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
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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.
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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
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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.
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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.
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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
---------------------------- ----------------------------
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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