GENERAL TERMS AGREEMENT between Spirit AeroSystems, Incorporated Tulsa Facility and Spirit AeroSystems-GTA-T5P2-YB001851 Amendment 1
EXHIBIT
10.1
between
Spirit
AeroSystems, Incorporated
Tulsa
Facility
and
LMI
Aerospace, Incorporated
Spirit
AeroSystems-GTA-T5P2-YB001851
Amendment
1
TABLE
OF CONTENTS
TITLE
PAGE
TABLE
OF
CONTENTS
AMENDMENT
PAGE
RECITAL
PAGE
|
1.0
|
DEFINITIONS
|
6
|
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|
2.0
|
ORDERING
|
7
|
||
|
2.1
|
Issuance
of Orders
|
7
|
||
|
2.2
|
Acceptance
of Orders
|
7
|
||
|
2.3
|
Written
Authorization to Proceed
|
7
|
||
|
3.0
|
TITLE
AND RISK OF LOSS
|
8
|
||
|
4.0
|
DELIVERY
|
8
|
||
|
4.1
|
Schedule
|
8
|
||
|
4.2
|
Reserved
|
9
|
||
|
4.3
|
Notice
of Labor Negotiations
|
9
|
||
|
5.0
|
ON-SITE
REVIEW AND RESIDENT REPRESENTATIVES
|
9
|
||
|
5.1
|
Review
|
9
|
||
|
5.2
|
Resident
Representatives
|
9
|
||
|
6.0
|
CREDIT
OFFICE VISIBILITY
|
10
|
||
|
7.0
|
PACKING
AND SHIPPING
|
10
|
||
|
7.1
|
General
|
10
|
||
|
7.1.1
|
Shipping
Documentation
|
11
|
||
|
7.1.2
|
Insurance
|
11
|
||
|
7.1.3
|
Shipping
Container Labels
|
11
|
||
|
7.1.4
|
Carrier
Selection
|
11
|
||
|
7.1.5
|
Invoices
|
11
|
||
|
7.1.6
|
Noncompliance
|
11
|
||
|
7.2
|
Barcode
Marking and Shipping
|
12
|
||
|
8.0
|
QUALITY
ASSURANCE, INSPECTION, REJECTION, &
ACCEPTANCE
|
12
|
||
|
8.1
|
Controlling
Document
|
12
|
||
|
8.2
|
Seller's
Inspection
|
12
|
||
|
8.2.1
|
Seller's
Disclosure
|
12
|
||
|
8.2.2
|
Seller’s
Acceptance
|
13
|
||
|
8.3
|
Spirit
AeroSystem, Inc. Inspection and Rejection
|
13
|
||
|
8.4
|
Rights
of Spirit
AeroSystem's Customers
and Regulators to Perform Inspections, Surveillance, and
Testing
|
14
|
||
|
8.5
|
Retention
of Records
|
14
|
||
|
8.6
|
Inspection
|
15
|
||
|
8.7
|
Reserved
|
15
|
||
|
8.8
|
Regulatory
Approvals
|
15
|
||
2
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
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9.0
|
EXAMINATION
OF RECORDS
|
16
|
||
|
10.0
|
CHANGES
|
16
|
||
|
10.1
|
Changes
Clause
|
16
|
||
|
11.0
|
GENERAL
& INTERNATIONAL REQUIREMENTS
|
17
|
||
|
11.1
|
Language
|
17
|
||
|
11.2
|
Currency
|
17
|
||
|
11.3
|
Import/Export
|
18
|
||
|
12.0
|
TERMINATION
FOR CONVENIENCE
|
19
|
||
|
12.1
|
Basis
for Termination; Notice
|
19
|
||
|
12.2
|
Termination
Instructions
|
19
|
||
|
12.3
|
Seller's
Claim
|
20
|
||
|
12.4
|
Failure
to Submit a Claim
|
20
|
||
|
12.5
|
Partial
Termination
|
20
|
||
|
12.6
|
Product
Price
|
20
|
||
|
12.7
|
Exclusions
or Deductions
|
21
|
||
|
12.8
|
Partial
Payment/Payment
|
21
|
||
|
12.9
|
Seller's
Accounting Practices
|
21
|
||
|
12.10
|
Records
|
21
|
||
|
13.0
|
CANCELLATION
FOR DEFAULT
|
21
|
||
|
13.1
|
Events
of Default
|
21
|
||
|
13.2
|
Remedies
|
22
|
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|
14.0
|
EXCUSABLE
DELAY
|
24
|
||
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15.0
|
SUSPENSION
OF WORK
|
25
|
||
|
16.0
|
TERMINATION
OR WRONGFUL CANCELLATION
|
25
|
||
|
17.0
|
ASSURANCE
OF PERFORMANCE
|
25
|
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|
18.0
|
RESPONSIBILITY
FOR PROPERTY
|
26
|
||
|
19.0
|
LIMITATION
OF SELLER'S RIGHT TO ENCUMBER ASSETS
|
26
|
||
|
20.0
|
PROPRIETARY
INFORMATION AND ITEMS
|
27
|
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|
21.0
|
COMPLIANCE
|
28
|
||
|
21.1
|
Compliance
With Laws
|
28
|
||
|
21.2
|
Government
Requirements
|
28
|
||
|
21.3
|
Ethic
Requirements/Code of Conduct
|
28
|
||
|
22.0
|
INTEGRITY
IN PROCUREMENT
|
29
|
||
|
23.0
|
UTILIZATION
OF SMALL BUSINESS CONCERNS
|
29
|
||
3
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
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24.0
|
SPIRIT
AEROSYSTEMS' RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS,
AND
TOOLING
|
29
|
||
|
25.0
|
TERMINATION
OF AIRPLANE PROGRAM
|
30
|
||
|
25.1
|
Program
Termination
|
30
|
||
|
25.2
|
Termination
Liability
|
31
|
||
|
26.0
|
PUBLICITY
|
31
|
||
|
27.0
|
PROPERTY
INSURANCE
|
31
|
||
|
27.1
|
Insurance
|
31
|
||
|
27.2
|
Certificate
of Insurance
|
32
|
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|
27.3
|
Notice
of Damage or Loss
|
32
|
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|
28.0
|
RESPONSIBILITY
FOR PERFORMANCE
|
32
|
||
|
28.1
|
Subcontracting
|
33
|
||
|
28.2
|
Reliance
|
33
|
||
|
28.3
|
Assignment
|
33
|
||
|
29.0
|
NON-WAIVER/PARTIAL
INVALIDITY
|
33
|
||
|
30.0
|
HEADINGS
|
34
|
||
|
31.0
|
RESERVED
|
34
|
||
|
32.0
|
RESERVED
|
34
|
||
|
33.0
|
DISPUTES
|
34
|
||
|
34.0
|
RESERVED
|
34
|
||
|
35.0
|
TAXES
|
34
|
||
|
35.1
|
Inclusion
of Taxes in Price
|
34
|
||
|
35.2
|
Litigation
|
35
|
||
|
35.3
|
Rebates
|
35
|
||
|
36.0
|
INDUSTRIAL
PARTICIPATION
|
35
|
||
4
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
AMENDMENTS
|
Amend
Number
|
Description
|
Date
|
Approval
|
|
1
|
Revised
Seller’s name on Cover Page, Pages 6 and 36 and Footer (Was: ▇▇▇▇▇▇▇’▇
Metal, Incorporated; Is: LMI Aerospace,
Incorporated)
Revised
Section 28.3, Page 33 & ▇▇
|
▇▇-▇▇-▇▇
03-28-06
|
KEL/RKF
KEL/RKF
|
5
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
RELATING
TO
Spirit
AeroSystems, Incorporated
Tulsa
Facility
THIS
GENERAL TERMS AGREEMENT (“GTA”) is entered into as of 14
October 2005,
by and
between LMI
Aerospace, Incorporated,
a
Missouri
State
corporation, with its principal office in
St.
Louis, MO,
("Seller"), and Spirit
AeroSystems, Incorporated (Spirit AeroSystems)
a
Delaware corporation . Hereinafter, the Seller and Spirit AeroSystems may be
referred to jointly as “Parties” hereto.
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 this GTA, any Order, and any related
Special Business Provisions ("SBP") (collectively "the Agreement"). Words
importing the singular shall also include the plural and vice
versa.
| A. |
"Customer"
means any manufacturer, owner, lessee or operator of an aircraft
or
commodity, or designee of such manufacturer, owner, lessee or
operator.
|
| B. |
"FAA"
means the United States Federal Aviation Administration or any successor
agency thereto.
|
| C. |
"FAR"
means the Federal Acquisition Regulations in effect on the date of
this
Agreement.
|
| D. |
"Procurement
Representative" means the individual designated by Spirit AeroSystems
as
being primarily responsible for interacting with Seller regarding
this
Agreement or any Order.
|
| E. |
"Order"
means each purchase contract and purchase order issued by Spirit
AeroSystems and either accepted by Seller under the terms of this
GTA and
SBP or issued within Spirit AeroSystems’ authority under this GTA and
SBP.
|
6
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
| F. |
"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 Spirit AeroSystems under any Order,
including Tooling, except for Rotating Use Tooling.
|
| G. |
"Tooling"
means all tooling, used in production or inspection of Products,
either
provided to Seller or supplied by Seller whereby Spirit AeroSystems
agrees
to pay Seller for the manufacture of the tooling.
|
2.0 Ordering
2.1 Issuance
of Orders
Spirit
AeroSystems 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, drawings or supplier part number, the quantities and prices,
the
delivery schedule, the terms and place of delivery and any special
conditions.
Each
Order shall be governed by and be deemed to include the provisions of this
GTA
and SBP. Any other Order terms and conditions, which conflict with this
Agreement, do not apply unless specifically agreed to in writing by the Parties.
2.2 Acceptance
of Orders
Each
Order is Spirit AeroSystems’ offer to Seller and acceptance is strictly limited
to its terms, unless specifically agreed to in writing by the Procurement
Representative of Spirit AeroSystems. Spirit AeroSystems objects to, and is
not
bound by, any terms or condition that differs from or adds to 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.
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.
2.3 Written
Authorization to Proceed
7
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
Spirit
AeroSystems’ Procurement Representative may give written or electronic
authorization to Seller to commence performance before Spirit AeroSystems issues
an Order. If Spirit AeroSystems’ authorization specifies that an Order will be
issued, Spirit AeroSystems and Seller shall proceed as if an Order had been
issued. This Agreement, the applicable SBP and the terms stated in the
authorization shall be deemed to be a part of Spirit AeroSystems’ offer and the
Parties shall promptly and in good faith agree on any open Order terms. If
Spirit AeroSystems does not specify in its authorization that an Order shall
be
issued, Spirit AeroSystems’ obligation is strictly limited to the terms of the
authorization.
If
Seller
commences performance before an Order is issued or without receiving Spirit
AeroSystems’ prior authorization to proceed, such performance shall be at
Seller's risk and expense.
3.0
Title
and Risk of Loss
Except
as
otherwise agreed to by the Parties, title to and risk of any loss of or damage
to the Products shall pass at the F.O.B. or INCOTERM point as specified in
the
applicable Order, except for loss or damage thereto resulting from Seller's
fault or negligence.
4.0 Delivery
4.1 Schedule
Seller
shall strictly adhere to the shipment, delivery or completion schedules
specified in the Order. In the event of any anticipated or actual delay,
including but not limited to delays attributed to labor disputes, Seller shall:
(i) promptly notify Spirit AeroSystems in writing of the reasons for the delay
and the actions being taken to overcome or minimize the delay; and (ii) provide
Spirit AeroSystems with a written recovery schedule. If Spirit AeroSystems
requests, Seller shall, at Seller’s expense, ship via air or other expedited
routing to avoid the delay or minimize it as much as possible. Seller shall
not
deliver Products prior to the scheduled delivery dates unless authorized by
Spirit AeroSystems.
Spirit
AeroSystems shall, at no additional cost to Spirit AeroSystems, retain goods
furnished in excess of the specified quantity or in excess of any allowable
overage unless, within forty-five (45) days of shipment, Seller requests return
of such excess. In the event of such request, Seller shall reimburse Spirit
AeroSystems for reasonable costs associated with storage and return of excess.
If
Products are manufactured with reference to Spirit AeroSystems Proprietary
Information or Materials, Seller agrees that pursuant to the Proprietary
Information and Items article of this Agreement, it will not sell or offer
such
Products for sale to anyone other than Spirit AeroSystems without Spirit
AeroSystems prior written consent.
8
|
LMI
Aerospace, Inc.
|
||
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
4.2 Reserved
4.3 Notice
of Labor Negotiations
When
requested by Spirit AeroSystems, Seller will provide status on labor contracts
and pending negotiations, including that of Seller’s subcontractors or
suppliers, except as may be prohibited by law.
5.0 On-Site
Review and Resident Representatives
5.1 Review
Seller
hereby grants, and shall cause any of its subcontractors or suppliers to grant,
to Spirit AeroSystems the right to visit the facility of Seller or any of its
subcontractors or suppliers during operating hours to review progress and
performance with respect to production, schedule, cost, quality and protection
of Spirit AeroSystems’ proprietary rights under any Order. Any Spirit
AeroSystems representative shall be allowed access to all areas used for the
performance of the Agreement. Such access shall be subject to the regulations
of
any governmental agency regarding admissibility and movement of personnel on
the
premises of Seller or any of its subcontractors or suppliers.
Spirit
AeroSystems shall notify Seller prior to any visit. Such notice shall contain
the names, citizenship and positions of the visiting personnel and the duration
and purpose of such visit.
5.2 Resident
Representatives
Spirit
AeroSystems may, in its sole discretion, and for such period, as it deems
necessary, locate resident personnel ("Resident Team") at Seller's facility
to
assist or support Seller. The Resident Team shall function under the direction
of a resident Spirit AeroSystems manager, if appropriate, or a manager located
at Spirit AeroSystems who will supervise Resident Team activities.
The
Resident Team shall be allowed access to or to review, as the case may be,
all
work areas, program status reports and management reviews used for or relating
to Seller's performance of the Agreement.
Seller
shall supply the Resident Team with office space, desks, facsimile machines,
telephones, high-speed access to internet services (if available from local
providers), stationery supplies, filing cabinets, communication facilities,
secretarial services and
9
|
General
Terms Agreement
|
LMI
Aerospace, Inc.
|
|
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
any
other items reasonably requested by Spirit
AeroSystems. A reasonable portion of the Resident Team's working area shall
be
dedicated to space for private telephone calls, meetings and similar Spirit
AeroSystems activities. All costs and expenses for such facilities and services,
if required, shall be paid by Seller.
Notwithstanding
such access and review, Seller remains solely responsible for performing in
accordance with each Order.
6.0 Credit
Office Visibility (Parent Company Guarantee?)
If
requested, Seller shall provide financial data, on a quarterly basis, or as
requested to the Boeing Corporate 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
headcount. Copies of such data are to be made available within 72 hours of
any
written request by Boeing’s Corporate Credit Office. Spirit AeroSystems and
Boeing shall treat all such information as confidential.
7.0 Packing
and Shipping
7.1 General
Seller
shall pack the Products to prevent damage and deterioration taking into account
method of shipment, location of shipment and destination of receipt, as well
as
time associated with shipment. Seller shall comply with carrier tariffs. Unless
the Order specifies otherwise, the price for Products sold place of destination
shall include shipping charges. Unless otherwise specified in the Order,
Products sold place of origin or shipment shall be forwarded collect. For
Products shipped domestically, Seller shall make no declaration concerning
the
value of the Products shipped, except on the Products where the tariff rating
is
dependent upon released or declared value. In such event, Seller shall release
or declare such value at the maximum value within the lowest rating.
Spirit
AeroSystems may
charge Seller for damage to or deterioration of any Products resulting from
improper packing or packaging. Seller
shall comply with any special instructions stated in the applicable Order.
Upon
Spirit AeroSystems’ request, Seller will identify packaging charges showing
material and labor costs for container fabrication.
10
|
General
Terms Agreement
|
LMI
Aerospace, Inc.
|
|
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
7.1.1 Shipping
Documentation
Shipments
by Seller or its subcontractors or suppliers must include packing sheets.
Each
packing sheet must include at a minimum the following: a) Seller's name,
address, phone number; and supplier code 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 packing slip number; f) nomenclature;
g)
unit of measure; h) “ship to” information if other than Spirit AeroSystems; 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.
A
shipment containing hazardous and non-hazardous materials must have separate
packing sheets for the hazardous and non-hazardous materials. Items shipped
on
the same day will be consolidated on one ▇▇▇▇ of lading or airbill, unless
Spirit
AeroSystems’
Procurement Representative authorizes otherwise. The shipping documents will
describe the material according to the applicable classification or tariff
rating. The total number of shipping containers will be referenced on all
shipping documents. Originals of all government bills of lading will be
surrendered to the origin carrier at the time of shipment.
7.1.2 Insurance
Seller
will not insure any shipment designated origin or place of shipment unless
authorized by
Spirit
AeroSystems.
7.1.3 Shipping
Container Labels
Seller
will label each shipping container with the Order number and the number that
each container represents of the total number being shipped (e.g., ▇▇▇ ▇ ▇▇
▇,
▇▇▇ ▇ of 2).
7.1.4 Carrier
Selection
Spirit
AeroSystems will select the carrier and mode of transportation for all shipments
where freight costs will be charged to Spirit AeroSystems.
7.1.5 Invoices
Seller
will include copies of documentation supporting prepaid freight charges (e.g.,
carrier invoices or shipping log/manifest), if any, with its
invoices.
7.1.6 Noncompliance
If
Seller
is unable to comply with the shipping instructions in an Order, Seller will
contact Spirit AeroSystems’ Traffic Management Department or Spirit AeroSystems’
Procurement Representative.
11
|
General
Terms Agreement
|
LMI
Aerospace, Inc.
|
|
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|
7.2 Barcode
Marking and Shipping
For
Orders from Spirit AeroSystems locations that have approved Seller to utilize
barcode labeling for shipping and packaging, Seller shall ▇▇▇▇ and package
such
shipments in accordance with the applicable barcode requirements for that
location. Where approved and pursuant to applicable specifications, Seller
will
utilize barcoding technology for part marking Products.
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.
8.2 Seller's
Inspection
Seller
shall inspect or otherwise verify that all Products, including those components
procured from or furnished by subcontractors or suppliers or Spirit AeroSystems,
comply with the requirements of the Order prior to shipment. Seller shall be
responsible for all tests and inspections of the Product during receiving,
manufacture and Seller's final inspection. Seller agrees to furnish copies
of
test and/or control data upon request from Spirit AeroSystems’ Procurement
Representative.
8.2.1 Seller's
Disclosure
Seller
shall provide written notification to Spirit AeroSystems within one business
day
when a nonconformance is determined to exist, or is suspected to exist, on
Product already delivered to Spirit AeroSystems under any Order and the
following is known:
| A. |
Affected
process or Product number and name
|
| B. |
Description
of the problem (i.e., what it is and what it should
be);
|
| C. |
Quantity
and dates delivered
|
| D. |
Suspect/affected
serial number(s) or date codes, when
applicable.
|
The
Seller
shall notify the Spirit AeroSystems Procurement Representative and the Spirit
AeroSystems Procurement Quality Assurance Field Representative for the Spirit
AeroSystems location where the Product was delivered.
If
the
nonconforming condition has been previously identified by Spirit
AeroSystems,
using a
Nonconformance Record or other equivalent means and requesting a corrective
action response, the Seller shall notify the Spirit
AeroSystems investigator
identified on the corrective action request that additional Product is
affected.
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8.2.2 Seller’s
Acceptance
Seller
shall provide with all shipments the following evidence of acceptance by its
quality assurance department: (a) certified physical and metallurgical or
mechanical test reports where required by controlling specifications, or (b)
a
signed, dated statement on the packing sheet certifying that its quality
assurance department has inspected the Products and they adhere to all
applicable drawings and/or specifications.
8.3 Spirit
AeroSystems’ Inspection and Rejection
Spirit
AeroSystems will accept the Products or give Seller notice of rejection or
revocation of acceptance (“rejection” herein), notwithstanding any payment,
prior test or inspection, or passage of title. No inspection, test delay or
failure to inspect or test or failure to discover any defect or other
nonconformance shall relieve Seller of any obligations under any Order or impair
any right or remedy of Spirit AeroSystems.
If
Seller
delivers non-conforming Products, Spirit AeroSystems may at its option and
at
Seller’s expense (i) return the Products for credit or refund; (ii) require
Seller to promptly correct or replace the Products; (iii) correct the Products;
or, (iv) obtain replacement Products from another source. These remedies are
in
addition to any remedies Spirit AeroSystems may have at law or
equity.
Seller
shall not redeliver corrected or rejected goods without disclosing the former
rejection or requirement for correction. Seller shall disclose any corrective
action taken. Repair, replacement and other correction and redelivery shall
be
completed within the original delivery schedule or such later time as
Procurement Representatives of Spirit AeroSystems may reasonably
direct.
All
costs
and expenses and loss of value incurred as a result of or in connection with
nonconformance and repair, replacement or other correction may be recovered
from
Seller by equitable price reduction or credit against amounts that may be owed
to Seller under this Agreement or otherwise.
Acceptance
of any Product by Spirit AeroSystems following any repair or rework pursuant
to
this Section 8.3 shall not alter or affect the obligations of Seller or the
rights of Spirit AeroSystems under SBP Section 6.1.
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8.4 Rights
of Spirit
AeroSystems’
Customers and Regulators to Perform Inspections, Surveillance, and
Testing
Spirit
AeroSystems’ rights to perform inspections, surveillance and tests and to review
procedures, practices, processes and related documents related to quality
assurance, quality control, flight safety, and configuration control shall
extend to the Customers of Spirit AeroSystems that are departments, agencies
or
instrumentalities of the United States Government and to the FAA and any
successor agency or instrumentality of the United States Government. Spirit
AeroSystems may also, at Spirit AeroSystems’ option, by prior written notice
from Spirit AeroSystems’ Procurement Representative, extend such rights to other
Customers of Spirit AeroSystems and to agencies or instrumentalities of other
governments equivalent in purpose to the FAA. Seller shall cooperate with any
such United States Government or Spirit AeroSystems directed inspection,
surveillance, test or review without additional charge to Spirit AeroSystems.
Nothing in any Order shall be interpreted to limit United States Government
access to Seller's facilities pursuant to law or regulation.
Where
Seller is located in or subcontracts with a supplier or subcontractor located
in
a country which does not have a bilateral airworthiness agreement with the
United States, Seller will obtain and maintain on file and require its affected
supplier(s) or subcontractor(s) to obtain and maintain on file, subject to
review by Spirit AeroSystems, a letter from the applicable government where
the
Product or subcontracted element is to be manufactured stating that Spirit
AeroSystems and the FAA will be granted access to perform inspections,
surveillance and tests and to review procedures, practices, processes and
related documents related to quality assurance, quality control, flight safety,
and configuration control.
8.5 Retention
of Records
Seller
shall maintain, on file at the seller’s facility, Quality records traceable to
the conformance of product/part numbers delivered to Spirit AeroSystems. Seller
shall make such records available to regulatory authorities and Spirit
AeroSystems’ authorized representatives. Seller shall retain such records for a
period of not less than (7) seven years from the date of shipment under each
applicable order for all product/part numbers unless otherwise specified on
the
order. Seller shall maintain all records related to the current first article
inspection (FAI) for (7) seven years past final delivery of the last Product
covered by the FAI.
At
the
expiration of such period, Spirit AeroSystems reserves the right to request
delivery of such records. In the event Spirit AeroSystems chooses to exercise
this right, Seller shall promptly deliver such records to Spirit AeroSystems
at
no additional cost on media agreed to by both parties.
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8.6 Inspection
At
no
additional cost to Spirit AeroSystems, Products may be subject to inspection,
surveillance and test at reasonable times and places, including Seller’s
subcontractors’ or suppliers’ locations. Spirit AeroSystems will perform
inspections; surveillance and tests so as not to unduly delay the work. Seller
shall maintain an inspection system acceptable to Spirit AeroSystems for the
Products purchased under any Order.
If
Spirit
AeroSystems performs an inspection or test on the premises of Seller or its
subcontractors or suppliers, Seller shall furnish and require its subcontractors
or suppliers to furnish, without additional charge, reasonable facilities and
assistance for the safe and convenient performance of these duties.
Seller's
documentation accompanying the shipment must reflect evidence of this
inspection.
8.7 Reserved
8.8 Regulatory
Approvals
For
aircraft regulated by the FAA or non-U.S. equivalent agency, regulatory approval
may be required for Seller to make direct sales (does not include “direct ship”
sale through Spirit AeroSystems) of modification or replacement parts to
owners/operators of type-certificated aircraft. Regulatory approval, such as
Parts Manufacturer Approval (PMA), is granted by the FAA or appropriate non-U.S.
equivalent regulatory agency. Seller agrees not to engage in any such direct
sales of Products under this Agreement without regulatory approval. Any breach
of this provision will be deemed a material breach of this Agreement. For Seller
proprietary parts, Seller agrees to notify Spirit AeroSystems of application
for
PMA or other applicable regulatory approval and subsequent approval or denial
of
same. Upon receipt of proof of PMA or other applicable regulatory approval,
Spirit AeroSystems may list Seller in the Illustrated Parts Catalog as seller
of
that part.
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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 Spirit
AeroSystems and be available to Spirit AeroSystems at Seller's facility for
Spirit AeroSystems’ examination, reproduction, 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 Spirit AeroSystems. Such examination shall provide Spirit
AeroSystems 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. Spirit
AeroSystems shall treat all information disclosed under this GTA Section as
confidential, unless required by U.S. Government contracting
regulation(s).
10.0 CHANGES
10.1 Changes
Clause
Spirit
AeroSystems Procurement Representative may, without notice to sureties, in
writing direct changes within the general scope of this Agreement or an Order
in
any of the following: (i) technical requirements and descriptions,
specifications, statement of work, drawings or designs; (ii) shipment or packing
methods; (iii) place of delivery, inspection or acceptance; (iv) reasonable
adjustments in quantities or delivery schedules or both; (v) amount of Spirit
AeroSystems-furnished property; and, if this contract includes services, (vi)
description of services to be performed; (vii) time of performance (i.e., hours
of the day, days of the week, etc.); and (viii) place of performance. Seller
shall comply immediately with such direction.
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If
such
change increases or decreases the cost or time required to perform this
contract, Spirit AeroSystems and Seller shall negotiate an equitable adjustment
in the price or schedule, or both, to reflect the increase or decrease. Unless
otherwise agreed in writing, Seller must assert any claim for adjustment to
Spirit AeroSystems’ Procurement Representative in writing within twenty-five
(25) days and deliver a fully supported proposal to Spirit AeroSystems’
Procurement Representative within 60 days after Seller’s receipt of such
direction. SPIRIT AEROSYSTEMS shall modify the Order in writing accordingly.
Spirit AeroSystems may, at its sole discretion, consider any claim regardless
of
when asserted. If Seller’s claim includes the cost of property made obsolete or
excess by the change, Spirit AeroSystems may direct the disposition of the
property. Spirit AeroSystems may examine Seller’s pertinent books and records to
verify the amount of Seller’s claim. Failure of the Parties to agree upon any
adjustment shall not excuse Seller from performing in accordance with Spirit
AeroSystems’ direction.
If
Seller
considers that Spirit AeroSystems’ conduct constitutes a change, Seller shall
notify Spirit AeroSystems’ Procurement Representative immediately in writing as
to the nature of such conduct and its effect upon Seller’s performance. Pending
direction from Spirit AeroSystems’ Procurement Representative, Seller shall take
no action to implement any such change.
11.0 GENERAL
& INTERNATIONAL REQUIREMENTS
11.1 Language
The
Parties hereto have agreed that this Agreement be written in American English
only. Where Seller resides in Quebec, Canada, les parties aux presentes tes
ont
convenu de ▇▇▇▇▇▇▇ ▇▇ contrat en Anglais seulement. All contractual documents
and all correspondence, invoices, notices and other documents shall be submitted
in American English. Any necessary conversations shall be held in English.
Spirit AeroSystems shall determine whether measurements will be in the English
or Metric system or a combination of the two systems. When furnishing documents
to Spirit AeroSystems, Seller shall not convert measurements, which Spirit
AeroSystems has stated in an English measurement system into the Metric
system.
11.2 Currency
Unless
specified elsewhere herein, all prices shall be stated in and all payments
shall
be made in the currency of the United States of America (U.S. Dollars). No
adjustments to any prices shall be made for changes to or fluctuations in
currency exchange rates.
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11.3 Import/Export
| A. |
In
performing the obligations of this Agreement, both Parties will comply
with United States export control and sanctions laws, regulations,
and
orders, as they may be amended from time to time, applicable to the
export
and re-export of goods, software, technology, or technical data (“Items”)
or services, including without limitation the Export Administration
Regulations (“EAR”), International Traffic in Arms Regulations (“ITAR”),
and regulations and orders administered by the Treasury Department’s
Office of Foreign Assets Control (collectively, “Export Control
Laws”).
|
| B. |
The
Party conducting the export shall be responsible for obtaining the
required authorizations. The Party conducting the re-export shall
be
responsible for obtaining the required authorizations. Each Party
shall
reasonably cooperate and exercise reasonable efforts to support the
other
Party in obtaining any necessary licenses or authorizations required
to
perform its obligations under this
Agreement.
|
| C. |
The
Party providing any Items under this Agreement shall, upon request,
notify
the other Party of the Items’ Export Control Classification Numbers
(“ECCNs”) as well as the ECCNs of any components or parts thereof if they
are different from the ECCN of the Item at
issue.
|
| D. |
Each
Party represents that (i) the Items, and the parts and components
thereof,
it is providing under this Agreement are not “defense articles” as that
term is defined in 22 C.F.R. § 120.6 of the ITAR and (ii) the
services it is providing under this Agreement are not “defense services”
as that term is defined in 22 C.F.R. § 120.9 of the ITAR. The Parties
acknowledge that this representation means that an official capable
of
binding the Party providing such Items knows or has otherwise determined
that such Items, and the parts and components thereof, are not on
the
ITAR’s Munitions List at 22 C.F.R. §121.1. Each Party agrees to reasonably
cooperate with the other in providing, upon request of the other
Party,
documentation or other information that supports or confirms this
representation.
|
| E. |
To
the extent that such Items, or any parts or components thereof, were
specifically designed or modified for a military end use or end user,
the
Party providing such Items shall notify the other Party of this fact
and
shall also provide the other Party with written confirmation from
the
United States Department of State that such Items, and all such parts
or
components thereof, are not subject to the jurisdiction of the
ITAR.
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12.0 TERMINATION
FOR CONVENIENCE
12.1 Basis
for Termination; Notice
Spirit
AeroSystems may, from time to time 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 Spirit AeroSystems, 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 Spirit AeroSystems shall have approved the amount of such termination
claims in writing prior to such
settlement;
|
| D. |
Preserve
and protect all terminated inventory and
Products;
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| E. |
At
Spirit AeroSystems’ request, transfer title (to the extent not previously
transferred) and deliver to Spirit AeroSystems or Spirit AeroSystems’
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. |
Be
compensated for such items to the extent provided in GTA Section
12.3
below;
|
| G. |
Take
all reasonable steps required to return, or at Spirit AeroSystems’ option
and with prior written approval to destroy, all Spirit AeroSystems
provided Proprietary Information and Items, as set forth in GTA Section
20.0, in the possession, custody or control of Seller or any of its
subcontractors or suppliers;
|
| H. |
Take
such other action as, in Spirit AeroSystems’s reasonable opinion, may be
necessary, and as Spirit AeroSystems shall direct in writing, to
facilitate termination of the Order;
and
|
| I. |
Complete
performance of the work not
terminated.
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12.3 Seller's
Claim
If
Spirit
AeroSystems terminates an Order in whole or in part pursuant to GTA Section
12.1
above, Seller shall have the right to submit a written termination claim to
Spirit AeroSystems in accordance with the terms of this GTA Section 12.3. Such
termination claim shall be asserted toSpirit AeroSystems within forty-five
(45)
days and all documentation supporting said claim must be asserted not later
than
six (6) months after Seller's receipt of the termination notice and shall be
in
the form prescribed by Spirit AeroSystems. 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.
In
no event shall claims for non-recurring engineering be considered or paid by
Spirit AeroSystems to Seller. With regard to the amount compensatable to Seller
under a termination pursuant to GTA Section 12.1 above, Seller shall be entitled
to compensation in accordance with and to the extent allowed under the terms
of
FAR 52-249-2 paragraphs (e)-(i), (Sept 96) (as published in 48 CFR § 52.249-2
approval 1996; without Alternates, unless alternate clause date is called out
on
the Order) which is incorporated herein by reference except "Government" and
"Contracting Officer" shall mean Spirit AeroSystems, "Contractor" shall mean
Seller and "Contract" shall mean Order.
Seller
shall indemnify Spirit AeroSystems and hold Spirit AeroSystems harmless from
and
against (i) any and all claims, suits and proceedings against Spirit AeroSystems
by any subcontractor or supplier of Seller in respect of any such termination
and (ii) any and all costs, expenses, losses and damages incurred by Spirit
AeroSystems in connection with any such claim, suit or proceeding.
12.4 Failure
to Submit a Claim
Notwithstanding
any other provision of this GTA 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 Spirit AeroSystems shall have no obligation for
payment to Seller under this GTA Section 12.0 except for those Products
previously delivered and accepted by Spirit AeroSystems.
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 this GTA Section 12.0 shall not result in any change to unit prices for
Products not terminated.
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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 Spirit AeroSystems
to
Seller pursuant to a terminated
Order;
|
| B. |
Any
claim which Spirit AeroSystems has against
Seller;
|
| C. |
The
agreed price for scrap allowance;
|
| D. |
Except
for normal spoilage and any risk of loss assumed by Spirit AeroSystems,
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 GTA Section 12.0 shall be made thirty (30) days
after settlement between the parties or as otherwise agreed to between the
parties. Spirit AeroSystems may make partial payments and payments against
costs
incurred by Seller for the terminated portion of the Order. If the total
payments exceed the final amount determined to be due, Seller shall repay the
excess to Spirit AeroSystemsupon demand.
12.9 Seller's
Accounting Practices
Spirit
AeroSystems 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 GTA Section 12.9, Seller's
"normal accounting practices" refers to Seller's method of charging costs as
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
financial 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 CANCELLATION
FOR DEFAULT
13.1 Events
of Default
The
occurrence of any one or more of the following events shall constitute an "Event
of Default".
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| 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 or appropriate non-U.S.
equivalent regulatory agency; or
|
| E. |
Spirit
AeroSystems revokes Seller’s Quality Assurance System approval, if
applicable; or,
|
| F. |
Any
failure by Seller to perform or comply with any obligation (other
than as
described in the foregoing GTA Sections (13.1.A, 13.1.B, 13.1.C,
13.1.D
and 13.1.E) set forth in this Agreement and such failure shall continue
unremedied for a period of ten (10) days or more following receipt
by
Seller of notice from Spirit AeroSystems specifying such failure;
or
|
| G. |
(1)
the suspension, dissolution or winding-up of Seller's business, (2)
Seller's insolvency, or its inability to pay debts, or its nonpayment
of
debts, as they become due, (3) 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, (4) an assignment by Seller for
the
benefit of its creditors, or (5) 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
|
Spirit
AeroSystems may, by giving written notice to Seller, immediately cancel any
Order, any SBP or the Agreement, in whole or in part, and Spirit AeroSystems
shall not be required after such notice to accept the tender by Seller of any
Products subject to the cancellation.
| B. |
Cover
|
Spirit
AeroSystems 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. In addition to any other
remedies or damages available to Spirit AeroSystems hereunder or at law or
in
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equity,
Spirit AeroSystems 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 bySpirit AeroSystems to manufacture, produce or provide, or
engage other persons to manufacture, produce or provide, each such
Product
| C. |
Rework
or Repair
|
Where
allowed by the applicable regulatory authority, Spirit AeroSystems or its
designee may rework or repair any Product in accordance with GTA Section
8.3;
| D. |
Setoff
|
Spirit
AeroSystems 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
Spirit AeroSystems hereunder or under any Order, all deposits, amounts or
balances held by Spirit AeroSystems for the account of Seller and any amounts
owed by Spirit AeroSystems 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
partial compensation for the additional costs which Spirit AeroSystems will
incur as a result of the transfer of production capabilities from Seller to
Spirit AeroSystems or Spirit AeroSystems’ designee, Seller shall upon the
request of Spirit AeroSystems, transfer and deliver to Spirit AeroSystems
orSpirit AeroSystems‘ designee title to any or all (i) Tooling, (ii) Spirit
AeroSystems -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 or suppliers (iv) Proprietary Information and Materials of Spirit
AeroSystems 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 or suppliers, in each case free
and clear of all liens, claims or other rights of any person.
Seller
shall be entitled to receive from Spirit AeroSystems reasonable compensation
for
any item accepted by Spirit AeroSystems which has been transferred to Spirit
AeroSystems pursuant to this GTA Section 13.2.E (except for any item the price
of which has 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 toSpirit
AeroSystems as a result of any Event of Default.
| F. |
Remedies
Generally
|
No
failure on the part of Spirit AeroSystems in exercising any right or remedy
hereunder, or as provided by law or in equity, shall impair, prejudice or
constitute
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a
waiver
of any such right or remedy, or shall be construed as a waiver of any Event
of
Default or as 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
full
by Seller of any such obligation. All rights and remedies of Spirit AeroSystems
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 Spirit AeroSystems 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 Spirit AeroSystems after an assessment by Spirit AeroSystems
of
alternative work methods. Excusable Delays may include, but are not limited
to,
acts of God, war, terrorist acts, riots, acts of government, fires, floods,
epidemics, quarantine restrictions, freight embargoes, strikes or unusually
severe weather, but shall exclude Seller's noncompliance with any legal
requirement as required by GTA Section 21.0 “Compliance with Laws”. However, the
above notwithstanding, Spirit AeroSystems 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, Spirit AeroSystems 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 Spirit
AeroSystems shall not be entitled to monetary damages or specific performance
to
the extent Seller's breach is the result of an Excusable Delay.
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15.0 SUSPENSION
OF WORK
Spirit
AeroSystems may at any time, by written order to Seller, require Seller to
stop
all or any part of the work called for by any Order for up to one hundred twenty
(120) days hereafter referred to as a "Stop Work Order" issued pursuant to
this
GTA 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) Spirit AeroSystems 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 Spirit AeroSystems or the period of the Stop
Work
Order (including any extension thereof) expires, Seller shall promptly resume
work in accordance with the terms of the Agreement.
16.0 TERMINATION
OR WRONGFUL CANCELLATION
Spirit
AeroSystems 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 to have been wrongful, in
which case such wrongful cancellation shall be deemed a termination pursuant
to
GTA Section 12.1 and therefore, Spirit AeroSystems’ liability shall be limited
to the payment to Seller of the amount or amounts identified in GTA Section
12.3.
17.0 ASSURANCE
OF PERFORMANCE
| A. |
Seller
to Provide Assurance
|
If
Spirit
AeroSystems determines, at any time or from time to time, that it is not
sufficiently assured of Seller's full, timely and continuing performance
hereunder, or if for any other reason Spirit AeroSystems has reasonable grounds
for insecurity, Spirit AeroSystems 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 any Order when and as specified herein.
Each Assurance of Performance shall be delivered by Seller to Spirit AeroSystems
as promptly as possible, but in any event no later than ten (10) calendar days
following Spirit AeroSystems’ request therefore and each Assurance of
Performance shall be accompanied by any information, reports or other materials,
prepared by Seller, as Spirit AeroSystems may reasonably request. Except as
to
payment for accepted goods, Spirit AeroSystems may suspend all or any part
of
Spirit AeroSystems’ performance hereunder until Spirit AeroSystems receives an
Assurance of Performance from Seller satisfactory in form and substance to
Spirit AeroSystems.
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SPIRIT
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| B. |
Meetings
and Information
|
Spirit
AeroSystems may request one or more meetings with senior management or other
employees of Seller for the purpose of discussing any request by Spirit
AeroSystems for Assurance of Performance or any Assurance of Performance
provided by Seller. Seller shall make such persons available to meet with
representatives of Spirit AeroSystems as soon as may be practicable following
a
request for any such meeting by Spirit AeroSystems and Seller shall make
available to Spirit AeroSystems any additional information, reports or other
materials in connection therewith as Spirit AeroSystems may reasonably
request.
18.0 RESPONSIBILITY
FOR PROPERTY
Seller
shall clearly ▇▇▇▇, maintain an inventory of, and keep segregated or
identifiable all of Spirit AeroSystems’ property and all property to which
Spirit AeroSystems has acquired an interest. Seller assumes all risk of loss,
destruction or damage of such property while in Seller’s or its subcontractors’
or suppliers’ possession, custody or control. Upon request, Seller shall provide
Spirit AeroSystems with adequate proof of insurance against such risk of loss.
Seller shall not use such property other than in performance of an Order without
prior written consent from Spirit AeroSystems. Seller shall notify Spirit
AeroSystems’ Procurement Representative if Spirit AeroSystems’ property is lost,
damaged or destroyed. As directed by SPIRIT Spirit AeroSystems, upon completion,
termination or cancellation of the agreement or any Order, Seller shall deliver
such property, to the extent not incorporated in delivered end products, to
Spirit AeroSystems in good condition subject to ordinary wear and tear and
normal manufacturing losses. Nothing in this GTA Section 18.0 limits Seller’s
use, in its direct contracts with the Government, of property in which the
Government has an interest.
19.0 LIMITATION
OF SELLER'S RIGHT TO ENCUMBER ASSETS
Seller
warrants to Spirit AeroSystems 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. Pursuant to the provisions
of
such Order, Seller will transfer to Spirit AeroSystems title to such inventory,
work-in-process, tooling and materials whether transferred separately or as
part
of any Product delivered under the Order, free of any liens, charges,
encumbrances or rights of others.
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20.0 PROPRIETARY
INFORMATION AND ITEMS
Spirit
AeroSystems 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").
Spirit AeroSystems 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 GTA Section 20.0, Spirit AeroSystems
shall have the right to use, disclose and copy 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 Spirit AeroSystems 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 Spirit AeroSystems provided Proprietary Information and Materials.Upon
Spirit AeroSystems’ request at any time, and in any event upon the completion,
termination or cancellation of this Agreement, Seller shall return all of Spirit
AeroSystems provided Proprietary Information and Materials, and all materials
derived from Spirit AeroSystems provided Proprietary Information and Materials
to Spirit AeroSystems or Spirit AeroSystems’ designee unless specifically
directed otherwise in writing by Spirit AeroSystems. Seller shall not, without
the prior written authorization of Spirit AeroSystems, 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. Prior to disposing of such parts or materials as
scrap, Seller shall render them unusable. Spirit AeroSystems shall have the
right to audit Seller's compliance with this GTA Section 20.0. Seller may
disclose Proprietary Information and Materials of Spirit AeroSystems to its
subcontractors or suppliers 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 GTA Section 20.0 relating to
Proprietary Informations and Materials; and Seller shall be liable to Spirit
AeroSystems for any breach of such obligation by such subcontractor. The
provisions of this GTA Section 20.0 are effective in lieu of, and will apply
notwithstanding the absence of, any restrictive legends or notices applied
to
Proprietary Informations and Materials; and the provisions of this GTA Section
20.0 shall survive the performance, completion, termination or cancellation
of
this Agreement or any Order. This GTA 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 Spirit AeroSystems’
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.
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AEROSYSTEMS-GTA-T5P2-YB-001851
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21.0 COMPLIANCE
21.1 Compliance
With Laws
Seller
shall be responsible for complying with all legal requirements, including,
but
not limited to the provisions of any statute, ordinance, rule, regulation,
judgment, decree, order, permit, approval, license or registration applicable
to
its performance under this Agreement. Seller shall notify Spirit AeroSystems
of
any aspect of Seller’s performance that is prohibited under any legal
requirements, at the earliest opportunity, but in all events sufficiently in
advance of Seller performance of such obligation, so as to identify and
implement alternative methods of performance. Seller shall notify Spirit
AeroSystems in writing at the earliest possible opportunity of any aspect of
its
performance, which becomes subject to any additional legal requirement after
the
date of execution of this Agreement or which Seller reasonably believes will
become subject to additional regulation during the term of this Agreement.
Seller agrees to indemnify and to hold harmless Spirit AeroSystems from any
failure by Seller to comply with any legal requirement.
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 Spirit AeroSystems,
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
there under. In addition, the following Federal Acquisition Regulations are
incorporated herein by this reference except "Contractor" shall mean "Seller":
Other Government clauses, if any, are incorporated herein either by attachment
to this document or by some other means of reference.
FAR
52.222-26 "Equal
Opportunity"
FAR
52.222-35 "Affirmative
Action for Disabled Veterans and Veterans of the Vietnam Era”
FAR
52.222-36 "Affirmative
Action for Workers with Disabilities”
FAR
52.247-64 “Preference
for Privately Owned U.S.-Flagged Commercial Vessels”
21.3 Ethic
Requirements/Code of Conduct
Spirit
AeroSystems is
committed
to
conducting its business fairly, impartially, and in an ethical and proper
manner. Spirit
AeroSystems expectation
is that Seller will also conduct its business fairly, impartially and in an
ethical and proper manner. Spirit
AeroSystems
further
expects that Seller will have (or will develop) and adhere to a code of ethical
standards. If Seller has cause to believe that Spirit AeroSystems or any
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employee
or agent of Spirit AeroSystems has behaved improperly or unethically under
this
contract, Seller shall report such conduct to Spirit AeroSystems. Although
Spirit AeroSystems will not use the failure to report improper or unethical
behavior as a basis for claiming breach of contract by Seller, Seller is
encouraged to exert reasonable efforts to report such behavior when
warranted.
22.0 INTEGRITY
IN PROCUREMENT
Seller
warrants that neither it nor any of its employees, agents or representatives
have offered or given, or will offer or give any gratuities to Spirit
AeroSystems’ employees, agents or representatives for the purpose of securing
any Order or securing favorable treatment under any Order.
23.0 UTILIZATION
OF SMALL BUSINESS CONCERNS
Seller
agrees to actively seek out and provide the maximum practicable opportunities
for small businesses, small disadvantaged businesses, women-owned small
businesses, minority business enterprises, historically black colleges and
universities and minority institutions, historically underutilized business
zone
small business concerns and U.S. veteran and service-disabled veteran owned
small business concerns to participate in the subcontracts Seller awards to
the
fullest extent consistent with the efficient performance of this
contract.
24.0 SPIRIT
AEROSYSTEMS’ RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS, AND
TOOLING
Seller
hereby grants to Spirit AeroSystems an irrevocable, nonexclusive, paid-up
worldwide license to practice and/or use, and license others to practice and/or
use on Spirit AeroSystems’ 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. Spirit AeroSystems
hereafter retains all of the aforementioned license rights in Licensed Property,
but Spirit AeroSystems 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 provided that such Product cannot, in Spirit
AeroSystems’ sole determination, be reasonably obtained in the required time
frame at a reasonable price from commercially available sources (including
Spirit AeroSystems) without the use of Seller’s Licensed Property and if one or
more of the following situations occur:
| A. |
Seller
discontinues or suspends business operations or the production of
any or
all of the Products;
|
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AEROSYSTEMS-GTA-T5P2-YB-001851
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| 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, without Spirit
AeroSystems’ prior written
concurrence;
|
| C. |
Spirit
AeroSystems cancels this Agreement or any Order for cause pursuant
to GTA
Section 13.0 herein;
|
| D. |
In
Spirit AeroSystems’ judgment it becomes necessary, in order for Seller to
comply with the terms of this Agreement or any Order, for Spirit
AeroSystems to provide support to Seller (in the form of design,
manufacturing, or on-site personnel assistance) substantially in
excess of
that which Spirit AeroSystems 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 Spirit AeroSystems 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 GTA Section 24.0, Seller shall, at the written
request of Spirit AeroSystems and at no additional cost to SPIRIT AEROSYSTEMS,
promptly deliver to Spirit AeroSystems any and all Licensed Property considered
by Spirit AeroSystems to be necessary to satisfy Spirit AeroSystems’
requirements for Products and their substitutes.
25.0 TERMINATION
OF AIRPLANE PROGRAM
25.1 Program
Termination
The
parties acknowledge and agree that Spirit AeroSystems may, in its sole
discretion, terminate all or part of this Agreement, including any Order issued
hereunder, by written notice to Seller, if Spirit AeroSystems’ Customer decides
not to initiate or continue production of the program which the Product
supports, by reason of SPIRIT AEROSYSTEMS’ Customer’s determination that there
is insufficient business basis for proceeding with such program. In the event
of
such a termination, Spirit AeroSystems shall have no liability to Seller except
as expressly provided in GTA Section 25.2 below.
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25.2 Termination
Liability
In
the
event of a termination of the program as described in 25.1 above, Spirit
AeroSystems shall have no liability whatsoever to Seller, except to the extent
of any Orders issued prior to the date of the written notice to Seller
identified in 25.1 above. Termination of such Orders shall be governed by GTA
Section 12.0 herein.
26.0 PUBLICITY
Without
Spirit AeroSystems’ prior written approval, Seller shall not, and shall require
that its subcontractors or suppliers shall not, release any publicity,
advertisement, news release or denial or confirmation of the same, regarding
any
Order or Products, or the program to which they may pertain. Seller shall be
liable to Spirit AeroSystems for any breach of such obligation by any
subcontractor or supplier.
27.0 PROPERTY
INSURANCE
27.1 Insurance
Seller
shall obtain and maintain continuously in effect a property insurance policy
covering loss or destruction of or damage to all property in which Spirit
AeroSystems does or could have an insurable interest pursuant to this Agreement,
including but not limited to Tooling, Spirit AeroSystems 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 or
any
agent, employee, affiliate, subcontractor or supplier 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 with insurers
reasonably acceptable to Spirit AeroSystems and shall (i) provide for payment
of
loss there under to Spirit AeroSystems, as loss payee, as its interests may
appear and (ii) contain a waiver of any rights of subrogation against Spirit
AeroSystems, its subsidiaries, and their respective directors, officers,
employees and agents
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27.2 Certificate
of Insurance
Upon
written request from Spirit AeroSystems, Seller shall provide to Spirit
AeroSystems’ Procurement Representative 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
Spirit AeroSystems’ Procurement Representative in the event of cancellation,
non-renewal or material change adversely affecting the interests of Spirit
AeroSystems.
27.3 Notice
of Damage or Loss
Seller
shall give prompt written notice to Spirit AeroSystems’ Procurement
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
Spirit AeroSystems, 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 Spirit
AeroSystems has given written approval, which approval shall not be unreasonably
withheld.
28.0 RESPONSIBILITY
FOR PERFORMANCE
Seller
shall be responsible for performance of its obligations under this Agreement.
Seller shall bear all risks of providing adequate facilities and equipment
to
perform each Order in accordance with the terms thereof. If any use of any
facilities or equipment contemplated by Seller for use in performing Orders
will
not be available for any reason, Seller shall be responsible for arranging
for
similar facilities and equipment at no cost to Spirit AeroSystems, and any
failure to do so shall not relieve Seller from its obligations.
Seller
shall notify and obtain written approval from Spirit AeroSystems prior to moving
work to be performed under this Agreement between Seller’s various facilities.
Seller shall include as part of its subcontracts those elements of the Agreement
that protect Spirit AeroSystems’ 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 subcontractor's
sufficient information to document clearly 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 Spirit AeroSystems’ Procurement
Representative.
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28.1 Subcontracting
Seller
shall maintain complete and accurate records regarding all subcontracted items
and/or processes. Seller’s use of subcontractors or suppliers shall comply with
Seller’s quality assurance system approval for said subcontractors or suppliers.
Unless Spirit AeroSystems’ prior written authorization or approval is obtained,
Seller may not purchase completed or substantially completed Products. For
purposes of this GTA Section and this GTA Section only, completed or
substantially completed Products shall not include components of assemblies
or
subassemblies. No subcontracting by Seller shall relieve Seller of its
obligation under the applicable Order. Utilization of a Spirit AeroSystems
approved source does not constitute a waiver of Seller's responsibility to
meet
all specification requirements.
28.2 Reliance
Entering
into this Agreement is in part based upon Spirit AeroSystems’ reliance on
Seller's ability, expertise and awareness of the intended use of the Products.
Seller agrees that Spirit AeroSystems and Spirit AeroSystems’ Customers may rely
on Seller as an expert, and Seller will not deny any responsibility or
obligation hereunder to Spirit AeroSystems or Spirit AeroSystems’ Customers on
the grounds that Spirit AeroSystems or Spirit AeroSystems’ Customers provided
recommendations or assistance in any phase of the work involved in producing
or
supporting the Products, including but not limited to Spirit AeroSystems’
acceptance of specifications, test data or the Products.
28.3 Assignment
*
29.0 NON-WAIVER/PARTIAL
INVALIDITY
Any
failures, delays or forbearances of Spirit AeroSystems in insisting upon or
enforcing any provisions of any Order, or in exercising any rights or remedies
under this Agreement, shall not be construed as a waiver or relinquishment
of
any such provisions, rights or remedies; rather, the same shall remain in full
force and effect. If any provision of any Order is or becomes void or
unenforceable by law, the remainder shall be valid and enforceable.
_______________________
*The
text
noted by asterisks has been redacted in connection with a request to the
Securities and Exchange Commission for confidential treatment of such text
pursuant to Rule 24b-2. A copy of this Agreement including the redacted
information has been submitted to the Securities and Exchange Commission as
part
of such request.
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AEROSYSTEMS-GTA-T5P2-YB-001851
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INITIALS:
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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 RESERVED
32.0 RESERVED
33.0 DISPUTES
Spirit
AeroSystems and Seller shall use their best reasonable efforts to resolve any
and all disputes, controversies, claims or differences between Spirit
AeroSystems and Seller, arising out of or relating in any way to this GTA or
its
performance, including, but not limited to, any questions regarding the
existence, validity or termination hereof ("Disputes"), through negotiation.
If
a Dispute cannot be resolved by the functional representatives of Spirit
AeroSystems and Seller, it shall be referred up through management channels
of
the Parties or their respective designees, for further negotiation.
Any
dispute that arises under or is related to this Agreement that cannot be settled
by mutual agreement of the parties shall be resolved only as provided in SBP
Section 5. Pending final resolution of any dispute, Seller shall proceed with
performance of this Agreement according to Spirit AeroSystems’ instructions so
long as Spirit AeroSystems continues to pay amounts not in dispute.
34.0 RESERVED
35.0 TAXES
35.1 Inclusion
of Taxes in Price
Unless
this Agreement, specifies otherwise, the price of this contract includes, and
Seller is liable for and shall pay, all taxes, impositions, charges and
exactions imposed on or measured by this Agreement and the Orders issued
hereunder, except for sales or use taxes on sales to Spirit AeroSystems ("Sales
Taxes") for which Spirit AeroSystems specifically agrees to pay and which are
separately stated on Seller’s invoice. Prices shall not include any taxes,
impositions, charges or exactions for which Spirit AeroSystems has furnished
a
valid exemption certificate or other evidence of exemption.
34
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General
Terms Agreement
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LMI
Aerospace, Inc.
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Pro-Forma
dated 07-01-05
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SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
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INITIALS:
KEL
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35.2 Litigation
In
the
event that any taxing authority has claimed or does claim payment for sales
taxes, Seller shall promptly notify Spirit AeroSystems, and Seller shall take
such action as Spirit AeroSystems 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 Spirit
AeroSystems or reimbursed to Seller. If Seller or Spirit AeroSystems is
successful in defending such claim, the amount of such taxes recovered by
Seller, which had previously been paid by Seller and reimbursed by Spirit
AeroSystems or paid directly by Spirit AeroSystems, shall be immediately
refunded to Spirit AeroSystems.
35.3 Rebates
If
any
taxes paid by Spirit AeroSystems are subject to rebate or reimbursement, Seller
shall take the necessary actions to secure such rebates or reimbursement and
shall promptly refund to Spirit AeroSystems any amount recovered
36.0 INDUSTRIAL
PARTICIPATION
To
the
exclusion of all others, Spirit AeroSystems or its assignee shall be entitled
to
all industrial participation benefits or offset credits which might result
from
this Agreement or Order. Seller shall provide documentation or information,
which Spirit AeroSystems or its assignee may reasonably request to substantiate
claims for industrial benefits or offset credits. Seller agrees to use
reasonable efforts to identify the foreign content of goods, which Seller either
produces itself or procures from other companies for work directly related
to
this Agreement. Promptly after selection of a non-U.S. subcontractor or supplier
for work under this Agreement, Seller shall notify Spirit AeroSystems of the
name, address, subcontract point of contact (including telephone number) and
dollar value of the subcontract.
EXECUTED
in duplicate as of the date and year first set forth above by the duly
authorized representatives of the Parties.
Spirit
AeroSystems SELLER
Spirit
AeroSystems, Inc. LMI
Aerospace, Inc.
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_______________________________
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_______________________________
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Name:
▇. ▇. ▇▇▇▇▇
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Name:
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Title:
Procurement Agent, V
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Title:
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35
|
General
Terms Agreement
|
LMI
Aerospace, Inc.
|
|
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
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Date:
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Date:
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36
|
General
Terms Agreement
|
LMI
Aerospace, Inc.
|
|
|
Pro-Forma
dated 07-01-05
|
SPIRIT
AEROSYSTEMS-GTA-T5P2-YB-001851
|
|
|
INITIALS:
KEL
|