Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Exhibit 10.24
AMENDMENT 1
GENERAL TERMS AGREEMENT
BETWEEN
THE BOEING COMPANY
AND
SPIRIT AEROSYSTEMS INCORPORATED
BCA-65530-0016
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
TABLE OF CONTENTS
TITLE PAGE
TABLE OF CONTENTS
AMENDMENT PAGE
RECITAL PAGE
1.0 DEFINITIONS........................................................................... - 6 -
2.0 ORDERING.............................................................................. - 7 -
2.1 Issuance of Orders.............................................................. - 7 -
2.2 Acceptance of Orders............................................................ - 8 -
2.3 Written Authorization to Proceed................................................ - 8 -
3.0 TITLE AND RISK OF LOSS................................................................ - 8 -
4.0 DELIVERY.............................................................................. - 9 -
4.1 Schedule........................................................................ - 9 -
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........................................................ - 10 -
5.3 Indemnification................................................................. - 10 -
6.0 CREDIT OFFICE VISIBILITY.............................................................. - 11 -
7.0 PACKING AND SHIPPING.................................................................. - 11 -
7.1 General ........................................................................ - 11 -
7.1.1 Shipping Documentation................................................... - 12 -
7.1.2 Insurance................................................................ - 12 -
7.1.3 Shipping Container Labels................................................ - 12 -
7.1.4 Carrier Selection........................................................ - 12 -
7.1.5 Invoices................................................................. - 12 -
7.1.6 Noncompliance............................................................ - 12 -
7.1.7 Reserved................................................................. - 13 -
7.2 Barcode Marking and Shipping.................................................... - 13 -
8.0 QUALITY ASSURANCE, INSPECTION, REJECTION, & ACCEPTANCE................................ - 13 -
8.1 Controlling Document............................................................ - 13 -
8.2 Seller's Inspection............................................................. - 13 -
8.2.1 Seller's Disclosure...................................................... - 13 -
8.2.2 Seller's Acceptance...................................................... - 14 -
8.3 Boeing's Inspection and Acceptance or Rejection................................. - 14 -
8.4 Rights of Boeing's Customers and Regulators to
Perform Inspections, Surveillance, and Testing.................................. - 15 -
8.5 Retention of Records............................................................ - 16 -
8.6 Inspection...................................................................... - 16 -
- 2 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
8.7 Sale of Products Using Boeing Proprietary Information........................... - 16 -
8.8 Regulatory Approvals............................................................ - 17 -
9.0 EXAMINATION OF RECORDS................................................................ - 17 -
10.0 CHANGES............................................................................... - 17 -
10.1 Changes Clause.................................................................. - 17 -
11.0 GENERAL& INTERNATIONAL REQUIREMENTS................................................... - 18 -
11.1 Language........................................................................ - 18 -
11.2 Currency........................................................................ - 18 -
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.................................................................. - 21 -
12.4 Failure to Submit a Claim....................................................... - 22 -
12.5 Partial Termination............................................................. - 22 -
12.6 Product Price................................................................... - 23 -
12.7 Exclusions or Deductions........................................................ - 23 -
12.8 Partial Payment/Payment......................................................... - 23 -
12.9 Seller's Accounting Practices................................................... - 23 -
12.10 Records......................................................................... - 23 -
13.0 CANCELLATION FOR DEFAULT.............................................................. - 24 -
13.1 Events of Default............................................................... - 24 -
13.2 Remedies........................................................................ - 25 -
14.0 EXCUSABLE DELAY....................................................................... - 27 -
15.0 SUSPENSION OF WORK.................................................................... - 28 -
16.0 TERMINATION OR WRONGFUL CANCELLATION.................................................. - 28 -
17.0 ASSURANCE OF PERFORMANCE.............................................................. - 29 -
18.0 RESPONSIBILITY FOR PROPERTY........................................................... - 30 -
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS....................................... - 30 -
20.0 PROPRIETARY INFORMATION AND ITEMS..................................................... - 30 -
21.0 COMPLIANCE............................................................................ - 32 -
21.1 Compliance with Laws............................................................ - 32 -
21.2 Government Requirements......................................................... - 32 -
21.3 Ethic Requirements / Code of Conduct............................................ - 32 -
- 3 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
22.0 INTEGRITY IN PROCUREMENT.............................................................. - 33 -
23.0 UTILIZATION OF SMALL BUSINESS CONCERNS................................................ - 33 -
24.0 BOEING'S RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS, AND TOOLING........... - 33 -
25.0 TERMINATION OF AIRPLANE PROGRAM....................................................... - 34 -
25.1 Program Termination............................................................. - 34 -
25.2 Termination Liability........................................................... - 34 -
26.0 PUBLICITY............................................................................. - 35 -
27.0 PROPERTY INSURANCE.................................................................... - 35 -
27.1 Insurance....................................................................... - 35 -
27.2 Certificate of Insurance........................................................ - 35 -
27.3 Notice of Damage or Loss........................................................ - 36 -
28.0 RESPONSIBILITY FOR PERFORMANCE........................................................ - 36 -
28.1 SUBCONTRACTING........................................................................ - 37 -
28.3 Assignment...................................................................... - 37 -
29.0 NON-WAIVER/PARTIAL INVALIDITY......................................................... - 39 -
30.0 HEADINGS.............................................................................. - 39 -
31.0 PRICES................................................................................ - 39 -
32.0 MUTUAL DRAFTING....................................................................... - 39 -
33.0 DISPUTES.............................................................................. - 40 -
34.0 COUNTERPARTS.......................................................................... - 40 -
35.0 TAXES................................................................................. - 40 -
35.1 Inclusion of Taxes in Price........................................................... - 40 -
35.2 Litigation...................................................................... - 41 -
35.3 Rebates......................................................................... - 41 -
36.0 OFFSET CREDITS........................................................................ - 41 -
37.0 NO JOINT VENTURE, AGENCY OR PARTNERSHIP RELATIONSHIP................................. - 41 -
38.0 APPLICABLE LAW........................................................................ - 42 -
- 4 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
AMENDMENTS
Amend
Number Description Date Approval
- ------ ------------------------------------------------------ ------ --------
1 Incorporate name change from Mid-Western Aircraft 4/1/06
Systems Inc. to Spirit AeroSystems Incorporated. Added
effective date of June 17, 2005 to agreement, and to
sections 12.3 and 16.0.
- 5 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
GENERAL TERMS AGREEMENT
RELATING TO
BOEING PRODUCTS
THIS GENERAL TERMS AGREEMENT ("GTA") is entered into as of June 17, 2005, by and
between Spirit AeroSystems, Inc., a Delaware corporation, with its principal
office in Wichita, Kansas, ("Seller"), and The Boeing Company, a Delaware
corporation acting by and through Boeing Commercial Airplanes, McDonnell Douglas
Corporation, a Maryland corporation, and Boeing-Oakridge Company, (collectively
and individually "Boeing"). Hereinafter, the Seller and Boeing may be referred
to jointly as "Parties" hereto.
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 owner, lessee or operator of a Boeing aircraft
or commodity, or designee of such owner, lessee or operator.
B. "Contract Administrator" means the individual designated by Seller
as being the primarily responsible for interacting with Boeing
regarding this Agreement, and any applicable SBP or Order.
C. "FAA" means the United States Federal Aviation Administration or any
successor agency thereto.
D. "FAR" means the Federal Acquisition Regulations in effect on the
date of this Agreement.
E. "Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.
F. "Procurement Representative" means the individual designated by
Boeing as being primarily responsible for interacting with Seller
regarding this Agreement, and any applicable SBP or Order.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
G. "Order" means each purchase contract and purchase order issued by
Boeing and either accepted by Seller under the terms of this GTA and
any applicable SBP or issued within Boeing's authority under this
GTA and any applicable SBP.
H. "Product" means goods, including components and parts thereof,
Production Articles, services, documents, data, software, software
documentation and other information or items furnished or to be
furnished to Boeing under any Order, including Tooling, except for
Common Use Tooling but does not include Products or Production
Articles used for modification or retrofit of previously delivered
Program Airplanes, other than as provided in sustaining SBP Section
4.3.1. Purchases of Parts or Production Articles for modification or
retrofits, other than those described in sustaining SBP 4.3.1, shall
be governed by SBP number SBP-6-5118-AEC-016.
I. Program Airplane "means a Boeing commercial transport aircraft
having a model designation of 737, 747, 767 or 777 for which Seller
shall provide Product Definition and Production Articles, pursuant
to the applicable SBP.
J. "Tooling" means all tooling, used in production or inspection of
Products, either provided to Seller by Boeing or supplied by Seller
whereby Boeing agrees to pay Seller for the manufacture of the
tooling.
2.0 ORDERING
2.1 ISSUANCE OF ORDERS
Boeing may issue Orders to Seller from time to time in accordance with the
applicable SBP. 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 the applicable SBP. Purchase Order Terms and Conditions, Form
D1-4100-4045, 49-5700, GP1, DAC Form 26-915, DAC Form 26-916 and Form P252T do
not apply. Any other Order terms and conditions, which conflict with this
Agreement or the applicable SBP, do not apply unless specifically agreed to in
writing by the Parties.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
2.2 ACCEPTANCE OF ORDERS
Each Order is Boeing's offer to Seller and acceptance is strictly limited to its
terms. Unless specifically agreed to in writing by the Procurement
Representative of Boeing, Boeing objects to, and is not bound by, any term or
condition that differs from or adds to the Order. Similarly, unless specifically
agreed to in writing by Seller's Contracts Administrator, Seller objects to, and
is not bound by, any term or condition that differs from or adds to the Order.
The Order is subject to this GTA, the applicable SBP, including the other
provisions as described in the applicable SBP section entitled Order of
Precedence. Seller's commencement of performance or acceptance of the Order in
any manner shall conclusively evidence Seller's acceptance of the Order as
written, provided, however, that if Seller commences work despite a failure to
agree as provided in Section 10.1, Seller shall have ten (10) days from
commencement of such work to notify Boeing of its objection, or be deemed to
have, by performance, accepted such Order.
Any rejection by Seller of an Order shall specify the reasons for rejection and
any changes or additions that would make the Order acceptable to Seller;
provided, however, that Seller may not reject any Order for reasons inconsistent
with the provisions of this Agreement or the applicable SBP.
2.3 WRITTEN AUTHORIZATION TO PROCEED
Boeing's Procurement Representative may give written or electronic authorization
to Seller's Contracts Administrator to commence performance before Boeing issues
an Order. If Boeing's authorization specifies that an Order will be issued,
Boeing and Seller shall proceed, and Boeing shall be obligated, 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 Boeing's offer and the Parties
shall promptly and in good faith agree on any open Order terms. If Boeing does
not specify in its authorization that an Order shall be issued, Boeing's
obligation is strictly limited to the terms of the authorization.
If Seller commences performance before an Order is issued and without receiving
Boeing's 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 tangible Products shall pass F.O.B.origin, except for loss or
damage thereto resulting from Seller's fault or negligence.
- 8 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
4.0 DELIVERY
4.1 SCHEDULE
Subject to GTA Sections 14.0 and 15.0, 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 Boeing in
writing of the reasons for the delay and the actions being taken to overcome or
minimize the delay; and (ii) provide Boeing with a written recovery schedule. If
Boeing requests, Seller shall, if delay is due to Seller's fault or negligence
at Seller's expense, and otherwise, at Boeing'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 Boeing in writing.
Boeing shall, at no additional cost to Boeing, 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 Boeing for reasonable costs
associated with storage and return of excess.
4.2 RESERVED
4.3 NOTICE OF LABOR NEGOTIATIONS
When requested by Boeing, Seller will use commercially reasonable efforts to
provide status on labor contracts and pending negotiations, including that of
Seller's subcontractors or suppliers, except as may be prohibited by law or
contract.
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 Boeing 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 Boeing's proprietary rights under any Order. Any Boeing representative
approved by Seller, such approval not to be unreasonably withheld, shall be
allowed access to all areas used for the performance of any Order; provided,
however, that if Seller believes that the information to which Boeing seeks
access is commercially sensitive, the Parties will agree upon a process to
protect such information; provided further, that Boeing shall not be entitled to
any information which relates to a customer other than Boeing. 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.
- 9 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
Boeing shall notify Seller a period of time that is reasonable given the
circumstances 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
Boeing may, in its sole discretion and in coordination with Seller, and for such
period as Boeing 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 Boeing manager, if appropriate, or a manager
located at Boeing 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 any Order.
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 any other items reasonably requested by
Boeing. A reasonable portion of the Resident Team's working area shall be
dedicated to space for private telephone calls, meetings and similar Boeing
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.
5.3 INDEMNIFICATION
Boeing shall indemnify and hold harmless Seller, its officers, agents and
employees, from and against any liability, obligation, claim, demand or cause of
action for bodily injury, including death, or damage to property, to the extent
resulting from the negligent acts or omissions of Boeing, its officers, agents
or employees which occurs while on Seller's premises.
- 10 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
6.0 CREDIT OFFICE VISIBILITY
Seller will cooperate with Boeing's Corporate Credit Office in response to
reasonable requests for financial data in a timely manner. If trends remain
stable, the data provided will be limited to balance sheets, schedule of
aggregate accounts payable and receivable, major lines of credit, creditors,
income statements (profit and loss), cash flow statements, firm backlog, and
headcount. In the event of material deterioration in financial condition or
performance, Boeing may reasonably request additional data to assess potential
contract performance risk. Data requested by Boeing may include if reasonable in
the circumstances, but may not be limited to, trade account ageing, banking
agreements and financial projections, but will not include identifiable
information with respect to Customers other than Boeing. All such information
will be treated as confidential in accordance with GTA Section 20.0 and shall be
used only by Boeing's Corporate Credit Office for the limited purpose of
verifying Seller's financial status and capability to perform to contract terms.
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. To the extent Seller arranges shipping in
accordance with the SBP, 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 or as otherwise required by law, rule
or regulation. In such event, Seller shall release or declare such value at the
maximum value within the lowest rating. Boeing 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
subject to the terms of the SBP. Upon Boeing's request, Seller will identify
packaging charges showing material and labor costs for container fabrication.
- 11 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
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 Boeing; i) warranty data
and certification, as applicable; j) rejection tag, if applicable; k) Seller's
certification that Products comply with Order requirements; and, l)
identification of optional material used, if applicable. 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 bill of lading or airbill, unless Boeing's 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 Boeing.
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., Box 1 of
2, Box 2 of 2).
7.1.4 CARRIER SELECTION
Boeing will select the carrier and mode of transportation for all shipments
where freight costs will be charged to Boeing.
7.1.5 INVOICES
Seller will include copies of documentation supporting prepaid freight charges
(e.g., carrier invoices or UPS 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 Boeing's Traffic Management Department or Boeing's Authorized
Procurement Representative.
- 12 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
7.1.7 RESERVED
7.2 BARCODE MARKING AND SHIPPING
For Orders from Boeing locations that have approved Seller to utilize barcode
labeling for shipping and packaging, Seller shall mark 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 applicable 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 Boeing,
comply with the requirements of the Order prior to shipment to Boeing or
Customer. Seller shall be responsible for all tests and inspections of the
Product during receiving, manufacture and Seller's final inspection. Seller
agrees to furnish copies of test and/or control data upon request from Boeing's
Procurement Representative.
8.2.1 SELLER'S DISCLOSURE
Seller shall provide written notification to Boeing within one business day
after Seller becomes aware that a nonconformance (i) is determined to exist, or
(ii) is reasonably believed to exist, on Product already delivered to Boeing
under any Order. The following must be included.
- Affected process or Product number and name
- Description of the problem (i.e. what it is and what it should be);
- Quantity and dates delivered;
- Suspect/affected serial number(s) or date codes, when applicable.
The Seller shall notify the Boeing Procurement Representative and the Boeing
Procurement Quality Assurance Field Representative for the Boeing location where
the Product was delivered.
- 13 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
If the nonconforming condition has been previously identified by Boeing, using a
Nonconformance Record or equivalent means and requesting a corrective action
response, the Seller shall notify the Boeing investigator identified on the
corrective action request that additional Product is affected.
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 BOEING'S INSPECTION AND ACCEPTANCE OR REJECTION
Seller shall achieve and maintain minimum Boeing requirements for Supplier Code
Delegation in accordance with appropriate Boeing policy in order that Seller may
source inspect, and accept, Product on Boeing's behalf. If Seller fails to
achieve and maintain Supplier Code Delegation, Product shall be source inspected
by Boeing, or Boeing's designee, at Seller's facilities, at Seller's cost.
Boeing will accept the Products or give Seller's Contract Administrator notice
of rejection at Seller's facilities, notwithstanding any payment, prior test or
inspection, or passage of title. Nothing in this GTA Section 8.3 shall be
construed as limiting Boeing's post acceptance remedies, including the ability
to revoke acceptance. 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 Boeing.
Boeing may exercise its right of cancellation for Seller's breach of this
Section 8.3 only as provided in GTA Section 13.2.A.
If Seller delivers non-conforming Products and such Products have not been
incorporated in an aircraft delivered to and accepted by a customer, Boeing 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 Boeing 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
the Procurement Representatives of Boeing may reasonably direct.
- 14 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
All reasonable costs and expenses incurred and damages suffered by Boeing
(including compensation made by Boeing to its customers), in each case as a
result of or in connection with nonconformance and repair, replacement or other
correction may be recovered from Seller by setoff or credit. Upon making any
payment to Boeing pursuant to this Section 8.3, Seller shall be subrogated,
solely to the extent of such payment, to any rights which Boeing may have
against amounts that may be owed by any third-parties with respect to the
nonconforming Product with respect to which such payment was made and Boeing
shall assign any such rights to Seller. Boeing shall retain any and all rights
to claim against such third-parties for amounts not compensated by Seller.
Seller and Boeing shall cooperate in asserting their respective claims against
third parties. Provided, that if Boeing determines not to cooperate in a claim
by Seller against a third-party, then Boeing shall reimburse to Seller the
amount of the payment that Seller has made to Boeing that is attributable to the
actions of the third-party.
Acceptance of any Product by Boeing following any repair or rework pursuant to
this GTA Section 8.3 shall not alter or affect the obligations of Seller or the
rights of Boeing under 16.1 of the applicable SBP.
8.4 RIGHTS OF BOEING'S CUSTOMERS AND REGULATORS TO PERFORM INSPECTIONS,
SURVEILLANCE, AND TESTING
Boeing's 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 Boeing 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. Boeing may
also, at Boeing's option, by prior written notice from Boeing's Procurement
Representative to Seller's Contracts Administrator, extend such rights to other
Customers of Boeing and to agencies or instrumentalities of other governments
equivalent in purpose to the FAA. Seller shall cooperate with any such United
States Government or Boeing directed inspection, surveillance, test or review
without additional charge to Boeing. 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 Boeing, a letter from the applicable government where the Product
or subcontracted element is to be manufactured stating that Boeing 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.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
8.5 RETENTION OF RECORDS
For Orders supporting BCA, Seller shall maintain, on file at the Seller's
facility, quality records traceable to the conformance of product/part numbers
delivered to Boeing. Seller shall make such records available to authorities and
to Boeing's authorized representative(s). Seller shall retain such records for a
period of not less than seven (7) years from the date of shipment under each
applicable Order for all product/part numbers unless otherwise specified on the
Order.
At the expiration of such period, if Seller determines not to retain such
records, Seller shall notify Boeing in writing, and Boeing shall have the right,
within thirty (30) days following receipt of such notice from Seller, to request
delivery of such records. In the event Boeing chooses to exercise this right,
Seller shall promptly deliver such records or copies thereof to Boeing at no
additional cost on media agreed by both parties.
8.6 INSPECTION
At no additional cost to Boeing, Products may be subject to inspection,
surveillance and test at reasonable times and places, including Seller's
subcontractors' or suppliers' locations. Boeing will perform inspections;
surveillance and tests so as not to unduly delay the work. Seller shall maintain
an inspection system acceptable to Boeing for the Products purchased under any
Order.
If Boeing 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 SALE OF PRODUCTS USING BOEING PROPRIETARY INFORMATION
Except as set forth in any other agreement between the parties executed on the
date hereof, or hereafter executed pursuant to an agreement executed between the
parties on the date hereof Seller shall not sell or offer to sell Products
manufactured using Boeing Proprietary Information or Materials, to anyone other
than Boeing.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
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 Boeing) 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 any required regulatory approval.
For Seller proprietary parts for Boeing aircraft, Seller agrees to notify Boeing
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, Boeing may list Seller in the Illustrated Parts Catalog as
seller of that part.
9.0 EXAMINATION OF RECORDS
Seller shall maintain complete and accurate records. 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. Seller will provide adequate data to support its
positions for any cost related issue. Seller shall provide assistance to
evaluate and interpret such data if requested by Boeing. Such evaluation shall
provide Boeing with complete information regarding Seller's proposal for the
purpose of the negotiation of equitable adjustments for changes and
termination/obsolescence claims pursuant to GTA Section 10.0. Boeing shall treat
all information disclosed under this GTA Section as confidential, in accordance
with GTA Section 20.0, unless required by U.S. Government contracting
regulation(s).
10.0 CHANGES
10.1 CHANGES CLAUSE
Boeing's 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 Boeing-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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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
If such change increases or decreases the cost or time required to perform this
contract, Boeing 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 Boeing's
Procurement Representative in writing within twenty-five (25) days and deliver a
fully supported proposal to Boeing's Procurement Representative within sixty
(60) days after Seller's receipt of such direction. Boeing shall modify the
Order in writing accordingly. Boeing 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, Boeing may direct the
disposition of the property. Boeing 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
Boeing's direction.
If Seller considers that Boeing's conduct constitutes a change, Seller shall
notify Boeing's Procurement Representative immediately in writing as to the
nature of such conduct and its effect upon Seller's performance. Pending
direction from Boeing's 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. 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. Boeing shall determine whether
measurements will be in the English or Metric system or a combination of the two
systems. When furnishing documents to Boeing, Seller shall not convert
measurements, which Boeing 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.
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").
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
(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. Section 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. Section 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.
Section 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.
12.0 TERMINATION FOR CONVENIENCE
12.1 BASIS FOR TERMINATION; NOTICE
Boeing may, from time to time terminate all or part of any Order issued
hereunder, by written notice to Seller's Contract Administrator. Any such
written notice of termination shall specify the effective date and the extent of
any such termination.
12.2 TERMINATION INSTRUCTIONS
On receipt of a written notice of termination pursuant to GTA Section 12.1,
unless otherwise directed by Boeing, Seller shall:
A. Promptly stop work as specified in the notice;
B. Promptly terminate its subcontracts and purchase orders relating to
work terminated;
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
C. Use commercially reasonable efforts to settle any termination claims
made by its subcontractors or suppliers. It is advisable that Seller
review such claims with Boeing prior to settlement, however Seller
shall not be required to obtain pre-approval from Boeing, provided,
that with respect to any payments made by Seller without Boeing's
prior approval, Boeing shall be obligated to pay Seller only that
portion of such termination claims as are compensable pursuant to
GTA 12.3.;
D. Preserve and protect all terminated inventory and Products;
E. At Boeing's request, transfer title (to the extent not previously
transferred) and deliver to Boeing or Boeing's designee all
supplies, materials and work-in-process, produced or acquired by
Seller for the performance of the terminated Order, and to the
extent not used, permitted to be used according to the terms of the
applicable SLA or required by Seller for performance under this
Agreement, any Order or any other agreement with Boeing, Tooling and
manufacturing drawings and data produced or acquired by Seller for
the performance of the Order, all in accordance with the terms of
such request;
F. Be compensated by Boeing for such items to the extent provided in
GTA Section 12.3 below; and
G. To the extent not used or required by Seller for performance under
this Agreement, any Order or any other agreement with Boeing, take
all reasonable steps required to return, or at Boeing's option and
with prior written approval to destroy, all Boeing Proprietary
Information and Materials, as set forth in GTA Section 20.0,
associated with the terminated Order, in the possession, custody or
control of Seller or any of its subcontractors or suppliers, which
Boeing reasonably believes are necessary.
H. Take such other action as, in Boeing's reasonable opinion, may be
necessary, and as Boeing shall direct in writing, to facilitate
termination of the Order; and
I. Complete performance of the work not terminated.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
12.3 SELLER'S CLAIM
If Boeing 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
Boeing in accordance with the terms of this GTA Section 12.3. Such termination
claim shall be asserted to Boeing within forty-five (45) days (to the extent
then known but not later than six (6) months after the notice of termination)
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 Boeing. Such claim must contain sufficient detail (to the
extent then reasonably available) 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 Boeing to Seller.
If Boeing terminates an Airplane Program according to the terms of GTA 25.0
within [*****] of June 17, 2005, then Seller shall further have the right to
receive from Boeing an inconvenience fee equal to the [*****] determined
without regard to any write-off or other adjustment by reason of such
termination, for the Tooling in support of the terminated Airplane Program.
Boeing shall have ninety (90) days from receipt of Seller's claim to dispute
such claim by delivering to Seller a written notice setting forth Boeing's
grounds for dispute. If Boeing does not deliver such a notice to Seller or reach
agreement with Seller regarding Seller's claim within such ninety (90) day
period, Seller may by written notice, seek resolution of its claim through the
Senior Vice President Supplier Management or that person's equivalent (the
"Senior Executive") as provided in Section 33. If no response from such Senior
Executive is received by Seller within 30 days of such Senior Executive's
receipt of Seller's notice, Boeing shall pay Seller the amount claimed by Seller
within fifteen (15) days thereafter. Provided, however, that such payment shall
be subject to full or partial recovery by Boeing by setoff, credit or otherwise,
to the extent Seller's claim is determined by Boeing to not be (x) in compliance
with the terms of Section 12 or Attachment 1 to this GTA or (y) compensable
under the regulations cited below; provided however, that Boeing's determination
shall remain subject to the provisions of Section 33. With regard to the amount
compensable 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 Section 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 Boeing,
"Contractor" shall mean Seller and "Contract" shall mean Order.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
Following payment by Boeing in accordance with the preceding paragraph, Seller
shall indemnify Boeing and hold Boeing harmless from and against (i) any and all
claims, suits and proceedings against Boeing by any subcontractor or supplier of
Seller in respect of any such termination and (ii) any and all reasonable costs,
expenses, losses and damages incurred by Boeing in connection with any such
claim, suit or proceeding.
With respect to claims by any subcontractor or supplier of Seller, within thirty
(30) days after receipt by Boeing of a claim or notice of the commencement of
any suit or proceeding against Boeing, Boeing will, if a claim is to be made by
Boeing against Seller, give notice to Seller adequate to apprise Seller of the
nature of the claim or the commencement of such suit or proceeding, specifying
the factual basis of the claim and the amount thereof in reasonable detail to
the extent then known by Boeing. Failure of Boeing to give such notice will not
relieve Seller from liability under this GTA Section 12.3, except if and to the
extent that Seller is actually prejudiced thereby. If any subcontractor or
supplier brings a claim, suit or proceeding against Boeing as a result of such
termination, and Boeing gives notice thereof to Seller. Seller may within twenty
(20) days of that notice assume the claim and its defense. After notice from
Seller to Boeing of Seller's election to assume the defense of such claim, suit
or proceeding, Seller will not be liable to Boeing for any fees of other counsel
or any other expenses with respect to the defense of such claim, suit or
proceeding, in each case subsequently incurred by Boeing in connection with the
defense of such claim, suit or proceeding. If Seller assumes the defense of a
claim, suit or proceeding: (i) no compromise or settlement of such claims may be
effected by Seller without Boeing's consent (which shall not be unreasonably
withheld or delayed) unless (A) there is no finding or admission of any
violation by Boeing of any law or any violation by Boeing of the rights of any
Person, and (B) the sole relief provided is monetary damages that are paid in
full by Seller; (ii) Seller will have no liability with respect to any
compromise or settlement of such claims, suits or proceedings effected by Boeing
without Seller's consent (which shall not be unreasonably withheld or delayed);
and (iii) Boeing will cooperate as Seller may reasonably request in
investigating, defending and (subject to clause (i)) settling 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 in GTA Section 12.3,
Seller shall be barred from submitting a claim and Boeing shall have no
obligation for payment to Seller under this GTA Section 12.0 except for those
Products previously delivered and accepted by Boeing.
12.5 PARTIAL TERMINATION
Any partial termination of an Order shall not alter or affect the terms and
conditions of the Order or any Order with respect to Products not terminated.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
12.6 PRODUCT PRICE
Termination under this GTA Section 12.0 shall not result in any change to unit
prices for Products not terminated, except as may be provided in an applicable
SBP.
12.7 EXCLUSIONS OR DEDUCTIONS
The following items shall be excluded or deducted from any claim submitted by
Seller:
A. All unliquidated advances or other payments made by Boeing to Seller
pursuant to a terminated Order;
B. Any settled claim which Boeing has against Seller;
C. The agreed price for scrap allowance;
D. Except for normal spoilage and any risk of loss assumed by Boeing, the
agreed fair value of property that is lost destroyed, stolen or damaged.
12.8 PARTIAL PAYMENT/PAYMENT
Payment, if any, to be paid under this GTA Section 12.0 shall be made fifteen
(15) days after settlement between the parties or as otherwise agreed to between
the parties in accordance with the terms outlined in GTA Section 12.3. Boeing
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 Boeing upon demand.
12.9 SELLER'S ACCOUNTING PRACTICES
For purposes of GTA Section 12.0 and subsections within it, Boeing and Seller
agree that Seller's "normal accounting practices" used in developing the price
of the Product(s) shall also be used in determining the allocable costs at
termination. For purposes of this 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.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
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".
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. Seller knowingly, willfully, or negligently fails to perform or
comply with any material obligation set forth in GTA Section 20.0;
or,
D. Seller knowingly, willfully, or negligently 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. Boeing 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 GTA Sections (13.1.A, 13.1.B, 13.1.C,
13.1.D, 13.1.E, and 13.1.H) 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 Boeing specifying
such failure; or
G. (a) the suspension, dissolution or winding-up of Seller's business,
(b) Seller's inability to pay debts, or its nonpayment of debts,
generally as they become due, (c) the institution of reorganization,
liquidation or other such proceedings by or against Seller or the
appointment of a custodian, trustee, receiver or similar Person for
Seller's properties or business, (d) an assignment by Seller for the
benefit of its creditors, or (e) any action of Seller for the
purpose of effecting or facilitating any of the foregoing; or
H. Any assignment by Seller in contravention of Section 28.3 and such
breach shall continue unremedied for a period of ten (10) days or
more following receipt by Seller of notice from Boeing specifying
such failure.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
13.2 REMEDIES
If any Event of Default shall occur:
A. Cancellation
Boeing may, by giving written notice ("Cancellation Notice") to
Seller, immediately cancel any Order, and any SBP or the Agreement
and Boeing shall not be required after delivery of such Cancellation
Notice to accept the tender by Seller of any Products subject to the
cancellation.
Provided that in the case of Sections 13.1.A, 13.1.B and 13.1.F
Boeing may only cancel any or all Orders associated with any
material Event of Default that has an operational or financial
impact on Boeing. Provided further that in the case of Sections
13.1.A, 13.1.B and 13.1.F, Boeing may only cancel any SBP or the
Agreement after (i) repeated and material Events of Default that are
having operational or financial impact on Boeing; and (ii) failure
by the parties within thirty (30) days of Seller's receipt of the
Cancellation Notice, to reach an agreement on a recovery plan that
is satisfactory to Boeing and Seller. At the end of such thirty (30)
day period absent such agreement, Boeing has the right to
immediately cancel any SBP affected by the Event of Default,
provided that within each SBP, such cancellation shall apply only to
the extent of the models of Program Airplanes (e.g. 737, 747)
affected by the Event of Default. If two or more models of Program
Airplanes are affected by such Events of Default, then Boeing has
the right to cancel the Agreement. Boeing agrees that it shall
exercise the right of cancellation with respect to any SBP or the
Agreement only in the case of an Event of Default as defined in
Section 13.1, and to the extent permitted in this Section 13.2.A.
For the avoidance of doubt, it is agreed that in the case of any
Event of Default, Boeing shall have all the remedies set forth in
this Section 13.2, except that with respect to Events of Default
under 13.1.A, 13.1.B and 13.1.F, Boeing's right to exercise
cancellation of an SBP or the Agreement shall be exclusively
pursuant to this Section 13.2.A) as limited by the immediately
preceding paragraph.
B. Cover
Boeing may manufacture, produce or provide, or may engage any other
persons to manufacture, produce or provide, any Products in
substitution for the Products to be delivered or provided by Seller
which Boeing reasonably believes may be affected by the Event of
Default. In addition to any other remedies or damages available to
Boeing hereunder or at law or in equity, Boeing may recover from
Seller the difference between the price for each such Product and
the aggregate expense, including, without limitation, administrative
and other indirect costs, paid or incurred by Boeing to manufacture,
produce or provide, or engage other persons to manufacture, produce
or provide, each such Product.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
C. Rework or Repair
Where allowed by the applicable regulatory authority, Boeing or its
designee may rework or repair any Product in accordance with GTA
Section 8.3;
D. Setoff
Boeing shall, at its option, have the right to set off against and
apply to the payment or performance of any obligation, sum or amount
owing at any time to Boeing hereunder or under any Order, all
deposits, amounts or balances held by Boeing for the account of
Seller and any amounts owed by Boeing to Seller, regardless of
whether any such deposit, amount, balance or other amount or payment
is then due and owing.
E. Tooling and other Materials
Upon the cancellation of any Order, any SBP or the Agreement, in whole or
in part, pursuant to Section 13.2.A, or as necessary to exercise the cover
remedy under Section 13.2.B and as partial compensation for the additional
costs which Boeing will incur as a result of the transfer of production
capabilities from Seller to Boeing or Boeing's designee, Seller shall upon
the request of Boeing, transfer and deliver to Boeing or Boeing's designee
title to any or all (i) Tooling, (ii) Boeing-furnished material, (iii) raw
materials, parts, work-in-process, incomplete or completed assemblies, and
all other Products or parts thereof in the possession or under the
effective control of Seller or any of its subcontractors or suppliers (iv)
Proprietary Information and Materials of Boeing including without
limitation planning data, drawings and other Proprietary Information and
Materials relating to the design, production, maintenance, repair and use
of Tooling, in the possession or under the effective control of Seller or
any of its subcontractors or suppliers, in each case free and clear of all
liens, claims or other rights of any person. Transfer and delivery with
respect to clauses (i)-(iv) above shall apply upon either (a) cancellation
of an Order, SBP or Agreement or (b) cancellation of the Order(s) with
respect to which Boeing is exercising its cover remedy. Seller shall be
entitled to receive from Boeing market value for any item accepted by
Boeing which has been transferred to Boeing pursuant to this GTA Section
13.2.E (except for any item which Boeing owns (including but not limited
to Existing Tooling) or 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 to Boeing as a result of any Event of
Default.
F. Assistance in Operation of Facility
Boeing may, in the case of an Event of Default involving an Order, the SBP
or this Agreement under Sections 13.1.A., 13.1.B., 13.1.E and 13.1.F, by
giving notice to Seller, have unencumbered access to Seller's facility to
operate or assist in operating the facility in order to assure completion
of the requirements for the Order, SBP or Agreement subject to the Event
of Default. Provided that in the case of Section 13.1.A, 13.1.B and
Section 13.1.F, Boeing may exercise this remedy only: (a) after repeated
and material Events of Default that are having operational
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
or financial impact on Boeing; and (b) failure by the parties with in
thirty (30) days of Seller's receipt of Cancellation Notice, to reach an
agreement on a recovery plan that is satisfactory to Boeing and Seller.
G. Remedies Generally
No failure on the part of Boeing in exercising any right or remedy
hereunder, or as provided by law or in equity, shall impair,
prejudice or constitute a waiver of any such right or remedy, or
shall be construed as a waiver of any Event of Default or as an
acquiescence therein. No single or partial exercise of any such
right or remedy shall preclude any other or further exercise thereof
or the exercise of any other right or remedy. No acceptance of
partial payment or performance of any of Seller's obligations
hereunder shall constitute a waiver of any Event of Default or a
waiver or release of payment or performance in full by Seller of any
such obligation. All rights and remedies of Boeing hereunder and at
law and in equity shall be cumulative and not mutually exclusive and
the exercise of one shall not be deemed a waiver of the right to
exercise any other. Nothing contained in this Agreement shall be
construed to limit any right or remedy of Boeing now or hereafter
existing at law or in equity, except for the right of cancellation
under Section 13.2.A, which Section nevertheless shall not otherwise
affect other remedies or damages available to Boeing hereunder or at
law or equity.
14.0 EXCUSABLE DELAY
If delivery of any Product is delayed by circumstances beyond Seller's
reasonable control (and despite Seller's commercially reasonable efforts to
mitigate such circumstances) and without the error or negligence of Seller or of
its suppliers or subcontractors or by any material act or failure to act by
Boeing (any such delay being hereinafter referred to as "Excusable Delay"), the
delivery of such Product shall be extended for a period to be determined by
Boeing after an assessment by Boeing of 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 rule, regulation or order promulgated by any
governmental agency for or with respect to environmental protection. However,
the above notwithstanding, Boeing expects Seller to continue production, recover
lost time and support all schedules as established under this Agreement or any
Order. Therefore, it is understood and agreed that (i) delays of less than two
(2) days duration shall not be considered to be Excusable Delays unless such
delays shall occur within thirty (30) days preceding the scheduled delivery date
of any Product and (ii) if delay in delivery of any Product is caused by the
default of any of Seller's subcontractors or suppliers, such delay shall not be
considered an Excusable Delay unless the supplies or services to be provided by
such subcontractor or supplier are not obtainable from other sources that meet
Boeing's specifications in sufficient time to permit Seller to meet the
applicable delivery schedules.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
If delivery of any Product is delayed by an Excusable Delay for more
than three (3) months, and:
(a) the Excusable Delay is due to a strike, Boeing may, without any
additional extension, cancel all or part of any Order with respect
to the delayed Products, and may exercise its rights and remedies of
cover in respect of such Products in accordance with GTA Section
13.2.B, or
(b) the Excusable Delay is due to reasons other than a strike,
Boeing may, without any additional extension, cancel all or part of
any Order, with respect to the delayed Products, and may exercise
its right of cover in respect of such Products, but at its own
expense.
If delivery of Product(s) constituting more than 25% of the shipset
value for one or more models of Program Airplanes is delayed by an
Excusable Delay for more than five (5) months, Boeing may without
any additional extension, cancel the SBP as it applies to such
models of Program Airplanes, and neither Party shall have any
liability to the other with respect to such cancellation, except
Section 13.2.E shall apply.
15.0 SUSPENSION OF WORK
Boeing may at any time, by written order to Seller setting forth in reasonable
detail the reasons for the order and the projected duration of the order,
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) Boeing shall either (i) cancel the
Stop Work Order or (ii) terminate or cancel the work covered by the Stop Work
Order in accordance with the provisions of GTA Section 12.0 or 13.0. In the
event the Stop Work Order is canceled by Boeing or the period of the Stop Work
Order (including any extension thereof) expires, Seller shall promptly resume
work in accordance with the terms of the Agreement, provided that the delivery
schedule affected by such Stop Work Order shall be extended by a mutually
agreeable period and Boeing will compensate Seller for its reasonable direct
costs incurred as a result of such Stop Work Order.
16.0 TERMINATION OR WRONGFUL CANCELLATION
Boeing shall not be liable for any loss or damage resulting from any termination
of an Order in accordance with GTA Section 12.1 and the applicable SBP, except
as expressly provided in GTA Section 12.3 or any cancellation in accordance with
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, Boeing's
liability shall be limited to the payment to Seller of the amount or amounts
identified in GTA Section
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
12.3, plus an amount for [*****], if any. Notwithstanding the foregoing, if
Boeing wrongfully cancels or terminates all orders with respect to a model of
Program Airplane ("Cancelled Program Airplane") and such cancellation or
termination results in or has the effect of a cancellation or termination of
this Agreement or SBP MS-65530-0016 in its entirety with respect to the
Cancelled Program Airplane, or if Boeing wrongfully cancels or terminates SBP
MS-65530-0016 with respect to a Cancelled Program Airplane, then Seller shall be
entitled to all remedies available at law or in equity, except that the monetary
damages that Seller may recover shall not exceed [*****].
17.0 ASSURANCE OF PERFORMANCE
A. Seller to Provide Assurance
If Boeing reasonably 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 Boeing
has reasonable grounds for insecurity, Boeing may request, by notice
to Seller setting forth in reasonable detail the basis for concern,
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 Boeing as
promptly as possible, but in any event no later than ten (10)
calendar days following Boeing's request therefore and each
Assurance of Performance shall be accompanied by any information,
reports or other materials, prepared by Seller, as Boeing may
reasonably request. Except as to payment for accepted goods, Boeing
may to the extent permitted under GTA Section 13.2 suspend all or
any part of Boeing's performance hereunder until Boeing receives an
Assurance of Performance from Seller satisfactory in form and
substance to Boeing.
B. Meetings and Information
Either Party may request one or more meetings with senior management
or other employees of the other Party for the purpose of discussing
any request by Boeing for Assurance of Performance or any Assurance
of Performance provided by Seller. Each of Seller and Boeing (Boeing
Commercial Airplanes) shall make such persons available to meet with
representatives of the other Party as soon as may be reasonably
practicable following a request for any such meeting by such other
Party and Seller and Boeing shall make available to each other any
additional information, reports or other materials in connection
therewith as such other Party may reasonably request.
- 29 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
18.0 RESPONSIBILITY FOR PROPERTY
Seller shall clearly mark, maintain an inventory of, and keep segregated or
identifiable all of Boeing's property and all property to which Boeing 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 Boeing with adequate
proof of insurance against such risk of loss. Nothing in this Agreement shall
authorize Seller to use such property other than in performance of an Order
without prior written consent from Boeing. Seller shall notify Boeing's
Procurement Representative if Boeing's property is lost, damaged or destroyed.
As directed by Boeing , Seller shall deliver, as and to the extent provided in
Sections 12, 13, and 25, as the case may be, such property reasonably necessary
in Boeing's judgment to carry out terminated, cancelled or completed GTA,
Programs or Orders, to the extent not incorporated in delivered end products.
Such property shall be delivered to Boeing in substantially the same condition
as provided to Seller, 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 Boeing that it has good title to all inventory,
work-in-process, Tooling (other than Tooling owned by Boeing) and materials to
be supplied by Seller in the performance of its obligations under any Order. If
required pursuant to the provisions of such an Order, Seller will transfer to
Boeing 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.
20.0 PROPRIETARY INFORMATION AND ITEMS
Boeing and Seller shall each keep confidential and protect from disclosure all
(a) confidential, proprietary, and/or trade secret information; including
editorial revisions, annotations, elaborations, or any other forms in which such
confidential, proprietary, and/or trade secret information may be modified,
recast, transformed, translated, condensed, or otherwise adapted; (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").
Except as set forth in any other agreement between the parties executed on the
date hereof, or hereafter executed pursuant to an agreement executed between the
parties on the date hereof. Boeing and Seller shall each use Proprietary
Information and Materials of the other only in the performance of and for the
purpose of this Agreement and/or any Order. Provided, however, that despite any
other obligations or restrictions imposed by this GTA Section 20.0, Boeing 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
- 30 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
any such disclosure by Boeing shall, whenever appropriate, include a restrictive
legend suitable to the particular circumstances. Each party shall maintain
restrictive legends placed by the other party on Proprietary Information and
Materials of the other party on all copies made of the other party's Proprietary
Information and Materials. The provisions of this Article 20 shall also apply to
all materials derived from the Proprietary Information and Materials of Boeing
or Seller.
Except as set forth in any other agreement between the parties executed on the
date hereof, or hereafter executed pursuant to an agreement executed between the
parties on the date hereof, upon Boeing's request at any time, and in any event
upon the completion, termination or cancellation of a Program or this Agreement,
Seller shall return all of Boeing's Proprietary Information and Materials, and
all materials derived from Boeing's Proprietary Information and Materials to
Boeing unless specifically directed otherwise in writing by Boeing. Except as
set forth in any other agreement between the parties executed on the date
hereof, or hereafter executed pursuant to an agreement executed between the
parties on the date hereof, Seller shall not, without the prior written
authorization of Boeing, sell or otherwise dispose of (as scrap or otherwise)
any parts or other materials containing, conveying, embodying, or made under
this GTA or applicable SPB in accordance with or by reference to any Proprietary
Information and Materials of Boeing. .
Prior to disposing of such parts or materials as scrap, Seller shall render them
unusable. Boeing shall have the right to audit Seller's compliance with this GTA
Section 20.0. Seller may disclose Proprietary Information and Materials of
Boeing 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 Boeing 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
The requirements of this Article 20 shall not restrict Seller's or Boeing's use
or disclosure of Independently Available Materials. For the purpose of this
Article the following definitions shall apply, (i) "Independently Available
Materials" means items that contain, convey, or embody Independently Available
Information, and that Seller or Boeing knows or reasonably should know are not
Proprietary Information or Materials of the other, and (ii). "Independently
Available Information" means information that: (a) Seller or Boeing lawfully
obtains from a third party who has the right to disclose such information to
Seller or Boeing without restriction; (b) Seller or Boeing independently
develops without reference to, or incorporation of Proprietary Information or
Materials of the other, or (c) that Seller or Boeing obtains from publicly
accessible sources; except, in each case, for information that Seller or Boeing
knows or reasonably should know are derived from Proprietary Information and
Materials of the other.
- 31 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
For the avoidance of doubt, Seller's obligations with respect to Boeing
Proprietary Information and Materials shall not be reduced even if such Boeing
Proprietary Information and Materials contain Independently Available
Information.
21.0 COMPLIANCE
21.1 COMPLIANCE WITH LAWS
Seller shall be responsible for complying with all laws, including, but not
limited to, any statute, rule, regulation, judgment, decree, order, or permit
applicable to its performance under this Agreement, including those pertaining
to United States Export Controls. Seller shall notify Boeing at the earliest
practicable opportunity of any aspect of its performance which becomes subject
to additional regulation 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, in each case if such additional regulation could
reasonably be expected to materially affect the Seller's or Boeing's performance
under this Agreement.
Boeing shall be responsible for complying with all laws, including, but not
limited to, any statute, rule, regulation, judgment, decree, order, or permit
applicable to its performance under this Agreement, including those pertaining
to United States Export Controls.
21.2 GOVERNMENT REQUIREMENTS
If any of the work to be performed under this Agreement is performed in the
United States, Seller shall, via invoice or other form satisfactory to Boeing,
certify that the Products covered by the Order were produced in compliance with
Sections 6, 7, and 12 of the Fair Labor Standards Act (29 U.S.C. 201-291), as
amended, and the regulations and orders of the U.S. Department of Labor issued
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
- 32 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
Boeing is committed to conducting its business fairly, impartially, and in an
ethical and proper manner. Boeing's expectation is that Seller will also conduct
its business fairly, impartially and in an ethical and proper manner, and that
Seller will have (or will develop) and adhere to a code of ethical standards. In
the event that Seller has cause to believe that Boeing or any Boeing employee or
agent has acted improperly or unethically under this contract, Seller shall
report such conduct to the Boeing Ethics hotline. Copies of Boeing's Code of
Conduct and contacts for such reports are available on www.boeing.com under
"Ethics and Business Conduct." Although Boeing will not use the failure to make
such a report as a basis for claiming breach of contract by Seller, Seller is
encouraged to exert reasonable efforts to make such reports when warranted.
22.0 INTEGRITY IN PROCUREMENT
Seller warrants that; to its knowledge, neither it nor any of its employees,
agents or representatives have offered or given, or will offer or give any
gratuities to Boeing's 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 will use commercially reasonable efforts to actively seek out and provide
commercially reasonable 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 BOEING'S RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS, AND
TOOLING
Seller hereby grants to Boeing an irrevocable, nonexclusive, paid-up worldwide
license to practice and/or use, and license others to practice and/or use on
Boeing's behalf, all of Seller's patents, copyrights, trade secrets (including,
without limitation, designs, processes, drawings, technical data and tooling),
industrial designs, semiconductor mask works, and Tooling related to the
development, production, maintenance or repair of Products (collectively
hereinafter referred to as "Licensed Property"). Boeing shall not exercise the
license granted to Boeing in this GTA Section 24.0 except in connection with the
making, having made, using and selling of Products or products of the same kind
provided that , (i) such undelivered quantity of Product cannot, in Boeing's
sole determination, be reasonably obtained in the required time frame at a
reasonable price from commercially available sources (including Boeing) without
the use of Seller's Licensed Property, and (ii) one or more of the following
situations occur:
- 33 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
A. Boeing cancels this Agreement or any Order for cause pursuant to GTA
Section 13.0 herein;
B. In Boeing's judgment it becomes necessary, in order for Seller to comply
with the terms of this Agreement or any Order, for Boeing to provide
support to Seller (in the form of design, manufacturing, or on-site
personnel assistance) substantially in excess of that which Boeing
normally provides to its suppliers;
C. Seller's trustee in bankruptcy (or Seller as debtor in possession) fails
to assume this Agreement and all Orders by formal entry of an order in the
bankruptcy court within sixty (60) days after entry of an order for relief
in a bankruptcy case of the Seller, or Boeing elects to retain its rights
to Licensed Property under the bankruptcy laws;
As a part of the license granted under this GTA Section 24.0, Seller shall, at
the written request of Boeing and at no additional cost to Boeing, promptly
deliver to Boeing any and all Licensed Property considered by Boeing to be
necessary to exercise Boeing's rights under this Section 24.0.
25.0 TERMINATION OF AIRPLANE PROGRAM
25.1 PROGRAM TERMINATION
The parties acknowledge and agree that Boeing may, in its sole discretion,
terminate any model of Program Airplane or Derivative from this Agreement
including any Order issued hereunder, by written notice to Seller, if Boeing
does not initiate or terminates production of such model of Program Airplane or
Derivative involving the Product, by reason of Boeing's determination that there
is insufficient business basis for proceeding with such model of Program
Airplane or Derivative. In the event of such a termination, Boeing shall have no
liability to Seller except as expressly provided in GTA Section 25.2 below.
25.2 TERMINATION LIABILITY
In the event of a termination of any model of Program Airplane or Derivative as
described in 25.1 above, Boeing shall have no liability whatsoever to Seller,
except to the extent of (i) any guaranteed minimum purchase, if any, as set
forth in an applicable SBP, (ii) any Orders issued prior to the date of the
written notice to Seller identified in 25.1 above; and (iii) in accordance with
GTA Section 25.1. Termination of such model of Program Airplane or Derivative or
Orders shall be governed by GTA Section 12.0 herein.
- 34 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
26.0 PUBLICITY
Except as required by law, rule or regulation, without Boeing's 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 Airplane to which they may pertain. Seller shall be liable to Boeing 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 Boeing
does or could have an insurable interest pursuant to this Agreement, including
but not limited to Tooling, Boeing-furnished property, raw materials, parts,
work-in-process, incomplete or completed assemblies and all other products or
parts thereof, and all drawings, specifications, data and other materials
relating to any of the foregoing in each case to the extent in the possession or
under the effective care, custody or control of Seller 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 Boeing and shall (i) provide for payment of loss there under to
Boeing, as loss payee, as its interests may appear and (ii) contain a waiver of
any rights of subrogation against Boeing, its subsidiaries, and their respective
directors, officers, employees and agents
27.2 CERTIFICATE OF INSURANCE
Upon written request from Boeing, Seller shall provide to Boeing's 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 Boeing's Procurement
Representative in the event of cancellation, non-renewal or material change
adversely affecting the interests of Boeing.
- 35 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
27.3 NOTICE OF DAMAGE OR LOSS
Seller shall give prompt written notice to Boeing's 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 Boeing, settle,
adjust, or compromise any and all such loss or damage not in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in any one occurrence and Five Hundred
Thousand Dollars ($500,000) in the aggregate. Seller may settle, adjust or
compromise any other claim by Seller only after Boeing has given written
approval, which approval shall not be unreasonably withheld or delayed.
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. Seller may
use its facilities and equipment (which shall not include any of Boeing's
Proprietary Information and Materials, the use of which shall be governed by GTA
Section 20.0, the HMSGTA and any applicable SLAs, or such other requirements as
may be agreed to between Boeing and Seller) for any lawful purposes in addition
to performing Orders. 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 alternative facilities and equipment at
no cost to Boeing, and any failure to do so shall not relieve Seller from its
obligations.
Seller shall notify and obtain written approval from Boeing prior to moving work
to be performed under this Agreement between Seller's or its subcontractors
various facilities. Seller shall include as part of its subcontracts those
elements of the Agreement that protect Boeing's rights including but not limited
to right of entry provisions, proprietary information and rights provisions and
quality control provisions. In addition, Seller shall provide to its
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 Boeing's Procurement Representative.
- 36 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
28.1 SUBCONTRACTING
Seller shall maintain complete and accurate records regarding all subcontracted
items and/or processes. Seller's use of subcontractors shall comply with
Seller's quality assurance system approval for said subcontractors. Unless
Boeing's prior written authorization or approval (which shall not be
unreasonably withheld or delayed) 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.
28.2 RELIANCE
Entering into this Agreement is in part based upon Boeing's reliance on Seller's
ability, expertise and awareness of the intended use of the Products. Seller
agrees that Boeing and Boeing's Customers may rely on Seller as an expert, and
Seller will not deny any responsibility or obligation hereunder to Boeing or
Boeing's Customers on the grounds that Boeing or Boeing's Customers provided
recommendations or assistance in any phase of the work involved in producing or
supporting the Products, including but not limited to Boeing's acceptance of
specifications, test data or the Products.
28.3 ASSIGNMENT
Seller shall not assign any of its rights or interest in this Agreement or any
Order, or subcontract all or substantially all of its performance of this
Agreement or any Order, without Boeing's prior written consent, which shall not
be unreasonably withheld, except that Boeing may withhold its consent to an
assignment to a Disqualified Person (as defined below) for any reason and at its
sole discretion. Seller shall provide Boeing with thirty (30) days notice prior
to any proposed assignment. Seller shall not delegate any of its duties or
obligations under this Agreement; provided that this shall not prohibit Seller
from subcontracting as permitted pursuant to the applicable SBP. Seller may
assign its right to monies due or to become due. No assignment, delegation or
subcontracting by Seller, with or without Boeing's consent, shall relieve Seller
of any of its obligations under this Agreement or Order or prejudice any rights
of Boeing against Seller whether arising before or after the date of any
assignment. This article does not limit Seller's ability to purchase standard
commercial supplies or raw material.
- 37 -
Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
The prohibition set forth in this GTA Section 28.3 includes, without limitation
(and the following shall, subject to the immediately following sentence, be
deemed to be "assignments"): (i) a consolidation or merger of Seller in which a
Disqualified Person directly or indirectly holds, immediately after consummation
of the transaction more than fifty percent (50%) of the voting power of the
issued and outstanding voting stock of the corporation resulting from or
surviving such transaction; (ii) the acquisition directly or indirectly by a
Disqualified Person of voting stock of any corporate Seller having more than
fifty percent (50%) of the voting power of the issued and outstanding voting
stock of Seller; (iii) the sale, assignment or transfer of all or substantially
all of the assets of Seller to a Disqualified Person; and (iv) where Seller is a
partnership, acquisition of control of such partnership by a Disqualified
Person. Any consolidation, merger, acquisition of voting stock or sale,
assignment or transfer of all or substantially all of the assets of Seller that
is not prohibited by the immediately preceding sentence shall not constitute an
"assignment" for purposes of this GTA and shall not be prohibited by, or require
Boeing's consent under, this Section 28.3.
A Disqualified Person is:
(i) a Person, a principal business of which is as an
original equipment manufacturer of commercial aircraft,
defense systems, satellites, space launch vehicles or
space vehicles;
(ii) a Person that Boeing reasonably believes is unable to
perform this Agreement, for reasons, including but not
limited to, financial viability, export and import laws,
and demonstrated past performance failures;
(iii) a Person, that after giving effect to the transaction ,
would be the supplier of more than forty percent (40%)
by value of the major structural components of any model
of Boeing aircraft then in production, unless it is
mutually agreed that significant identifiable benefits
will accrue to Boeing as a result of the transaction;
or;
(iv) a Person who is one of the following companies or a
parent, subsidiary or affiliate of one of the following
companies: Lufthansa Technique; Israeli Aircraft
Industries; HAECO; PEMCO Aeroplex, EADS/Airbus, or who
is an airline or an operator of commercial aircraft in
revenue service or a parent, subsidiary or affiliate of
an airline or an operator of commercial aircraft in
revenue service..
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
Seller shall not permit any Person described in clause (iv) of the definition of
Disqualified Person to hold any voting stock of Seller at any time that Seller
is not a Public Company. Seller shall not enter into any agreement under which
any Person described in clause (iv) of the definition of Disqualified Person is
entitled to designate one or more members of Seller's board of directors at any
time that Seller is a Public Company. A Public Company is any Person (i) with
equity securities registered under Section 12 of the Securities Exchange Act of
1934 or which is subject to the reporting requirements of Section 15(d) of the
Securities Exchange Act of 1934 or (ii) with equity securities traded or quoted
in a domestic or foreign securities exchange or market.
For the avoidance of doubt, Boeing and Seller agree that HMSGTA MWS and
Supplemental License Agreements WS-001/-002/-003 and -004 may be assigned to the
third party receiving assignment of this GTA and its corresponding SBP's. Any
other Supplemental License Agreement between Boeing and Seller will be subject
to the assignment terms of HMSGTA MWS.
28.4 RESERVED
29.0 NON-WAIVER/PARTIAL INVALIDITY
Any failures, delays or forbearances of Boeing 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.
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 PRICES
Boeing and Seller agree that the prices have been negotiated on an arms-length
basis and represent the fair market value of the Products as of the date hereof.
32.0 MUTUAL DRAFTING
The parties hereto are sophisticated and have been represented by lawyers who
have carefully negotiated the provisions hereof. As a consequence, the parties
do not intend that the presumptions of any laws or rules relating to the
interpretation of contracts against the drafter of any particular clause should
be applied to this GTA and therefore waive their effects.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
33.0 DISPUTES
Boeing and Seller shall use their best reasonable efforts to resolve any and all
disputes, controversies, claims or differences between Boeing and Seller,
arising out of or relating in any way to this GTA, any applicable SBP or Order
or the performance, including, but not limited to, any questions regarding the
existence, validity or termination hereof ("Disputes"), through negotiation. If
either party determines that a Dispute cannot be resolved by the functional
representatives of Boeing and Seller, such party may refer the Dispute through
management channels of the Parties or their respective designees, for further
negotiation by senior management representatives of the Parties. Depending on
the seriousness of the dispute and prior attempts to resolve the dispute as
appropriate, the senior representatives will be the Senior Vice President
Supplier Management or that person's equivalent.
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 15. Pending final resolution of any dispute, Seller and Boeing shall
proceed with performance of this Agreement so long as the other party continues
to perform its obligations hereunder.
34.0 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
the other party.
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 Boeing ("Sales Taxes"),
which Boeing specifically agrees to pay provided such Sales Taxes are separately
stated on Seller's invoice. Prices shall not include any taxes, impositions,
charges or exactions for which Boeing has furnished a valid exemption
certificate or other evidence of exemption.
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
35.2 LITIGATION
In the event that any taxing authority has claimed or does claim payment for
Sales Taxes, Seller shall promptly notify Boeing, and Seller shall take such
action as Boeing may direct to pay or protest such taxes or to defend against
such claim, provided, that Seller shall not be required to take any action which
it reasonably determines may be criminal or may subject any officer, director,
employee or agent to liability. The actual and direct costs and expenses,
without the addition of profit and overhead, of such defense and the amount of
such taxes as ultimately determined as due and payable shall be paid directly by
Boeing or reimbursed to Seller. If Seller or Boeing is successful in defending
such claim, the amount of such taxes recovered by Seller, which had previously
been paid by Seller and reimbursed by Boeing or paid directly by Boeing, shall
be immediately refunded to Boeing, less any costs incurred by Seller in
defending such claim which have not theretofore been reimbursed by Boeing.
35.3 REBATES
If any Sales Taxes paid by Boeing are subject to rebate or reimbursement, Seller
shall use commercially reasonable efforts (which need not include litigation),
to secure such rebates or reimbursement and shall promptly refund to Boeing any
amount recovered by Seller on account of any such rebate or reimbursement.
36.0 OFFSET CREDITS
To the exclusion of all others, Boeing or its assignee shall be entitled to all
industrial benefits or offset credits which might result from this Agreement or
Order. Seller shall provide documentation or information, which Boeing 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 Boeing of the name, address, subcontract point of contact
(including telephone number) and dollar value of the subcontract.
37.0 NO JOINT VENTURE, AGENCY OR PARTNERSHIP RELATIONSHIP
This Agreement shall not constitute, give effect to, or otherwise imply a joint
venture, partnership, agency or formal business organization of any kind between
Boeing and Seller
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Confidential portions of this exhibit have been omitted
pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing / Spirit AeroSystems, Inc.
General Terms Agreement (GTA)
BCA-65530-0016 Amendment 1
38.0 APPLICABLE LAW
This contract shall be governed by the laws of the State of Washington No
consideration shall be given to Washington's conflict of law rules. This
contract excludes the application of the 1980 United Nations Convention on
Contracts for the International Sale of Goods. Boeing and Seller hereby
irrevocably consent to and submit themselves exclusively to the jurisdiction of
the applicable courts of King County, Washington and the federal courts of
Washington State 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. Boeing and Seller hereby waive and agree not to assert
by way of motion, as a defense, or otherwise, in any such suit, action or
proceeding, any claim that (a) Boeing and Seller are 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.
39.0 ORDER OF PRECEDENCE
The order of precedence of the terms and conditions of this GTA when compared to
the terms and conditions of other documents is determined by the Order of
Precedence section in the relevant SBP.
EXECUTED in duplicate as of the date and year first written above by the duly
authorized representatives of the parties.
BOEING SELLER
THE BOEING COMPANY Spirit AeroSystems , Inc.
By and Through its Division
Boeing Commercial Airplanes
/s/ Bryan Gerard /s/ Seth Mersky
- -------------------------------------- --------------------------
Name: Bryan Gerard Name: Seth Mersky
Title: Director-New Business Ventures Title: President
Date: June 16, 2005 Date: June 16, 2005
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