GENERAL TERMS AGREEMENT
between
THE BOEING COMPANY
and
Leonard's Metals
BCA-65344-0596
TABLE OF CONTENTS
TITLE PAGE
TABLE OF CONTENTS
AMENDMENT PAGE
RECITAL PAGE
1.0 DEFINITIONS..........................................................6
2.0
ORDERING.............................................................7
2.1 Issuance of Orders..........................................7
2.2 Acceptance of Orders........................................7
2.3 Written Authorization to Proceed............................8
3.0 TITLE AND RISK OF LOSS...............................................8
4.0 DELIVERY.............................................................8
4.1 Schedule....................................................8
4.2 Reserved....................................................9
4.3 Notice of Labor Negotiations................................9
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES..........................9
5.1 Review .....................................................9
5.2 Resident Representatives....................................9
6.0 CREDIT OFFICE VISIBILITY.............................................10
7.0 PACKING AND SHIPPING.................................................10
7.1 General.................................................... 10
7.1.1 Shipping Documentation...........................10
7.1.2 Insurance........................................11
7.1.3 Shipping Container Labels........................11
7.1.4 Carrier Selection................................11
7.1.5 Invoices.........................................11
7.1.6 Noncompliance....................................11
7.1.7 Reserved.........................................11
7.2 Barcode Marking and Shipping................................11
8.0 QUALITY ASSURANCE, INSPECTION, REJECTION, &
ACCEPTANCE...........................................................12
8.1 Controlling Document........................................12
8.2 Seller's Inspection.........................................12
8.2.1 Seller's Disclosure..............................12
8.2.2 Seller's Acceptance..............................12
8.3 Boeing's Inspection and Rejection...........................12
8.4 Rights of Boeing's Customers and Regulators to
Perform Inspections, Surveillance, and
Testing ....................................................13
8.5 Retention of Records........................................14
8.6 Inspection..................................................14
8.7 Reserved....................................................14
8.8 Regulatory Approvals........................................14
9.0 EXAMINATION OF RECORDS...............................................15
10.0 CHANGES..............................................................15
10.1 Changes Clause..............................................15
11.0 GENERAL & INTERNATIONAL REQUIREMENTS.................................16
11.1 Language....................................................16
11.2 Currency....................................................16
11.3 Import/Export...............................................16
11.4 Mutual Assistance in Obtaining Import/Export
Authorizations Under ITAR or EAR............................18
12.0 TERMINATION FOR CONVENIENCE..........................................19
12.1 Basis for Termination; Notice...............................19
12.2 Termination Instructions....................................19
12.3 Seller's Claim..............................................20
12.4 Failure to Submit a Claim...................................20
12.5 Partial Termination.........................................20
12.6 Product Price...............................................20
12.7 Exclusions or Deductions....................................21
12.8 Partial Payment/Payment.....................................21
12.9 Seller's Accounting Practices...............................21
12.10 Records.................................................... 21
13.0 CANCELLATION FORDEFAULT..............................................22
13.1 Events of Default...........................................22
13.2 Remedies....................................................23
14.0 EXCUSABLE DELAY......................................................25
15.0 SUSPENSION OF WORK...................................................25
16.0 TERMINATION OR WRONGFUL CANCELLATION.................................26
17.0 ASSURANCE OF PERFORMANCE.............................................26
18.0 RESPONSIBILITY FOR PROPERTY..........................................27
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS......................27
20.0 PROPRIETARY INFORMATION AND ITEMS....................................27
21.0 COMPLIANCE WITH LAWS.................................................28
21.1 Seller's Obligation.........................................28
21.2 Government Requirements.....................................29
22.0 INTEGRITY IN PROCUREMENT.............................................29
23.0 UTILIZATION OF SMALL BUSINESS CONCERNS...............................29
24.0 BOEING'S RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS,
AND TOOLING..........................................................30
25.0 TERMINATION OF AIRPLANE PROGRAM......................................31
25.1 Program Termination.........................................31
25.2 Termination Liability.......................................31
26.0 PUBLICITY............................................................31
27.0 PROPERTY INSURANCE...................................................32
27.1 Insurance...................................................32
27.2 Certificate of Insurance....................................32
27.3 Notice of Damage or Loss....................................32
28.0 RESPONSIBILITY FOR PERFORMANCE.......................................33
28.1 Subcontracting..............................................33
28.2 Reliance....................................................34
28.3 Assignment..................................................34
29.0 NON-WAIVER/PARTIAL INVALIDITY........................................34
30.0 HEADINGS.............................................................34
31.0 RESERVED.............................................................35
32.0 RESERVED.............................................................35
33.0 DISPUTES.............................................................35
34.0 RESERVED.............................................................35
35.0 TAXES................................................................35
35.1 Inclusion of Taxes in Price.................................35
35.2 Litigation..................................................36
35.3 Rebates.....................................................36
36.0 OFFSET CREDITS.......................................................36
AMENDMENTS
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Amend Description Date Approval
Number
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GENERAL TERMS AGREEMENT
RELATING TO
BOEING PRODUCTS
THIS GENERAL TERMS AGREEMENT ("GTA") ("the Agreement") is entered into as of
March 20, 2003 by and between Leonard's Metal Inc., a Missouri corporation, with
its principal office in St. Charles, Missouri ("Seller"), and The Boeing
Company, a Delaware corporation acting by and through the Boeing Commercial
Airplanes, McDonnell Douglas Corporation, a Maryland corporation, and
Boeing-Oakridge Company, (collectively and individually "Boeing"). Hereinafter,
the Seller and Boeing may be referred to jointly as "Parties" hereto.
AGREEMENTS
1.0 DEFINITIONS
The definitions set forth below shall apply to this Agreement, any Order, and
any related Special Business Provisions ("SBP"). Words importing the singular
shall also include the plural and vice versa.
A. "Customer" means any owner, lessee or operator of an aircraft or
commodity, or designee of such owner, lessee or operator.
B. "FAA" means the United States Federal Aviation Administration or any
successor agency thereto.
C. "FAR" means the Federal Acquisition Regulations in effect on the date
of this Agreement.
D. "Procurement Representative" means the individual designated by Boeing
as being primarily responsible for interacting with Seller regarding
this Agreement or any Order.
E. "Order" means each purchase contract and purchase order issued by
Boeing and either accepted by Seller under the terms of this Agreement
or issued within Boeing's authority under this Agreement.
F. "Product" means goods, including components and parts thereof,
services, documents, data, software, software documentation and other
information or items furnished or to be furnished to Boeing under any
Order, including Tooling, except for Rotating Use Tooling.
G. "Tooling" means all tooling, used in production or inspection of
Products, either provided to Seller or supplied by Seller whereby
Boeing agrees to pay Seller for the manufacture of the tooling.
2.0 ORDERING
2.1 Issuance of Orders
Boeing may issue Orders to Seller under this Agreement from time to time. Each
Order shall contain a description of the Products ordered, a reference to the
applicable specifications, Drawings or supplier part number, the quantities and
prices, the delivery schedule, the terms and place of delivery and any special
conditions.
Each Order, which incorporates a Special Business Provisions (SBP), which
incorporates this Agreement, shall be governed by and be deemed to include the
provisions of this Agreement. Purchase Order Terms and Conditions, Form
D1-4100-4045, 49-5700, GP1, DAC Form 26-915, DAC Form 26-916 or Form P252T does
not apply. Any other Order terms and conditions, which directly conflict with
this Agreement, do not apply unless specifically agreed to in writing by the
Parties.
2.2 Acceptance of Orders
Each Order is Boeing's offer to Seller and acceptance is strictly limited to its
terms. Unless specifically agreed to in writing by the Authorized Procurement
Representative of Boeing, Boeing objects to, and is not bound by, any terms or
condition that differs from or adds to the Order. Seller's commencement of
performance or acceptance of the Order in any manner shall conclusively evidence
Seller's acceptance of the Order as written.
Any rejection by Seller of an Order shall specify the reasons for rejection and
any changes or additions that would make the Order acceptable to Seller;
provided, however, that Seller may not reject any Order for reasons inconsistent
with the provisions of this Agreement or the applicable SBP.
2.3 Written Authorization to Proceed
Boeing's Procurement Representative may give written or electronic authorization
to Seller to commence performance before Boeing issues an Order. If Boeing's
authorization specifies that an Order will be issued, Boeing and Seller shall
proceed as if an Order had been issued. This Agreement, the applicable SBP and
the terms stated in the authorization shall be deemed to be a part of Boeing's
offer and the Parties shall promptly and in good faith agree on any open Order
terms. If Boeing does not specify in its authorization that an Order shall be
issued, Boeing's obligation is strictly limited to the terms of the
authorization.
If Seller commences performance before an Order is issued or without receiving
Boeing's prior authorization to proceed, such performance shall be at Seller's
risk and expense.
3.0 TITLE AND RISK OF LOSS
Title to and risk of any loss of or damage to the Products shall pass at the
F.O.B. point as specified in the applicable Order, except for loss or damage
thereto resulting from Seller's fault or negligence.
4.0 DELIVERY
4.1 Schedule
Seller shall strictly adhere to the shipment, delivery or completion schedules
specified in the Order. In the event of any anticipated or actual delay,
including but not limited to delays attributed to labor disputes, Seller shall:
(i) promptly notify Boeing in writing of the reasons for the delay and the
actions being taken to overcome or minimize the delay; and (ii) provide Boeing
with a written recovery schedule. If Boeing requests, Seller shall, at Seller's
expense, ship via air or other expedited routing to avoid the delay or minimize
it as much as possible. Seller shall not deliver Products prior to the scheduled
delivery dates unless authorized by Boeing,
Boeing shall, at no additional cost, retain goods furnished in excess of the
specified quantity or in excess of any allowable overage unless, within 45 days
of shipment, Seller requests return of such excess. In the event of such
request, Seller shall reimburse Boeing for reasonable costs associated with
storage and return of excess. If Products are manufactured with reference to
Boeing Proprietary Information or Materials, Seller agrees that pursuant to the
Proprietary Information and Items article of this Agreement, it will not sell or
offer such Products for sale to anyone other than Boeing without Boeing prior
written consent.
4.2 Reserved
4.3 Notice of Labor Negotiations
When requested by Boeing, Seller will provide status on labor contracts and
pending negotiations, including that of Seller's subcontractors, except as may
be prohibited by law.
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
5.1 Review
Seller hereby grants, and shall cause any of its subcontractors to grant, to
Boeing the right to visit the facility of Seller or any of its subcontractors
during operating hours to review progress and performance with respect to
production, schedule, cost, quality and protection of Boeing's proprietary
rights under this GTA. Any Boeing representative shall be allowed access to all
areas used for the performance of this GTA. Such access shall be subject to the
regulations of any governmental agency regarding admissibility and movement of
personnel on the premises of Seller or any of its subcontractors.
Boeing shall notify Seller prior to any visit. Such notice shall contain the
names, citizenship and positions of the visiting personnel and the duration and
purpose of such visit.
5.2 Resident Representatives
Boeing may, in its sole discretion, and for such period, as it deems necessary,
locate resident personnel ("Resident Team") at Seller's facility. The Resident
Team shall function under the direction of a resident Boeing manager, if
appropriate, or a manager located at Boeing who will supervise Resident Team
activities.
The Resident Team shall be allowed access to or to review, as the case may be,
all work areas, program status reports and management reviews used for or
relating to Seller's performance of this GTA.
Seller shall supply the Resident Team with office space, desks, facsimile
machines, telephones, stationery supplies, filing cabinets, communication
facilities, secretarial and stenographic services and any other items reasonably
requested by Boeing. A reasonable portion of the Resident Team's working area
shall be dedicated to space for private telephone calls, meetings and similar
Boeing activities. All costs and expenses for such facilities and services, if
required, shall be paid by Seller.
Notwithstanding such assistance, Seller remains solely responsible for
performing in accordance with each Order.
6.0 CREDIT OFFICE VISIBILITY
If requested, Seller shall provide financial data, on a quarterly basis, or as
requested to the Boeing Corporate Credit Office for credit and financial
condition reviews. Said data shall include but not be limited to balance sheets,
schedule of accounts payable and receivable, major lines of credit, creditors,
income statements (profit and loss), cash flow statements, firm backlog, and
headcount. Copies of such data are to be made available within 72 hours of any
written request by Boeing's Corporate Credit Office. Boeing shall treat all such
information as confidential.
7.0 PACKING AND SHIPPING
7.1 General
Seller shall pack the Products to prevent damage and deterioration taking into
account method of shipment, location of shipment and destination of receipt, as
well as time associated with shipment. Seller shall comply with carrier tariffs.
Unless the Order specifies otherwise, the price includes shipping charges for
Products to the F.O.B. destination. Unless otherwise specified in the Order,
Products sold F.O.B. place of shipment shall be forwarded collect. For Products
shipped domestically, Seller shall make no declaration concerning the value of
the Products shipped, except on the Products where the tariff rating is
dependent upon released or declared value. In such event, Seller shall release
or declare such value at the maximum value within the lowest rating. Boeing may
charge Seller for damage to or deterioration of any Products resulting from
improper packing or packaging. Seller shall comply with any special instructions
stated in the applicable Order. Upon Boeing's request, Seller will identify
packaging charges showing material and labor costs for container fabrication.
7.1.1 Shipping Documentation
Shipments by Seller or its subcontractors must include packing sheets. Each
packing sheet must include at a minimum the following: a) Seller's name,
address, phone number; and supplier code number b) Order and item number; c)
ship date for the Products; d) total quantity shipped and quantity in each
container, if applicable; e) legible pack slip number; f) nomenclature; g) unit
of measure; h) ship to information if other than Boeing; i) warranty data and
certification, as applicable; j) rejection tag, if applicable; k) Seller's
certification that Products comply with Order requirements; and, l)
identification of optional material used, if applicable. A shipment containing
hazardous and non-hazardous materials must have separate packing sheets for the
hazardous and non-hazardous materials. Items shipped on the same day will be
consolidated on one bill of lading or airbill, unless Boeing's Authorized
Procurement Representative authorizes otherwise. The shipping documents will
describe the material according to the applicable classification or tariff
rating. The total number of shipping containers will be referenced on all
shipping documents. Originals of all government bills of lading will be
surrendered to the origin carrier at the time of shipment.
7.1.2 Insurance
Seller will not insure any FOB Origin shipment unless authorized by Boeing.
7.1.3 Shipping Container Labels
Seller will label each shipping container with the Order number and the number
that each container represents of the total number being shipped (e.g., Box 1 of
2, Box 2 of 2).
7.1.4 Carrier Selection
Boeing will select the carrier and mode of transportation for all shipments
where freight costs will be charged to Boeing.
7.1.5 Invoices
Seller will include copies of documentation supporting prepaid freight charges
(e.g., carrier invoices or UPS shipping log/manifest), if any, with its
invoices.
7.1.6 Noncompliance
If Seller is unable to comply with the shipping instructions in this Agreement
or an Order, Seller will contact Boeing's Traffic Management Department or
Boeing's Authorized Procurement Representative.
7.1.7 Reserved
7.2 Barcode Marking and Shipping
For those shipments which support Orders from Boeing locations where Seller has
been approved to utilize barcode labeling for shipping and packaging, Seller
shall mark and package such shipments in accordance with the applicable barcode
requirements for that location.
8.0 QUALITY ASSURANCE, INSPECTION, REJECTION, & ACCEPTANCE
8.1 Controlling Document
The controlling quality assurance document for Orders shall be as set forth
elsewhere in the contract.
8.2 Seller's Inspection
Seller shall inspect or otherwise verify that all Products, including those
components procured from or furnished by subcontractors or Boeing, comply with
the requirements of the Order prior to shipment to Boeing or Customer. Seller
shall be responsible for all tests and inspections of the Product during
receiving, manufacture and Seller's final inspection. Seller agrees to furnish
copies of test and/or control data upon request from Boeing's Procurement
Representative.
8.2.1 Seller's Disclosure
Seller will immediately notify Boeing in writing when discrepancies in Seller's
processes or Product are discovered or suspected for Products Seller has
delivered or will deliver under this Agreement.
8.2.2 Seller's Acceptance
Seller shall provide with all shipments the following evidence of acceptance by
its Quality Assurance department: (a) certified physical and metallurgical or
mechanical test reports where required by controlling specifications, or (b) a
signed, dated statement on the packing sheet certifying that its Quality
Assurance department has inspected the Products and they adhere to all
applicable Drawings and/or specifications.
8.3 Boeing's Inspection and Rejection
Boeing will accept the Products or give Seller notice of rejection or revocation
of acceptance ("rejection" herein), notwithstanding any payment, prior test or
inspection, or passage of title. No inspection, test delay or failure to inspect
or test or failure to discover any defect or other nonconformance shall relieve
Seller of any obligations under this Agreement or impair any right or remedy of
Boeing.
If Seller delivers non-conforming Products, Boeing may at its option and at
Seller's expense (i) return the Products for credit or refund; (ii) require
Seller to promptly correct or replace the Products; (iii) correct the Products;
or, (iv) obtain replacement Products from another source.
Seller shall not redeliver corrected or rejected goods without disclosing the
former rejection or requirement for correction. Seller shall disclose any
corrective action taken. Repair, replacement and other correction and redelivery
shall be completed within the original delivery schedule or such later time as
Authorized Procurement Representatives of Boeing may reasonably direct.
All costs and expenses and loss of value incurred as a result of or in
connection with nonconformance and repair, replacement or other correction may
be recovered from Seller by equitable price reduction or credit against amounts
that may be owed to Seller under this Agreement or otherwise.
Acceptance of any Product by Boeing following any repair or rework pursuant to
this Section 8.3 shall not alter or affect the obligations of Seller or the
rights of Boeing under SBP Section 6.1.
8.4 Rights of Boeing's Customers and Regulators to Perform Inspections,
Surveillance, and Testing
Boeing's rights to perform inspections, surveillance and tests and to review
procedures, practices, processes and related documents related to quality
assurance, quality control, flight safety, and configuration control shall
extend to the Customers of Boeing that are departments, agencies or
instrumentalities of the United States Government and to the United States
Government FAA and any successor agency or instrumentality of the United States
Government. Boeing may also, at Boeing's option, by prior written notice from
Boeing's Authorized Procurement Representative, extend such rights to other
Customers of Boeing and to agencies or instrumentalities of foreign governments
equivalent in purpose to the Federal Aviation Administration. Seller shall
cooperate with any such United States Government or Boeing directed inspection,
surveillance, test or review without additional charge to Boeing. Nothing in
this contract shall be interpreted to limit United States Government access to
Seller's facilities pursuant to law or regulation.
Where Seller is located in or subcontracts with a supplier or subcontractor
located in a country which does not have a Bi-lateral Airworthiness Agreement
with the United States, Seller will obtain and maintain on file and require its
affected supplier(s) or subcontractor(s) to obtain and maintain on file, subject
to review by Boeing, a letter from the applicable government where the Product
or subcontracted element is to be manufactured stating that Boeing and the FAA
will be granted access to perform inspections, surveillance and tests and to
review procedures, practices, processes and related documents related to quality
assurance, quality control, flight safety, and configuration control.
8.5 Retention of Records
For purchases supporting BCA, Quality Assurance records shall be maintained on
file at Seller's facility and available to FAA (or equivalent governmental
agency in Seller's country that has been granted jurisdiction by the FAA) and
Boeing's authorized representatives. Seller shall retain such records for a
period of not less than seven (7) years from the date of final payment under the
applicable Order for all Products unless otherwise specified on the Order.
8.6 Inspection
At no additional cost to Boeing, Products may be subject to inspection,
surveillance and test at reasonable times and places, including Seller's
subcontractors' locations. Boeing will perform inspections; surveillance and
tests so as not to unduly delay the work. Seller shall maintain an inspection
system acceptable to Boeing for the Products purchased under this Agreement.
If Boeing performs an inspection or test on the premises of Seller or its
subcontractors, Seller shall furnish and require its subcontractors to furnish,
without additional charge, reasonable facilities and assistance for the safe and
convenient performance of these duties.
Seller's documentation accompanying the shipment must reflect evidence of this
inspection.
8.7 Reserved
8.8 Regulatory Approvals
For aircraft regulated by the FAA or non-U.S. equivalent agency, regulatory
approval may be required for Seller to make direct sales (does not include
"direct ship" sale through Boeing) of modification or replacement parts to
owners/operators of type-certificated aircraft. Regulatory approval, such as
Parts Manufacturing Authority (PMA), is granted by the FAA or appropriate
non-U.S. equivalent regulatory agency. Seller agrees not to engage in any such
direct sales of Products under this Agreement without regulatory approval. Any
breach of this provision will be deemed a material breach of this Agreement. On
Seller proprietary parts, Seller agrees to notify Boeing of application for PMA
or other applicable regulatory approval and subsequent approval or denial of
same. Upon receipt of proof of PMA or other applicable regulatory approval,
Boeing may list Seller in the Illustrated Parts Catalog as seller of that part.
9.0 EXAMINATION OF RECORDS
Seller shall maintain complete and accurate records showing the sales volume of
all Products. Such records shall support all services performed, allowances
claimed and costs incurred by Seller in the performance of each Order, including
but not limited to those factors which comprise or affect direct labor hours,
direct labor rates, material costs, burden rates and subcontracts. Such records
and other data shall be capable of verification through audit and analysis by
Boeing and be available to Boeing at Seller's facility for Boeing's examination,
reproduction, and audit at all reasonable times from the date of the applicable
Order until three (3) years after final payment under such Order. Seller shall
provide assistance to interpret such data if requested by Boeing. Such
examination shall provide Boeing with complete information regarding Seller's
performance for use in price negotiations with Seller relating to existing or
future orders for Products, including but not limited to negotiation of
equitable adjustments for changes and termination/obsolescence claims pursuant
to GTA Section 10.0. Boeing shall treat all information disclosed under this GTA
Section as confidential, unless required by US Government contracting
regulation(s).
10.0 CHANGES
10.1 Changes Clause
Boeing's Procurement Representative may, without notice to sureties, in writing
direct changes within the general scope of this Agreement or an Order in any of
the following: (i) technical requirements and descriptions, specifications,
statement of work, drawings or designs; (ii) shipment or packing methods; (iii)
place of delivery, inspection or acceptance; (iv) reasonable adjustments in
quantities or delivery schedules or both; (v) amount of Boeing-furnished
property; and, if this contract includes services, (vi) description of services
to be performed; (vii) time of performance (i.e., hours of the day, days of the
week, etc.); and (viii) place of performance. Seller shall comply immediately
with such direction.
If such change increases or decreases the cost or time required to perform this
contract, Boeing and Seller shall negotiate an equitable adjustment in the price
or schedule, or both, to reflect the increase or decrease. Boeing shall modify
the Order in writing accordingly. Unless otherwise agreed in writing, Seller
must assert any claim for adjustment to Boeing's Procurement Representative in
writing within 25 days and deliver a fully supported proposal to Boeing's
Procurement Representative within 60 days after Seller's receipt of such
direction. Boeing may, at its sole discretion, consider any claim regardless of
when asserted. If Seller's proposal includes the cost of property made obsolete
or excess by the change, Boeing may direct the disposition of the property.
Boeing may examine Seller's pertinent books and records to verify the amount of
Seller's claim. Failure of the Parties to agree upon any adjustment shall not
excuse Seller from performing in accordance with Boeing's direction.
If Seller considers that Boeing's conduct constitutes a change, Seller shall
notify Boeing's Procurement Representative immediately in writing as to the
nature of such conduct and its effect upon Seller's performance. Pending
direction from Boeing's Procurement Representative, Seller shall take no action
to implement any such change.
11.0 GENERAL & INTERNATIONAL REQUIREMENTS
11.1 Language
The Parties hereto have agreed that this Agreement be drafted in American
English only. Where Seller resides in Quebec, Canada, les parties aux presentes
tes ont convenu de rediger ce contrat en Anglais seulement. All contractual
documents and all correspondence, invoices, notices and other documents shall be
submitted in American English. Any necessary conversations shall be held in
English. Boeing shall determine whether measurements will be in the English or
Metric system or a combination of the two systems. Seller shall not convert
measurements, which Boeing has stated in an English measurement system into the
Metric system in documents furnished to Boeing
11.2 Currency
Unless specified elsewhere herein, all prices shall be stated in and all
payments shall be made in the currency of the United States of America (U.S.
Dollars). No adjustments to any prices shall be made for changes to or
fluctuations in currency exchange rates.
11.3 Import/Export
A. Seller shall comply with applicable import and export laws and
regulations of Seller's country and of the United States and with all
applicable export licenses and their provisos. This contract may
involve information or items which are subject to the International
Traffic in Arms Regulations (ITAR) or Export Administration
Regulations (EAR) and which may not be released to "Foreign Persons"
inside or outside the United States without the proper export
authority.
The ITAR defines a Foreign Person as any person who is not a U.S.
citizen, a lawful permanent resident as defined by 8 USC 1101(a)(20),
or a protected individual as defined by 8 USC 1324b(a)(3). Foreign
Person also means a corporation, business association, partnership, or
any other entity that is not incorporated or organized to do business
in the United States, as well as international organizations, foreign
governments, and any agency or subdivision of foreign governments
(e.g. diplomatic missions).
B. The importer/exporter of record has obtained or will obtain and
properly utilize, U.S. Government import/export authorization to
furnish to Seller any defense articles, technical data, defense
services, software, and/or other controlled items (together referred
to herein as "Controlled Items") requiring such authorization, which
are necessary for Seller to perform this contract.
Such Controlled Items are authorized for export only to Seller's
country for use by Seller and may not, without the prior written
approval of the U.S. Government, be transferred, transshipped on a
non-continuous voyage, or otherwise disposed of in any other country,
either in their original form or after being incorporated into other
end items.
If so requested by the importer/exporter of record, the other party
shall assist in obtaining such authorization. If U.S. Government
import/export authorization is not available, cannot be obtained, or
is obtained and subsequently revoked, Controlled Items to be delivered
or exchanged pursuant to this contract shall not be imported,
exported, or re-exported. Resale or other transfer of items delivered
or exchanged pursuant to this contract shall be in accordance with
this clause.
C. U.S. Government import/export authorization is based upon the
following ITAR requirements and upon all applicable export licenses
with which Seller agrees to comply:
1. Seller shall use Controlled Items furnished by Boeing only in the
manufacture of Products in accordance with this contract.
2. Seller shall not disclose or provide Controlled Items furnished
by Boeing to any Foreign Person either in the United States or
abroad before obtaining written authorization from Boeing or from
the U.S. Department of State Office of Defense Trade Controls,
except that if Seller is itself a Foreign Person, it may disclose
or provide Controlled Items furnished by Boeing to Seller's
employees who are nationals of Seller's country of site.
3. Seller acquires no rights in Controlled Items furnished by Boeing
except to use them to perform this contract. Seller shall not
purport to convey to any subcontractor or person any greater
rights in the data than Seller has. Seller may convey to
subcontractors the right to use the Controlled Items only as
required to perform their subcontracts.
4. Seller shall deliver the articles manufactured in accordance with
this contract only to Boeing in the United States or, with
Boeing's authorization, to the U.S. Government.
5. Upon completion or termination of this contract, Boeing may
require Seller to: i) return to Boeing all technical data
furnished by Boeing pursuant to this contract; or ii) destroy
such technical data and to certify in writing to such
destruction.
6. Seller shall impose these requirements, 1 through 6 inclusive,
suitably revised to properly identify the parties, on all
subcontractors to whom Seller intends to furnish Controlled Items
provided by Boeing for use by the subcontractors in performance
of subcontracts.
D. Seller agrees, in addition to the above procedures established by the
ITAR, to place the following legend on all technical data obtained,
used, generated, or delivered in performance of this contract:
WARNING--Information Subject to Export Control Laws This document may
contain information subject to the International Traffic in Arms
Regulation (ITAR) or the Export Administration Regulation (EAR) of
1979. This information may not be exported, released, or disclosed to
Foreign Nationals outside the United States without first complying
with the export.
11.4 Mutual Assistance in Obtaining Import/Export Authorizations Under ITAR
or EAR
A. Upon request of Boeing's Authorized Procurement Agent, Seller shall,
promptly and without additional cost, furnish Boeing with any
documentation, including import certificates or end-user statements
from Seller or Seller's government, which is reasonably necessary to
support Boeing's application for U.S. import or export authorizations.
Boeing shall not be responsible for delays in U.S. import or export of
Controlled Items supplied hereunder by Boeing due to a lack of
necessary documentation from Seller or Seller's country.
B. Seller shall be responsible for obtaining required import or export
approvals, including licenses to import or export equipment or
authorizations for Boeing to locate personnel and furnish in-country
technical assistance.
C. Upon Seller's request, Boeing shall promptly furnish Seller with any
documentation, including import certificates or end -user statements
from Boeing or the U.S. Government, which is reasonably necessary to
support Seller's application for import or export authorizations
issued by Seller's government. Seller shall not be responsible for
delays in import or export of Controlled Items supplied hereunder by
Seller into or out of Seller's country due to a lack of necessary
documentation from Boeing or Boeing's country.
D. If the government of either party denies, fails to grant, or revokes
any import or export authorizations necessary for the performance of
this contract, that party shall immediately notify the other party,
and neither party shall be responsible for performance or payment
under this contract for directly affected activities.
12.0 TERMINATION FOR CONVENIENCE
12.1 Basis for Termination; Notice
Boeing may, from time to time terminate all or part of any Order
issued hereunder, by written notice to Seller. Any such written notice
of termination shall specify the effective date and the extent of any
such termination.
12.2 Termination Instructions
On receipt of a written notice of termination pursuant to GTA Section
12.1, unless otherwise directed by Boeing, Seller shall:
A. Immediately stop work as specified in the notice;
B. Immediately terminate its subcontracts and purchase orders relating to
work terminated;
C. Settle any termination claims made by its subcontractors or suppliers;
provided, that Boeing shall have approved the amount of such
termination claims prior to such settlement;
D. Preserve and protect all terminated inventory and Products;
E. At Boeing's request, transfer title (to the extent not previously
transferred) and deliver to Boeing or Boeing's designee all supplies
and materials, work-in-process, Tooling and manufacturing drawings and
data produced or acquired by Seller for the performance of this
Agreement and any Order, all in accordance with the terms of such
request;
F. Be compensated for such items to the extent provided in GTA Section
12.3 below;
G. Take all reasonable steps required to return, or at Boeing's option
and with prior written approval to destroy, all Boeing Proprietary
Information and Items, as set forth in GTA Section 20.0, in the
possession, custody or control of Seller;
H. Take such other action as, in Boeing's reasonable opinion, may be
necessary, and as Boeing shall direct in writing, to facilitate
termination of the Order; and
I. Complete performance of the work not terminated.
12.3 Seller's Claim
If Boeing terminates an Order in whole or in part pursuant to GTA Section 12.1
above, Seller shall have the right to submit a written termination claim to
Boeing in accordance with the terms of this GTA Section 12.3. Such termination
claim shall be asserted to Boeing within forty-five (45) days and all
documentation supporting said claim must be asserted not later than six (6)
months after Seller's receipt of the termination notice and shall be in the form
prescribed by Boeing. Such claim must contain sufficient detail to explain the
amount claimed, including detailed inventory schedules and a detailed breakdown
of all costs claimed separated into categories (e.g., materials, purchased
parts, finished components, labor, burden, general and administrative), and to
explain the basis for allocation of all other costs. With regard to the amount
compensatable to Seller under a termination pursuant to GTA Section 12.1 above,
Seller shall be entitled to compensation in accordance with and to the extent
allowed under the terms of FAR 52-249-2 paragraphs (e)-(i), (Sept 96) (as
published in 48 CFR ss. 52.249-2 approval 1996; without Alternates, unless
alternate clause date is called out on the Order) which is incorporated herein
by reference except "Government" and "Contracting Officer" shall mean Boeing,
"Contractor" shall mean Seller and "Contract" shall mean Order.
Seller shall indemnify Boeing and hold Boeing harmless from and against (i) any
and all claims, suits and proceedings against Boeing by any subcontractor or
supplier of Seller in respect of any such termination and (ii) any and all
costs, expenses, losses and damages incurred by Boeing in connection with any
such claim, suit or proceeding.
12.4 Failure to Submit a Claim
Notwithstanding any other provision of this GTA Section 12.0, if Seller fails to
submit a termination claim within the time period set forth above, Seller shall
be barred from submitting a claim and Boeing shall have no obligation for
payment to Seller under this GTA Section 12.0 except for those Products
previously delivered and accepted by Boeing.
12.5 Partial Termination
Any partial termination of an Order shall not alter or affect the terms and
conditions of the Order or any Order with respect to Products not terminated.
12.6 Product Price
Termination under any of the above paragraphs shall not result in any change to
unit prices for Products not terminated.
12.7 Exclusions or Deductions
The following items shall be excluded or deducted from any claim submitted by
Seller:
A. All unliquidated advances or other payments made by Boeing to Seller
pursuant to a terminated Order;
B. Any claim which Boeing has against Seller;
C. The agreed price for scrap allowance;
D. Except for normal spoilage and any risk of loss assumed by Boeing, the
agreed fair value of property that is lost, destroyed, stolen or
damaged.
12.8 Partial Payment/Payment
Payment, if any, to be paid under this GTA Section 12.0 shall be made thirty
(30) days after settlement between the parties or as otherwise agreed to between
the parties. Boeing may make partial payments and payments against costs
incurred by Seller for the terminated portion of the Order. If the total
payments exceed the final amount determined to be due, Seller shall repay the
excess to Boeing upon demand.
12.9 Seller's Accounting Practices
Boeing and Seller agree that Seller's "normal accounting practices" used in
developing the price of the Product(s) shall also be used in determining the
allocable costs at termination. For purposes of this GTA Section 12.9, Seller's
"normal accounting practices" refers to Seller's method of charging costs as
either a direct charge, overhead expense, general administrative expense, etc.
12.10 Records
Unless otherwise provided in this Agreement or by law, Seller shall maintain all
financial records and documents relating to the terminated portion of the Order
for three (3) years after final settlement of Seller's termination claim.
13.0 CANCELLATION FOR DEFAULT
13.1 Events of Default
The occurrence of any one or more of the following events shall constitute an
"Event of Default".
A. Any failure by Seller to deliver, when and as required by this
Agreement or any Order, any Product, except as provided in GTA Section
14.0; or
B. Any failure by Seller to provide an acceptable Assurance of
Performance within the time specified in GTA Section 17.0, or
otherwise in accordance with applicable law; or,
C. Any failure by Seller to perform or comply with any obligation set
forth in GTA Section 20.0;or,
D. Seller is or has participated in the sale, purchase or manufacture of
airplane parts without the required approval of the FAA or appropriate
non-U.S. equivalent regulatory agency; or
E. Boeing revokes Seller's Quality Assurance System approval, if
applicable; or,
F. Any failure by Seller to perform or comply with any obligation (other
than as described in the foregoing GTA Sections (13.1.A, 13.1.B,
13.1.C, 13.1.D and 13.1.E) set forth in this Agreement and such
failure shall continue unremedied for a period of ten (10) days or
more following receipt by Seller of notice from Boeing specifying such
failure; or
G. (a) the suspension, dissolution or winding-up of Seller's business,
(b) Seller's insolvency, or its inability to pay debts, or its
nonpayment of debts, as they become due, (c) the institution of
reorganization, liquidation or other such proceedings by or against
Seller or the appointment of a custodian, trustee, receiver or similar
Person for Seller's properties or business, (d) an assignment by
Seller for the benefit of its creditors, or (e) any action of Seller
for the purpose of effecting or facilitating any of the foregoing.
13.2 Remedies
If any Event of Default shall occur:
A. Cancellation
Boeing may, by giving written notice to Seller, immediately cancel
this Agreement, any SBP, any Administrative Agreement, or any Order,
in whole or in part, and Boeing shall not be required after such
notice to accept the tender by Seller of any Products with respect to
which Boeing has elected to cancel this Agreement.
B. Cover
Boeing may manufacture, produce or provide, or may engage any other
persons to manufacture, produce or provide, any Products in
substitution for the Products to be delivered or provided by Seller
hereunder with respect to which this Agreement or any Order has been
canceled. In addition to any other remedies or damages available to
Boeing hereunder or at law or in equity, Boeing may recover from
Seller the difference between the price for each such Product and the
aggregate expense, including, without limitation, administrative and
other indirect costs, paid or incurred by Boeing to manufacture,
produce or provide, or engage other persons to manufacture, produce or
provide, each such Product.
C. Rework or Repair
Where allowed by the applicable regulatory authority, Boeing or its
designee may rework or repair any Product in accordance with GTA
Section 8.3;
D. Setoff
Boeing shall, at its option, have the right to set off against and
apply to the payment or performance of any obligation, sum or amount
owing at any time to Boeing hereunder or under any Order, all
deposits, amounts or balances held by Boeing for the account of Seller
and any amounts owed by Boeing to Seller, regardless of whether any
such deposit, amount, balance or other amount or payment is then due
and owing.
E. Tooling and other Materials
As partial compensation for the additional costs which Boeing will
incur as a result of the actual physical transfer of production
capabilities from Seller to Boeing or Boeing's designee, Seller shall
upon the request of Boeing, transfer and deliver to Boeing or Boeing's
designee title to any or all (i) Tooling, (ii) Boeing-furnished
material, (iii) raw materials, parts, work-in-process, incomplete or
completed assemblies, and all other Products or parts thereof in the
possession or under the effective control of Seller or any of its
subcontractors (iv) Proprietary Information and Materials of Boeing
including without limitation planning data, drawings and other
Proprietary Information and Materials relating to the design,
production, maintenance, repair and use of Tooling, in the possession
or under the effective control of Seller or any of its subcontractors,
in each case free and clear of all liens, claims or other rights of
any person.
Seller shall be entitled to receive from Boeing reasonable
compensation for any item accepted by Boeing which has been
transferred to Boeing pursuant to this GTA Section 13.2.E (except for
any item the price of which shall have been paid to Seller prior to
such transfer); provided, however, that such compensation shall not be
paid directly to Seller, but shall be accounted for as a setoff
against any damages payable by Seller to Boeing as a result of any
Event of Default.
F. Remedies Generally
No failure on the part of Boeing in exercising any right or remedy
hereunder, or as provided by law or in equity, shall impair, prejudice
or constitute a waiver of any such right or remedy, or shall be
construed as a waiver of any Event of Default or as an acquiescence
therein. No single or partial exercise of any such right or remedy
shall preclude any other or further exercise thereof or the exercise
of any other right or remedy. No acceptance of partial payment or
performance of any of Seller's obligations hereunder shall constitute
a waiver of any Event of Default or a waiver or release of payment or
performance in full by Seller of any such obligation. All rights and
remedies of Boeing hereunder and at law and in equity shall be
cumulative and not mutually exclusive and the exercise of one shall
not be deemed a waiver of the right to exercise any other. Nothing
contained in this Agreement shall be construed to limit any right or
remedy of Boeing now or hereafter existing at law or in equity.
14.0 EXCUSABLE DELAY
If delivery of any Product is delayed by unforeseeable circumstances beyond the
control and without the fault or negligence of Seller or of its suppliers or
subcontractors (any such delay being hereinafter referred to as "Excusable
Delay"), the delivery of such Product shall be extended for a period to be
determined by Boeing after an assessment by Boeing of alternative work methods.
Excusable Delays may include, but are not limited to, acts of God, war,
terrorist acts, riots, acts of government, fires, floods, epidemics, quarantine
restrictions, freight embargoes, strikes or unusually severe weather, but shall
exclude Seller's noncompliance with any rule, regulation or order promulgated by
any governmental agency for or with respect to environmental protection.
However, the above notwithstanding, Boeing expects Seller to continue
production, recover lost time and support all schedules as established under
this Agreement or any Order. Therefore, it is understood and agreed that (i)
delays of less than two (2) days duration shall not be considered to be
Excusable Delays unless such delays shall occur within thirty (30) days
preceding the scheduled delivery date of any Product and (ii) if delay in
delivery of any Product is caused by the default of any of Seller's
subcontractors or suppliers, such delay shall not be considered an Excusable
Delay unless the supplies or services to be provided by such subcontractor or
supplier are not obtainable from other sources in sufficient time to permit
Seller to meet the applicable delivery schedules. If delivery of any Product is
delayed by any Excusable Delay for more than three (3) months, Boeing may,
without any additional extension, cancel all or part of any Order with respect
to the delayed Products, and exercise any of its remedies in accordance with GTA
Section 13.2, provided however, that Boeing shall not be entitled to monetary
damages or specific performance to the extent Seller's breach is the result of
an Excusable Delay.
15.0 SUSPENSION OF WORK
Boeing may at any time, by written order to Seller, require Seller to stop all
or any part of the work called for by this Agreement for up to one hundred
twenty (120) days hereafter referred to as a "Stop Work Order" issued pursuant
to this GTA Section 15.0. On receipt of a Stop Work Order, Seller shall promptly
comply with its terms and take all reasonable steps to minimize the occurrence
of costs arising from the work covered by the Stop Work Order during the period
of work stoppage. Within the period covered by the Stop Work Order (including
any extension thereof) Boeing shall either (i) cancel the Stop Work Order or
(ii) terminate or cancel the work covered by the Stop Work Order in accordance
with the provisions of GTA Section 12.0 or 13.0. In the event the Stop Work
Order is canceled by Boeing or the period of the Stop Work Order (including any
extension thereof) expires, Seller shall promptly resume work in accordance with
the terms of this Agreement or any applicable Order.
16.0 TERMINATION OR WRONGFUL CANCELLATION
Boeing shall not be liable for any loss or damage resulting from any termination
pursuant to GTA Section 12.1, except as expressly provided in GTA Section 12.3
or any cancellation under GTA Section 13.0 except to the extent that such
cancellation shall have been determined to have been wrongful, in which case
such wrongful cancellation shall be deemed a termination pursuant to GTA Section
12.1 and therefore, Boeing's liability shall be limited to the payment to Seller
of the amount or amounts identified in GTA Section 12.3.
17.0 ASSURANCE OF PERFORMANCE
A. Seller to Provide Assurance
If Boeing determines, at any time or from time to time, that it is not
sufficiently assured of Seller's full, timely and continuing
performance hereunder, or if for any other reason Boeing has
reasonable grounds for insecurity, Boeing may request, by notice to
Seller, written assurance (hereafter an "Assurance of Performance")
with respect to any specific matters affecting Seller's performance
hereunder, that Seller is able to perform all of its respective
obligations under this Agreement when and as specified herein. Each
Assurance of Performance shall be delivered by Seller to Boeing as
promptly as possible, but in any event no later than ten (10) calendar
days following Boeing's request therefore and each Assurance of
Performance shall be accompanied by any information, reports or other
materials, prepared by Seller, as Boeing may reasonably request.
Except as to payment for accepted goods, Boeing may suspend all or any
part of Boeing's performance hereunder until Boeing receives an
Assurance of Performance from Seller satisfactory in form and
substance to Boeing.
B. Meetings and Information
Boeing may request one or more meetings with senior management or
other employees of Seller for the purpose of discussing any request by
Boeing for Assurance of Performance or any Assurance of Performance
provided by Seller. Seller shall make such persons available to meet
with representatives of Boeing as soon as may be practicable following
a request for any such meeting by Boeing and Seller shall make
available to Boeing any additional information, reports or other
materials in connection therewith as Boeing may reasonably request.
18.0 RESPONSIBILITY FOR PROPERTY
Seller shall clearly mark, maintain an inventory of, and keep segregated or
identifiable all of Boeing's property and all property to which Boeing has
acquired an interest. Seller assumes all risk of loss, destruction or damage of
such property while in Seller's possession, custody or control, including any
transfer to Seller's subcontractors. Upon request, Seller shall provide Boeing
with adequate proof of insurance against such risk of loss. Seller shall not use
such property other than in performance of an Order without prior written
consent from Boeing. Seller shall notify Boeing's Authorized Procurement
Representative if Boeing's property is lost, damaged or destroyed. As directed
by Boeing, upon completion, termination or cancellation of the agreement or any
Order, Seller shall deliver such property, to the extent not incorporated in
delivered end products, to Boeing in good condition subject to ordinary wear and
tear and normal manufacturing losses. Nothing in this GTA Section limits
Seller's use, in its direct contracts with the Government, of property in which
the Government has an interest.
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS
Seller warrants to Boeing that it has good title to all inventory,
work-in-process, tooling and materials to be supplied by Seller in the
performance of its obligations under any Order. Pursuant to the provisions of
such Order, Seller will transfer to Boeing title to such inventory,
work-in-process, tooling and materials whether transferred separately or as part
of any Product delivered under the Order, free of any liens, charges,
encumbrances or rights of others.
20.0 PROPRIETARY INFORMATION AND ITEMS
Boeing and Seller shall each keep confidential and protect from disclosure all
(a) confidential, proprietary, and/or trade secret information; (b) tangible
items containing, conveying, or embodying such information; and (c) tooling
obtained from and/or belonging to the other in connection with this Agreement or
any Order (collectively referred to as "Proprietary Information and Materials").
Boeing and Seller shall each use Proprietary Information and Materials of the
other only in the performance of and for the purpose of this Agreement and/or
any Order. Provided, however, that despite any other obligations or restrictions
imposed by this GTA Section 20.0, Boeing shall have the right to use, disclose
and copy Seller's Proprietary Information and Materials for the purposes of
testing, certification, use, sale, or support of any item delivered under this
Agreement, an Order, or any airplane including such an item; and any such
disclosure by Boeing shall, whenever appropriate, include a restrictive legend
suitable to the particular circumstances. The restrictions on disclosure or use
of Proprietary Information and Materials by Seller shall apply to all materials
derived by Seller or others from Boeing's Proprietary Information and Materials.
Upon Boeing's request at any time, and in any event upon the completion,
termination or cancellation of this Agreement, Seller shall return all of
Boeing's Proprietary Information and Materials, and all materials derived from
Boeing's Proprietary Information and Materials to Boeing unless specifically
directed otherwise in writing by Boeing. Seller shall not, without the prior
written authorization of Boeing, sell or otherwise dispose of (as scrap or
otherwise) any parts or other materials containing, conveying, embodying, or
made in accordance with or by reference to any Proprietary Information and
Materials of Boeing. Prior to disposing of such parts or materials as scrap,
Seller shall render them unusable. Boeing shall have the right to audit Seller's
compliance with this GTA Section 20.0. Seller may disclose Proprietary
Information and Materials of Boeing to its subcontractors as required for the
performance of an Order, provided that each such subcontractor first assumes, by
written agreement, the same obligations imposed upon Seller under this GTA
Section 20.0 relating to Proprietary Informations and Materials; and Seller
shall be liable to Boeing for any breach of such obligation by such
subcontractor. The provisions of this GTA Section 20.0 are effective in lieu of,
and will apply notwithstanding the absence of, any restrictive legends or
notices applied to Proprietary Informations and Materials; and the provisions of
this GTA Section 20.0 shall survive the performance, completion, termination or
cancellation of this Agreement or any Order. This GTA Section 20.0 supersedes
and replaces any and all other prior agreements or understandings between the
parties to the extent that such agreements or understandings relate to Boeing's
obligations relative to confidential, proprietary, and/or trade secret
information, or tangible items containing, conveying, or embodying such
information, obtained from Seller and related to any Product, regardless of
whether disclosed to the receiving party before or after the effective date of
this Agreement.
21.0 COMPLIANCE WITH LAWS
21.1 Seller's Obligation
Seller shall be responsible for complying with all laws, including, but not
limited to, any statute, rule, regulation, judgment, decree, order, or permit
applicable to its performance under this Agreement, including those pertaining
to United States Export Controls. Seller shall notify Boeing at the earliest
possible opportunity of any aspect of its performance, which becomes subject to
additional regulation after the date of execution of this Agreement or which
Seller reasonably believes will become subject to additional regulation during
the term of this Agreement. Seller agrees to indemnify and to hold harmless
Boeing from any failure by Seller to comply with any provision of any statute,
rule, regulation, judgment, decree, order or permit applicable to its
performance under this Agreement.
21.2 Government Requirements
If any of the work to be performed under this Agreement is performed in the
United States, Seller shall, via invoice or other form satisfactory to Boeing,
certify that the Products covered by the Order were produced in compliance with
GTA Sections 6, 7, and 12 of the Fair Labor Standards Act (29 U.S.C. 201-291),
as amended, and the regulations and orders of the U.S. Department of Labor
issued there under. In addition, the following Federal Acquisition Regulations
are incorporated herein by this reference except "Contractor" shall mean
"Seller": Other Government clauses, if any, are incorporated herein either by
attachment to this document or by some other means of reference.
FAR 52.222-26 "Equal Opportunity"
FAR 52.222-35 "Affirmative Action for Disabled Veterans and
Veterans of the Vietnam Era "
FAR 52.222-36 "Affirmative Action for Workers with Disabilities"
FAR 52.247-64 "Preference for Privately Owned U.S.-Flagged
Commercial Vessels"
22.0 INTEGRITY IN PROCUREMENT
Seller warrants that neither it nor any of its employees, agents or
representatives have offered or given, or will offer or give any gratuities to
Boeing's employees, agents or representatives for the purpose of securing this
contract or securing favorable treatment under this contract.
23.0 UTILIZATION OF SMALL BUSINESS CONCERNS
Seller agrees to actively seek out and provide the maximum practicable
opportunities for small businesses, small disadvantaged businesses, women-owned
small businesses, minority business enterprises, historically black colleges and
universities and minority institutions, historically underutilized business zone
small business concerns and U.S. veteran and service-disabled veteran owned
small business concerns to participate in the subcontracts Seller awards to the
fullest extent consistent with the efficient performance of this contract.
24.0 BOEING'S RIGHTS IN SELLER'S PATENTS, COPYRIGHTS, TRADE SECRETS, AND
TOOLING
Seller hereby grants to Boeing an irrevocable, nonexclusive, paid-up worldwide
license to practice and/or use, and license others to practice and/or use on
Boeing's behalf, all of Seller's patents, copyrights, trade secrets (including,
without limitation, designs, processes, drawings, technical data and tooling),
industrial designs, semiconductor mask works, and tooling (collectively
hereinafter referred to as "Licensed Property") related to the development,
production, maintenance or repair of Products. Boeing hereafter retains all of
the aforementioned license rights in Licensed Property, but Boeing hereby
covenants not to exercise such rights except in connection with the making,
having made, using and selling of Products or products of the same kind provided
that such undelivered quantity of Product cannot, in Boeing's sole
determination, be reasonably obtained in the required time frame at a reasonable
price from commercially available sources (including Boeing) without the use of
Seller's Licensed Property and if one or more of the following situations occur:
A. Seller discontinues or suspends business operations or the
production of any or all of the Products;
B. Seller is acquired by or transfers any or all of its rights to
manufacture any Product to any third party, whether or not
related, without Boeing's prior written concurrence;
C. Boeing cancels this Agreement or any Order for cause pursuant to
GTA Section 13.0 herein;
D. In Boeing's judgment it becomes necessary, in order for Seller to
comply with the terms of this Agreement or any Order, for Boeing
to provide support to Seller (in the form of design,
manufacturing, or on-site personnel assistance) substantially in
excess of that which Boeing normally provides to its suppliers;
E. Seller's trustee in bankruptcy (or Seller as debtor in
possession) fails to assume this Agreement and all Orders by
formal entry of an order in the bankruptcy court within sixty
(60) days after entry of an order for relief in a bankruptcy case
of the Seller, or Boeing elects to retain its rights to Licensed
Property under the bankruptcy laws;
F. Seller is at any time insolvent (whether measured under a balance
sheet test or by the failure to pay debts as they come due) or
the subject of any insolvency or debt assignment proceeding under
state or non-bankruptcy law; or
G. Seller voluntarily becomes a debtor in any case under bankruptcy
law or, in the event an involuntary bankruptcy petition is filed
against Seller, such petition is not dismissed within thirty (30)
days.
As a part of the license granted under this GTA Section 24.0, Seller shall, at
the written request of Boeing and at no additional cost to Boeing, promptly
deliver to Boeing any and all Licensed Property considered by Boeing to be
necessary to satisfy Boeing's requirements for Products and their substitutes.
25.0 TERMINATION OF AIRPLANE PROGRAM
25.1 Program Termination
The parties acknowledge and agree that Boeing may, in its sole discretion,
terminate all or part of this Agreement, including any Order issued hereunder,
by written notice to Seller, if Boeing decides not to initiate or continue
production of the program which the Product supports, by reason of Boeing's
determination that there is insufficient business basis for proceeding with such
program. In the event of such a termination, Boeing shall have no liability to
Seller except as expressly provided in GTA Section 25.2 below.
25.2 Termination Liability
In the event of a termination of the program as described in 25.1 above, Boeing
shall have no liability whatsoever to Seller, except to the extent of (i) any
guaranteed minimum purchase, if any, as set forth in SBP Section 10.0, and (ii)
any Orders issued prior to the date of the written notice to Seller identified
in 25.1 above. Termination of such Orders shall be governed by GTA Section 12.0
herein.
26.0 PUBLICITY
Without Boeing's prior written approval, Seller shall not, and shall require
that its subcontractors and suppliers of any tier shall not, release any
publicity, advertisement, news release or denial or confirmation of the same,
regarding any Order or Products, or the program to which they may pertain.
Seller shall be liable to Buyer for any breach of such obligation by any
subcontractor.
27.0 PROPERTY INSURANCE
27.1 Insurance
Seller shall obtain and maintain continuously in effect a property insurance
policy covering loss or destruction of or damage to all property in which Boeing
does or could have an insurable interest pursuant to this Agreement, including
but not limited to Tooling, Boeing-furnished property, raw materials, parts,
work-in-process, incomplete or completed assemblies and all other products or
parts thereof, and all drawings, specifications, data and other materials
relating to any of the foregoing in each case to the extent in the possession or
under the effective care, custody or control of Seller or any agent, employee,
affiliate, or subcontractor of Seller, in the amount of full replacement value
thereof providing protection against all perils normally covered in an "all
risk" property insurance policy (including without limitation fire, windstorm,
explosion, riot, civil commotion, aircraft, earthquake, flood or other acts of
God). Any such policy shall be with insurers reasonably acceptable to Boeing and
shall (i) provide for payment of loss there under to Boeing, as loss payee, as
its interests may appear and (ii) contain a waiver of any rights of subrogation
against Boeing, its subsidiaries, and their respective directors, officers,
employees and agents
27.2 Certificate of Insurance
Upon written request from Boeing, Seller shall provide to Boeing's Procurement
Representative certificates of insurance reflecting full compliance with the
requirements set forth in GTA Section 27.1. Such certificates shall be kept
current and in compliance throughout the period of this Agreement and shall
provide for thirty (30) days advanced written notice to Boeing's Procurement
Representative in the event of cancellation, non-renewal or material change
adversely affecting the interests of Boeing.
27.3 Notice of Damage or Loss
Seller shall give prompt written notice to Boeing's Procurement Representative
of the occurrence of any damage or loss to any property required to be insured
herein. If any such property shall be damaged or destroyed, in whole or in part,
by an insured peril or otherwise, and if no Event of Default shall have occurred
and be continuing, then Seller may, upon written notice to Boeing, settle,
adjust, or compromise any and all such loss or damage not in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in any one occurrence and Five Hundred
Thousand Dollars ($500,000) in the aggregate. Seller may settle, adjust or
compromise any other claim by Seller only after Boeing has given written
approval, which approval shall not be unreasonably withheld.
28.0 RESPONSIBILITY FOR PERFORMANCE
Seller shall be responsible for it's requirements under this Agreement and any
Order referencing this Agreement. Seller shall bear all risks of providing
adequate facilities and equipment to perform each Order in accordance with the
terms thereof. If any use of any facilities or equipment contemplated by Seller
will not be available for any reason, Seller shall be responsible for arranging
for similar facilities and equipment at no cost to Boeing, and any failure to do
so shall not relieve Seller from its obligations.
Seller shall notify and obtain approval from Boeing prior to moving work to be
performed under this Agreement between Seller's various facilities. Seller shall
include as part of its subcontracts those elements of the Agreement that protect
Boeing's rights including but not limited to right of entry provisions,
proprietary information and rights provisions and quality control provisions. In
addition, Seller shall provide to its subcontractor's sufficient information to
document clearly that the work being performed by Seller's subcontractor is to
facilitate performance under this Agreement or any Order. Sufficient information
may include but is not limited to Order number, GTA number or the name of
Boeing's Procurement Representative.
28.1 Subcontracting
Seller shall maintain complete and accurate records regarding all subcontracted
items and/or processes. Seller's use of subcontractors shall comply with
Seller's quality assurance system approval for said subcontractors. Unless
Boeing's prior written authorization or approval is obtained, Seller may not
purchase completed or substantially completed Products. For purposes of this GTA
Section and this GTA Section only, completed or substantially completed Products
shall not include components of assemblies or subassemblies. No subcontracting
by Seller shall relieve Seller of its obligation under the applicable Order.
No non-domestic metallic raw materials, composite materials or products,
aircraft bearings or designated fasteners, or special processing may be
incorporated in a Product unless: (a) Seller uses an approved source identified
in the applicable specification or set forth in Boeing Document D1-4426 which is
incorporated herein and made a part hereof by this reference or (b) Boeing has
surveyed and qualified Seller's receiving inspection personnel and laboratories
to test the specified raw materials and/or material process. No waiver of survey
and qualification requirements will be effective unless granted by Boeing's
Engineering and Quality Assurance departments. Utilization of a Boeing-approved
source does not constitute a waiver of Seller's responsibility to meet all
specification requirements.
28.2 Reliance
Entering into this Agreement is in part based upon Boeing's reliance on Seller's
ability, expertise and awareness of the intended use of the Products. Seller
agrees that Boeing and Boeing's Customers may rely on Seller as an expert, and
Seller will not deny any responsibility or obligation hereunder to Boeing or
Boeing's Customers on the grounds that Boeing or Boeing's Customers provided
recommendations or assistance in any phase of the work involved in producing or
supporting the Products, including but not limited to Boeing's acceptance of
specifications, test data or the Products.
28.3 Assignment
Seller shall not assign any of its rights or interest in this Agreement or any
Order, or subcontract all or substantially all of its performance of this
Agreement or any Order, without Boeing's prior written consent. Seller shall not
delegate any of its duties or obligations under this contract. Seller may assign
its right to monies due or to become due. No assignment, delegation or
subcontracting by Seller, with or without Boeing's consent, shall relieve Seller
of any of its obligations under this Agreement or prejudice any rights of Boeing
against Seller whether arising before or after the date of any assignment. This
article does not limit Seller's ability to purchase standard commercial supplies
or raw material.
The prohibition set forth in this GTA Section 28.3 includes, without limitation
(and the following shall be deemed to be "assignments"): (i) a consolidation or
merger of Seller; (ii) a change in the ownership or voting rights of more than
fifty percent (50%) of the issued and outstanding stock of any corporate Seller;
(iii) any assignment or transfer which would otherwise occur by operation of
law, merger, consolidation, reorganization, transfer or other significant change
in corporate or proprietary structure; (iv) the sale, assignment or transfer of
all or substantially all of the assets of Seller; and (v) where Seller is a
partnership, a change in control in such partnership.
29.0 NON-WAIVER/PARTIAL INVALIDITY
Any failures, delays or forbearances of Boeing in insisting upon or enforcing
any provisions of this contract, or in exercising any rights or remedies under
this contract, shall not be construed as a waiver or relinquishment of any such
provisions, rights or remedies; rather, the same shall remain in full force and
effect. If any provision of this contract is or becomes void or unenforceable by
law, the remainder shall be valid and enforceable.
30.0 HEADINGS
GTA Section headings used in this Agreement are for convenient reference only
and do not affect the interpretation of the Agreement.
31.0 RESERVED
32.0 RESERVED
33.0 DISPUTES
Boeing and Seller shall use their best reasonable efforts to resolve any and all
disputes, controversies, claims or differences between Boeing and Seller,
arising out of or relating in any way to this GTA or its performance, including,
but not limited to, any questions regarding the existence, validity or
termination hereof ("Disputes"), through negotiation. If a Dispute cannot be
resolved by the functional representatives of Boeing and Seller, it shall be
referred up through management channels of the Parties or their respective
designees, for further negotiation.
Any dispute that arises under or is related to this Agreement that cannot be
settled by mutual agreement of the parties shall be resolved only as provided in
SBP Section 5. Pending final resolution of any dispute, Seller shall proceed
with performance of this Agreement according to Boeing's instructions so long as
Boeing continues to pay amounts not in dispute.
34.0 RESERVED
35.0 TAXES
35.1 Inclusion of Taxes in Price
Unless this Agreement or a Special Business Provisions, or Order issued under
this Agreement specifies otherwise, the price of this contract includes, and
Seller is liable for and shall pay, all taxes, impositions, charges and
exactions imposed on or measured by this Agreement and the Orders issued
hereunder, except for sales or use taxes on sales to Boeing ("Sales Taxes") for
which Boeing specifically agrees to pay and which are separately stated on
Seller's invoice. Prices shall not include any taxes, impositions, charges or
exactions for which Boeing has furnished a valid exemption certificate or other
evidence of exemption.
Additionally, Buyer shall reimburse Seller for all personal property taxes
applicable to the tooling after receipt by Buyer of Seller's invoice for such
taxes for the amount of tax imposed by the state or the local taxing authority.
35.2 Litigation
In the event that any taxing authority has claimed or does claim payment for
Sales Taxes, Seller shall promptly notify Boeing, and Seller shall take such
action as Boeing may direct to pay or protest such taxes or to defend against
such claim. The actual and direct expenses, without the addition of profit and
overhead, of such defense and the amount of such taxes as ultimately determined
as due and payable shall be paid directly by Boeing or reimbursed to Seller. If
Seller or Boeing is successful in defending such claim, the amount of such taxes
recovered by Seller, which had previously been paid by Seller and reimbursed by
Boeing or paid directly by Boeing, shall be immediately refunded to Boeing.
35.3 Rebates
If any taxes paid by Boeing are subject to rebate or reimbursement, Seller shall
take the necessary actions to secure such rebates or reimbursement and shall
promptly refund to Boeing any amount recovered
36.0 OFFSET CREDITS
To the exclusion of all others, Boeing or its assignee shall be entitled to all
industrial benefits or offset credits which might result from this Agreement or
Order. Seller shall provide documentation or information, which Boeing or its
assignee may reasonably request to substantiate claims for industrial benefits
or offset credits. Seller agrees to use reasonable efforts to identify the
foreign content of goods, which Seller either produces itself or procures from
other companies for work directly related to this Agreement. Promptly after
selection of a non-U.S. subcontractor for work under this Agreement, Seller
shall notify Boeing of the name, address, subcontract point of contact
(including telephone number) and dollar value of the subcontract.
EXECUTED in duplicate as of the date and year first written above by the duly
authorized representatives of the parties.
BOEING SELLER
THE BOEING COMPANY Leonard's Metal, Inc.
By and Through its Divisions
Boeing Commercial Airplanes
/s/ Peggy McDonald /s/ Rick Darrow
- ------------------------------ -------------------------------
Name: Peggy McDonald Name: Rick Darrow
Title: Procurement Agent Title: Program Manager
Date: Date: