set forth above.
In addition to the quarterly reviews, monthly conference calls will occur.
These calls will take place on the first Wednesday of every month at a
mutually agreeable time. Monthly Seller/Boeing teleconference minutes are
to be supplied to Boeing by Seller no later than one week after the
teleconference has taken place.
11.2 Cost Performance Reviews (CPR)
Boeing/Seller will conduct Cost Performance Reviews as a part of the
Quarterly Review. The purpose of the CPR is to identify and implement cost
improvement initiatives pursuant to SBP Section 12.6. Areas of improvement
of cost (hereafter "Work Packages") will be identified and agreed to by
the parties. CPR meeting minutes and action items as part of the minutes
are to be supplied to the Boeing Buyer by Seller no later than one week
after a CPR has taken place.
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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 Twenty 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:
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a. Any Technical Change which is a change between raw material
classifications such as a change from to steel or titanium to
plastic. Included as a Technical Change for purposes of this
Section are changes within any raw material classifications
such as a change in alloy or temper.
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 (30) 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 nonrecurring price as set forth in Attachment 1. For
purposes of this Section, the then current unit price or total
nonrecurring price shall be the price identified in Attachment 1 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 within reason.
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.
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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
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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: $100.00/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
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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,
Sellers's subcontractor's facilities and Boeing's Facilities.
Manufacturing and assembly process improvements include but are not
limited to inventory turn rates, lead time reductions, contracting
strategies, set up reductions, and lot size reduction. 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
savings are beyond any anticipated Lean Manufacturing improvements
reflected in the current contract price, identified and documented, the
parties agree to reduce the Product(s) unit price by the amount
apportioned to Boeing as identified above.
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12.6.6 Raw Material Cost Improvements
Boeing is currently in the process of reviewing raw material costs and the
impacts on the subcontractor base. It is Boeing's intention of
implementing a program or programs which will help address raw material
issues affecting the subcontractor base. Seller agrees to support Boeing
in its efforts to identify and address the issues affecting raw material.
Where Boeing and Seller can identify areas of improvement, the parties
will determine the amount of savings which will result from the
improvement and reduce the product's unit price accordingly.
12.7 Reduction in Quantity to be Delivered
NOT APPLICABLE
13.0 SPARES AND OTHER PRICING
13.0.1 Purchase orders released inside of normal lead time
Purchase orders issued from Boeing to Seller within the normal lead time
necessary to produce the product, will be reviewed after Seller notifies
Boeing in writing of production delays. Seller may submit a proposal
outlining costs for production parts in which lead times are less than
mutually upon between Seller and Boeing. Seller and Boeing agree to
coordinate activities to reduce or eliminate the need for special charges.
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
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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 I) - 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.
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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 Requirement
The price for AOG and Critical Spares and POA requirements shall be the
price for such Products listed on Attachment 1 in effect when such Spares
are ordered multiplied by a factor of 1.07.
13.1.3.2 Expedite Spare (Class 1)
The price for Expedite Spares shall be the price for such Products listed
on Attachment 1 in effect when such Spares are ordered multiplied by a
factor of 1.05.
13.1.4 Special Handling
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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 Section
13.1.3.1 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. For purposes of this Section, "Short Flow Production" shall be
defined as any requirement released less than Seller's current Re-Order
Lead time (ROLT). 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 delivery 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
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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/REVIEW
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 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
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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 required on dock dates for
material within two (2) days after the issuance of the purchase order.
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 1 thereof.
Boeing reserves the right to rescind its assignment at anytime.
Boeing's assignment of purchasing obligation includes scheduling, issuance
of Order(s), receival 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
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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
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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 CASHMERE MANUFACTURING
By and Through Its Division
Boeing Commercial Airplane Group
Name: /s/ Name: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------
Title: Buyer Title: President
--------------------------- ---------------------------
Date: 6-12-97 Date: 6-12-97
---------------------------- ----------------------------
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AMENDMENT 1
EXECUTED in duplicate as of the date and year first set forth above by the duly
authorized representatives of the parties.
THE BOEING COMPANY CASHMERE MANUFACTURING
CORPORATION
By and Through Its Division
Boeing Commercial Airplane Group
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------- ----------------------------------
Boeing, Contract Administrator President
February 20, 1998 February 20, 1998
---------------------------------- ----------------------------------
Date Date
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ATTACHMENT 1 TO
SPECIAL BUSINESS PROVISIONS
WORK STATEMENT AND PRICING
INTENTIONALLY OMITTED - CONFIDENTIAL TREATMENT REQUESTED
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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
------------- ------- ------------ ------- ----------
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ATTACHMENT 3 TO
SPECIAL BUSINESS PROVISIONS
RATES AND FACTORS
INTENTIONALLY OMITTED - CONFIDENTIAL TREATMENT REQUESTED
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ATTACHMENT 4 TO
SPECIAL BUSINESS PROVISIONS
BOEING AOG COVERAGE
o NORMAL HOURS BOEING'S MATERIEL REPRESENTATIVE (MATERIEL DIVISION)
Approximately 5:30 a.m. - 6:00 p.m.
o Performs all functions of procurement process.
o Manages formal communication with Seller.
o SECOND SHIFT - AOG PROCUREMENT SUPPORT (MATERIEL DIVISION)
3:00 p.m. - 11:00 p.m.
o May place order and assist with commitment and shipping information,
working with several suppliers on a priority basis.
o Provides a communication link between Seller and Boeing.
o 24 HOUR AOG SERVICE - AOG CUSTOMER REPRESENTATIVE (CUSTOMER SERVICE
DIVISION) 544-9000
o Support commitment information particularly with urgent orders.
o Customer Service Representative needs (if available):
o Part Number
o Boeing Purchase Order
o Airline Customer & customer purchase order number
o 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).
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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 or
-------------------------------- Invoice:
-----------------------
*Airway ▇▇▇▇: *Flight #:
----------------------------- ---------------------
Carrier:
---------------------------------- ---------------------
Freight
Forwarder:
--------------------------------
*If Applicable:
Shipped To: (Check One) Boeing
-------------
Direct Ship
to Customer
-------------
Direct Ship
to Supplier
-------------
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Remarks:
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IF UNABLE TO CONTACT BUYER,
PLEASE USE THIS FORM TO FAX SHIPPING INFORMATION
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