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 10.25
Final Draft
HARDWARE MATERIAL SERVICES
GENERAL TERMS AGREEMENT
Relating to
BOEING AIRCRAFT
This Hardware Material Services General Terms Agreement No. MWS (HMSGTA) is
entered into as of June 16, 2005 by and between The Boeing Company, a Delaware
corporation, including its wholly-owned subsidiaries, Boeing Management Company
and McDonnell Douglas Corporation (Boeing), and Mid-Western Aircraft Systems,
Inc., a Delaware corporation, (Customer). This HMSGTA will be applicable
prospectively from this date and be incorporated into orders entered into on or
after this date.
Accordingly, Customer and Boeing agree as follows:
Boeing will provide and Customer will purchase, lease or license the spare
parts, standards, tools, Materials (as defined in Part 1 herein), services, and
other things described herein in accordance with the attached terms and
conditions and in accordance with the ordering provisions of the Spares Catalog,
and the Materials and Services Listing, as applicable. Except as set forth in an
SLA, Boeing is under no obligation to provide spare parts, standards, tools,
Materials, services or any other things to Customer once this HMSGTA is signed.
However, any spare parts, standards, tools, Materials, services or any other
things provided to Customer will be done so under the terms and conditions of
this HMSGTA, including any SLAs thereto.
Part 1, Article 11, relating to DISCLAIMER AND RELEASE and the EXCLUSION OF
CONSEQUENTIAL AND OTHER DAMAGES, and the provisions relating to indemnity and
insurance, have been the subject of discussion and negotiation and are fully
understood by the parties, and the other provisions set forth in this HMSGTA
were, and each SLA and Order will be made, in consideration of such provisions.
THE BOEING COMPANY MID-WESTERN AIRCRAFT SYSTEMS, INC.
Signature: /s/ Bryan Gerard Signature: /s/ Seth Mersky
-------------------------- --------------------------
Printed Name: Bryan Gerard Printed Name: Seth Mersky
Title: Director-New Business Ventures Title: President
(i)
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 [*****].
HARDWARE MATERIAL SERVICES
GENERAL TERMS AGREEMENT
PART 1
COMMON TERMS AND CONDITIONS
PAGE
CONTENTS NUMBER
- -------- ------
1. Scope of HMSGTA and Ordering.................................................................. 1-1
2. Definitions................................................................................... 1-1
3. Payment....................................................................................... 1-4
4. Taxes......................................................................................... 1-5
5. Delivery...................................................................................... 1-5
6. Cancellation of Orders........................................................................ 1-5
7. Inspection and Acceptance..................................................................... 1-6
8. Excusable Delay............................................................................... 1-6
9. Right to Stop Work............................................................................ 1-6
10. Notices....................................................................................... 1-7
11. EXCLUSION OF LIABILITIES...................................................................... 1-7
12. Indemnity..................................................................................... 1-8
13. Insurance..................................................................................... 1-9
14. Termination for Insolvency.................................................................... 1-10
15. Assignment.................................................................................... 1-10
16. Amendments.................................................................................... 1-11
17. Term.......................................................................................... 1-11
18. Miscellaneous................................................................................. 1-11
(ii)
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 [*****].
HARDWARE MATERIAL SERVICES
GENERAL TERMS AGREEMENT
PART 2
SPECIFIC TERMS AND CONDITIONS
PAGE
CONTENTS NUMBER
- -------- ------
1. Purchase of Spare Parts and Standards...................................................... 2-1
2. Lease of Parts and Tools................................................................... 2-2
3. Provision of Services ..................................................................... 2-4
4. Provision of Materials..................................................................... 2-4
5. Provision of Repair/Overhaul/Exchange parts................................................ 2-8
PART 3
WARRANTY TERMS AND CONDITIONS
PAGE
CONTENTS NUMBER
- -------- ------
1. Boeing Spare Parts Warranty................................................................ 3-1
2. Supplier Warranty Commitment............................................................... 3-6
3. Warranty of Leased Tools and Leased Parts.................................................. 3-6
4. Warranty of Technical Assistance and Technical Consulting.................................. 3-6
5. Warranty for Repair/Overhaul/Exchange Parts................................................ 3-6
6. Indemnities Against Patent and Copyright Infringement...................................... 3-7
APPENDICES
1. Appendix I - Form of Insurance Broker's Letter............................................. A-1
2. Appendix II - Form of Contractor Confidentiality Agreement................................. A-3
(iii)
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 [*****].
PART 1
COMMON TERMS AND CONDITIONS
1. Scope of HMSGTA and Ordering.
This HMSGTA provides common terms and conditions (Part 1), specific terms
and conditions (Part 2), and warranty terms and conditions (Part 3), which apply
to the provision to Customer of Spare Parts, Standards, Leased Parts, Leased
Tools, Materials, Services (including, but not limited to, Technical Assistance
and Technical Consulting) and other things as Boeing and Customer may agree.
Ordering of such items from Boeing will be as set forth in the Spares Catalog,
and the Materials and Services Listing, as applicable, or as agreed between
Customer and Boeing.
2. Definitions.
The following is a list of capitalized terms and their definitions as used
and not otherwise defined in this HMSGTA.
2.1 "Aircraft" means a Boeing commercial transport aircraft but does not
include derivatives of such aircraft developed, modified or operated for
military or government missions.
2.2 "Aircraft Software" means software intended to fly with and be
utilized in the operation of an Aircraft, but excludes software furnished by
Customer.
2.3 "Authentication Mechanism" means a mechanism used to verify the
identity of a system user including but not limited to user identifications and
passwords, tokens, smart cards, or biometrics.
2.4 "Average Direct Hourly Labor Rate" means the average hourly rate
(excluding all fringe benefits, premium-time allowances, social charges,
business taxes and the like) paid by Customer to its Direct Labor employees.
2.5 "Boeing Spare Parts" means materials (including, among other things,
gaskets, grease, sealants and adhesives), spare parts (including, among other
things, copies of Aircraft Software), tools and other items that are
manufactured by Boeing or pursuant to Boeing's detailed design with Boeing's
authorization.
2.6 "Boeing Warranty Regional Manager" means the manager within the
Boeing organization responsible for administration of Warranties between Boeing
and Customer.
2.7 "Contractor" means any Third Party having the necessary regulatory
approvals, that is appointed by Customer to perform work on behalf of Customer.
The term includes, but is not limited to, entities partially or wholly-owned by
Customer, but which are separately incorporated or otherwise established as
separate legal entities.
2.8 "Correct" means to repair, modify, provide modification kits or
replace with a new product.
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
2.9 "Correction" means a repair, a modification, a modification kit or a
new product.
2.10 "Corrected Boeing Spare Part" means a Boeing Spare Part which is
free of defect as a result of a Correction.
2.11 "Direct Labor" means labor spent by direct labor employees to
remove, disassemble, modify, repair, inspect and bench test a defective Boeing
Spare Part, and to reassemble, reinstall a Corrected Boeing Spare Part and
perform final inspection or to perform similar acts to Correct Services.
2.12 "Direct Materials" means items such as parts, gaskets, grease,
sealant and adhesives, installed or consumed in performing a Correction,
excluding allowances for administration, overhead, taxes, customs duties and the
like.
2.13 "Electronic Access" means access to Materials by way of electronic
transmission, including but not limited to, access through the World Wide Web,
Internet or private data transmission lines from Boeing's internal computing
systems.
2.14 "Leased Parts" means Boeing Spare Parts leased from Boeing by
Customer, but excludes tools that are Boeing Spare Parts.
2.15 "Leased Tools" means tools leased from Boeing by Customer.
2.16 "Lessor" means the entity that is leasing an Aircraft either
directly or indirectly to the Operator.
2.17 "Materials" means items that are created by Boeing or a Third Party,
are provided directly or indirectly from Boeing, and serve primarily to contain,
convey, or embody information. Materials may include either tangible forms or
intangible embodiments (for example, software and other electronic forms) of
information, but excludes Aircraft Software and software furnished by Customer.
2.18 "Materials and Services Listing" means any list of available
Materials and Services offered by Boeing in a catalog or other medium, that
identifies ordering provisions and prices.
2.19 "Operator" means the entity that operates the Aircraft.
2.20 "Order" means a contract created pursuant to this HMSGTA. An Order
is not a SLA as defined herein.
2.21 "Owner" means the entity that has legal title to the Aircraft.
2.22 "Proprietary Information" means proprietary, confidential, and/or
trade secret information owned by Boeing or a Third Party which is contained,
conveyed or embodied in Materials.
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
2.23 "Proprietary Materials" means Materials that contain, convey, or
embody Proprietary Information.
2.24 "Repair/Overhaul/Exchange Parts" means goods repaired, overhauled,
modified, remanufactured or provided as exchange goods under a
Repair/Overhaul/Exchange order.
2.25 "Services" means services that may be provided by Boeing, including,
but not limited to, Technical Assistance and Technical Consulting.
2.26 "Spare Parts" means Supplier Spare Parts and Boeing Spare Parts that
may be provided by Boeing.
2.27 "Spares Catalog" means the applicable Boeing Spare Parts Price
Catalog, published by Boeing, listing Boeing Spare Parts and Standards, prices,
reorder lead times and ordering provisions.
2.28 "Standards" means parts available through the Spares Catalog or
those items considered as aircraft standards by the industry that are sold to
Customer by Boeing.
2.29 "Supplemental License Agreement (SLA)" means one or more license
agreements created pursuant to this HMSGTA and entered into by the parties. A
Supplemental License Agreement is not an Order as defined herein.
2.30 "Supplier Spare Parts" means materials (including among other
things, gaskets, grease, sealants and adhesives), spare parts (including, but
not limited to, copies of Aircraft Software), tools and other items that are not
manufactured by Boeing or not manufactured pursuant to Boeing's detailed design
with Boeing's authorization.
2.31 "Technical Assistance" means the providing of Boeing personnel to
Customer during Customer's repair, maintenance or modification of an Aircraft.
Technical Assistance may be of an advisory nature or of a hands-on nature.
2.32 "Technical Consulting" means engineering or other technical services
provided by Boeing.
2.33 "Third Party" means anyone not a party to this HMSGTA.
2.34 "Warranties" means the Boeing warranties and related terms and
conditions contained in this HMSGTA.
2.35 "Warranty Labor Rate" is the greater of the standard labor rate paid
by Boeing to its customers which is established and published annually or
[*****] of Customer's Average Direct Hourly Labor Rate.
Page 1-3
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
3. Payment.
3.1 Invoice.
3.1.1 Boeing will submit invoices to Customer upon delivery of Spare
Parts, Standards, Repair/Overhaul/Exchange Parts, or Materials, or upon
completion of Services called for by the SLA or Order. Advance payments will be
credited against Boeing's invoice issued against such SLA or Order.
3.1.2 Boeing will submit invoices to Customer for Leased Parts and
Leased Tools upon the return of such Leased Parts and Leased Tools to Boeing. If
Customer exercises the option to purchase such Leased Parts, Boeing will submit
an invoice to Customer upon Boeing's receipt of notification of option exercise.
3.2 Payment Due. Payment will be net 30 days after the date of Boeing's
invoice. Other terms of payment may be required if (i) Customer does not have an
account with Boeing, (ii) Customer has not established credit with Boeing, or
(iii) otherwise specified in Boeing's offer.
3.3 Advance Payment and Insurance Proceeds. Boeing's offer will specify
when partial or full payment in advance and/or assignment of insurance proceeds
are required.
3.4 Failure to Pay. In the event Customer fails to make payments when
due, Boeing reserves the right to assert whatever remedies it may have under
this HMSGTA, SLA or an Order, or at law. In such event, Boeing may, with respect
to future SLAs or Orders, require full payment in advance or otherwise alter the
terms of payment specified in Part 1, Article 3.2.
3.5 Late Payment Charge.
3.5.1 Payments due Boeing not paid within 45 days after the date of
Boeing's invoice will be subject to a late payment charge. Such charge will be
computed monthly using the prime rate in effect as published and defined in the
Wall Street Journal on the 15th day of the month, as adjusted month to month,
plus 2%. If the 15th day of the month falls on either a Saturday, Sunday, or a
United States federal holiday, Boeing will use the rate published on the next
business day. Such rate will be applied on the basis of a 365-day year against
the past-due amount, commencing on the 46th day after the invoice date and
continuing until payment is received by Boeing.
3.5.2 Payments due Boeing under any SLA to this HMSGTA and not paid
within 45 days after each calendar quarter will be subject to a late payment
charge. Such charge will be computed monthly using the prime rate in effect as
published and defined in the Wall Street Journal on the 15th day of the month,
as adjusted month to month, plus 2%. If the 15th day of the month falls on
either a Saturday, Sunday, or a United States federal holiday, Boeing will use
the rate published on the next business day. Such rate will be applied on the
basis of a 365-day year against the past-due amount, commencing on the 46th day
after each calendar quarter and continuing until payment is received by Boeing.
Boeing will be entitled to apply any
Page 1-4
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
amounts paid by Customer towards the payment of interest due prior to applying
the amount paid to reduce the amount of royalties due.
3.6 Currency. All payments and amounts listed in this HMSGTA, any SLA or
any Order will be in United States Dollars. The United States currency amount of
any sum payable to Boeing under a SLA will be computed at the lawful exchange
rate most favorable to Boeing prevailing on the last day of each calendar
quarter for which such sum is due.
3.7 Supplemental License Agreement Payment Address. All payments
required under any SLA will be sent postage prepaid to the address specified in
writing by Boeing, or with prior written notice to Boeing, Customer may wire
transfer its payments to an account specified in writing by Boeing.
4. Taxes.
"Taxes" are defined as all taxes, fees, charges or duties and any
interest, penalties, fines, or other additions to tax, including, but not
limited to, sales, use, value-added, gross receipts, stamp, excise, transfer and
similar taxes imposed by any domestic or foreign taxing authority arising out of
or in connection with this HMSGTA, an SLA or an Order. Except for U.S. federal
and U.S. state income taxes and Washington State business and occupation tax
imposed on Boeing, Customer will be responsible for and pay all Taxes.
5. Delivery.
Delivery of Spare Parts, Repair/Overhaul/Exchange Parts, Leased Parts,
Leased Tools, Materials and other items will be Free on Board (F.O.B.) Boeing's
plant, Seattle, Washington, or such other Boeing shipping point or distribution
center from which the item is shipped in fulfillment of an SLA or an Order and
is made upon placing an item in the possession of the carrier.
6. Cancellation of Orders.
6.1 Spare Parts, Repair/Overhaul/Exchange Parts, and Standards. Customer
may cancel an Order for Spare Parts, Repair/Overhaul/Exchange Parts, or
Standards at any time prior to delivery, provided that Boeing will be entitled
to receive a cancellation charge in accordance with the following:
6.1.1 If work accomplished has been limited to Boeing's Spares
Department, no cancellation charge will be made.
6.1.2 If production planning has been completed, but no time or
material charges have been made, the cancellation charge will be [*****] of the
price.
6.1.3 If time or material charges have been made, the cancellation
charge will be based on such charges, but will not exceed the price of the Spare
Parts ordered, or in the case of Repair/Overhaul/Exchange Parts, the charges
will not exceed the current price of the returned part.
Page 1-5
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
6.1.4 If the Spare Parts or Standards are listed in the Spares
Catalog, or can be absorbed into Boeing's inventory without increasing that
inventory beyond Boeing's normal maximum stock level, no cancellation charge
will be made.
6.2 Materials, Services, Leased Tools, and Leased Parts. Customer may
cancel an Order for Materials, Services, Leased Tools or Leased Parts at any
time prior to delivery of such items or completion of Services, provided that
Boeing will be entitled to receive a cancellation charge. The cancellation
charge will be, at a minimum, Boeing's normal charges for time and materials for
work performed under the Order prior to receipt of the cancellation. At a
maximum, the cancellation charge will be the agreed price/fee for the canceled
item. Any cancellation charge relating to Spare Parts provided or to be provided
as part of Services will be determined as set forth in Part 1, Article 6.1.
7. Inspection and Acceptance.
All Spare Parts, Standards, Repair/Overhaul/Exchange Parts, and Materials,
will be subject to inspection by Customer at destination. Use of any of the
above, or failure of Customer to give notice of rejection within 10 weeks after
receipt of any of the above, whichever first occurs, will constitute Customer's
acceptance.
8. Excusable Delay.
Boeing will not be liable for any delay in performance of an SLA or an
Order caused by (i) acts of God, (ii) war or armed hostilities, (iii) government
acts or priorities; (iv) fires, floods or earthquakes, (v) strikes or labor
troubles causing cessation, slow-down or interruption of work, (vi) delivery to
anyone pursuant to an Aircraft on Ground (AOG) or critical request affecting any
aspect of Boeing's performance identified to an SLA or an Order, or (vii)
inability, after due and timely diligence, to procure materials, systems,
accessories, equipment, or parts; (viii) any other cause to the extent such
cause is beyond Boeing's control and not occasioned by Boeing's fault or
negligence. A delay resulting from any such cause is defined as an Excusable
Delay and the date for completion of Boeing's performance will be equitably
extended.
9. Right to Stop Work.
9.1 Boeing will not be required to provide or to continue Services at a
non-Boeing facility during any period in which:
9.1.1 There is a labor dispute or stoppage in progress;
9.1.2 There exist war or warlike operations, riots or insurrections
in the country where such Services are to be performed;
9.1.3 There exist conditions which, in the opinion of Boeing, are
detrimental to the general health, welfare or safety of the Boeing employees; or
9.1.4 The Government of the United States refuses Boeing permission
of entry to the country where the Services are to be performed or recommends
that the Boeing employees
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
leave the country, or refuses Boeing permission to export Materials, Spare
Parts, Aircraft Software or Services to such country.
10. Notices.
10.1 Notices regarding the terms of this HMSGTA or an SLA will be in
English and may be transmitted by any customary written means of communication
addressed as follows:
Customer: Mid-Western Aircraft Systems, Inc.
3801 South Oliver
Wichita, KS 67210
Attention: Director of Contracts
Boeing: Boeing Commercial Airplanes
P.O. Box 3707
Seattle, WA 98124-2207
Attention: Director Special Services - Contracts
Mail Code 21-35
10.2 Notices regarding any Order will be in English, and will be
transmitted as directed in the Order, or if not so directed, then as set forth
in either (i) the Spares Catalog, or (ii) the Materials and Services Listing, as
appropriate.
10.3 The effective date of any notice will be the date on which it is
received by the addressee.
11. EXCLUSION OF LIABILITIES.
11.1 DISCLAIMER AND RELEASE. THE WARRANTIES, OBLIGATIONS AND LIABILITIES
OF BOEING AND THE REMEDIES OF CUSTOMER SET FORTH IN THIS HMSGTA ARE EXCLUSIVE
AND IN SUBSTITUTION FOR, AND CUSTOMER HEREBY WAIVES, RELEASES AND RENOUNCES ALL
OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF BOEING AND ALL OTHER RIGHTS,
CLAIMS AND REMEDIES OF CUSTOMER AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY
LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY SPARE
PARTS, AIRCRAFT SOFTWARE, STANDARDS, REPAIR/OVERHAUL/ EXCHANGE PARTS, LEASED
PARTS, LEASED TOOLS, MATERIALS AND INFORMATION, SERVICES (INCLUDING, BUT NOT
LIMITED TO, TECHNICAL ASSISTANCE AND TECHNICAL CONSULTING) OR ANY OTHER THINGS
PROVIDED UNDER ANY SLA OR ANY ORDER, OR IN ANY BOEING SPARE PARTS, AIRCRAFT
SOFTWARE, STANDARDS AVAILABLE THROUGH THE SPARES CATALOG,
REPAIR/OVERHAUL/EXCHANGE PARTS, OR MATERIALS AND INFORMATION PROVIDED TO
CUSTOMER BY A THIRD PARTY, INCLUDING BUT NOT LIMITED TO:
Page 1-7
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
11.1.1 ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
11.1.2 ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE;
11.1.3 ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT,
WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING; AND
11.1.4 ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF
OR DAMAGE TO ANY AIRCRAFT OR SPARE PART.
11.2 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES. BOEING WILL HAVE NO
OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT
(WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING) OR OTHERWISE, FOR LOSS OF
USE, REVENUE OR PROFIT OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH
RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY SPARE PARTS, AIRCRAFT SOFTWARE,
STANDARDS, REPAIR/OVERHAUL/EXCHANGE PARTS, LEASED PARTS, LEASED TOOLS, MATERIALS
AND INFORMATION, SERVICES (INCLUDING, BUT NOT LIMITED TO, TECHNICAL ASSISTANCE
AND TECHNICAL CONSULTING) OR ANY OTHER THINGS PROVIDED UNDER ANY SLA OR ANY
ORDER, OR IN ANY BOEING SPARE PARTS, AIRCRAFT SOFTWARE, STANDARDS AVAILABLE
THROUGH THE SPARES CATALOG, REPAIR/OVERHAUL/EXCHANGE PARTS, OR MATERIALS AND
INFORMATION PROVIDED TO CUSTOMER BY A THIRD PARTY.
11.3 EXCLUSION OF LIABILITIES - OWNERS. CUSTOMER WILL CAUSE THE OWNER (OR
LESSOR OR OPERATOR, IF AGREED BY BOEING) TO ACCEPT THE PROVISIONS OF THIS
ARTICLE 11 TO THE SAME EXTENT AS CUSTOMER.
11.4 For the purpose of this Article 11, "BOEING" is defined as The
Boeing Company, its divisions, subsidiaries and affiliates, the assignees of
each, and their respective directors, officers, employees and agents.
12. Indemnity.
12.1 Customer will indemnify and hold harmless Boeing from and against
all claims and liabilities, including costs and expenses (including attorneys'
fees), incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Customer but not employees of Boeing, or for loss of or damage to
any property, including any aircraft, arising out of or in any way relating to
the use, lease or shipping of any Leased Tool, the performance of Services
(including, but not limited to, Technical Assistance and Technical Consulting),
the providing or use of any Materials and information, or any other things
provided under any SLA or any Order (except with respect to Spare Parts,
Standards, Repair/Overhaul/Exchange Parts and Leased Parts), or the use by
Boeing of Customer's technical instructions, whether or not arising in tort or
occasioned by the negligence of Boeing. Customer's obligations under this
indemnity will survive the expiration,
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
termination, completion or cancellation of this HMSGTA, any SLA or any Order.
Nothing in this provision shall require Customer to indemnify or hold Boeing
harmless for claims arising out of defects in Spare Parts, Standards,
Repair/Overhaul/Exchange Parts and Leased Parts as originally manufactured by
Boeing.
12.2 For the purpose of this Article 12, "Boeing" means The Boeing
Company, its divisions, subsidiaries and affiliates, the assignees of each, and
their respective directors, officers, employees and agents.
13. Insurance.
13.1 Insurance Requirements. Upon execution of this HMSGTA, Customer will
provide to Boeing a certificate of insurance, renewable on an annual basis,
evidencing that the contractual liabilities assumed by Customer under this
HMSGTA and any SLAs are insured. The form of the insurance certificate, attached
as Appendix I, states the terms, limits, provisions and coverages required by
this Article 13.1. Boeing reserves the right to deny the provision of Services
or Materials pursuant to this HMSGTA if any insurance certificate provided by
Customer fails to meet the requirements of this Article 13.1 or Appendix I, or
if in Boeing's opinion Customer's insurers are unacceptable to Boeing. The
failure of Boeing to demand strict compliance with this Article 13.1 in any year
will not in any way relieve Customer of its obligation to provide insurance
coverage nor constitute a waiver by Boeing of such obligation.
13.2 Insurance for Test Aircraft. In the event that Customer uses, hires,
charters, rents, contracts for, or operates an aircraft in testing,
demonstration, efforts to obtain a supplemental type certification, or for any
other purpose in connection with or based on Materials or Services:
13.2.1 Customer will cause the test aircraft's hull insurer to waive
all rights of subrogation against Boeing.
13.2.2 Customer will cause the test aircraft's comprehensive
liability insurer's to name Boeing as an additional insured for any liabilities
claims, losses or damages arising out of or in any way connected with operation
of the test aircraft.
13.2.3 Customer will cause the insurers of the above coverages to
issue a certificate of insurance evidencing the extension of protection to
Boeing at least 30 days prior to any flight test and will provide such
certificate to Boeing.
13.3 Insurance for Leased Parts and Leased Tools. During any periods of
lease, Customer will, at Customer's expense, insure Leased Parts and Leased
Tools and promptly reimburse Boeing for any loss or destruction of, or damage
to, such Leased Parts or Leased Tools. If requested by Boeing, Customer will
provide proof of insurance referencing this HMSGTA and naming Boeing as a loss
payee.
13.4 For the purpose of this Article 13, "Boeing" is defined as The
Boeing Company, its divisions, subsidiaries and affiliates, the assignees of
each, and their respective directors, officers, employees and agents.
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
14. Termination for Insolvency.
14.1 Terminating Events. This HMSGTA, any SLA, or any Order may be
terminated with regard to undelivered Spare Parts, Standards or Materials,
unexpired lease terms for Leased Parts and Leased Tools, and unperformed
Services, by notice in writing by either party hereto if the other party:
14.1.1 Ceases doing business, suspends all or substantially all its
business operations, makes an assignment for the benefit of creditors, generally
does not pay its debts in the ordinary course of business, or admits in writing
its inability to pay its debts; or
14.1.2 Petitions for or acquiesces in the appointment of any
receiver, trustee or similar officer to liquidate or conserve its business or
any substantial part of its assets; commences any legal proceeding such as
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation
available for the relief of financially distressed debtors; or becomes the
object of any such proceeding, unless such proceeding is dismissed or stayed
within 60 days.
14.2 Effect of Termination of Leases. Upon termination of all Orders for
Leased Parts or Leased Tools under this Article 14, Customer will promptly
assemble all Leased Parts or Leased Tools and deliver them to Boeing at a time
and place designated by Boeing. If Customer fails to so return such Leased Parts
or Leased Tools, Boeing may repossess the Leased Parts or Leased Tools and may
enter at any time Customer's premises to effect such repossession. Customer will
pay all costs and expenses incurred by Boeing in connection with repossession of
any Leased Parts or Leased Tools, including reasonable attorneys' fees. Boeing
will invoice Customer for such costs and expenses and payment will be due
pursuant to Part 1, Article 3. Notwithstanding any such termination, Customer
will remain liable for and will pay to Boeing all lease charges calculated to
the date on which the Leased Parts or Leased Tools are returned to Boeing.
15. Assignment.
15.1 Assignment. This HMSGTA, each SLA and each Order is for the benefit
of and is binding upon each of the parties hereto and their respective
successors and permitted assigns. No rights or duties of either party under this
HMSGTA, any SLA or any Order may be assigned, delegated or contracted to be
assigned or delegated by either party except that:
15.1.1 Upon written authorization by Boeing, Customer may assign its
interest to a corporation that (i) results from any merger or reorganization of
such party or (ii) acquires substantially all the assets of such party;
15.1.2 Boeing may assign its interest to a corporation that (i)
results from any merger or reorganization of Boeing or (ii) acquires
substantially all the assets of Boeing;
15.1.3 Boeing may assign any of its rights to receive money; and
15.1.4 Boeing may assign all or any part of its rights and
obligations under this HMSGTA, any SLA or any Order, to any wholly-owned
subsidiary of Boeing provided that
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Boeing will remain responsible for all obligations and liabilities and Customer
will continue to deal exclusively with Boeing.
15.2 In the interest of maintaining accurate records, Customer will give
notice to Boeing, as soon as practicable, of any change in Customer's name or
corporate structure. The notice will include the new name of the entity, the
nature of the change of the corporate structure if any, and the effective date
of the change.
15.3 No action taken by Customer or Boeing relating to the assignment of
Customer's or Boeing's rights under this HMSGTA, any SLA or any Order will
subject Boeing or Customer to any liability beyond that in this HMSGTA, the
applicable SLA or the applicable Order.
16. Amendments.
Except as provided in this HMSGTA, all amendments to this HMSGTA, any SLA,
or any Order will be in writing, signed by an authorized representative of each
party.
17. Term.
Except as provided in Part 1 Article 14, Termination for Insolvency, this
HMSGTA will be effective as of the date first written above and will remain in
full force and effect thereafter unless and until terminated by written notice
from either party to the other. Unless specified otherwise in a specific SLA,
termination or cancellation of this HMSGTA shall terminate or cancel all SLAs.
Any notice of termination given pursuant to this Article 17 will specify the
effective date of termination, which must be 60 days or more after the date the
notice is sent. All Orders in good standing at the time of termination of the
HMSGTA will be performed in accordance with their terms, unless said Orders
provide or license Materials, in which case said Orders may, at Boeing's option,
be terminated.
18. Miscellaneous.
18.1 Survival of Obligations. The Articles of this HMSGTA relating to
Materials, Proprietary Materials, Proprietary Information, Exclusion of
Liabilities, Indemnity, Insurance, and Warranties will survive termination or
cancellation of this HMSGTA.
18.2 Order of Precedence. In the event of any conflicting terms, the
following order of precedence will prevail (i) the HMSGTA, (ii) the SLA, (iii)
the Order, and (iv) the applicable catalog. For the avoidance of doubt, the
parties agree that certain SLA's may contain terms which are prefaced with
"Notwithstanding Article X.Y.Z of the HMSGTA..." which terms specifically shall
take precedence over or revise the terms of this HMSGTA, the parties further
agree that such terms are not considered to be conflicting terms for the purpose
of this Article 18.2.
18.3 Headings. Article headings used in this HMSGTA, any SLA or any Order
are for convenient reference only and are not intended to affect the
interpretation of this HMSGTA, any SLA or any Order.
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
18.4 Supervision of Employees. Boeing employees performing work under an
SLA or an Order will at all times remain under the exclusive direction and
control of Boeing.
18.5 Waiver and Severability. Failure by either party to enforce any of
the provisions of this HMSGTA, SLA, or any Order will not be construed as a
waiver of such provisions. If any of the provisions of this HMSGTA, SLA, or any
Order are held unlawful or otherwise ineffective by a court of competent
jurisdiction, the remainder of the HMSGTA, SLA, or Order will remain in full
force.
18.6 Compliance with Laws and Export.
18.6.1 Each party shall comply with all laws, including, but not
limited to, any statute, rule, regulation, judgment, decree, order, or permit
applicable to its performance under this HMSGTA or any SLA or Order.
18.6.2 Each party will comply with all United States export laws and
regulations. If an export license is required by United States law or regulation
for any Spare Part, Aircraft Software, Materials, Service or any other thing
delivered under this HMSGTA, SLA or any Order, it is Customer's obligation to
obtain such license. Boeing shall cooperate with Customers request for relevant
information in support of Customer's application for such license.
18.7 Use of Company Name, Trade Names, Trademarks and Service Marks.
18.7.1 Customer agrees not to use the name "Boeing" or its
equivalent, or any other trade name, trademark or service mark of Boeing in any
manner whatsoever without Boeing's prior written consent.
18.7.2 Customer agrees to allow Boeing to use Customer's name in
various documents or lists for the sole purpose of informing Third Parties that
Customer is authorized to use certain Boeing Materials.
18.8 Entire Agreement. This HMSGTA, the applicable SLA and the applicable
Order contain the entire agreement between the parties with respect to the
subject matter hereof and supersede all previous proposals, understandings,
commitments or representations whatsoever, oral or written. Any purchase order
provided or issued by Customer will be used solely for purposes of
administration and financial controls.
18.9 GOVERNING LAW. THIS HMSGTA, SLA, AND ALL ORDERS WILL BE INTERPRETED
UNDER AND GOVERNED BY THE LAW OF THE STATE OF WASHINGTON, U.S.A., EXCEPT THAT
WASHINGTON'S CONFLICTS OF LAWS RULES SHALL NOT BE INVOKED FOR THE PURPOSES OF
APPLYING THE LAW OF ANOTHER JURISDICTION. THE UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS HMSGTA,
SLA, AND ANY ORDER.
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
PART 2
SPECIFIC TERMS AND CONDITIONS
1. Purchase of Spare Parts and Standards.
1.1 Ordering. From time to time, Customer may submit an order for Spare
Parts or Standards. For Spare Parts or Standards listed in the Spares Catalog,
Boeing's receipt of Customer's order will establish an Order. For Spare Parts or
Standards not listed in the Spares Catalog, Boeing will acknowledge receipt and
either (i) accept Customer's order, or (ii) advise Customer of any Spare Parts
or Standards listed in the order that Boeing cannot provide. Boeing's acceptance
of Customer's order will establish an Order.
1.2 Price. The purchase price of a Boeing Spare Part or Standard will be
as set forth in the Spares Catalog at the time Boeing receives a Customer's
order or, if not in the Spares Catalog, as quoted to Customer by Boeing. Boeing
will release the Spares Catalog annually. Prices in the Spares Catalog will be
firm and in effect for 12 months after the effective date of the Spares Catalog.
The Spares Catalog will be released 90 days prior to its effective date to
provide Customer with notice of any price revisions applicable to the Boeing
Spare Parts identified in the Spares Catalog prior to the effective date of such
revisions. Boeing may, however, at any time correct major errors in the Spares
Catalog. If Customer requests accelerated deliveries or special handling, the
price may be increased to cover Boeing's additional costs.
1.3 Title and Risk of Loss. Title and risk of loss will pass from Boeing
to Customer upon delivery pursuant to Part 1, Article 5. Boeing will convey to
Customer good title, free and clear of all liens, claims, charges and
encumbrances. Title and risk of loss of Spare Parts or Standards rejected by
Customer will remain with Customer until redelivered to Boeing.
1.4 Resale or Lease. When, in the performance of repair, maintenance or
modification services, Customer sells Spare Parts or Standards purchased from
Boeing, all rights and benefits conferred under this HMSGTA upon Customer with
respect to such Spare Parts or Standards will transfer to the purchaser, but
only if purchaser has or obtains from Customer sufficient information to
substantiate a claim, and has executed its own Customer Services General Terms
Agreement with Boeing or HMSGTA with Boeing.
1.5 Changes to Orders. Unless otherwise agreed in writing, Boeing may
without Customer's consent make necessary corrections or changes in the design,
part number and nomenclature of Spare Parts, substitute Spare Parts and adjust
prices accordingly, provided that interchangeability is not affected and the
unit price is not increased by more than [*****]. Boeing will promptly give
Customer written notice of corrections, changes, substitutions and price
adjustments. Corrections, changes, substitutions and price adjustments that
affect interchangeability or exceed the price limitations set forth above may be
made only with Customer's consent, which consent will conclusively be deemed to
have been given unless Customer gives Boeing written notice of objection within
15 business days after receipt of Boeing's notice.
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separately with the Securities and Exchange Commission.
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1.6 Customer Spare Parts Transactions. Nothing in this HMSGTA, SLA, or
any Order will prohibit Customer, Owners, Lessors and Operators from buying or
selling or otherwise disposing of stocks of Boeing Spare Parts among themselves
either directly or through transactions involving dealers, distributors, agents
or brokers who buy or sell stocks of Boeing Spare Parts either for their own
account or for the account of others. Nothing in any provision of this HMSGTA,
SLA, or any Order will prohibit Customer, Owner, Lessor and Operators from
purchasing spare parts that have been manufactured pursuant to appropriate
regulatory approvals.
2. Lease of Parts and Tools.
2.1 Ordering. Boeing will advise Customer of the daily lease charge for
any Leased Parts or Leased Tools upon request. From time to time, Customer may
submit an order for lease of parts or tools. If previously quoted to Customer,
and subject to the terms of that quote and to availability, Boeing's receipt of
such order will constitute an Order. If not previously quoted, or such quote has
expired, or such part or tool is not available, Boeing will acknowledge receipt
and either (i) accept Customer's order, (ii) advise Customer of any part or tool
listed in the order that Boeing cannot provide, or (iii) provide an offer that
contains a description of the tool, lease charge, lease term and other
applicable terms and conditions. Under (i) above, Boeing's acknowledgment of
Customer's order will establish an Order. Under (iii) above, Customer's
acceptance of Boeing's offer will establish an Order.
2.2 Stock of Leased Parts. Boeing will select and maintain a limited
stock of parts for lease to Customer. Lease of such parts is subject to
availability.
2.3 Lease Term and Return. Unless otherwise stated in Boeing's offer,
the lease term starts upon delivery of a Leased Part or Leased Tool to Customer
pursuant to Part 1, Article 5, and ends upon return by Customer of such Leased
Part or Leased Tool to Boeing at the Boeing distribution center from which it
was shipped, or other mutually agreed to distribution center in accordance with
instructions provided by Boeing. All Leased Parts and Leased Tools are to be
returned to Boeing in the shipping containers in which they were shipped by
Boeing.
2.4 Unexpected Return of Leased Tools. Unusual circumstances, such as an
AOG from an Operator, may require a Leased Tool be sent back to Boeing prior to
Customer's intended return of the Leased Tool. Accordingly, within 48 hours of
Customer's receipt of written or telegraphic notice from Boeing that a Leased
Tool is required for an AOG, Customer will ship such Leased Tool to Boeing air
freight prepaid, unless Boeing and Customer agree that the return of the Leased
Tool would create an AOG situation for Customer. As soon as a tool is available
and providing that Customer still needs the tool, the original lease will be
continued by Boeing shipping the tool back to Customer freight prepaid and
reimbursing Customer for the freight charges incurred by Customer when the tool
was returned at Boeing's request.
2.5 Leased Tool Use Days. Within 10 days after Customer's return of any
Leased Tool to Boeing, Customer will advise Boeing of the actual number of days
such Leased Tool was used.
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separately with the Securities and Exchange Commission.
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2.6 Leased Part Flight Hours. Within 10 days after Customer's return of
a Leased Part, Customer will advise Boeing of all flight hours accumulated by
Customer on such Leased Part.
2.7 Sublease. Customer will not sublease Leased Parts or Leased Tools.
2.8 Lease Charges.
2.8.1 Basic Charges. The daily lease charge for a Leased Tool will
apply to the actual number of days the Leased Tool is used. The daily lease
charge for a Leased Part will apply to each day of the lease term.
2.8.2 Additional Charges. Customer will also pay (i) a Boeing
inspection charge for each Leased Tool, and (ii) charges, as necessary, for
damage or deterioration other than normal wear and tear resulting from
Customer's use of a Leased Part or Leased Tool, including costs of repair,
overhaul and repackaging as required to place the Leased Part or Leased Tool in
a condition satisfactory for lease or sale to another party.
2.8.3 Suspension. If a Leased Part or Leased Tool is found to be
defective, Customer's obligation to pay lease charges will be suspended from the
date Boeing receives Customer's notice of such defect until the date on which
Boeing has repaired, corrected or replaced the defective Leased Part or Leased
Tool. Boeing will reimburse Customer for freight charges connected with the
initial delivery to Customer and the return to Boeing of such defective Leased
Part or Leased Tool.
2.8.4 Option to Purchase Leased Parts. Upon written notice to
Boeing, Customer may purchase any Leased Part. If Customer exercises such option
within 60 days after commencement of the lease term, Customer will be invoiced
for the purchase price of the part and no lease charges will accrue. If Customer
exercises such option more than 60 days after commencement of the lease term,
Customer will be invoiced for the purchase price of the part and 50% of the
accrued lease charges.
2.9 Title to and Risk of Loss.
2.9.1 Title to each Leased Part or Leased Tool will remain with
Boeing. At Boeing's request, Customer will take any reasonable action to sign
and deliver such instruments as may be required to preserve and protect Boeing's
right, title and interest in and to each Leased Part or Leased Tool. Risk of
loss of each Leased Part or Leased Tool will pass from Boeing to Customer upon
delivery. Risk of loss or damage to Leased Parts or Leased Tools will remain
with Customer until such Leased Parts or Leased Tools are returned to Boeing.
2.9.2 If Customer exercises its option to purchase a Leased Part,
title will pass to Customer upon receipt by Boeing of Customer's written notice
under Part 2, Article 2.8.4.
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
3. Provision of Services.
3.1 Ordering.
3.1.1 Upon receipt of a Customer's request for Services, Boeing will
evaluate the request and, if offerable, provide an offer that contains a
statement of work, price, period of performance and other applicable terms and
conditions. Each offer accepted by Customer will establish an Order.
3.1.2 From time to time Boeing may perform Services as requested by
Customer, at no charge and without requiring a Boeing offer. Performance by
Boeing in response to Customer's request will constitute acceptance and
establish an Order.
3.2 Price. The price for Services and any other charges related thereto
will be as set forth in the Boeing offer.
4. Provision of Materials.
4.1 Ordering.
4.1.1 From time to time, Customer may submit an order for Materials.
However, one or more SLAs must be executed prior to Boeing accepting Customer
orders for Proprietary Materials pursuant to this HMSGTA. The SLA(s) will
establish additional terms and conditions under which particular Proprietary
Materials must be protected, obtained, disclosed and/or used. Once the
appropriate SLA has been executed, for Materials listed in the Materials and
Services Listing and as related to such SLA, Boeing's receipt of Customer's
order will establish an Order. For Materials not listed in the Materials and
Services Listing, Boeing will acknowledge receipt and either (i) accept
Customer's order, or (ii) advise Customer of any Materials listed in the order
that Boeing cannot provide. Boeing's acceptance of Customer's order will
establish an Order.
4.1.2 Upon receipt of a Customer's written request for either (i)
the use of Proprietary Materials or Proprietary Information other than as
specified in this HMSGTA or a SLA, or (ii) the disclosure or use of Proprietary
Materials or Proprietary Information beyond that permitted by this HMSGTA or a
SLA, Boeing will evaluate the request. Boeing may provide an offer that contains
a description of the Proprietary Materials or Proprietary Information, fee,
delivery schedule and other applicable terms and conditions. Each offer accepted
by Customer will establish an Order.
4.1.3 From time to time Boeing may provide Materials, Proprietary
Materials, or Proprietary Information as requested by Customer, at no charge and
without requiring a Boeing offer. The provision of such items or information by
Boeing in response to Customer's request will constitute acceptance and
establish an Order.
4.1.4 Unless specified otherwise in a specific SLA, upon
cancellation or termination of this HMSGTA or SLA thereto, (a) Customer will not
use or cause to be used any
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
Materials, Proprietary Information and Proprietary Materials that were licensed
pursuant to such SLA, and (b) within ten days of written notice to Customer by
Boeing, and in accordance with the direction received by Boeing, Customer will
either (i) return all copies of the Proprietary Materials including partial
copies or modifications to Boeing postage prepaid, or (ii) certify to Boeing, by
a duly authorized officer of Customer, that all copies of the Proprietary
Materials including partial copies or modifications have been destroyed.
4.2 Provision of Materials by Electronic Transmission
4.2.1 From time to time, Boeing may offer to provide Customer access
to Materials by way of Electronic Access. However, one or more SLAs must be
executed prior to Boeing providing Customer Electronic Access pursuant to this
HMSGTA. Any Electronic Access so granted by Boeing will be subject to the
following provisions:
4.2.2 Boeing requires Customer to identify each of Customer's
employees who have Electronic Access and to have on file for each such employee
an agreement between Customer and each such employee wherein the employee agrees
to (a) maintain in confidence, all Proprietary Information and Proprietary
Materials received by means of Electronic Access, (b) maintain in confidence any
Authentication Mechanism used to verify the identity of a system user or access
proceeding to facilitate access, and (c) to use such information and materials
pursuant to the HMSGTA and SLA
4.2.3 Customer is responsible for communicating to all of Customer's
employees who have Electronic Access the terms and conditions contained in the
HMSGTA and any SLAs applicable to such Electronic Access. Customer will include
in such communications the provisions set forth in the HMSGTA and any SLA
relating to the use, disclosure and protection of Proprietary Materials obtained
through Electronic Access, along with the consequences of failing to comply with
those provisions.
4.2.4 Customer acknowledges that any attempts by Customer or its
employees to access any Materials, other than the Materials licensed in SLAs
with Customer, or any attempts to circumvent any security measures designed to
prevent unauthorized access to Materials, may be in violation of the United
States federal Computer Fraud and Abuse Act, and other applicable United States
federal and state statutes, and may subject the violator to criminal and civil
penalties.
4.2.5 Customer will maintain a complete and accurate listing of
Customer's employees who are granted Electronic Access and to provide such
listing to Boeing every three months, or upon request. Customer will identify to
Boeing a specific employee(s) (Focal) responsible for the initiation and
administration of all Authentication Mechanisms requested on behalf of Customer.
Customer further agrees to notify Boeing immediately when an individual having
been granted Electronic Access no longer requires Electronic Access (e.g. when
an employee changes job responsibilities, or when an employee leaves the
company).
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
4.2.6 Unless otherwise authorized by Boeing in writing, all
Authentication Mechanisms will be provided to Customer's employees for their
individual use only, and are not transferable.
4.2.7 Boeing has the right to monitor all Electronic Access by
Customer, and immediately discontinue Electronic Access to any of Customer's
employees or to Customer, in the event Boeing determines that Customer or
Customer's employees have breached any provisions of the HMSGTA or applicable
SLAs relating to use, disclosure and protection of Materials.
4.2.8 All Materials provided by Electronic Access are Proprietary
Materials whether or not they are marked as such, and are subject to the
provisions of the License Grant of the applicable SLA(s) and the provisions of
the Use and Disclosure of Proprietary Materials section of the HMSGTA.
4.2.9 All Materials provided by Electronic Access are owned by
Boeing or a Third Party and Customer will obtain no rights, title, or interest
in the Materials except as expressly provided in the HMSGTA and applicable SLA.
4.2.10 Customer will comply with the terms of this HMSGTA and
applicable SLAs and all U.S. laws, including U.S. export regulations, in the
distribution of user accounts and passwords to its employees.
4.3 Fees.
4.3.1 In addition to any fees that may be specified in any SLAs to
this HMSGTA, the following fees will apply:
4.3.1.1 The fee for the provision of any Materials or
information for which such Materials or information are specified by Boeing and
which are provided from the Materials and Services Listing, will be at the
then-current listed price or, if there is no listed price, as quoted to
Customer. 4.3.1.2 The fee for the provision of any Materials or information for
which such Materials or information are not specified by Boeing will be as
quoted to Customer.
4.4 Grant.
4.4.1 Any grant to Customer for the right to use Proprietary
Materials and Proprietary Information, is provided in a SLA to this HMSGTA.
There may be more than one SLA granting Customer the right to use particular
Proprietary Materials and Proprietary Information depending upon the work
Customer performs.
4.4.2 The individual copies of all Materials and Aircraft Software
are provided to Customer subject to copyrights therein, and all such copyrights
are retained by Boeing or, in some cases, by Third Parties.
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
4.4.3 Customer will not attempt to gain access to information by
reverse engineering, decompiling, or disassembling any portion of any software
or Aircraft Software provided to Customer pursuant to an SLA or an Order or
otherwise by Boeing.
4.5 Use and Disclosure of Proprietary Materials.
4.5.1 Customer is authorized to use and disclose Proprietary
Materials and Proprietary Information only as specifically authorized herein, or
in an applicable SLA incorporating this HMSGTA. Customer will preserve and
protect all Proprietary Materials and all Proprietary Information in confidence.
4.5.2 When specific authorization is provided in the SLA, Customer
is authorized to provide Proprietary Materials and disclose Proprietary
Information to a Contractor for the sole purpose of assisting Customer's
activities as related to such SLA.
4.5.3 Before providing Proprietary Materials or Proprietary
Information to a Contractor, Customer will obtain a written agreement from that
Contractor (i) to use the Proprietary Materials and Proprietary Information only
on behalf of Customer, (ii) to be bound by all of the restrictions and
limitations of this Article 4, and (iii) that Boeing is an intended third-party
beneficiary under such agreement. Customer agrees to provide copies of all such
written agreements to Boeing upon request, and to be liable to Boeing for any
breach of those agreements by Contractor. A form of agreement, acceptable to
Boeing, is attached as Appendix II.
4.5.4 When and to the extent required by a government regulatory
agency having jurisdiction over the Aircraft being maintained, repaired or
modified by Customer or otherwise required by law (e.g., pursuant to a
subpoena), Customer is authorized to provide and disclose Proprietary Materials
and Proprietary Information, owned by Boeing, to the agency for the agency's use
in connection with the Customer's maintenance, repair, or modification of that
Aircraft or to the extent otherwise required by law, provided that Boeing shall
be notified sufficiently in advance of such requirement so that it may seek an
appropriate protective order (or equivalent) with respect to such disclosure,
with which Customer shall fully comply; and provided further that in the event
such a protective order or other remedy is not obtained by Boeing or Boeing
waives compliance with the terms hereof, Customer shall disclose only that
portion of Proprietary Materials and Proprietary Information that it is legally
required to disclose and shall exercise its reasonable best efforts to assure
that confidential treatment will be accorded such Proprietary Materials and
Proprietary Information and shall promptly notify Boeing of the extent and
circumstances of such disclosure. Notwithstanding the foregoing to the contrary,
if Customer is prohibited by an order of a court or governmental regulatory
agency from notifying Boeing in advance of Customer's disclosure of Proprietary
Materials or Proprietary Information owned by Boeing to a governmental agency,
then Customer shall (A) notify the court or governmental regulatory agency that
the information required to be disclosed is or may be Proprietary Materials and
Proprietary Information of Boeing and request the court or governmental
regulatory agency to hold the information required to be disclosed in confidence
pending appropriate proceedings affording Boeing an opportunity at its expense
to seek a protective or other appropriate order, (B) notify Boeing as soon as
Customer is legally
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
permitted to do so that Proprietary Materials and Proprietary Information owned
by Boeing is or may be required to be or has been disclosed pursuant to such
process, together with the extent and circumstances of such disclosure, and (C)
disclose only that portion of the Proprietary Materials and Proprietary
Information that is legally required to be disclosed. Unless prohibited by
applicable law or court order, Boeing shall be given an opportunity to review
the Proprietary Materials and Proprietary Information prior to its disclosure.
Customer agrees to take reasonable steps to prevent such agency or other entity
to which Customer is required to disclose Proprietary Materials and/or
Proprietary Information (e.g., a court) from making any distribution or
disclosure, or additional use of the Proprietary Materials and Proprietary
Information so provided or disclosed. Customer further agrees to promptly notify
Boeing upon learning of any (i) distribution, disclosure, or additional use by
such agency or other entity, (ii) request to such agency or other entity for
distribution, disclosure, or additional use, or (iii) intention on the part of
such agency or other entity to distribute, disclose, or make additional use of
the Proprietary Materials or Proprietary Information.
4.5.5 The requirements of Article 4.5.1 through Article 4.5.4 shall
not restrict Customer'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 Customer knows or reasonably
should know are not Boeing Source Materials or derivatives thereof, (ii)
"Independently Available Information" means information that: (a) Customer
lawfully obtains from a Third Party who has the right to disclose such
information to Customer without restriction; (b) Customer independently develops
without reference to, or incorporation of Boeing Source Materials; or (c) that
Customer obtains from publicly accessible sources; except, in each case, for
information that Customer knows or reasonably should know are derived from
Boeing Source Materials, and (iii) "Boeing Source Materials" means Materials
obtained, directly or indirectly, from Boeing, including editorial revisions,
annotations, elaborations, or any other forms in which such Materials may be
modified, recast, transformed, translated, condensed, or otherwise adapted. For
the avoidance of doubt, Customer's obligations with respect to Boeing Source
Materials shall not be reduced even if such Boeing Source Materials contain
Independently Available Information.
4.6 Customer Responsibility.
4.6.1 Customer agrees that it shall establish, maintain, and take
all reasonable measures to protect the secrecy of and avoid disclosure or use of
Proprietary Information other than as authorized under this HMSGTA. Such
measures shall include, without limitation, the same degree of care that
Customer utilizes to protect its own confidential or proprietary information of
a similar nature, which shall be no less than reasonable care.
4.6.2 Customer will be solely responsible for ascertaining and
ensuring that all Materials are appropriate for the use to which they are put
and that all uses of Materials by Customer conform to the terms of this HMSGTA.
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
4.7 Records and Audit Rights.
4.7.1 No more than once every twelve (12) months and upon reasonable
prior written notice to Customer, Boeing will have the right to audit pertinent
records of Customer and to make reasonable inspection of Customer's premises for
the purpose of verifying compliance with the:
(i) use of Materials as specified in any SLA; and
(ii) obligations to protect Materials; and
(iii) any royalty reporting and payment provisions that may be
specified in any SLA.
4.7.2 In the event Customer and Boeing enter into a SLA to this
HMSGTA containing terms or conditions related to license fees, royalties or
other compensation to Boeing, Customer agrees to maintain true and accurate
records relating to any such SLA. Such records will be prepared in accordance
with generally accepted accounting principles and will be available for audit no
more than once every three (3) months by Boeing or its duly authorized
representative at all reasonable times during business hours. Boeing will
provide at least five (5) days written notice to Customer prior to such audits.
Boeing will have access to, and the right to copy pertinent portions of, such
accounting information and other records to the extent necessary to permit an
examination in accordance with the requirements of any SLA to this HMSGTA.
Boeing will bear any costs and expenses associated with such audit, except that
in the event the results of any audit shows the amounts payable to Boeing are
greater than one hundred-ten percent (110%) of the amounts reported and paid to
Boeing for the audited period, then Customer will (i) pay Boeing for its
reasonable out-of-pocket costs and expenses associated with such audit, and (ii)
pay Boeing all amounts found owed to Boeing with interest as calculated in this
HMSGTA Part 1, Article 3.5. Customer will pay such amounts to Boeing within
thirty (30) days of Customer's receipt of written notice from Boeing.
4.7.3 Boeing will have the right to conduct audits of Customer's
records for a period of up to twelve (12) months subsequent to the effective
date of termination or cancellation of any SLA.
4.7.4 Notwithstanding Article 4.7.1 above, Boeing will have the
right to conduct quarterly audits if a previous audit has found amounts payable
to Boeing greater than one hundred-ten percent (110%) of the amounts reported
and paid to Boeing for the audited period.
4.7.5 Boeing shall maintain in confidence Customer's confidential
information obtained as a result of an audit, conducted pursuant to this Part 2
Article 4.7, according to the protections that Boeing uses for Boeing's own
confidential information, and Boeing shall use and disclose such confidential
information only in connection with its agreements with Customer or in
connection with enforcement Boeing's rights against Customer.
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4.8 Offset Credits.
4.8.1 To the exclusion of all others, Boeing or its assignees will
be entitled to all industrial benefits or offset credits which might result from
any SLA. Customer will provide documentation or information that Boeing or its
assignees may reasonably request to substantiate claims for industrial benefits
or offset credits.
4.8.2 Customer agrees to use reasonable efforts to identify the
foreign content of goods that Customer either produces itself or procures from
subcontractors for work directly related to any SLA. Promptly after selection of
a foreign subcontractor for work under any SLA, Customer will notify Boeing of
the name, address, subcontract point of contact (including telephone number) and
dollar value of the subcontract.
5. Provision of Repair/Overhaul/Exchange Parts.
5.1 Ordering. Boeing will advise Customer of the price to
repair/overhaul/exchange any Boeing Spare Parts upon request. From time to time,
Customer may submit an order for the repair/overhaul/exchange of Boeing Spare
Parts. Boeing will acknowledge receipt and either (i) accept Customer's order,
(ii) advise Customer of any Boeing Spare Part listed in the order that Boeing
cannot repair, overhaul or exchange. Boeing's acknowledgment of Customer's order
will establish an Order.
5.2 Non-repairable Repair/Overhaul/Exchange Parts. Unless previously
agreed, Boeing considers any part non-repairable, i.e., Beyond Economical Repair
(BER) if a repair will exceed [*****] of Boeing's then current sales price for a
new replacement part. Boeing will promptly notify Customer if, in Boeing's
discretion, a Repair/Overhaul/Exchange Part is non-repairable, and Customer will
instruct Boeing to either:
5.2.1 continue the repair with an approved budgetary quote
5.2.2 ship the nonrepairable Repair/Overhaul/Exchange Parts to
Customer at Customer's expense, or
5.2.3 destroy the Repair/Overhaul/Exchange Part at Boeing's
facility. In the event Customer requests disposition of a part pursuant to this
clause, Customer will pay Boeing a handling charge of a minimum of [*****].
5.3 Title and Risk of Loss. Title to and risk of loss of any
Repair/Overhaul/Exchange Parts returned to Boeing will at all times remain with
Customer or any other title holder of such Boeing Spare Part, except that
components of such Repair/Overhaul/Exchange Parts removed and replaced will pass
to Boeing upon replacement. Title to replacement components will pass to
Customer upon redelivery to Customer. Title to Repair/Overhaul/Exchange Parts
delivered to Boeing for exchange with remanufactured, modified or overhauled
Repair/Overhaul/Exchange Parts will pass to Boeing upon delivery to Customer of
the remanufactured, modified or overhauled Repair/Overhaul/Exchange Parts. Title
to such remanufactured, modified or
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Omissions are designated by the symbol [*****].
overhauled Repair/Overhaul/Exchange Parts will pass to Customer upon delivery to
Customer. While Boeing has possession of the returned Repair/Overhaul/Exchange
Parts, Boeing will have only such liabilities as a bailee for mutual benefit
would have, but will not be liable for loss of use.
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separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
PART 3
WARRANTY TERMS AND CONDITIONS
1. Boeing Spare Parts Warranty.
1.1 Coverage. Boeing warrants that, at the time of delivery, each Boeing
Spare Part purchased by Customer will:
(i) conform to the applicable drawing and specification;
(ii) be free from defects in material and workmanship, including
process of manufacture; and
(iii) be free from defects in design including selection of
materials and process of manufacture, in view of the
state-of-the-art at the time of design.
1.2 Exceptions.
1.2.1 The following conditions do not constitute a defect under this
warranty:
(i) conditions resulting from normal wear and tear;
(ii) conditions resulting from acts or omissions of Customer;
and
(iii) conditions resulting from failure to properly service
and maintain a Boeing Spare Part.
1.2.2 The warranties set forth in Part 3 of this HMSGTA will not
apply to any Boeing Spare Parts manufactured pursuant to any SLA.
1.3 Warranty Periods.
1.3.1 Warranty. The warranty period begins on the date of delivery
of the Boeing Spare Part and ends (i) after 48 months for a Boeing Spare Part
manufactured for installation on Aircraft models 777-200, -300 or 737-600, -700,
- -800, -900, or new Aircraft models designed and manufactured with similar, new
technology; or (ii) after 36 months for a Boeing Spare Part manufactured for
installation on any other Aircraft model. Notwithstanding, in the case of any
Boeing Spare Part that is subject to the 48 month warranty and the 36 month
warranty, the 48 month warranty will apply in every instance.
1.3.2 Warranty on Corrected Boeing Spare Parts. The warranty period
applicable to a Corrected Boeing Spare Part resulting from a defect in material
or workmanship is the remainder of the initial warranty period for the defective
Boeing Spare Part it replaced. The warranty period for a Corrected Boeing Spare
Part resulting from a defect in design is 18 months or the remainder of the
initial warranty period, whichever is longer. The 18 month
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period begins on the date of delivery of the Corrected Boeing Spare Part or date
of delivery of the kit or kits furnished to Correct the Boeing Spare Part.
1.4 Remedies.
1.4.1 Defect Correction. At Customer's option, Boeing will either
Correct or reimburse Customer to Correct defects in Boeing Spare Parts
discovered during the warranty period.
1.4.2 Warranty Labor Rate. If Customer Corrects a defective Boeing
Spare Part, Boeing will reimburse Customer for Direct Labor hours at Customer's
established Warranty Labor Rate at the time of Correction. Prior to or
concurrently with submittal of Customer's first claim for Direct Labor
reimbursement, Customer may notify Boeing of Customer's then-current Average
Direct Hourly Labor Rate, and thereafter notify Boeing of any material change in
such rate. Boeing will require information from Customer to substantiate such
rates.
1.4.3 Warranty Inspections. In addition to the remedies to Correct
defects in Boeing Spare Parts, Boeing will reimburse Customer for the cost of
Direct Labor to perform certain inspections of the Aircraft to determine the
occurrence of a condition Boeing has identified as a covered defect, provided:
1.4.3.1 the inspections are recommended by a service bulletin
or service letter issued by Boeing during the warranty period; and
1.4.3.2 such reimbursement will not apply to any inspections
performed after a Correction is available to Customer.
1.4.4 Credit Memorandum Reimbursement. Boeing will make all
reimbursements by credit memoranda which may be applied toward the purchase of
Boeing goods and services.
1.4.5 Maximum Reimbursement. Unless previously agreed, the maximum
reimbursement for Direct Labor and Direct Materials used to Correct a defective
Boeing Spare Part will not exceed [*****] of Boeing's then-current sales price
for a new replacement Boeing Spare Part.
1.5 Discovery and Notice.
1.5.1 For a claim to be valid:
(i) the defect must be discovered during the warranty
period; and
(ii) Boeing Warranty Regional Manager must receive written
notice of the discovery no later than 90 days after
expiration of the warranty period. The notice must
include sufficient information to substantiate the
claim.
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1.5.2 Receipt of Customer's notice of the discovery of a defect
secures Customer's rights to remedies under this Part 3, even though a
Correction is performed after the expiration of the warranty period.
1.5.3 Once Customer has given valid notice of the discovery of a
defect, a claim should be submitted as soon as practicable after performance of
the Correction.
1.5.4 Boeing may release service bulletins or service letters
advising Customer of the availability of certain warranty remedies. When such
advice is provided, Customer will be deemed to have fulfilled the requirements
for discovery of the defect and submittal of notice under this Part 3 as of the
date specified in the service bulletin or service letter.
1.6 Filing a Claim.
1.6.1 Authority to File. Claims may be filed by Customer.
1.6.2 Claim Information.
1.6.2.1 Claimant is responsible for providing sufficient
information to substantiate Customer's rights to remedies under this Part 3.
Boeing may reject a claim for lack of sufficient information. At a minimum, such
information must include:
(i) identity of claimant;
(ii) part number and nomenclature of defective Boeing
Spare Part;
(iii) purchase order number and date of delivery of a
defective Boeing Spare Part;
(iv) description and substantiation of the defect;
(v) date the defect was discovered;
(vi) date the Correction was completed;
(vii) the total flight hours or cycles accrued, if
applicable;
(viii)an itemized account of direct labor hours expended
in performing the Correction; and
(ix) an itemized account of any direct materials
incorporated in the Correction.
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1.6.2.2 Additional information may be required based on the
nature of the defect and the remedies requested.
1.6.3 Boeing Claim Processing.
1.6.3.1 Any claim for a Boeing Spare Part returned by Customer
to Boeing for Correction must accompany the Boeing Spare Part. Any claim not
associated with the return of a Boeing Spare Part must be signed and submitted
in writing directly by Customer to Boeing Warranty Regional Manager.
1.6.3.2 Boeing will promptly review the claim and will give
notification of claim approval or rejection. If the claim is rejected, Boeing
will provide a written explanation.
1.7 Corrections Performed by Customer.
1.7.1 Facilities Requirements. Customer may at its option Correct
defective Boeing Spare Parts at its facilities or may subcontract Corrections to
a Contractor. A Contractor must be certified by Customer's Civil Aviation
Authority or the Federal Aviation Administration.
1.7.2 Technical Requirements. All Corrections done by Customer, or
Contractor must be performed in accordance with Boeing's applicable service
manuals, bulletins or other written instructions, using parts and materials
furnished or approved by Boeing.
1.7.3 Reimbursement.
1.7.3.1 Boeing will reimburse Customer's reasonable costs of
Direct Materials and Direct Labor (excluding time expended for overhaul) at
Customer's established Warranty Labor Rate to Correct a defective Boeing Spare
Part. Claims for reimbursement must contain sufficient information to
substantiate Direct Labor hours expended and Direct Materials consumed. Customer
or Contractor may be required to produce invoices for materials.
1.7.3.2 Reimbursement for Direct Labor hours to perform a
Correction stated in a service bulletin will be based on the labor estimates in
the service bulletin.
1.7.3.3 Boeing will reimburse Customer for freight charges
associated with Correction of defects performed by its Contractor.
1.7.4 Disposition of Defective Boeing Spare Parts Beyond Economical
Repair.
1.7.4.1 Defective Boeing Spare Parts that are found to be
beyond economical repair will be retained for a period of 60 days from the date
Boeing receives Customer's claim. Boeing may request return of such Boeing Spare
Parts during the 60 day period for inspection and confirmation of a defect.
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1.7.4.2 After the 60 day period, a defective Boeing Spare Part
with a value of U.S. $2,000 or less may be scrapped without notification to
Boeing. If such Part has a value greater than U.S. $2,000, Customer must obtain
confirmation of unrepairability by Boeing's on-site Customer Services
Representative prior to scrapping. Confirmation may be in the form of the
Representative's signature on Customer's claim or through direct communication
between the Representative and Boeing Warranty Regional Manager.
1.8 Corrections Performed by Boeing.
1.8.1 Freight Charges. Customer will pay shipping charges to return
a Boeing Spare Part to Boeing. Except for Boeing Spare Parts applicable to
Boeing Models 707, 727 and DC-8 Aircraft, Boeing will reimburse Customer for
reasonable incoming shipping charges. Boeing will pay shipping charges to return
the Corrected Boeing Spare Part.
1.8.2 Customer Instructions. The documentation shipped with the
returned defective Boeing Spare Part may include specific technical instructions
for additional work to be performed on the Boeing Spare Part. The absence of
such instructions will evidence Customer's authorization for Boeing to perform
all necessary Corrections and work required to return the Boeing Spare Part to a
serviceable condition.
1.8.3 Correction Time Objectives.
1.8.3.1 Boeing's objective for making Corrections is 10
working days for avionics and electronic Boeing Spare Parts, 30 working days for
Corrections of other Boeing Spare Parts performed at Boeing's facilities, and 40
working days for Corrections of other Boeing Spare Parts performed at Boeing
subcontractor's facilities. The objectives are measured from the date Boeing
receives the defective Boeing Spare Part and a valid claim to the date Boeing
ships the Correction.
1.8.3.2 Except for Boeing Spare Parts applicable to Boeing
Models 707, 727 and DC-8 Aircraft, if Customer has a critical parts shortage
because Boeing has exceeded a Correction time objective and Customer has
procured spare Boeing Spare Parts for the defective Boeing Spare Part in
quantities shown in Boeing's Recommended Spare Parts List (RSPL), or Spares
Planning and Requirements Evaluation Model (M-SPARE), or as otherwise agreed
between the parties, then Boeing will either expedite the Correction or provide
an interchangeable Boeing Spare Part on a no charge loan or lease basis until
the Corrected Boeing Spare Part is returned.
1.8.4 Title Transfer and Risk of Loss.
1.8.4.1 Title to and risk of loss of any Boeing Spare Part
returned to Boeing will at all times remain with Customer or any other title
holder of such Boeing Spare Part. While Boeing has possession of the returned
Boeing Spare Part, Boeing will have only such liabilities as a bailee for mutual
benefit would have, but will not be liable for loss of use.
1.8.4.2 If a Correction requires delivery of a new Boeing
Spare Part,
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then at the time Boeing delivers the new Boeing Spare Part, title to and risk of
loss for the returned Boeing Spare Part will pass to Boeing, and title to and
risk of loss for the new Boeing Spare Part will pass to Customer.
2. Supplier Warranty Commitment.
Supplier Spare Parts purchased from Boeing are purchased "as is" and
Boeing makes no warranty whatsoever with regard to them.
3. Warranty of Leased Tools and Leased Parts.
Each Leased Tool and Leased Part leased hereunder is leased "as is" and
Boeing makes no warranty whatsoever with regard to them. A Leased Part purchased
by Customer is a Boeing Spare Part and as such the warranty is contained in Part
3, Article 1.
4. Warranty of Technical Assistance and Technical Consulting.
4.1 Coverage. Boeing warrants that Technical Assistance and Technical
Consulting will be performed in a workmanlike manner.
4.2 Warranty Period and Claims. The warranty period with respect to the
performance of Technical Assistance and Technical Consulting is 36 months after
the completion date of the applicable Service. Boeing Warranty Regional Manager
must receive written notice of the discovery no later than 90 days after
expiration of the warranty period. The notice must include sufficient
information to substantiate the claim.
4.3 Remedy. Customer's remedy and Boeing's sole obligation and liability
for deficient Services are limited to the no-charge reperformance by Boeing for
that portion of the Services determined to be deficient.
5. Warranty for Repair/Overhaul/Exchange Parts.
5.1 Coverage and Warranty Period. Boeing warrants that, at the time of
delivery, each Repair/Overhaul/Exchange Part processed by Boeing under a
Repair/Overhaul/Exchange Order will be free from defects in material and
workmanship for a period of 12 months after such delivery. There are no
warranties as to any parts not manufactured to Boeing's detail design, whether
or not such parts are installed or incorporated in the Repair/Overhaul/ Exchange
Part delivered to Customer.
5.2 Claims. The claimed defect must be discovered by Customer within the
applicable warranty period, and Boeing Warranty Regional Manager must receive
written notice of such defect at the earliest practicable time after discovery
of the defect by Customer, but in no event later than 90 days after expiration
of the applicable warranty period. Such claim must include reasonable evidence
that the claimed defect is covered by one of the above warranties and, if
requested by Boeing, that such defect did not result from:
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(i) conditions resulting from normal wear and tear;
(ii) conditions resulting from acts or omissions of Customer; and
(iii) conditions resulting from failure to properly service and
maintain a Repair/Overhaul/Exchange Part.
5.3 Remedy. Customer's remedy for a defect in material and workmanship
in the Repair/Overhaul/Exchange Part is repair or replacement, at Boeing's
option, of the defective Repair/Overhaul/Exchange Part. If a replacement
Repair/Overhaul/Exchange Part is provided, such replacement will be
interchangeable with the replaced part and be free from defect. Boeing's
liability and Customer's remedy under this Article 5.3 are conditioned upon the
return, as soon as practicable, of the defective Repair/Overhaul/Exchange Part,
with all shipping charges prepaid, to Boeing's location, from which such part
was previously delivered to Customer, or other mutually agreeable location. Upon
confirmation of the defect, Boeing will reimburse Customer's reasonable incoming
shipping charges. Return of the repaired or replacement Repair/Overhaul/Exchange
Part will be at Boeing's expense.
5.4 Warranty of Title. Boeing warrants that it will convey good title to
any replaced or exchanged component part provided with the
Repair/Overhaul/Exchange Part delivered to Customer from Boeing, and such part
will be free and clear of all liens, claims, charges and encumbrances. Boeing's
liability and Customer's remedy under this Article 5.4 are limited to the
removal of any defect in title or the replacement of any part having such a
defect.
6. Indemnities Against Patent and Copyright Infringement.
6.1 Indemnity Against Patent Infringement. Boeing will defend and
indemnify Customer with respect to all claims, suits, and liabilities arising
out of any actual or alleged patent infringement through Customer's use or
resale of any Boeing Spare Part purchased by Customer from Boeing pursuant to an
Order.
6.2 Indemnity Against Copyright Infringement. Boeing will defend and
indemnify Customer with respect to all claims, suits, and liabilities arising
out of any actual or alleged copyright infringement through Customer's (i) use
or resale of any Boeing-created Aircraft Software purchased by Customer from
Boeing pursuant to an SLA or an Order or (ii) use of any Boeing-created
Materials provided to Customer pursuant to an SLA or an Order.
6.3 Exceptions, Limitations, and Conditions.
6.3.1 Boeing's obligation to indemnify Customer for actual or
alleged patent infringement will extend only to infringements in countries
which, at the time of the infringement, were party to and fully bound by either
(i) Article 27 of the Chicago Convention on International Civil Aviation of
December 7, 1944, or (ii) the International Convention for the Protection of
Industrial Property (Paris Convention).
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6.3.2 Boeing's obligation to indemnify Customer for copyright
infringement is limited to infringements in countries which, at the time of the
infringement, are members of The Berne Union and, with respect to copyright
infringement related to computer software, recognize computer software as a
"work" under The Berne Convention.
6.3.3 The indemnities provided under this Article 6 will not apply
to any (i) Boeing Spare Part, Aircraft Software, or Materials used other than
for its intended purpose, or (ii) Aircraft Software not created by Boeing or
Materials not created by Boeing; provided, however, Boeing shall indemnity
Customer to the extent Boeing holds contractual rights to indemnification from
third parties that cover or extend to Customer with respect to Aircraft Software
not created by Boeing or Materials not created by Boeing.
6.3.4 Customer must deliver prompt written notice to Boeing of any
notice received by Customer of any suit or other formal action against Customer
or any other written allegation or written claim of infringement covered by this
Article 6; provided, however, Customer shall provide written notice to Boeing no
less than seven (7) days after service to Customer of a summons or complaint for
any suit or formal action unless the date that response or any other action in
defense must be taken within such seven (7) day period, in which case Customer
must give notice no less than three (3) days after such service to Customer, or
if the response or other action in defense must be taken within such three (3)
day period, immediately upon such service to Customer.
6.3.5 At any time, Boeing will have the right at its option and
expense to (i) negotiate with any party claiming infringement, (ii) assume or
control the defense of any infringement allegation, claim, suit or formal
action, (iii) intervene in any infringement suit or formal action, and/or (iv)
attempt to resolve any claim of infringement by replacing an allegedly
infringing Boeing Spare Part, or Boeing-created Aircraft Software or Materials,
with a noninfringing equivalent.
6.3.6 Upon receipt of Boeing written request, Customer will promptly
furnish to Boeing all information, records, and assistance within Customer's
possession or control which Boeing considers relevant or material to any alleged
infringement covered by this Article 6.
6.3.7 Except as required by a final judgment entered against
Customer by a court of competent jurisdiction from which no appeals can be or
have been filed, Customer will obtain Boeing's written approval prior to paying,
committing to pay, assuming any obligation, or making any concession relative to
any infringement covered by these indemnities. If Customer has provided notice
as specified in Article 6.3.4 and keeps Boeing reasonably informed of the
progress of the defense of any such claim relative to any infringement covered
by these indemnities and settlement discussions related thereto, then, Boeing
shall bear the cost of any bond required by Court order as a prerequisite to
such appeal (but not a bond for cost of litigation or cost of appeal) if (1)
Customer has also delivered to Boeing a written request for Boeing's
determination of whether to appeal a judgment, together with notice of the date
that is seven (7) business days prior to the date the notice of appeal must be
filed with the appellate court and (2) Boeing thereafter instructs Customer to
appeal or fails to provide a determination on or before such deadline; provided,
however, in no event shall Boeing be responsible for such
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cost if Customer fails to give Boeing at least seven (7) business day's prior
notice. For the avoidance of doubt, the foregoing does not require Boeing to
post a bond to ensure Boeing's payment of amounts that may become owing to
Customer if Boeing is unsuccessful on appeal (including without limitation
Newco's costs of litigation or costs of appeal).
6.3.8 BOEING WILL HAVE NO OBLIGATION OR LIABILITY UNDER THIS ARTICLE
6 FOR LOSS OF USE, REVENUE, OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR
CONSEQUENTIAL DAMAGES. THE OBLIGATIONS OF BOEING AND REMEDIES OF CUSTOMER IN
THIS ARTICLE 6 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND CUSTOMER HEREBY
WAIVES, RELEASES, AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS, AND
LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS, AND REMEDIES OF CUSTOMER
AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO
ANY ACTUAL OR ALLEGED PATENT, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY
INFRINGEMENT BY ANY SPARE PARTS, AIRCRAFT SOFTWARE, STANDARDS,
REPAIR/OVERHAUL/EXCHANGE PARTS, LEASED PARTS, LEASED TOOLS, MATERIALS AND
INFORMATION, SERVICES (INCLUDING, BUT NOT LIMITED TO, TECHNICAL ASSISTANCE AND
TECHNICAL CONSULTING), OR ANY OTHER THINGS PROVIDED UNDER THIS HMSGTA AND THE
APPLICABLE ORDER.
6.3.9 For the purpose of this Article 6, "Boeing" or "BOEING" is
defined as The Boeing Company, its divisions, subsidiaries and affiliates, the
assignees of each, and their respective directors, officers, employees and
agents.
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APPENDIX I
BROKER'S LETTERHEAD
[ date ]
CERTIFICATE OF INSURANCE
ISSUED TO: The Boeing Company
Post Office Box 3707
Mail Code 13-57
Seattle, Washington 98124-2207
U.S.A.
Attn: Manager - Aviation Insurance
CC: Boeing Commercial Airplane Company
Post Office Box 3707
Mail Code 21-35
Seattle, Washington 98124-2207
U.S.A.
Attn: Director Special Services - Contracts
NAMED INSURED:
We hereby certify that in our capacity as Brokers to the Named Insured, the
following described insurance is in force at this date:
INSURER POLICY NO PARTICIPATION
- ------- --------- -------------
POLICY PERIOD: From [date and time of inception of the
Policy(ies)] to [date and time of expiration].
COVERAGES:
AVIATION OR AIRLINE LIABILITY INSURANCE
Including, but not limited to, Premises/Operations Liability, Completed
Operations/Products Liability, Contractual Liability, Personal Injury,
Bodily Injury and Property Damage.
LIMITS OF LIABILITY:
To the fullest extent of the Policy limits that the Named Insured carries from
the time of execution of the HMSGTA referenced herein and thereafter at the
inception of each policy period, but in any event no less than two hundred
million dollars (US$200,000,000); combined single limit, any one occurrence
(with aggregates as applicable).
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APPENDIX I
SPECIAL PROVISIONS APPLICABLE TO BOEING:
It is certified that Insurers are aware of the terms and conditions of the
Hardware Material Services General Terms Agreement No. MWS dated
______________________ (HMSGTA), and that Insurers have agreed to the following:
(1) To include Boeing as an additional insured in accordance with
Customer's undertaking in Part 1, Article 13.1 of the HMSGTA;
(2) To provide that such insurance will be primary and not
contributory nor excess with respect to any other insurance available for the
protection of Boeing;
(3) To provide that with respect to the interests of Boeing, such
insurance shall not be invalidated or minimized by any action or inaction,
omission or misrepresentation by the Insured or any other person or party (other
than Boeing) regardless of any breach or violation of any warranty, declaration
or condition contained in such policies;
(4) To provide that all provisions of the insurance coverages
referenced above, except the limits of liability, will operate to give each
Insured or additional insured the same protection as if there were a separate
Policy issued to each;
(5) Boeing will not be responsible for payment, set-off, or
assessment of any kind or any premiums in connection with the policies,
endorsements or coverages described herein;
(6) If a policy is canceled for any reason whatsoever, or any
substantial change is made in the coverage which affects the interests of Boeing
or if a policy is allowed to lapse for nonpayment of premium, such cancellation,
change or lapse shall not be effective as to Boeing for thirty (30) days (in the
case of war risk and allied perils coverage seven (7) days after sending, or
such other period as may from time to time be customarily obtainable in the
industry) after receipt by Boeing of written notice from the Insurers or their
authorized representatives or Broker of such cancellation, change or lapse; and
(7) For the purposes of the Certificate, "Boeing" is defined as
The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of
each and their respective directors, officers, employees and agents.
SUBJECT TO THE TERMS, CONDITIONS, LIMITATIONS AND EXCLUSIONS OF THE RELATIVE
POLICIES.
(signature)
(typed name)
(title)
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APPENDIX II
CONTRACTOR CONFIDENTIALITY AGREEMENT
This agreement (Agreement) is entered into between _______________________
(Contractor) and Mid-Western Aircraft Systems, Inc. (Customer) and will be
effective as of the date set forth below.
In connection with Customer's provision to Contractor of certain
Materials, Proprietary Materials and Proprietary Information, reference is made
to Hardware Material Services General Terms Agreement No. MWS dated as of
________________________ between The Boeing Company, including its wholly-owned
subsidiaries, Boeing Management Company and McDonnell Douglas Corporation
(Boeing) and Customer (the HMSGTA).
Capitalized terms used herein without definition will have the same meaning as
in the HMSGTA.
Boeing has agreed to permit Customer to make certain Materials,
Proprietary Materials and Proprietary Information relating to [Boeing Model
________ aircraft - Manufacturer's Serial Number ______ / Registration No.
________ ][(the Aircraft)] [the Project] available to Contractor in connection
with Customer's contract with Contractor (the Contract) to assist Customer in
the [maintenance repair/modification of the Aircraft]. In consideration of the
Contract, and as a condition of receiving the Proprietary Materials and
Proprietary Information, Contractor agrees as follows:
1. For purposes of this Agreement:
"Aircraft Software" means software intended to fly with and be utilized in
the operation of an Aircraft, but excludes software furnished by Customer.
"Materials" means any and all items that are created by Boeing or a Third
Party, are provided to Contractor from Boeing or from Customer, and serve
primarily to contain, convey, or embody information. Materials may include
either tangible forms or intangible embodiments (for example, software and other
electronic forms) of information, but excludes Aircraft Software and software
furnished by Customer.
"Proprietary Information" means any and all proprietary, confidential
and/or trade secret information owned by Boeing or a Third Party which are
contained, conveyed or embodied in Materials.
"Proprietary Materials" means Materials that contain, convey, or embody
Proprietary Information.
"Third Party" means anyone other than Boeing, Customer and Contractor.
2. Boeing has authorized Customer to grant to Contractor a worldwide,
non-exclusive, personal and nontransferable license to use Proprietary Materials
and Proprietary Information, owned by Boeing, internally in connection with
performance of the Contract or as may otherwise
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pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.
Omissions are designated by the symbol [*****].
APPENDIX II
be authorized by Boeing in writing. Contractor will keep confidential and
protect from disclosure to any person, entity or government agency, including
any person or entity affiliated with Contractor, all Proprietary Materials and
Proprietary Information. Individual copies of all Materials and Aircraft
Software are provided to Contractor subject to copyrights therein, and all such
copyrights are retained by Boeing or, in some cases, by Third Parties.
Contractor is authorized to make copies of Materials (except for Materials
bearing the copyright legend of a Third Party) provided, however, Contractor
preserves the restrictive legends and proprietary notices on all copies. All
copies of Proprietary Materials will belong to Boeing and be treated as
Proprietary Materials under this Agreement.
3. Other than in support of work conducted under this Agreement or a separate
agreement with Customer pursuant to a Boeing supply agreement, Contractor
specifically agrees not to use Proprietary Materials or Proprietary Information
in connection with the manufacture or sale of any part or design. Unless
otherwise agreed with Boeing in writing, Proprietary Materials and Proprietary
Information may be used by Contractor only for work on the [Aircraft] [Project]
for which such Proprietary Materials have been specified or licensed by Boeing.
Customer and Contractor recognize and agree that they are responsible for
ascertaining and ensuring that all Materials are appropriate for the use to
which they are put.
4. Contractor will not attempt to gain access to information by reverse
engineering, decompiling, or disassembling any portion of any software or
Aircraft Software provided to Contractor pursuant to this Agreement.
5. If Boeing reasonably believes that the Contractor is not complying with
the terms of this Agreement, Boeing may request, and Contractor will promptly
return to Boeing (or, at Boeing's option, destroy) all Proprietary Materials,
together with all copies thereof and will certify to Boeing that all such
Proprietary Materials and copies have been so returned or destroyed.
6. When and to the extent required by a government regulatory agency having
jurisdiction over Contractor, Customer or Customer's [Aircraft][Project],
Contractor is authorized to provide Proprietary Materials and disclose
Proprietary Information to the agency for the agency's use in connection with
Contractor's authorized use of such Proprietary Materials and/or Proprietary
Information in connection with Contractor's work on the [Aircraft] [Project].
Contractor agrees to take reasonable steps to prevent such agency from making
any distribution or disclosure, or additional use of the Proprietary Materials
and Proprietary Information so provided or disclosed. Contractor further agrees
to promptly notify Boeing upon learning of any (i) distribution, disclosure, or
additional use by such agency, (ii) request to such agency for distribution,
disclosure, or additional use, or (iii) intention on the part of such agency to
distribute, disclose, or make additional use of the Proprietary Materials or
Proprietary Information.
7. Boeing is an intended third-party beneficiary with respect to this
Agreement, and Boeing may enforce any and all of the provisions of the Agreement
directly against Contractor. Contractor hereby submits to the jurisdiction of
the Washington state courts and the United States District Court for the Western
District of Washington with regard to any Boeing claims under this Agreement. It
is agreed that Washington law (excluding Washington's conflict-of-law
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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 [*****].
APPENDIX II
rules) will apply to this Agreement and with regard to any claim or dispute
under this Agreement.
8. No disclosure or physical transfer by Boeing or Customer to Contractor, of
any Proprietary Materials or Proprietary Information covered by this Agreement
will be construed as granting a license, other than as expressly set forth in
this Agreement or any ownership right in any patent, patent application,
copyright or proprietary information.
9. The provisions of this Agreement will apply notwithstanding any markings,
or legends or the absence thereof, on any Proprietary Materials.
10. This Agreement is the entire agreement of the parties regarding the
ownership and treatment of Proprietary Materials and Proprietary Information,
and no modification of this Agreement will be effective as against Boeing unless
embodied in a writing signed by authorized representatives of Contractor,
Customer and Boeing.
11. Failure by either party to enforce any of the provisions of this Agreement
will not be construed as a waiver of such provisions. If any of the provisions
of this Agreement is/are held unlawful or otherwise ineffective by a court of
competent jurisdiction, the remainder of the Agreement will remain in full
force.
12. This Agreement will remain in effect indefinitely.
ACCEPTED AND AGREED TO this
Date: ________________________________
CONTRACTOR CUSTOMER
______________________________________ ______________________________________
By ___________________________________ By ___________________________________
Its __________________________________ Its __________________________________
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