GENERAL TERMS AGREEMENT
between
THE BOEING COMPANY
and
TRI-STAR Electronics International, Inc.
Number BCA-6-5632-0032
i
GENERAL TERMS AGREEMENT
TABLE OF CONTENTS
SECTION TITLE
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1.0 DEFINITIONS
2.0 ISSUANCE OF PURCHASE ORDERS
AND APPLICABLE TERMS
2.1 Issuance of Purchase Orders
2.2 Acceptance of Purchase Orders
2.3 Written Authorization to Proceed
2.4 Rejection of Purchase Orders
3.0 TITLE AND RISK OF LOSS
4.0 DELIVERY
4.1 Requirements
4.2 Delay
4.3 Notice of Labor Disputes
5.0 ON-SITE REVIEW AND RESIDENT
REPRESENTATIVES
5.1 Review
5.2 Resident Representatives
6.0 INVOICE AND PAYMENT
7.0 PACKING AND SHIPPING
8.0 QUALITY ASSURANCE, INSPECTION
REJECTION AND ACCEPTANCE
8.1 Controlling Document
8.2 Seller's Inspection
8.3 Boeing's Inspection and Rejection
8.4 Federal Aviation Administration or
Equivalent Government Agency Inspection
8.5 Retention of Records
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SECTION TITLE
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8.6 Source Inspection
8.7 Language for Technical Information
9.0 EXAMINATION OF RECORDS
10.0 CHANGES
10.1 General
10.2 Model Mix
11.0 PRODUCT ASSURANCE
12.0 TERMINATION FOR CONVENIENCE
13.0 EVENTS OF DEFAULT AND REMEDIES
14.0 EXCUSABLE DELAY
15.0 SUSPENSION OF WORK
16.0 TERMINATION OR CANCELLATION; INDEMNITY AGAINST
SUBCONTRACTOR'S CLAIMS
17.0 ASSURANCE OF PERFORMANCE
18.0 RESPONSIBILITY FOR PROPERTY
19.0 LIMITATION OF SELLER'S RIGHT TO ENCUMBER ASSETS
20.0 PROPRIETARY INFORMATION AND ITEMS
21.0 COMPLIANCE WITH LAWS
22.0 INTEGRITY IN PROCUREMENT
23.0 INFRINGEMENT
24.0 BOEING'S RIGHTS IN SELLER'S, PATENTS COPYRIGHTS, TRADE
SECRETS AND TOOLING
25.0 NOTICES
25.1 Addresses
25.2 Effective Date
25.3 Approval or Consent
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SECTION TITLE
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26.0 PUBLICITY
27.0 PROPERTY INSURANCE
27.1 Insurance
27.2 Certificate of Insurance
27.3 Notice of Damage or Loss
28.0 RESPONSIBILITY FOR PERFORMANCE
28.1 Subcontracting
28.2 Reliance
28.3 Assignment
29.0 NON-WAIVER
30.0 HEADINGS
31.0 PARTIAL INVALIDITY
32.0 APPLICABLE LAW
33.0 AMENDMENT
34.0 LIMITATION
35.0 TAXES
35.1 Inclusion of Taxes in Price
35.2 Litigation
35.3 Rebates
36.0 FOREIGN PROCUREMENT OFFSET
37.0 ENTIRE AGREEMENT/ORDER
OF PRECEDENCE
37.1 Entire Agreement
37.2 Incorporated By Reference
37.3 Order of Precedence
37.4 Disclaimer
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AMENDMENT
AMEND
NUMBER DESCRIPTION DATE APPROVAL
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GENERAL TERMS AGREEMENT
RELATING TO
BOEING PRODUCTS
THIS GENERAL TERMS AGREEMENT ("Agreement") is entered into as of July 1,
1998, by and between Tri-Star Electronics, a Delaware corporation, with its
principal office in El Segundo, California ("Seller"), and The Boeing
Company, a Delaware corporation with its principal office in Seattle,
Washington acting by and through its division the Boeing Commercial Airplane
Group ("Boeing").
RECITALS
A. Boeing produces commercial airplanes.
B. Seller manufactures and sells certain goods and services for use in the
production and support of such airplanes.
C. Seller desires to sell and Boeing desires to purchase certain of Seller's
goods and services in accordance with the terms of this Agreement.
Now therefore, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
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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 number shall also include the plural number and
vice versa.
(a) "Customer" means any owner, operator or user of Products and any
other individual, partnership, corporation or entity which has
or acquires any interest in the Products from, through or under
Boeing.
(b) "Derivative" means any new model airplane designated by Boeing
as a derivative of an existing Model airplane and which: (1) has
the same number of engines as the existing model airplane; (2)
utilizes essentially the same aerodynamic and propulsion design,
major assembly components, and systems as the existing model
airplane and (3) achieves other payload/range combinations by
changes in body length, engine thrust, or variations in
certified gross weight.
(c) "Drawing" means an automated or manual depiction of graphics or
technical information representing a Product or any part thereof
and which includes the parts list and specifications relating
thereto.
(d) "End Item Assembly" means any Product which is described by a
single part number and which is comprised of more than one
component part.
(e) "FAA" means the United States Federal Aviation Administration or
any successor agency thereto.
(f) "FAR" means the Federal Acquisition Regulations in effect on the
date of this Agreement.
(g) "Materiel Representative" means the individual designated from
time to time, by Boeing as being primarily responsible for
interacting with Seller regarding this Agreement and any Order.
(h) "Order" means each purchase order issued by Boeing and accepted
by Seller under the terms of this Agreement. Each Order is a
contract between Boeing and Seller.
(i) "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 Tools.
(j) "Purchase on Assembly Production Detail Part (POA)" means a
component part of an End Item Assembly.
(k) "Shipset" means the total quantity of a given part number or
material necessary for production of one airplane.
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(l) "Spare" means any Product, regardless of whether the Product is
an End Item Assembly or a Purchased on Assembly Production
Detail Part, which is intended for use or sale as a spare part
of a production replacement.
(m) "Tooling" means all tooling, as defined in Boeing Document
D33200 "Boeing Suppliers' Tooling Document" and/or described on
any Order, including but not limited to Boeing-Use Tooling,
Supplier-Use Tooling and Common-Use Tooling as defined in Boeing
Document D953W001, "General Operations Requirements for
Suppliers," and Rotating-Use Tooling as defined in Boeing
Document M31-13, "Accountability of Inplant/Outplant Special
(Contract) Tools." For purposes of this Agreement, in the
documents named in this subparagraph, the term "Supplier Use
Tooling" shall be changed to Seller Use Tooling.
2.0 ISSUANCE OF ORDERS AND APPLICABLE TERMS
2.1 ISSUANCE OF ORDERS
Boeing may issue Orders to Seller from time to time. Each Order shall
contain a description of the Products ordered, a reference to the
applicable specifications and Drawings, the quantities and prices,
the delivery schedule, the terms and place of delivery and any
special conditions.
Each Order 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, Form P252T do not apply. Any
other purchase order terms and conditions which may conflict with
this Agreement, do not apply to the Orders.
2.2 ACCEPTANCE OF ORDERS
Each Order is Boeing's offer to Seller and acceptance is strictly
limited to its terms. Boeing will not be bound by and specifically
objects to any term or condition which is different from or in
addition to the provisions of the Order, whether or not such term or
condition will materially alter 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.
Boeing may revoke any Order prior to Seller's acceptance or Seller's
commencement of performance.
2.3 WRITTEN AUTHORIZATION TO PROCEED
Boeing's Materiel Representative may give written authorization to
Seller to commence performance before Boeing issues an Order. If
Boeing in its written 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 written authorization shall be deemed to be a part of Boeing's
offer and the parties shall promptly agree on any open Order terms.
If Boeing does not specify in its written authorization that an Order
shall be issued, Boeing's obligation is strictly limited to the terms
of the written authorization. For purposes of this Section 2.3,
written authorization includes electronic transmission chosen by
Boeing.
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 expense.
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2.4 REJECTION OF PURCHASE ORDER
Seller is only required to formally respond to an Order when an
exception is noted and Seller thereby rejects the Order. Any rejection
by Seller of an Order shall specify the reasons for rejection and any
changes or additions that would make the Order acceptable to Seller;
provided, however, that Seller may not reject any Order for reasons
inconsistent with the provisions of this Agreement or the applicable
SBP.
3.0 TITLE AND RISK OF LOSS
Title to and risk of any loss of or damage to the Products shall pass
from Seller to Boeing 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 REQUIREMENTS
Deliveries shall be strictly in accordance with the quantities, the
schedule and other requirements specified in the applicable Order.
Seller may not make early deliveries without Boeing's prior written
authorization. Seller may not make partial deliveries without Boeing's
prior authorization. Deliveries which fail to meet Order requirements
may be returned to Seller at Seller's expense.
4.2 DELAY
Seller shall notify Boeing immediately, of any circumstances that may
cause a delay in delivery, stating the estimated period of delay and
the reasons therefor. If requested by Boeing, Seller shall use
additional effort, including premium effort, and shall ship via air
or other expedited routing to avoid or minimize delay to the maximum
extent possible. All additional costs resulting from such premium
effort or premium transportation shall be borne by Seller with the
exception of such costs attributable to delays caused directly by
Boeing. Nothing herein shall prejudice any of the rights or remedies
provided to Boeing in the applicable Order or by law.
4.3 NOTICE OF LABOR DISPUTES
Seller shall immediately notify Boeing of any actual or potential
labor dispute that may disrupt the timely performance of an Order.
Seller shall include the substance of this Section 4.3, including
this sentence, in any subcontract relating to an Order if a labor
dispute involving the subcontractor would have the potential to delay
the timely performance of such Order. Each subcontractor, however,
shall only be required to give the necessary notice and information
to its next higher-tier subcontractor.
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
5.1 REVIEW
At Boeing's request, Seller shall provide at Boeing's facility or at
a place designated by Boeing, a review explaining the status of the
Order, actions taken or planned relating to the Order and any other
relevant information. Nothing herein may be construed as a waiver of
Boeing's rights to proceed against Seller because of any delinquency.
Boeing's authorized representatives may enter Seller's plant at all
reasonable times to conduct preliminary inspections and tests of the
Products and work-in-progress. Seller shall include in its
subcontracts issued in connection with an Order a like provision
giving Boeing the right to enter the premises of Seller's
subcontractors. When requested by Boeing, Seller shall accompany
Boeing to Seller's subcontractors.
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5.2 RESIDENT REPRESENTATIVES
Boeing may in its discretion and for such periods as it deems
necessary assign resident personnel at Seller's facilities. Seller
shall furnish, free of charge, all office space, secretarial service
and other facilities and assistance reasonably required by Boeing's
representatives at Seller's plant. The resident team will function
under the guidance of a Boeing manager. The resident team will provide
communication and coordination to ensure timely performance of the
Order. Boeing's resident team shall be allowed access to all work
areas, Order status reports and management review necessary to assure
timely performance and conformance with the requirements of each
Order. Notwithstanding such assistance, Seller remains solely
responsible for performing in accordance with each Order.
6.0 INVOICE AND PAYMENT
Unless otherwise provided in the applicable Order, invoicing and
payment shall be in accordance with SBP Section 7.0.
7.0 PACKING AND SHIPPING
Seller shall (a) prepare for shipment and suitably pack all Products
to prevent damage or deterioration, (b) where Boeing has not
identified a carrier, secure lowest transportation rates, (c) comply
with the appropriate carrier tariff for the mode of transportation
specified by Boeing and (d) comply with any special instructions
stated in the applicable Order.
Boeing shall pay no charges for preparation, packing, crating or
cartage unless stated in the applicable Order. Unless otherwise
directed by Boeing, all standard routing shipments forwarded on one
day must be consolidated. Each container must be consecutively
numbered and marked as set forth below. Container and Order numbers
must be indicated on the applicable bill of lading. Two copies of the
packing sheets must be attached to the No. 1 container of each
shipment and one copy in each individual container. Each pack sheet
must include as a minimum the following: a) Seller's name, address
and phone 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 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.
Products sold F.O.B. place of shipment must be forwarded collect.
Seller may not make any declaration concerning the value of the
Products shipped, except on Products where the tariff rating or rate
depends on the released or declared value, and in such event the
value shall be released or declared at the maximum value for the
lowest tariff rating or rate.
The following markings shall be included on each unit container: a)
Seller's name; b) Seller's part number, if applicable; c) Boeing part
number, if applicable; d) part nomenclature; e) Order number; f)
quantity of Products in container; g) unit of measure; h) serial
number, if applicable; i) date (quarter/year) identified as assembly
or rubber cure date, if applicable; j) precautionary handling
instructions or marking as required.
In addition, the following markings/labels shall be included on each
shipping container: a) Name and address of consignee; b) Name and
address of consigner; c) Order number; d) Part number as shown on the
Order; e) Quantity of Products in container; f) Unit of measure; g)
Box number; h) Total number of boxes in shipment; and, i)
Precautionary handling, labeling or marking as required.
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8.0 QUALITY ASSURANCE, INSPECTION, REJECTION, & ACCEPTANCE
8.1 CONTROLLING DOCUMENT
The controlling quality assurance document for Orders shall be as set
forth in the SBP Section 4.0.
8.2 SELLER'S INSPECTION
Seller shall inspect or otherwise verify that all Products and
components thereof, including those 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 and any component thereof
during receiving, manufacture and Seller's final inspection. Seller
shall include on each packing sheet a certification that the Products
comply with the requirements of the Order.
8.2.1 SELLER'S DISCLOSURE
Seller will immediately notify Boeing when discrepancies in Seller's
processes or Product are discovered or suspected for Products Seller
has delivered.
8.2.2 SELLER'S ACCEPTANCE
Seller shall provide with all shipments the following proof of
acceptance by its Quality Assurance Department: (A) certified
physical and metallurgical test reports where required by controlling
specifications, or (B) a signed, dated statement on the packing sheet
certifying its Quality Assurance Department has inspected the parts
and they adhere to all applicable drawings and/or specifications.
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8.3 BOEING'S INSPECTION AND REJECTION
Unless otherwise specified on an Order, Products shall be subject to
inspection by Boeing, notwithstanding any payment or prior inspection.
Boeing may reject any Product which does not strictly conform to the
requirements of the applicable Order. Boeing shall by notice,
rejection tag or other communication notify Seller of such rejection.
Whenever possible, Boeing may coordinate with Seller prior to
disposition of the rejected Product(s), however, Boeing shall retain
final disposition authority with respect to all rejections. At
Seller's risk and expense, all such Products will be returned to
Seller for immediate repair, replacement or other correction and
redelivery to Boeing; provided, however, that with respect to any or
all of such Products and at Boeing's election and at Seller's risk and
expense, Boeing may: (a) return such Products without permitting any
repair, replacement or other correction by Seller; (b) hold or retain
such Products for repair by Seller or, at Boeing's election, for
repair by Boeing with such assistance from Seller as Boeing may
require; (c) hold such Products until Seller has delivered conforming
replacements for such Products; (d) hold such Products until
conforming replacements are obtained from a third party; (e) return
such Products with instructions to Seller as to whether the Products
shall be repaired or replaced and as to the manner of redelivery or
(f) return such Products with instructions that they be scrapped upon
final disposition by Boeing and Seller that the non-conforming
Product(s) are not subject to repair or useable in another application
for which they would be acceptable, and prior to the Products being
scrapped, Seller shall render the Product(s) unusable. Seller shall
also maintain, pursuant to their quality assurance system, records
certifying destruction of the applicable Products. Said certification
shall state the method and date of mutilation and destruction of the
subject Product(s). Boeing shall have the right to review and inspect
these records at any time it deems necessary. Failure to comply with
these requirements shall be a material breach of this Agreement and
grounds for default pursuant to GTA Section 13.0. All repair,
replacement and other corrections and redelivery shall be completed
within such time as Boeing may require. All costs and expenses, loss
of value and any other damages incurred as a result of or in
connection with nonconformance and repair, replacement or other
correction may be recovered from Seller by an equitable price
reduction, set-off or credit against any amounts that may be owed to
Seller under the applicable Order or otherwise.
Boeing may revoke its acceptance of any Products and have the same
rights with regard to the Products involved as if it had originally
rejected them.
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8.4 FEDERAL AVIATION ADMINISTRATION OR EQUIVALENT
GOVERNMENT AGENCY INSPECTION
Representatives of Boeing, the FAA or any equivalent government agency
may inspect and evaluate Seller's plant including, but not limited to,
Seller's and subcontractor's facilities, systems, data, equipment,
inventory holding areas, procedures, personnel, testing, and all
work-in-process and completed Products. For purposes of this Section
8.4, equivalent government agency shall mean those governmental
agencies so designated by the FAA or those agencies within individual
countries which maintain responsibility for assuring aircraft
airworthiness.
8.5 RETENTION OF RECORDS
Quality assurance records shall be maintained on file at Seller's
facility and available to 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.
8.6 SOURCE INSPECTION
If an Order contains a notation that "100% Source Inspection" is
required, the Products shall not be packed for shipment until they
have been submitted to Boeing's quality assurance representative for
inspection. Both the packing list and Seller's invoice must reflect
evidence of this inspection.
8.7 LANGUAGE FOR TECHNICAL INFORMATION
All reports, drawings and other technical information submitted to
Boeing for review or approval shall be in English and shall employ the
units of measure customarily used by Boeing in the United States of
America.
8.8 FAA PART MANUFACTURING APPROVAL (PMA) REQUIREMENTS
Where Seller is required to obtain FAA approval to sell Product(s) to
third parties pursuant to Federal Aviation Regulation 21.303, the
following statement shall be included on the pack sheet signed by an
authorized representative of Seller with responsibility for the
conformity of the Product to the FAA type certified engineering
drawing:
"It is hereby certified that, (a) the parts and/or materials reflected
herein were produced under a FAA approved manufacturing and Quality
Assurance system/methods as set forth in Federal Aviation Regulation
21.303, and (b) all parts and/or materials are certified new, conforms
to the design data and are in airworthy condition".
In the event such attestation cannot be made, a copy of the latest
detail drawings must accompany the Product??.
In order to comply with Federal Aviation Regulation 45.15, each Product
must be permanently and legibly marked as follows:
(1) "FAA-PMA"
(2) Name, trademark or symbol of manufacturer
(3) Part number
(4) Name and model of each type certified product on which the
approved part can be used.
If Product is too small to get all the above data on it, a tag may be
used, attached to the Product or container. If usage is extensive,
reference to a specific manual or catalog for the information is
permissible. See regulation for detail.
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9.0 EXAMINATION OF RECORDS
Seller shall maintain complete and accurate records showing the sales
volume of all Products. Such records shall support all services
performed, allowances claimed and costs incurred by Seller in the
performance of each Order, including but not limited to those factors
which comprise or affect direct labor hours, direct labor rates,
material costs, burden rates and subcontracts. Such records and other
data shall be capable of verification through audit and analysis by
Boeing and be available to Boeing at Seller's facility for Boeing's
examination 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 Section as confidential.
10.0 CHANGES
10.1 GENERAL
Boeing's Materiel Representative may at any time by written change
order make changes within the general scope of an Order in any one or
more of the following: drawings, designs, specifications, shipping,
packing, place of inspection, place of delivery place of acceptance,
adjustments in quantities, adjustments in delivery schedules, or the
amount of Boeing furnished material. For purposes of this Section
10.1, written change includes electronic transmission chosen by
Boeing. Seller shall proceed immediately to perform the Order as
changed. If any such change causes an increase or decrease in the
cost of or the time required for the performance of any part of the
work, whether changed or not changed by the change order, an
equitable adjustment shall be made in the price of or the delivery
schedule for those Products affected, and the applicable Order shall
be modified in writing accordingly. Any claim by Seller for
adjustment under this Section 10.1 must be received by Boeing in
writing no later than (60) days from the date of receipt by Seller of
the written change order or within such further time as the parties
may agree in writing or such claim shall be deemed waived. Nothing in
this Section 10.1 shall excuse Seller from proceeding with an Order
as changed, including failure of the parties to agree on any
adjustment to be made under this Section 10.1.
If Seller considers that the conduct of any of Boeing's employees has
constituted a change hereunder, Seller shall immediately notify
Boeing's Materiel Representative in writing as to the nature of such
conduct and its effect on Seller's performance. Pending direction
from Boeing's Materiel Representative, Seller shall take no action to
implement any such change.
10.2 DERIVATIVE AIRCRAFT
In the event any Derivative aircraft(s) is introduced by Boeing,
Boeing may (but is not obligated to) direct Seller within the scope
of the applicable Order and in accordance with the provisions of GTA
Section 10.0 to supply Boeing's requirements for Products for such
Derivative aircraft(s) which correspond to those Products being
produced under the applicable Order.
11.0 PRODUCT SUPPORT AND ASSURANCE
Boeing's acceptance of any Product does not alter or affect the
obligations of Seller or the rights of Boeing and its customers under
the document referenced in the SBP Section 6.0 or as provided by law.
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12.0 TERMINATION FOR CONVENIENCE
12.1 BASIS FOR TERMINATION; NOTICE
Boeing may, from time to time and at Boeing's sole discretion,
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, for which Boeing
has or will pay for as part of Seller's termination claim pursuant
to Section 12.3 below, all in accordance with the terms of such
request;
F. 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 in the possession, custody
or control of Seller;
G. Take such other action as, in Boeing's reasonable
opinion, may be necessary, and as Boeing shall direct in writing,
to facilitate termination of this Order; and
H. Complete performance of the work not terminated.
12.3 SELLER'S CLAIM
If Boeing terminates an Order in whole or in part pursuant to Section
12.1 above, Seller shall have the right to submit a written
termination claim to Boeing in accordance with the terms of this
Section 12.3. Such termination claim shall be submitted to Boeing 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. Seller shall
be entitled to be compensated in accordance with and to the extent
allowed under the terms of FAR 52-249-2(e)-(m) excluding (i), (as
published in 48 CFR Section 52.249-2) which is incorporated herein by
this reference except "Government" and "Contracting Officer" shall
mean Boeing, "Contractor" shall mean Seller and "Contract" shall mean
Order.
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12.4 FAILURE TO SUBMIT A CLAIM
Notwithstanding any other provision of this 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 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 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 of such payments does not exceed the amount
to which Seller would be otherwise entitled. 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
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 records and documents relating to the terminated portion
of the Order for three (3) years after final settlement of Seller's
termination claim.
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13.0 EVENTS OF DEFAULT AND REMEDIES
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;
D. Seller is or has participated in the sale, purchase or manufacture
of airplane parts without the required approval of the FAA;
E. Where applicable, Boeing revokes Seller's Quality Assurance System
approval;
F. Any failure by Seller to perform or comply with any obligation
(other than as described in the foregoing 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 thirty (30) 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 and/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 and, in addition to any other remedies or
damages available to Boeing hereunder or at law or in equity,
Boeing may recover from Seller the difference between the price
for each such Product and the aggregate expense, including,
without limitation, administrative and other indirect costs, paid
or incurred by Boeing to manufacture, produce or provide, or
engage other persons to manufacture, produce or provide, each such
Product.
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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 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 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.
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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 alternate work methods. Excusable Delays may include, but are
not limited to, acts of God, war, 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 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 CANCELLATION AND INDEMNITY AGAINST SUBCONTRACTOR CLAIMS
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 by Boeing
and Seller to have been wrongful, in which case such wrongful
cancellation shall be deemed a termination pursuant to GTA Section 12.1
and therefore shall be limited to the payment to Seller of the amount or
amounts identified in GTA Section 12.3. As subcontractor claims are
included in Seller's termination claim pursuant to GTA Section 12.3,
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) and any and all costs, expenses, losses and damages incurred by
Boeing in connection with any such claim, suit or proceeding.
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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 15 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. 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
On delivery to Seller or manufacture or acquisition by it of any
materials, parts, Tooling or other property, title to any of which is
held by Boeing, Seller shall assume the risk of and shall be
responsible for any loss thereof or damage thereto. In accordance
with the provisions of an Order, but in any event on completion
thereof, Seller shall return such property to Boeing in the condition
in which it was received except for reasonable wear and tear and
except to the extent that such property has been incorporated in
Products delivered under such Order or has been consumed in the
normal performance of work under such Order.
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 ("Inventory"), and
that pursuant to the provisions of such Order, it will transfer to
Boeing title to such Inventory, 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 Section
20.0, Boeing shall have the right to use and disclose 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
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20.0 (cont.)
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 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 Section 20.0 relating to
Proprietary Information and Materials; and Seller shall be liable to
Boeing for any breach of such obligation by such subcontractor. The
provisions of this Section 20.0 are effective in lieu of, and will
apply notwithstanding the absence of, any restrictive legends or
notices applied to Proprietary Information and Materials; and the
provisions of this Section 20.0 shall survive the performance,
completion, termination or cancellation of this Agreement or any
Order. This 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.
Seller further agrees (1) to notify Boeing of any obligation under
this Agreement which is prohibited under applicable environmental
law, at the earliest opportunity but in all events sufficiently in
advance of Seller's performance of such obligation so as to enable
the identification of alternative methods of performance, and (2) to
notify Boeing at the earliest possible opportunity of any aspect of
its performance which becomes subject to additional environmental
regulation of which Seller reasonably believes will become subject to
additional regulation during the performance of this Agreement.
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21.0 (cont.)
21.2 GOVERNMENT REQUIREMENTS
If any of the work to be performed under this Agreement is performed in
the United States, Seller shall, via invoice or other form satisfactory
to Boeing, certify that the Products covered by the Order were produced
in compliance with Sections 6, 7, and 12 of the Fair Labor Standards
Act (29 U. S. C. 201-291), as amended, and the regulations and orders
of the U. S. Department of Labor issued thereunder. In addition, the
following Federal Acquisition Regulations are incorporated herein by
this reference except "Contractor" shall mean "Seller":
FAR 52.222-26 "Equal Opportunity"
FAR 52.222-35 "Affirmative Action for Special Disabled
and Vietnam Era Veterans"
FAR 52.222-36 "Affirmative Action for Handicapped Workers".
22.0 INTEGRITY IN PROCUREMENT
Boeing's policy is to maintain high standards of integrity in
procurement. Boeing's employees must ensure that no favorable treatment
compromises their impartiality in the procurement process. Accordingly,
Boeing's employees must strictly refrain from soliciting or accepting
any payment, gift, favor or thing of value which could improperly
influence their judgment with respect to either issuing a Order or
administering this Agreement. Consistent with this policy, Seller
agrees not to provide or offer to provide any employees of Boeing any
payment, gift, favor or thing of value for the purposes of improperly
obtaining or rewarding favorable treatment in connection with any Order
or this Agreement. Seller shall conduct its own procurement practices
and shall ensure that its suppliers conduct their procurement practices
consistent with these standards. If Seller has reasonable grounds to
believe that this policy may have been violated, Seller shall
immediately report such possible violation to the appropriate Director
of Materiel or Ethics Advisor of Boeing.
23.0 INFRINGEMENT
Seller shall indemnify, defend, and save Boeing and Customers harmless
from all claims, suits, actions, awards (including but not limited to
awards based on intentional infringement of patents known to Seller at
the time of such infringement, exceeding actual damages, and/or
including attorneys' fees and/or costs), liabilities, damages, costs
and attorneys' fees, (but excluding consequential damages) related to
the actual or alleged infringement of any United States or foreign
intellectual property right (including but not limited to any right in
a patent, copyright, industrial design or semiconductor mask work, or
based on misappropriation or wrongful use of information or documents)
and arising out of the manufacture, sale or use of Products by Boeing
or Customers. Boeing and/or Customers shall duly notify Seller of any
such claim, suit or action; and Seller shall, at its own expense, fully
defend such claim, suit or action on behalf of Boeing and/or Customers.
Seller shall have no obligation under this Section 23.0 with regard to
any infringement arising from: (i) Seller's compliance with formal
specifications issued by Boeing where infringement could not be avoided
in complying with such specifications or (ii) use or sale of PRODUCTS
in combination with other items when such infringement would not have
occurred from the use or sale of those Products solely for the purpose
for which they were designed or sold by Seller. For purposes of this
Section 23.0 only, the term Customer shall not include the United
States Government; and the term Boeing shall include The Boeing Company
(Boeing) and all Boeing subsidiaries and all officers, agents, and
employees of Boeing or any Boeing subsidiary.
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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 and then only if such undelivered quantity
of Product cannot, in Boeing's sole determination, be obtained 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 all of its rights to manufacture
the Products to any unrelated third party.
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 nonbankruptcy 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 (30) days.
As a part of the license granted under this 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 NOTICES
25.1 ADDRESSES
Notices and other communications shall be given in writing by personal
delivery, mail, telex, teletype, telegram, facsimile, cable or other
electronic transmission addressed to the respective party as set forth
in the SBP Section 9.0.
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25.2 EFFECTIVE DATE
The date on which any such communication is received by the addressee
is the effective date of such communication.
25.3 APPROVAL OR CONSENT
With respect to all matters subject to the approval or consent of
either party, such approval or consent shall be requested in writing and
is not effective until given in writing. With respect to Boeing,
authority to grant approval or consent is limited to Boeing's Materiel
Representative.
26.0 PUBLICITY
Seller will not, and will require that its subcontractors and suppliers
of any tier will not, (i) cause or permit to be released any publicity,
advertisement, news release, public announcement, or denial or
confirmation of the same, in whatever form, regarding any Order or
Products, or the program to which they may pertain, or (ii) use, or
cause or permit to be used, the Boeing name or any Boeing trademark in
any form of promotion or publicity without Boeing's prior written
approval.
27.0 PROPERTY INSURANCE
27.1 INSURANCE
When Boeing has an insurable interest, 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, 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 thereunder 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
Materiel 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 Materiel 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 Materiel
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.
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28.0 RESPONSIBILITY FOR PERFORMANCE
Seller shall be responsible for the requirements of 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. Seller shall include as part of its
subcontracts those elements of the Agreement which 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 subcontractors
sufficient information to clearly document 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 and the name of Boeing's
Materiel Representative. No subcontracting by Seller shall relieve
Seller of its obligation under the applicable Order.
28.1 SUBCONTRACTING
Where required by the requirements of the Order, no raw material
and/or material process may be incorporated in a Product unless: (a)
Seller uses an approved source or (b) Boeing has surveyed and qualified
Seller's receiving inspection personnel and laboratories to test the
specified raw materials an/or material process. No waiver of survey and
qualification requirements will be effective unless granted by
Boeing's Engineering and Quality Control Departments. Utilization of a
Boeing-approved raw material source does not constitute a waiver of
Seller's responsibility to meet all specification requirements.
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.
28.2 RELIANCE
Boeing's 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
Each Order shall inure to the benefit of and be binding on each of the
parties hereto and their respective successors and assigns, provided
however, that no assignment of any rights or delegation of any duties
under such Order is binding on Boeing unless Boeing's written consent
has first been obtained. Notwithstanding the above, Seller may assign
claims for monies due or to become due under any Order provided that
Boeing may recoup or setoff any amounts covered by any such assignment
against any indebtedness of Seller to Boeing, whether arising before or
after the date of the assignment or the date of this Agreement, and
whether arising out of any such Order or any other agreement between
the parties. Boeing may settle all claims arising out of any Order,
including termination claims, directly with Seller.
29.0 NON-WAIVER
Boeing's failure at any time to enforce any provision of an Order
does not constitute a waiver of such provision or prejudice Boeing's
right to enforce such provision at any subsequent time.
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30.0 HEADINGS
Section headings used in this Agreement are for convenient reference
only and do not affect the interpretation of the Agreement.
31.0 PARTIAL INVALIDITY
If any provision of any Order is or becomes void or unenforceable by
force or operation of law, the other provisions shall remain valid
and enforceable.
32.0 APPLICABLE LAW; JURISDICTION
Each Order, including all matters of construction, validity and
performance, shall in all respects be governed by, and construed
and enforced in accordance with, the law as set forth in SBP
Section 5.0.
33.0 AMENDMENT
Oral statements and understandings are not valid or binding. Except as
otherwise provided in GTA Section 10.0 and SBP Section 12.0, no Order
may be changed or modified except by a writing signed by Seller and
Boeing's Materiel Representative.
34.0 LIMITATION
Seller may not (except to provide an inventory of Products to support
delivery acceleration and to satisfy reasonable replacement and Spares
requirements) manufacture or fabricate Products or procure any goods in
advance of the reasonable flow time required to comply with the delivery
schedule in the applicable Order. Notwithstanding any other provision of
an Order, Seller is not entitled to any equitable adjustment or other
modification of such Order for any manufacture, fabrication, or
procurement of Products not in conformity with the requirements of the
Order, unless Boeing's written consent has first been obtained. Nothing
in this Section 34.0 shall be construed as relieving Seller of any of
its obligations under the Order.
35.0 TAXES
35.1 INCLUSION OF TAXES IN PRICE
All taxes, including but not limited to federal, state and local
income taxes, value added taxes, gross receipt taxes, property taxes,
and custom duties taxes are deemed to be included in the Order price,
except applicable sales or use taxes on sales to Boeing ("Sales
Taxes") for which Boeing has not supplied a valid exemption
certificate or unless otherwise indicated on the applicable Order.
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.
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36.0 FOREIGN PROCUREMENT OFFSET
With respect to work covered by the Order, Seller shall use its best
efforts to cooperate with Boeing in the fulfillment of any foreign
offset program obligation that Boeing may have accepted as a condition
of the sale of Boeing's products. In the event that Seller solicits
bids or proposals for, or procures or offers to procure any goods or
services relating to the work covered by an Order from any source
outside of the United States, Boeing shall be entitled, to the
exclusion of all others, to all industrial benefits and other "offset"
credits which may result from such solicitations, procurements or
offers to procure. Seller agrees to take any actions that may be
required on its part to assure that Boeing receives such credits.
37.0 ENTIRE AGREEMENT/ORDER OF PRECEDENCE
37.1 ENTIRE AGREEMENT
The Order sets forth the entire agreement, and supersedes any and all
other prior agreements understandings and communications between
Boeing and Seller related to the subject matter of an Order. The
rights and remedies afforded to Boeing or Customers pursuant to
any provisions of an Order are in addition to any other rights
and remedies afforded by any other provisions of this Order, by law
or otherwise.
37.2 INCORPORATED BY REFERENCE
In addition to the documents previously incorporated herein by
reference, the documents listed below are by this reference made a part
of this Agreement:
A. Engineering Drawing by Part Number and, if applicable, related
Outside Production Specification Plan (OPSP).
B. Any other exhibits or documents agreed to by the parties to be a
part of this Agreement.
37.3 ORDER OF PRECEDENCE
In the event of a conflict or inconsistency between any of the terms
of the following documents, the following order of precedence shall
control:
A. SBP (excluding the Administrative Agreement identified in E below)
B. This General Terms Agreement (excluding the documents identified in
D and F below)
C. Order (excluding the documents identified in A and B above)
D. Engineering Drawing by Part Number and, if applicable, related
Outside Production Specification Plan (OPSP).
E. Administrative Agreement (If Applicable)
F. Any other exhibits or documents the parties agree shall be part of
the Agreement.
22
37.4 DISCLAIMER
Unless otherwise specified on the face of the applicable Order, any
CATIA Dataset or translation thereof (each or collectively "Data")
furnished by Boeing is furnished as an accommodation to Seller. It
is the Seller's responsibility to compare such Data to the comparable
two dimensional computer aided design drawing to confirm the accuracy
of the Data.
BOEING HEREBY DISCLAIMS, AND SELLER HEREBY WAIVES, ALL WARRANTIES AND
LIABILITIES OF BOEING AND ALL CLAIMS AND REMEDIES OF SELLER, EXPRESS
OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT
IN ANY CATIA DATASET OR TRANSLATION THEREOF, INCLUDING, WITHOUT
LIMITATION, ANY (A) IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR USE OR FOR A PARTICULAR PURPOSE, (B) ANY IMPLIED WARRANTY
ARISING FROM COURSE OF DEALING OR PERFORMANCE OR USAGE OF TRADE, (C)
RECOVERY BASED UPON TORT, WHETHER OR NOT ARISING FROM BOEING'S
NEGLIGENCE, AND (D) ANY RECOVERY BASED UPON DAMAGED PROPERTY, OR
OTHERWISE BASED UPON DAMAGED PROPERTY, OR OTHERWISE BASED UPON LOSS OF
USE OR PROFIT OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES.
EXECUTED in duplicate as of the date and year first written above by the duly
authorized representatives of the parties.
THE BOEING COMPANY TRI-STAR ELECTRONICS
by and through its division
Boeing Commercial Airplane Group
Name: /s/ John Pregent Name: /s/ [illegible]
----------------------------- --------------------------
Title: Contracts Administrator Title: President
---------------------------- -------------------------
Date: 7-14-98 Date: 7-15-98
---------------------------- -------------------------
23
SPECIAL BUSINESS PROVISIONS
between
THE BOEING COMPANY
and
TRI-STAR ELECTRONICS INTERNATIONAL, INC.
Number STD-6-5632-0097
i
SPECIAL BUSINESS PROVISIONS
TABLE OF CONTENTS
Section Item
- ------- ----
1.0 DEFINITIONS
2.0 PURCHASE ORDER NOTE
3.0 PRICES
3.1 Product Pricing
3.2 Manufacturing Configuration Baseline
3.3 Packaging
4.0 GOVERNING QUALITY
ASSURANCE REQUIREMENT
5.0 APPLICABLE LAW/JURISDICTION
6.0 PRODUCT ASSURANCE
7.0 PAYMENT
7.1 Recurring Cost
7.2 Non-Recurring Cost
8.0 ACCEL/DECEL AT NO COST
9.0 NOTICES
9.1 Addresses
10.0 OBLIGATION TO PURCHASE AND SELL
11.0 COST Changes to the Statement of Work
12.2 Computation AND FINANCIAL PERFORMANCE VISIBILITY
12.0 CHANGES
12.1 of Equitable Adjustment
12.3 Obsolescense
12.4 Change Absorption
12.5 Planning Schedule
12.6 Value Engineering
12.7 Reduction in Quantity to be Delivered
13.0 SPARES AND OTHER PRICING
13.1 Spares
13.2 Short Flow Production Requirements
13.3 Tooling
ii
Section Item
13.4 Pricing of Boeing's Supporting Requirements
13.5 Pricing of Requirements for Modification or
Retrofit
13.6 Similar to Pricing
14.0 STATUS REPORTS/REVIEWS
15.0 FOREIGN PROCUREMENT REPORT
16.0 BOEING FURNISHED MATERIEL
17.0 ASSIGNMENT
18.0 Not Applicable
19.0 Not Applicable
19.1 Not Applicable
19.2 Not Applicable
19.3 Not Applicable
19.4 Not Applicable
20.0 Not Applicable
21.0 Not Applicable
22.0 Not Applicable
23.0 Not Applicable
24.0 Not Applicable
25.0 Not Applicable
26.0 Not Applicable
Attachment 1 Work Statement and Pricing
Attachment 2 Foreign Procurement Report
Attachment 3 Rates and Factors
Attachment 4 Boeing AOG Coverage
Attachment 5 Boeing AOG/Critical Shipping Notification
Attachment 6 Not Applicable
Attachment 7 Not Applicable
Attachment 8 Precious Metals Abnormal Escalation Charges
iii
AMENDMENTS
AMEND
NUMBER DESCRIPTION DATE APPROVAL
iv
SPECIAL BUSINESS PROVISIONS
THESE SPECIAL BUSINESS PROVISIONS are entered into as of July 1, 1998 by and
between Tri-Star Electronics, a Delaware corporation with its principal office
in El Segundo, California ("Seller"), and The Boeing Company, a Delaware
corporation with an office in Seattle, Washington, acting by and through its
division the Boeing Commercial Airplane Group ("Boeing").
RECITALS
A. Boeing and Seller entered into a General Terms Agreement GTA
BCA-6-5632-0032 dated July 1, 1998 (the "Agreement") which is
incorporated herein and made a part hereof by this reference, for the
sale by Seller and purchase by Boeing of Products.
B. Boeing and Seller desire to include these special business provisions
("SBP") relating to the sale by Seller and purchase by Boeing of
Products.
Now, therefore, in consideration of the mutual covenants set forth herein, the
parties agree as follows:
SPECIAL BUSINESS PROVISIONS
1.0 DEFINITIONS
The definitions used herein shall be the same as used in the Agreement.
2.0 PURCHASE ORDER NOTE
The following note shall be contained in any Order to which this SBP is
applicable:
This Order is subject to and incorporates by this reference SBP
STD-6-5632-0097 between The Boeing Company and Tri-Star Electronics
dated July 1, 1998.
Each Order bearing such note shall be governed by and be deemed to
include the provisions of this SBP.
3.0 PRICES
3.1 PRODUCT PRICING
The prices and applicable period of performance of Products scheduled
for delivery under this SBP are set forth in Attachment 1. Prices are
in United States dollars, F.O.B. (El Segundo, California).
1
3.2 MANUFACTURING CONFIGURATION BASELINE
Unit pricing for each Product or part number shown in Attachment 1 is
based on the latest revisions of the engineering drawings or
specifications at the time of the signing of this SBP.
3.3 PACKAGING
The prices shown in Attachment 1 include packaging costs and all
materials and labor required to package Products identified in
Attachment 1. Packaging shall be furnished by the Seller in accordance
with Document M6-1025, Volume II, "Supplier Part Protection Guide" or
Document D200-10038-2 "Supplier Packaging Requirements" as applicable.
In the case of Products to be shipped directly to Customers, A.T.A.
Specification 300 "Specification for Packaging of Airline Supplies"
shall apply unless otherwise directed by Boeing.
4.0 GOVERNING QUALITY ASSURANCE REQUIREMENT
Pick the appropriate governing document for applicable procurement
package
All work performed under this SBP shall be in accordance with the
following applicable documents which are incorporated herein and made a
part hereof by this reference:
Document D1-9000 Rev A., "Advanced Quality System", Basic Quality System
as amended from time to time.
5.0 APPLICABLE LAW JURISDICTION
Each Order, including all matters of construction, validity and
performance, shall in all respects be governed by, and construed and
enforced in accordance only with the law of the State of Washington as
applicable to contracts entered into and to be performed wholly within
such STATE between citizens of such STATE, without reference to any
rules governing conflicts of law. Seller hereby irrevocably consents to
and submits itself exclusively to the jurisdiction of the applicable
courts of the STATE and the federal courts therein for the purpose of
any suit, action or other judicial proceeding arising out of or
connected with any Order or the performance or subject matter thereof.
Seller hereby waives and agrees not to assert by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim
that (a) Seller is not personally subject to the jurisdiction of the
above-named courts, (b) the suit, action or proceeding is brought in an
inconvenient forum or (c) the venue of the suit, action or proceeding is
improper.
6.0 PRODUCT ASSURANCE
6.1 GOVERNING DOCUMENT
Seller acknowledges that Boeing and Customers must be able to rely on
each Product performing as specified and that Seller will provide all
required support. Accordingly, the following provisions and document(s)
are incorporated herein and made a part hereof:
Seller warrants to Boeing and Customers that Products shall: (a) conform
in all respects to all the requirements of the Order; (b) be free from
all defects in materials and workmanship; and (c) to the extent not
manufactured pursuant to detailed designs furnished by Boeing, be free
from all defects in design and be fit for the intended purposes.
2
7.0 PAYMENT
7.1 RECURRING PRICE
Unless otherwise provided in the applicable Order, payment of the
recurring price shall be made in accordance with Form X-27981 "Pay From
Receipt - Additional Terms and Conditions Regarding Invoicing and
Payment". Payment terms shall be net thirty (30) days except as
otherwise agreed to by the parties. All payments are subject to
adjustment for shortages, credits and rejections.
7.2 NON-RECURRING PRICE/SPECIAL CHARGES
Unless otherwise provided in the applicable Order, any non-recurring
price payable by Boeing under Attachment 1 shall be paid within the term
discount period or thirty (30) calendar days (whichever is later) after
receipt by Boeing of both acceptable Products and a correct invoice.
8.0 ACCELERATION/DECELERATION AT NO COST
Notwithstanding GTA Section 10.0, Boeing may make changes in the
delivery schedule without additional cost or change to the unit price
stated in the applicable Order if (a) the delivery date of the Product
under such Order is on or before the last date of contract, if
applicable, and (b) Boeing provides Seller with written notice of such
changes.
9.0 NOTICES
9.1 ADDRESSES
Notices and other communications shall be given in writing by personal
delivery, United States mail, express delivery, telegram, facsimile, or
electronic transmission addressed to the respective party as follows:
To Boeing: Attention: Buyer: John Pregent M/S 38-FW
BOEING COMMERCIAL AIRPLANE GROUP
MATERIEL DIVISION
P.O. Box 3707
Seattle, Washington 98124-2207
To Seller: Attention: Ken Thomas
Tri-Star Electronics Int'l Inc.
2201 Rosecrans Avenue
El Segundo, CA 90245
3
10.0 OBLIGATION TO PURCHASE AND SELL
Boeing and Seller agree that in consideration of the prices set forth
under Attachment 1, Boeing shall issue Orders for Products from time to
time to Seller for Boeing's requirements. Such Products shall be
shipped at any scheduled rate of delivery, as determined by Boeing, and
Seller shall sell to Boeing Boeing's requirements of such Products,
provided that, without limitation on Boeing's right to determine its
requirements, Boeing shall not be obligated to issue any Orders for any
given Product if:
A. Any of Boeing's customers specify an alternate product;
B. Such Product is, in Boeing's reasonable judgment, not
technologically competitive at any time, for reasons including but
not limited to the availability of significant changes in
technology, design, materials, specifications, or manufacturing
processes which result in a reduced price or weight or improved
appearance, functionality, maintainability or reliability;
C. Boeing gives reasonable notice to Seller of a change in any of
Boeing's aircraft which will result in Boeing no longer requiring
such Product for such aircraft;
D. Seller has materially defaulted in any of its obligations under any
Order, whether or not Boeing has issued a notice of default to
Seller pursuant to GTA Section 13.0; or,
E. Boeing reasonably determines that Seller cannot support Boeing's
requirements for Products in the amounts and within the delivery
schedules Boeing requires.
11.0 COST AND FINANCIAL PERFORMANCE VISIBILITY
11.1 COST AND PERFORMANCE VISIBILITY AND REVIEWS
When requested by Boeing, Seller shall provide all necessary cost
support data, source documents for direct and indirect costs, and
assistance at the Seller's facility in support of cost and performance
reviews performed by the parties pursuant to any Order or cost
improvement program.
11.2 FINANCIAL PERFORMANCE VISIBILITY
Seller shall provide financial data, on a quarterly basis, or as
requested, to Boeing's Credit Office for credit and financial condition
reviews. Said data shall include but not be limited to balance sheets,
schedule of accounts payable and receivable, major lines of credit,
creditors, income statements (profit and loss), cash flow statements,
firm backlog, and head counts. Copies of such data are to be made
available within 72 hours of any written request by Boeing. This data
is required in addition to the cost data provided pursuant to GTA
Section 9.0. All such information shall be treated as confidential in
accordance with GTA Section 20.0.
12.0 CHANGES
12.1 CHANGES TO THE STATEMENT OF WORK
Boeing may direct Seller within the scope of the applicable Order and in
accordance with the provisions of GTA Section 10.0, to increase or
decrease the work to be performed by the Seller in the manufacture of
any Product.
12.2 COMPUTATION OF EQUITABLE ADJUSTMENT Not Applicable
4
12.3 OBSOLESCENCE
Claims for obsolete or surplus material and work-in-process created by
change orders issued pursuant to this Section shall be subject to the
procedures set forth in GTA Section 12.0, except that Seller may not
submit a claim for obsolete or surplus material resulting from an
individual change order that has a total claim value of twenty-five
hundred Dollars ($2,500.00) or less. Payment for obsolete or surplus
materials shall be made by check deposited as first class mail to the
address designated by Seller in SBP Section 9.1. Payment will be made
on the tenth (10th) day of the month following the month of the
obsolescence claim settlement.
12.4 CHANGE ABSORPTION Not Applicable
12.5 PLANNING SCHEDULE
Any planning schedule or quantity estimate provided by Boeing shall be
used solely for production planning. Boeing may purchase Products in
different quantities and specify different delivery dates as necessary
to meet Boeing's requirements. Such planning schedule and quantity
estimate shall be subject to adjustment from time to time. Any such
adjustment is not a change under GTA Section 10.0.
12.6 VALUE ENGINEERING, WEIGHT REDUCTION, LEAN MANUFACTURING AND RAW MATERIAL
COST IMPROVEMENT
12.6.1 VALUE ENGINEERING
Seller may from time to time submit proposals to Boeing to change
drawings, designs, specifications or other requirements that:
a. decrease Seller's performance costs; or
b. produce a net reduction in the cost to Boeing of installation,
operation, maintenance or production of the Product.
Provided, that such change shall not impair any essential functions or
characteristics of the Products or Tooling.
12.6.1.1 SUBMISSION OF PROPOSAL
Proposals shall be submitted to Boeing's Materiel Representative.
Boeing shall not be liable for any delay in acting upon a proposal.
Boeing's decision to accept or reject any proposal shall be final.
If there is a delay and the net result in savings no longer
justifies the investment, Seller will not be obligated to proceed
with the change. Seller has the right to withdraw, in whole or in
part, any proposal not accepted by Boeing within the time period
specified in the proposal. Seller shall submit, as a minimum, the
following information with the proposal:
a. description of the difference between the existing
requirement and the proposed change, and the comparative advantages
and disadvantages of each;
b. the specific requirements which must be changed if the
proposal is adopted;
c. the cost savings and Seller's implementation costs;
d. Each proposal shall include the need dates for engineering
release and the time by which a proposal must be approved so as
to obtain the maximum cost reduction.
5
12.6.1.2 ACCEPTANCE AND COST SHARING
Boeing may accept, in whole or in part, any proposal by issuing a
change order. Until such change has been issued, Seller shall
remain obligated to perform in accordance with the terms and
requirements of the original Order as written. Boeing and Seller
shall share the savings as follows:
(50%) savings to Boeing;
(50%) savings to Seller.
Seller shall include with each proposal verifiable cost records and
other data as required by Boeing for proposal review and analysis.
Each party shall be responsible for its own implementation costs,
including but not limited to non-recurring costs.
12.6.1.3 COST SAVINGS COMPUTATION
A change order shall be issued by Boeing and the unit price shall be
reduced in an amount equal to the savings portion attributable to
Boeing as set forth above. The applicable unit price as set forth
in Attachment 1 Statement of Work shall be amended to reflect such
change.
EXAMPLE:
--------
Current Price: $600.00
Proposed Cost Savings: $100.00/unit
Boeing's Percentage: 50.0%
Seller's Percentage: 50.0%
STEP BY STEP COMPUTATION:
1. $100.00 unit savings x 50.0% Boeing's percentage of savings =
$50.00 Boeing savings.
2. $100.00 unit savings x 50.0% Seller's percentage of savings =
$50.00 Seller savings.
3. Net affect to the unit cost = $50.00
New Unit Price For Units - $550.00
12.6.2 WEIGHT REDUCTION PROPOSALS
Seller is encouraged to submit proposals to Boeing that reduce the
Product's weight without impairing any essential functions or
characteristics of the Product.
Seller shall submit such proposals in accordance with SBP Section 12.6.1
above. The amount of any costs or savings that result from a weight
reduction proposal shall be agreed by Boeing and Seller. Seller shall
include with each proposal verifiable cost records and other data as
required by Boeing for proposal review and analysis.
Boeing may accept in whole or in part, any such proposal by issuing a
change order to the applicable Order.
12.6.3 LEAN MANUFACTURING/PROCESS IMPROVEMENT
Boeing and Seller agree to work together to identify areas of
improvement which affect the manufacturing and assembly process at
Seller's facility and/or Seller's subcontractor's
6
facilities. Manufacturing and assembly processes include but are not
limited to inventory turn rates, leadtime reductions, contracting
strategies, setup reductions and lot size reductions. Boeing and
Seller agree to use the following metrics to evaluate improvement:
i) Inventory Turns, defined as Annual Costs of Goods Sold/Inventory
Value; ii) Productivity, defined as Annual Sales/Average Employee
Count; and, iii) Asset Turnover, defined as Annual Sales/Total Assets.
Additional metrics may be added and evaluated as agreed to by the
parties. Where Boeing and Seller can identify areas of improvement,
beyond those previously anticipated, identified and documented in
the contract price, the parties will determine the amount of savings
which will result from the improvements and share the savings as set
forth in 12.6.1.2 above. Where a savings is identified and documented,
the parties agree to reduce the Product unit price by that amount
apportioned to Boeing as identified above.
12.6.4 RAW MATERIAL COST IMPROVEMENT
In the event Boeing implements a program to address raw material
issues affecting the subcontractor base, Seller agrees to support
Boeing by identifying areas of improvement involving raw materials.
When requested by Boeing, Seller shall identify usage, leadtime,
contractual impediments or any other factor which may affect
Boeing's ability to implement raw material program improvements.
Boeing's program to improve leadtime and price for raw material is
intended to support all divisions, subsidiaries and affiliates
of The Boeing Company.
Where savings are identified and documented, the parties agree to
reduce the Product's unit price by the corresponding reduction in
raw material price plus the applicable reduction in the corresponding
mark-ups. These reductions shall be incorporated on the first delivery
of applicable Product(s) which incorporate the revised pricing for raw
material or as otherwise agreed to by the parties in writing.
The implementation of these programs by Boeing and Seller's
participation in these programs shall not impair, prejudice or relieve
Seller of its obligations under any applicable Order.
12.7 REDUCTION IN QUANTITY TO BE DELIVERED Not Applicable
13.0 SPARES AND OTHER PRICING
13.1 SPARES
For purposes of this Section, the following definitions shall apply:
A. AIRCRAFT ON GROUND (AOG) - means the highest Spares priority.
Seller will expend best efforts to provide the earliest possible
delivery of any Spare designated AOG by Boeing. Such effort
includes but is not limited to working twenty-four (24) hours a
day, seven days a week and use of premium transportation. Seller
shall specify the delivery date and time of any such AOG Spare
within two (2) hours of receipt of an AOG Spare request.
B. CRITICAL - means an imminent AOG work stoppage. Seller will expend
best efforts to provide the earliest possible delivery of any
Spare designated Critical by Boeing. Such effort includes but is
not limited to working two (2) shifts a day, five (5) days a week
and use of premium transportation. Seller shall specify the
delivery date and time of any such Critical Spare within the same
working day of receipt of a Critical Spare request.
7
C. EXPEDITE (CLASS I) - means a Spare required in less than Seller's
normal leadtime. Seller will expend best efforts to meet the
requested delivery date. Such effort includes but is not limited
to working overtime and use of premium transportation.
D. ROUTINE (CLASS III) - means a Spare required in Seller's normal
leadtime.
E. POA REQUIREMENT (POA) - means any detail component needed to
replace a component on an End Item Assembly currently in Boeing's
assembly line process. Seller shall expend best efforts feasible
to provide the earliest possible delivery of any Spare designated
as POA by Boeing. Such effort includes but is not limited to
working twenty-four (24) hours a day, seven days a week and use
of premium transportation. Seller shall specify the delivery date
and time of any such POA within two (2) hours of an AOG Spare
request.
F. IN-PRODUCTION - means any Spare with a designation of AOG,
Critical, Expedite, Routine, POA or End Item Assembly which is in
the current engineering configuration for the Product and is used
on a model aircraft currently being manufactured by Boeing.
G. NON-PRODUCTION REQUIREMENTS - means any Spare with a designation
of AOG, Critical, Expedite and Routine requirements which is used
on model aircraft no longer being manufactured by Boeing (Post
Production) or is in a non-current engineering configuration for
the Product (Out of Production).
H. BOEING PROPRIETARY SPARE - means any Spare which is manufactured
(i) by Boeing, or (ii) to Boeing's detailed designs with Boeing's
authorization or (iii) in whole or in p art using Boeing's
Proprietary Materials.
13.1.1 SPARES SUPPORT
Seller shall provide Boeing with a written Spares support process
describing Seller's plan for supporting AOG and Critical commitments
and manufacturing support. The process must provide Boeing with the
name and number of a twenty-four (24) hour contact for coordination
of AOG and Critical requirements. Such contact shall be equivalent to
the coverage provided by Boeing to its Customers as outlined in
Attachment 4 "Boeing AOG Coverage" which is incorporated herein and
made a part hereof by this reference.
Seller shall notify Boeing as soon as possible via fax, telecon, or
as otherwise agreed to by the parties of each AOG and Critical
requirement shipment using the form identified in Attachment 5
"Boeing AOG and Critical Shipping Notification". Such notification
shall include time and date shipped, quantity shipped, Order, pack
slip, method of transportation and air bill if applicable. Seller
shall also notify Boeing immediately upon the discovery of any delays
in shipment of any requirement and identify the earliest revised
shipment possible.
13.1.2 RECLASSIFICATION OR RE-EXERCISES
Boeing may on occasion, instruct Seller to re-prioritize or
reclassify an existing requirement in order to improve or otherwise
change the established shipping schedule. Seller shall expend the
effort required to meet the revised requirement as set forth above in
the definitions of the requirements. Seller's commitment of a
delivery schedule shall be given in accordance with that set forth
above for the applicable classification but in no case shall it
exceed twenty-four (24) hours from notification by Boeing.
8
SPECIAL BUSINESS PROVISIONS
13.1.3 SPARE PRICING
Except as set forth in subsections 13.1.3.1 and 13.1.3.2 below, the
price for {{Boeing Proprietary}} Spare(s) shall be the same as the
production price for the Products as listed on Attachment 1, in
effect at the time the Spare(s) are ordered. Detail parts shall be
priced so that the sum of the prices for all detail parts of an End
Item Assembly equals the applicable recurring portion of the End
Item Assembly.
13.1.4 SPECIAL HANDLING
The price for all effort associated with the handling and delivery
of Spare(s) is deemed to be included in the price for such Spare(s).
Provided, that if Boeing directs delivery of Spares to an F.O.B.
point other than Seller's plant, Boeing shall reimburse Seller for
shipping charges, including insurance, paid by Seller from the plant
to the designated F.O.B. point. Such charges shall be shown
separately on all invoices.
13.2 SHORT FLOW PRODUCTION REQUIREMENTS
Boeing shall pay no expedite charges for production requirements
released less than Seller's current Re-Order Leadtime (ROLT). Seller
agrees to support Boeing's short flow requirements with its best
effort.
13.3 TOOLING
13.3.1 RESPONSIBLE PARTY
Seller shall absorb all costs for Tooling manufactured and/or
purchased by Seller necessary for the manufacture and delivery of
the Products including but not limited to rework, repair and
maintenance of the Tooling.
13.3.2 BOEING FURNISHED TOOLING
In the event Boeing furnishes Tooling to Seller, Seller shall comply
with the Terms and Conditions applicable to the Blanket Tooling
Purchase Control Order. No repair, replacement or rework of such
Tooling shall be performed without Boeing's prior written consent.
Boeing shall notify Seller of any action required for discrepant
Tooling.
13.4 PRICING OF BOEING'S SUPPORTING REQUIREMENTS
Any Products required to assist Boeing's supporting requirements,
including but not limited to requirements for color and appearance
samples, Boeing-owned simulators, test requirements, factory
support, flight test spares will be provided for not more than the
applicable price as set forth in Attachment 1.
13.5 PRICING OF REQUIREMENTS FOR MODIFICATION OR RETROFIT
Any Products required by Boeing to support a modification or
retrofit program shall be provided for not more than the applicable
price as set forth in Attachment 1.
13.6 SIMILAR PRICING
New Products ordered by Boeing that are similar to or within Product
families of Products currently being manufactured by Seller shall be
priced using the same methodology or basis as that used to price the
existing Product(s).
14.0 STATUS REPORTS/REVIEWS
When requested by Boeing, Seller shall update and submit, as a
minimum, monthly status reports on data requested by Boeing using a
method mutually agreed upon by Boeing and Seller.
9
When requested by Boeing, Seller shall provide to Boeing a
manufacturing milestone chart identifying the major purchasing,
planning and manufacturing operations for the applicable Product(s).
Upon request by Boeing, program review(s) may be held between the
parties. The location of such review shall be mutually agreed to by
the parties. The purpose of the review is to improve communication
and understanding between the parties to ensure program success.
15.0 MARKET ACCESS/INTERNATIONAL COOPERATION/BUSINESS STRATEGIES FOREIGN
PROCUREMENT REPORT
Seller agrees to work with Boeing to develop a contracting strategy
which supports Boeing's Market Access and International Business
Strategy. Boeing and Seller agree to work together to identify
suppliers and countries where Seller may subcontract in support of
Boeing's Market Access and International Business Strategy. Prior to
releasing any request for proposal to a subcontract or to support
Boeing's offset or business strategy, Seller shall coordinate with
Boeing.
Seller shall document on Attachment 2 all offers to contract and
executed contracts with such subcontractors including the dollars
contracted. Seller shall provide to Boeing with an updated copy of
Attachment 2 for the six-month periods ending June 30 and December
31 of each year. The reports shall be submitted on the 1st of August
and the 1st of February respectively.
16.0 BOEING FURNISHED MATERIAL Not Applicable
17.0 ASSIGNMENT AND THIRD PARTY PRICING
17.1 ASSIGNMENT
Boeing and Seller agree that Boeing may, in its discretion, assign,
in part or in whole, its purchasing obligations under the Agreement
or any Order, as applicable, at the prices set forth in Attachment 1
thereof. Boeing reserves the right to rescind its assignment at
anytime.
Boeing's assignment of purchasing obligation includes scheduling,
issuance of Order(s), receival and inspection of Products,
acceptance or rejection of Products, payment for accepted Products,
and ensuring conformance to the quality assurance system
requirements.
Boeing shall retain all other rights and obligations pursuant to the
applicable terms and conditions. In addition, Boeing reserves the
right, where necessary, to coordinate with and mediate between
Seller and any assignee regarding such assignment.
In the event Boeing assigns its purchasing obligations pursuant to
17.0, Boeing shall remain liable if the assignee fails to make
payments under the terms of this Agreement.
17.2 THIRD PARTY PRICING
SELLER agrees to sell products defined in Attachment 1, "PRICING and
LEADTIME", to a third party or parties which may be designated by
the BUYER within the duration of this contract at the same pricing
afforded to Boeing when said requirements are in support of Boeing
purchase orders, i.e., for work the third party is performing under
Boeing purchase orders. The terms and conditions governing the sale
between Seller and the third party shall be agreed to between the
Seller and the third party.
10
18.0 INVENTORY AT CONTRACT COMPLETION Not Applicable
19.0 OWNERSHIP OF INTELLECTUAL PROPERTY Not Applicable
19.1 TECHNICAL WORK PRODUCT Not Applicable
19.2 INVENTIONS AND PATENTS Not Applicable
19.3 WORKS OF AUTHORSHIP AND COPYRIGHTS Not Applicable
19.4 PRE-EXISTING INVENTIONS AND WORKS OF AUTHORSHIP Not Applicable
20.0 ADMINISTRATIVE AGREEMENTS Not Applicable
21.0 GUARANTEED WEIGHT REQUIREMENTS Not Applicable
22.0 SUPPLIER DATA REQUIREMENTS Not Applicable
23.0 DEFERRED PAYMENT Not Applicable
24.0 SOFTWARE PROPRIETARY INFORMATION RIGHTS Not Applicable
25.0 CONFIGURATION CONTROL OF SCD PRODUCTS Not Applicable
26.0 INFRINGEMENT Not Applicable
EXECUTED in duplicate as of the date and year first set forth above by the
duly authorized representatives of the parties.
THE BOEING COMPANY TRI-STAR INT'L INC.
By and Through its Division 2201 Rosecrans Ave.
Boeing Commercial Airplane Group El Segundo, California 90245
Name: /s/ John Pregent Name: /s/ [illegible]
---------------------------- ----------------------------
Title: Contracts Administrator Title: President
--------------------------- ---------------------------
Date: 7-14-98 Date: 7-15-98
---------------------------- ----------------------------
11
ATTACHMENT 1 TO
SPECIAL BUSINESS PROVISIONS
WORK STATEMENT AND PRICING
The price for products to be delivered through June 30, 2003 shall be as
follows:
Part Number/Family Lead Time Description Price
- ----------------------- --------- ----------- -------
001-9007-001 8 Weeks Contact $0.8200
118-2020-074 8 Weeks Contact $0.1638
31A2016-035 10 Weeks Contact $0.7200
316-1616-634 14 Weeks Contact $0.3800
316-1620-634 14 Weeks Contact $0.3840
316-2020-192 8 Weeks Contact $0.2250
316-2222-634 8 Weeks Contact $0.0895
318-1616-253 (590290-7) 12 Weeks Contact $0.5950
318-2016-035 12 Weeks Contact $0.5007
318-2020-252 14 Weeks Contact $0.4320
5000-070-0116 Contact buy sub part M39029-9-516
5000-070-0216 Contact buy sub part M39029-9-517
5100-108-0216 Contact buy sub part M39029-10-522
5000-179-16-1 Contact buy sub part 318-1616-253
BACC47CN1A 8 Weeks Contact $0.1950
BACC47CN1S 8 Weeks Contact $0.0960
BACC47CN3 8 Weeks Contact $0.2765
BACC47CP1S 8 Weeks Contact $0.1152
BACC47CP2T 8 Weeks Contact $0.2592
BACC47CP3T 8 Weeks Contact $0.3802
BACC47DE1A 12 Weeks Contact $0.1571
BACC47DE3A 14 Weeks Contact $0.5850
BACC47DE4A 8 Weeks Contact $0.1536
BACC47DE5A 10 Weeks Contact $0.1537
BACC47DE6A 10 Weeks Contact $0.1399
BACC47DE7A 8 Weeks Contact $0.1382
BACC47DE8A 8 Weeks Contact $0.1476
BACC47DJ1 8 Weeks Contact $0.2280
BACC47DJ2 10 Weeks Contact $0.3024
BACC47DP1 10 Weeks Contact $0.3024
BACC47DP2 14 Weeks Contact $0.5760
BACC47DP3 12 Weeks Contact $2.1600
BACC47DP4 14 Weeks Contact $2.4000
BACC47DP5 14 Weeks Contact $2.5900
BACC47DR1 10 Weeks Contact $0.3888
BACC47DR2 14 Weeks Contact $1.8000
1
ATTACHMENT 1 TO
SPECIAL BUSINESS PROVISIONS
WORK STATEMENT AND PRICING
The price for products to be delivered through June 30, 2003 shall be as
follows:
Part Number/Family Lead Time Description Price
- ----------------------- --------- ----------- -------
BACC47DR3 12 Weeks Contact $2.1600
BACC47DR4 14 Weeks Contact $3.3600
BACC47DR5 14 Weeks Contact $3.8400
BACC47EF1 8 Weeks Contact $0.0778
BACC47EF2 8 Weeks Contact $0.1210
BACC47EF4 14 Weeks Contact $0.7200
BACC47EG1 8 Weeks Contact $0.2112
BACC47EG2 8 Weeks Contact $0.1900
BACC47EG4 12 Weeks Contact $1.1250
BACC47ER1 8 Weeks Contact $0.2851
M39029-1-100 8 Weeks Contact $0.1296
M39029-1-101 8 Weeks Contact $0.0864
M39029-1-102 8 Weeks Contact $0.1296
M39029-1-103 14 Weeks Contact $0.2610
M39029-10-139 12 Weeks Contact $8.0000
M39029-10-141 12 Weeks Contact $5.0000
M39029-10-520 12 Weeks Contact $8.0000
M39029-10-521 12 Weeks Contact $5.4000
M39029-10-522 12 Weeks Contact $6.0000
M39029-11-145 8 Weeks Contact $0.0821
M39029-22-191 8 Weeks Contact $0.1620
M39029-22-192 8 Weeks Contact $0.1710
M39029-29-212 8 Weeks Contact $0.3800
M39029-29-214 12 Weeks Contact $3.0400
M39029-30-217 14 Weeks Contact $0.2400
M39029-30-219 14 Weeks Contact $0.4000
M39029-30-220 14 Weeks Contact $1.2900
M39029-32-248 10 Weeks Contact $0.2400
M39029-4-110 8 Weeks Contact $0.0672
M39029-4-111 14 Weeks Contact $0.0768
M39029-4-113 12 Weeks Contact $0.1920
M39029-5-115 8 Weeks Contact $0.0900
M39029-5-116 14 Weeks Contact $0.1056
M39029-5-118 12 Weeks Contact $0.2400
M39029-56-348 8 Weeks Contact $0.0864
M39029-56-351 8 Weeks Contact $0.1248
2
ATTACHMENT 1 TO
SPECIAL BUSINESS PROVISIONS
WORK STATEMENT AND PRICING
The price for products to be delivered through June 30, 2003 shall be as
follows:
Part Number/Family Lead Time Description Price
- ----------------------- --------- ----------- -------
M39029-56-352 12 Weeks Contact $0.4100
M39029-57-354 8 Weeks Contact $0.0864
M39029-57-355 14 Weeks Contact $0.3615
M39029-57-356 14 Weeks Contact $0.2400
M39029-57-357 8 Weeks Contact $0.1152
M39029-57-358 8 Weeks Contact $0.2430
M39029-58-360 8 Weeks Contact $0.0540
M39029-58-362 14 Weeks Contact $0.0960
M39029-58-363 8 Weeks Contact $0.0672
M39029-58-364 8 Weeks Contact $0.1260
M39029-63-368 8 Weeks Contact $0.0864
M39029-64-369 8 Weeks Contact $0.0691
M39029-85-455 12 Weeks Contact $5.8500
M39029-85-456 12 Weeks Contact $4.8000
M39029-9-515 12 Weeks Contact $8.0000
M39029-9-516 12 Weeks Contact $5.7500
M39029-9-517 12 Weeks Contact $7.0500
M39029-92-531 Contact buy sub part 316-2222-634
M39029-92-535 14 Weeks Contact $0.8200
S280W552-107 10 Weeks Contact $1.5000
S280W552-109 10 Weeks Contact $0.9000
S280W552-205 14 Weeks Contact $7.5700
S280W555-916 8 Weeks Contact $0.1890
S280W555-918 12 Weeks Contact $0.6030
S280W555-920 8 Weeks Contact $0.0963
3
ATTACHMENT 2 TO
SPECIAL BUSINESS PROVISIONS
FOREIGN PROCUREMENT REPORT FORM
(Seller to Submit)
(Reference Section 15.0)
COMMODITY/ BID CONTRACTED
SUPPLIER NAME COUNTRY NOMENCLATURE DOLLARS DOLLARS
- ------------- ------- ------------ ------- ----------
21
ATTACHMENT 3 TO
SPECIAL BUSINESS PROVISIONS
RATES AND FACTORS
The following Rates and Factors shall be used on all price change negotiations
during the period of performance of these SBP
VARIABLE DATA REQUIRED
DEPENDING UPON ORGANIZATION
Direct Labor Rate $
Manufacturing Burden %
G&A (Gen. Admin. Expense) %
Profit %
---
Total Rate
22
ATTACHMENT 4 TO
SPECIAL BUSINESS PROVISIONS
BOEING AOG COVERAGE
- - NORMAL HOURS BOEING'S MATERIEL REPRESENTATIVE (MATERIEL DIVISION)
Approximately 5:30 a.m. - 6:00 p.m.
- Performs all functions of procurement process.
- Manages formal communication with Seller.
- - SECOND SHIFT - AOG PROCUREMENT SUPPORT (MATERIEL DIVISION)
3:00 p.m. - 11:00 p.m.
- May place order and assist with commitment and shipping information,
working with several suppliers on a priority basis.
- Provides a communication link between Seller and Boeing.
- - 24 HOUR AOG SERVICE - AOG CUSTOMER REPRESENTATIVE (CUSTOMER SERVICE
DIVISION) 544-9000
- Support commitment information particularly with urgent orders.
- Customer Service Representative needs (if available):
- Part Number
- Boeing Purchase Order
- Airline Customer & customer purchase order number
- Boeing S.I.S. #
If Seller is unable to contact any of the above, please provide AOG/Critical
shipping information notification via FAX using Boeing AOG/Critical shipping
notification form (Attachment 5).
23
ATTACHMENT 5 TO
SPECIAL BUSINESS PROVISIONS
BOEING
AOG/CRITICAL
SHIPPING NOTIFICATION
- --------------------------------------------------------------------------------
To: FAX: (206) 544-9261 or 544-9262 Phone: (206) 544-9296
---------------------------- ----------------------------
Buyer Name: Phone:
---------------------------- ----------------------------
From: Today's Date:
---------------------------- ---------------------
- --------------------------------------------------------------------------------
Part Number: Customer PO:
---------------------------- ----------------------
Customer: Ship Date:
---------------------------- ------------------------
Qty Shipped: *SIS Number:
---------------------------- ----------------------
Boeing PO: Pack Sheet
---------------------------- or Invoice:
-----------------------
*Airway Bill:
--------------------------- *Flight #:
------------------------
Carrier:
----------------------------
Freight
Forwarder:
----------------------------
* If Applicable
Shipped To: (Check One) Boeing
--------
Direct Ship
to Customer
--------
Direct Ship
to Supplier
--------
Remarks:
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
IF UNABLE TO CONTACT BUYER,
PLEASE USE THIS FORM TO FAX SHIPPING INFORMATION.
24
ATTACHMENT 6 TO
SPECIAL BUSINESS PROVISIONS
SUPPLIER DATA REQUIREMENTS LIST ("SDRL")
CUSTOMER SUPPORT
(Reference Section 22.0)
25
ATTACHMENT 7 TO
SPECIAL BUSINESS PROVISIONS
SUPPLIER DATA REQUIREMENTS LIST ("SDRL")
ENGINEERING
(Reference Section 22.0)
26
ATTACHMENT 8 TO
SPECIAL BUSINESS PROVISIONS
PRECIOUS METALS ABNORMAL ESCALATION CHARGES
Abnormal escalation adjustment clauses for precious metals used in the
manufacture of Seller's products shall be in effect for this contract. The
purpose of such clauses is to protect Supplier and Buyer from extreme price
fluctuations in the precious metals used to plate electrical contacts. As
such, the following clauses shall be in effect during the period of this
contract for determining price adjustments, which shall occur quarterly, for
such extreme fluctuations.
RHODIUM
The following concept will be used for calculating abnormal escalation
adjustments for the rhodium plated electrical contacts. The amount of rhodium
in each contact is as follows:
Part Number Rhodium Content (grams)
---------------------------------------------
BACC47CN3 .00314000
BACC47CN3B .00314000
BACC47CP2T .00246688
BACC47CP2TB .00246688
BACC47CP3T .00373080
The base price of rhodium shall be $20.81 per gram with a ceiling price of
$35/gram and a floor price of $6.62. Adjustments will be made when the price
of rhodium extends beyond the ceiling or floor and will be adjusted from the
base price. The following formula shall be used for price adjustments:
(Monthly weighted average rhodium price - base rhodium price) x rhodium
content (grams) x quantity of electrical contacts delivered in the
referenced quarter.
A resulting positive number indicates that Boeing owes Tri-Star, while a
resulting negative number indicates that Tri-Star owes Boeing.
As soon as practical after each quarter delivery date (March 31, June 30,
September 30, December 31), Supplier will send to Buyer an assertion for the
rhodium adjustment for that quarter. Documentation provided to Buyer shall
include:
- Part number
- Quantity of parts
- Price adjustments for that part number
- All invoices for rhodium purchased in the delivery month
- Rhodium cost used in the adjustment formula
As soon as the data can be verified, Buyer will issue a non-receivable
purchase order for the cost adjustment.
1
ATTACHMENT 8 TO
SPECIAL BUSINESS PROVISIONS
EXAMPLES:
RHODIUM PRICE INCREASE:
Current month weighted average price: $35.00/gr.
Base price: $21.81/gr.
Part deliveries. BACC47CN3 = 18,000
Rhodium content: .003140 gr.
Adjustment: ($35.00 - $21.81) x .003140 x 18,000 = $745.50 Boeing owes Tri-Star
RHODIUM PRICE NO CHARGE
Current month weighted average price: $33.50/gr.
Base price: $21.81/gr.
Or
Current month weighted average price: $7.25/gr.
Base price: $21.81/gr.
Adjustment: Current prices in the above two scenarios are neither above
$35.00/gr. nor below $6.62/gr. therefore, no price adjustment.
RHODIUM PRICE DECREASE
Current month weighted average price: $4.25/gr.
Base price: $21.81/gr.
Part deliveries: BACC47CN3 = 18,000
Rhodium content: .003140 gr.
Adjustment: ($4.25 - $21.81) x .003140 x 18,000 = -$992.49 Tri-Star owes Boeing
GOLD
The following concept will be used for calculating abnormal escalation
adjustments for the gold plated electrical contacts. The amount of gold in
each contact is as follows:
Part Number Gold Content (grams)
-----------------------------------
001-9007-001 .00026890
118-2020-074 .00007080
31A-2016-035 .00015590
316-1616-634 .00015650
316-1620-634 .00014210
318-1616-253 .00014450
318-2016-035 .00018180
318-2020-252 .00016660
BACC47CN1A .00014350
BACC47CN1S .00007170
BACC47CN3 .00010510
BACC47CP1S .00008260
BACC47CP2T .00008260
BACC47CP3T .00012490
BACC47DE1A .00010700
BACC47DE3A .00006430
BACC47DE4A .00006040
BACC47DE5A .00006310
2
ATTACHMENT 8 TO
SPECIAL BUSINESS PROVISIONS
BACC47DE6A .00006310
BACC47DE7A .00006160
BACC47DE8A .00005590
BACC47DJI .00013470
BACC47DJ2 .00014600
BACC47DP1 .00021210
BACC47DP2 .00034770
BACC47DP3 .00073650
BACC47DP4 .00110960
BACC47DP5 .00213300
BACC47DR1 .00031380
BACC47DR2 .00048230
BACC47DR3 .00097510
BACC47DR4 .00140010
BACC47DR5 .00254910
BACC47EF1 .00005920
BACC47EF2 .00007560
BACC47EF4 .00002701
BACC47EG1 .00008140
BACC47EG2 .00014630
BACC47EG4 .00041900
BACC47ER1 .00007820
M39029-1-100 .00006400
M39029-1-101 .00007240
M39029-1-102 .00012320
M39029-1-103 .00020230
M39029-11-145 .00004370
M39029-22-191 .00004700
M39029-22-192 .00006500
M39029-29-212 .00008500
M39029-30-217 .00012440
M39029-32-248 .00010880
M39029-4-110 .00004560
M39029-4-111 .00007800
M39029-4-113 .00012140
M39029-5-115 .00004770
M39029-5-116 .00009970
M39029-5-118 .00015070
M39029-56-348 .00004770
M39029-56-351 .00006880
M39029-56-352 .00010660
M39029-57-354 .00003050
M39029-57-355 .00006410
M39029-57-356 .00003270
M39029-57-357 .00004660
M39029-57-358 .00007820
M39029-58-360 .00002300
M39029-58-362 .00002470
M39029-58-363 .00007140
M39029-58-364 .00005910
M39029-63-368 .00004720
M39029-64-369 .00003380
S280W552-205 .00195370
S280W555-916 .00013490
3
ATTACHMENT 8 TO
SPECIAL BUSINESS PROVISIONS
S280W555-918 .00008090
S280W555-920 .00007940
The base price of gold shall be $320 per troy ounce with a ceiling price of
$425/troy oz. and a floor price of $215. Adjustments will be made when the
price of gold extends beyond the ceiling or floor and will be adjusted from
the base price. The following forumula shall be used for price adjustments:
(Monthly weighted average gold price - base gold price) x gold content
(troy oz.) x quantity of electrical contacts delivered in the referenced
quarter.
A resulting positive number indicates that Boeing owes Tri-Star, while a
resulting negative number indicates that Tri-Star owes Boeing.
As soon as practical after each quarter delivery date (March 31, June 30,
September 30, December 31), Supplier will send to Buyer an assertion for the
gold adjustment for that quarter. Documentation provided to Buyer shall
include:
- Part number
- Quantity of parts
- Price adjustments for that part number
- All invoices for gold purchased in the delivery month
- Gold cost used in the adjustment formula
As soon as the data can be verified, Buyer will issue a non-receivable
purchase order for the cost adjustment.
EXAMPLES:
GOLD PRICE INCREASE
Current month weighted average price: $550.00/oz.
Base price: $320/oz.
Part deliveries: BACC47CNIS - 18,000
Gold content: .0000717 oz.
Adjustment: ($550.00 - $320.00) x .0000717 x 18,000 = $296.84 Boeing owes
Tri-Star.
GOLD PRICE NO CHARGE
Current month weighted average price: $395/oz.
Base price: $320/oz..
Or
Current month weighted average price: $225/oz.
Base price: $320/oz.
Adjustment: Current prices in the above two scenarios are neither above
$425/oz. nor below $215/oz. therefore, no price adjustment.
GOLD PRICE DECREASE
Current month weighted average price: $175.00/oz.
Base price: $320/oz.
Part deliveries: BACC47CNIS = 18,000
Gold content: .0000717 oz.
Adjustment: ($175.00 - $320.00) x .0000717 x 18,000 = $187.14 Tri-Star owes
Boeing
4