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EXHIBIT 10.27
AGREEMENT
6-5675-JKH-97002
between
THE BOEING COMPANY
and
PRIDE AVIATION, INC.
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TABLE OF CONTENTS
SECTION TITLE
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1.0 DEFINITIONS
2.0 ISSUANCE OF PURCHASE ORDER
AND APPLICABLE TERMS
2.1 Issuance of Purchase Order
2.2 Acceptance of Purchase Order
2.3 Written Authorization to Proceed
3.0 TITLE AND RISK OF LOSS
4.0 DELIVERY
4.1 Aircraft Arrival
4.2 Requirements
4.3 Delay
4.4 Notice of Labor Disputes
5.0 ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
5.1 Review
5.2 Resident Representatives
6.0 QUALITY ASSURANCE, INSPECTION, REJECTION, AND
ACCEPTANCE
6.1 Seller's Inspection
6.1.1 Seller's Disclosure
6.2 Boeing's Inspection and Rejection
6.3 Federal Aviation Administration or Equivalent Government Agency
Inspection
6.4 Retention of Records
6.5 Language for Technical Information
7.0 EXAMINATION OF RECORDS
8.0 CHANGES
8.1 General
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SECTION TITLE
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9.0 PRODUCT ASSURANCE
10.0 TERMINATION FOR CONVENIENCE
10.1 Basis for Termination
10.2 Termination Instructions
10.3 Seller's Claim
10.4 Failure to Submit a Claim
10.5 Partial Termination
10.6 Price
10.7 Deductions
10.8 Partial Payment/Payment
10.9 Seller's Accounting Practices
10.10 Records
11.0 EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default
11.2 Remedies
12.0 EXCUSABLE DELAY
13.0 SUSPENSION OF WORK
14.0 TERMINATION OR CANCELLATION: INDEMNITY
AGAINST SUBCONTRACTOR'S CLAIMS
15.0 ASSURANCE OF PERFORMANCE
16.0 RESPONSIBILITY FOR PROPERTY
17.0 PROPRIETARY INFORMATION AND ITEMS
18.0 COMPLIANCE WITH LAWS
18.1 Seller's Obligation
18.2 Government Requirements
19.0 INTEGRITY IN PROCUREMENT
20.0 INFRINGEMENT
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SECTION TITLE
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21.0 NOTICES
21.1 Addresses
21.2 Effective Date
21.3 Approval or Consent
22.0 PUBLICITY
23.0 INDEMNIFICATION AND INSURANCE
24.0 NOTICE OF DAMAGE
25.0 RESPONSIBILITY FOR PERFORMANCE
25.1 Subcontracting
25.2 Reliance
25.3 Assignment
26.0 WARRANTY
27.0 NON-WAIVER
28.0 HEADINGS
29.0 PARTIAL INVALIDITY
30.0 APPLICABLE LAW; JURISDICTION
31.0 AMENDMENT
32.0 TAXES
32.1 Inclusion of Taxes in Price
32.2 Litigation
32.3 Rebates
33.0 PLACARDS
34.0 PRICES
34.1 Product Pricing
34.2 Option Pricing
34.3 Exercise of Option
35.0 PAYMENT
36.0 ENTIRE AGREEMENT
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This Agreement ("Agreement") is entered into as of September 15, 1997,
by and between Pride Aviation, Inc., an Oklahoma corporation with its
principal office in New Iberia, Louisiana ("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 provides certain goods and services relating to the painting of
such aircraft.
C. Seller desires to sell and Boeing desires to purchase certain of
Seller's goods and services in accordance with the terms set forth in
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 the following terms as
they are used in this Agreement or the Order. Words importing the
singular number shall also include the plural number and vice versa.
(a) "Aircraft" means the Boeing aircraft listed in ATTACHMENT B,
Aircraft Delivery Schedule, which is incorporated herein by this
reference.
(b) "Correction" means repair, correction or provision of the
Services to bring defective Services into compliance with all
requirements of the warranty, or at Seller's option, replacement
of such Services that meets all requirements of the warranty.
(c) "Customer" means any owner, operator or user of the Aircraft and
any other individual, partnership, corporation or entity which
has or acquires any interest in the Aircraft from, through or
under Boeing.
(d) "Drawing" means an automated or manual depiction of graphics or
technical information, including the parts list and
specifications relating thereto.
(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 the Order.
(h) "Order" means the purchase order issued by Boeing and accepted
by Seller under the terms of this Agreement. The Order is a
contract between Boeing and Seller.
(i) "Services" means the services and goods provided by Seller in
connection with the exterior painting of the Aircraft in
accordance with the Statement of Work.
(j) "Statement of Work" means the ATTACHMENT A Statement of Work,
Exterior Decorative Paint of Boeing Aircraft, which is
incorporated herein by this reference.
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2.0 ISSUANCE OF ORDER AND APPLICABLE TERMS
2.1 Issuance of Purchase Order
Boeing may issue purchase orders to Seller from time to time. Each
purchase order shall contain a description of the Services 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 and any other purchase
order terms and conditions which may conflict with this Agreement, do
not apply to the Order.
2.2 Acceptance of Purchase Order
Each purchase 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 purchase order, whether or not such
term or condition will materially alter the purchase order. Seller's
commencement of performance or acceptance of the purchase order in any
manner shall conclusively evidence Seller's acceptance of the purchase
order as written. Boeing may revoke any purchase order prior to
Boeing's receipt of Seller's written acceptance or Seller's
commencement of performance.
2.3 Written Authorization to Proceed
Boeing's Material Representative may give written authorization to
Seller to commence performance before Boeing issues a purchase order.
If Boeing in its written authorization specifies that a purchase order
will be issued, Boeing and Seller shall proceed as if a purchase order
had been issued. This Agreement 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 purchase order terms. If
Boeing does not specify in its written authorization that a purchase
order shall be issued, Boeing's obligation is strictly limited to the
terms of the written authorization. For purposes of this Section 2.3
only, written authorization includes electronic transmission chosen by
Boeing.
If Seller commences performance before a purchase order is issued or
without receiving Boeing's prior written authorization to proceed, such
performance shall be at Seller's expense.
3.0 TITLE AND RISK OF LOSS
Title to and risk of any loss or damage to the Aircraft shall remain
at all times in Boeing during the period of time in which the Aircraft
is in the possession of or under the care, custody or control of Seller,
except for loss or damage thereto resulting from Seller's fault or
negligence.
4.0 DELIVERY
4.1 Aircraft Arrival
Boeing shall specify in the ATTACHMENT B Aircraft Delivery Schedule an
estimated arrival date of each Aircraft at Seller's facility. Seller
acknowledges that such date is only Boeing's best estimate and Boeing
shall not be responsible for or deemed to be in default under the Order
if an arrival date is changed. In the event the arrival date of the
Aircraft is different from the one set forth in the Order, the parties
shall negotiate a revised delivery and Order completion date.
Notwithstanding the provision for an equitable adjustment included in
Section 8.0, any change in the arrival date shall not entitle Seller to
an equitable adjustment in the Order price or in the total time required
to complete the Services.
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4.2 Requirements
The Services shall be provided in strict accordance with the schedule
and other requirements specified in the Order.
4.3 Delay
Seller shall notify Boeing immediately of any circumstances that may
cause a delay in completion of the performance of the Services, stating
the estimated period of delay and the reasons therefor. If requested by
Boeing, Seller shall use additional effort, including premium effort, to
avoid or minimize delay to the maximum extent possible. All additional
costs resulting from such premium effort 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 Order or by law.
4.4 Notice of Labor Disputes
Seller shall immediately notify Boeing of any actual or potential labor
dispute that may disrupt the timely performance of the Order. Seller
shall include the substance of this Section 4.4, including this
sentence, in any subcontract relating to the Order if a labor dispute
involving the subcontractor would have the potential to delay the timely
performance of the 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 Seller'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 and Customer representatives may enter Seller's plant at all
reasonable times to conduct preliminary inspections and tests of the
work-in-process. Seller shall include in its subcontracts issued in
connection with the Order a like provision giving Boeing and Customer
the right to enter the premises of Seller's subcontractors. When
requested by Boeing, Seller shall accompany Boeing and Customer to
Seller's subcontractors.
5.2 Resident Representatives
Boeing and Customer may at their discretion and for such periods as they
deem 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 the
representatives of Boeing and Customer at Seller's plant. The resident
team will function under the guidance of Boeing's manager. The
resident team will provide communication and coordination to ensure
timely performance of the Order. The 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 the Order. Notwithstanding such assistance, Seller
remains solely responsible for performing in accordance with the Order.
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6.0 QUALITY ASSURANCE INSPECTION, REJECTION, & ACCEPTANCE
6.1 Seller's Inspection
Seller shall inspect or otherwise verify that all Services and
components thereof, including those procured from or furnished by
subcontractors or Boeing, comply with the requirements of the Order.
Seller shall be responsible for all tests and inspections of the
work-in-process and any component thereof during Seller's performance
of the Services and final inspection. Seller shall provide a
certification stating that the Services comply with the requirements of
the Order.
6.1.1 Seller's Disclosure
Seller will immediately notify Boeing when discrepancies in Seller's
processes or the Services are discovered or suspected for the Services
Seller has provided.
6.2 Boeing's Inspection and Rejection
Unless otherwise specified in the Order, all Services shall be subject
to final inspection and acceptance by Boeing at Seller's plant,
notwithstanding any payment or prior inspection. Boeing may reject any
Services which do not strictly conform to the requirements of the
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 Services,
however, Boeing shall retain final disposition authority with respect
to all rejections. At Seller's risk and expense, all rejected Services
shall be immediately corrected, repaired, or replaced by Seller;
provided however, at Seller's risk and expense, Boeing may elect to
correct, repair, or replace the rejected Services with such assistance
from Seller as Boeing may require. 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 Order or otherwise.
6.3 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 Services. For purposes of this Section
6.3, 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.
6.4 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 Order.
6.5 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 U.S.A.
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7.0 EXAMINATION OF RECORDS
Seller shall maintain complete and accurate records regarding all
Services provided under the Order. Such records shall support all
Services performed, allowances claimed and costs incurred by Seller in
the performance of the 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
Order until three (3) years after final payment under the 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 the Order or any future orders, including but not
limited to negotiation of equitable adjustments for changes and
termination/obsolescence claims pursuant to Section 8.0. Boeing shall
treat all information disclosed under this Section as confidential.
8.0 CHANGES
8.1 General.
Boeing's Materiel Representative may at any time by written change
order make changes within the general scope of the 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 delivery schedules, or the amount of Boeing furnished
material. 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
Services, 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 Services affected, and the Order shall be modified
in writing accordingly. Any claim by Seller for adjustment under this
Section 8.1 must be received by Boeing in writing no later than sixty
(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 8.1
shall excuse Seller from proceeding with the Order as changed,
including failure of the parties to agree on any adjustment to be made
under this Section 8.1.
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.
9.0 PRODUCT ASSURANCE
Boeing's acceptance of the completed Services does not alter or affect
the obligations of Seller or the rights of Boeing and Customer as
provided by law.
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10.0 TERMINATION FOR CONVENIENCE
10.1 Basis for Termination: Notice
Boeing may, from time to time and at Boeing's sole discretion, terminate
all or part of the 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.
10.2 Termination Instructions
On receipt of a written notice of termination pursuant to Section 10.1,
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 the Services terminated;
X. Xxxxxx 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.
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 the Order, 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 the Order; and
H. Complete performance of the Services not terminated.
10.3 Seller's Claim
If Boeing terminates the Order in whole or in part pursuant to Section
10.1 above, Seller shall have the right to submit a written termination
claim to Boeing in accordance with the terms of this Section 10.3. 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), 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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10.4 Failure to Submit a Claim
Notwithstanding any other provision of this Section 10.0, 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 10.0 except
for those Services previously delivered and accepted by Boeing.
10.5 Partial Termination
Any partial termination of the Order shall not alter or affect the terms
and conditions of the Order with respect to the Services not terminated.
10.6 Price
Termination under any of the above paragraphs shall not result in any
change to the price for the Services not terminated.
10.7 Deductions
The following items shall be 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.
10.8 Partial Payment/Payment
Payment, if any, to be paid under this Section 10.0 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.
10.9 Seller's Accounting Practices
Boeing and Seller agree that Seller's "normal accounting practices" used
in developing the price of the Services shall also be used in
determining the allocable costs at termination. For purposes of this
Section 10.9, Seller's "normal accounting practices" refers to Seller's
method of charging costs as either a direct charge, overhead expense,
general administrative expense, etc.
10.10 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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11.0 EVENTS OF DEFAULT AND REMEDIES
11.1 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 the Order, any Services, except as provided in
Section 12.0; or
B. Any failure by Seller to provide an acceptable Assurance of
Performance within the time specified in Section 15.0, or
otherwise in accordance with applicable law; or,
C. Any failure by Seller to perform or comply with any obligation
set forth in Section 18.0; or
D. Seller is or has participated in the sale, purchase or
manufacture of airplane parts without the required approval of
the FAA.
E. Any failure by Seller to perform or comply with any obligation
(other than as described in the foregoing Sections 11.1.A,
11.1.B, 11.1.C and 11.1.D) set forth in this Agreement or the
Order 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
F. (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.
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11.2 Remedies
If any Event of Default shall occur:
A. Cancellation
Boeing may, by giving written notice to Seller, immediately
cancel the Order, in whole or in part, and Boeing shall not be
required after such notice to accept the tender by Seller of any
Services with respect to which Boeing has elected to cancel the
Order.
B. Cover
Boeing may produce or provide, or may engage any other persons
to produce or provide, any services in substitution for the
Services to be delivered or provided by Seller hereunder with
respect to which the 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 such Services and the aggregate
expense, including, without limitation, administrative and other
indirect costs, paid or incurred by Boeing to produce or
provide, or engage other persons to produce or provide, any
Services.
C. 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 under the 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.
D. Transfer of 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) Boeing-furnished
material, (ii) raw materials, work-in-process, and all other
Services either complete or incomplete, (iii) Proprietary
Information and Materials of Boeing including without limitation
planning data, drawings and other Proprietary Information and
Materials relating to the Services 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 11.2.D (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.
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E. 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.
12.0 EXCUSABLE DELAY
If completion of any Services 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 completion of such Services
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, any act of
government unless such act is due to Seller's noncompliance with a law
or other governmental requirement, rule, regulation, or order
promulgated by any governmental agency including but not limited to
those with respect to environmental protection, fires, floods,
epidemics, quarantine restrictions, freight embargoes, strikes or
unusually severe weather. However, the above notwithstanding, Boeing
expects Seller to continue production, recover lost time and support
all schedules as established under the 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 three (6) days preceding the scheduled
completion date of any Services and (ii) if delay in completion of any
Services 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 completion schedules. If
completion of any Services is delayed by any Excusable Delay for more
than seven (7) days, Boeing may, without any additional extension,
cancel all or part of the Order with respect to the delayed Services,
and exercise any of its remedies in accordance with Section 11.2
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.
13.0 SUSPENSION OF WORK
Boeing may at any time, by written order to Seller, require Seller to
stop performance of all or any part of the Services called for by the
Order hereafter referred to as a "Stop Work Order" issued pursuant to
this Section 13.0. 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 Services covered by the Stop Work Order in accordance with the
provisions of Section 10.0 or 11.0. In the event the Stop Work Order is
canceled by Boeing or the period of the Stop Work Order (including any
extension thereof) expires, Seller shall promptly resume work in
accordance with the terms of the Order.
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14.0 TERMINATION OR CANCELLATION AND INDEMNITY AGAINST SUBCONTRACTOR CLAIMS
Boeing shall not be liable for any loss or damage resulting from any
termination pursuant to Section 10.1, except as expressly provided in
Section 10.3 or any cancellation under Section 12.0 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 Section 10.1 and therefore shall be
limited to the payment to Seller of the amount or amounts identified in
Section 10.3. As subcontractor claims are included in Seller's
termination claim pursuant to Section 10.3, 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) any and all costs,
expenses, losses and damages incurred by Boeing in connection with any
such claim, suit or proceeding.
15.0 ASSURANCE OF PERFORMANCE
A. Seller of 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 the Order when
and as specified herein. Each Assurance of Performance shall be
delivered by Seller to Boeing as promptly as possible, but in
any event no later than three (3) calendar days following
Boeing's request therefor 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.
16.0 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 in
Boeing, excluding the Aircraft, Seller shall assume the risk of and
shall be responsible for any loss thereof or damage thereto. In
accordance with the provisions of the 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
Services delivered under the Order or has been consumed in the normal
performance of the Services under the Order. Notwithstanding the
foregoing, hazardous materials shall be returned to Boeing only if such
materials are unopened and in the original packaging; Seller shall take
ownership of and responsibility for any hazardous materials not in such
condition at the completion of the Order.
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17.0 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 the 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 the Order. Provided, however, that
despite any other obligations or restrictions imposed by this Section
17.0, 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 the
Order, or any airplane including such an item; and any such disclosure
by Boeing shall, whenever appropriate, include a restrictive legend
suitable to the particular circumstances. The restrictions on disclosure
or use of Proprietary Information and Materials by Seller shall apply to
all materials derived by Seller or others from Boeing's Proprietary
Information and Materials. Upon Boeing's request at any time, and in any
event upon the completion, termination or cancellation of the Order,
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 17.0. Seller
may disclose Proprietary Information and Materials of Boeing to its
subcontractors as required for the performance of the Order, provided
that each such subcontractor first assumes, by written agreement, the
same obligations imposed upon Seller under this Section 17.0 relating to
Proprietary Informations and Materials; and Seller shall be liable to
Boeing for any breach of such obligation by such subcontractor. The
provisions of this Section 17.0 are effective in lieu of, and will apply
notwithstanding the absence of, any restrictive legends or notices
applied to Proprietary Informations and Materials; and the provisions of
this Section 17.0 shall survive the performance, completion, termination
or cancellation of the Order. This Section 17.0 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 Services,
regardless of whether disclosed to the receiving party before or after
the effective date of this Agreement.
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18.0 COMPLIANCE WITH LAWS
18.1 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 become subject to additional environmental regulation
or which Seller reasonably believes will become subject to additional
regulation which may affect Seller's ability to perform this Agreement
according to its terms.
18.2 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 Services covered by the Order were provided
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".
19.0 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 judgement with respect to either issuing or
administering the Order. 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 the 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.
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20.0 INFRINGEMENT
Seller shall indemnify, defend, and save Boeing and Customer 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 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 the Services by Boeing or Customer.
Boeing and/or Customer 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 Customer.
Seller shall have no obligation under this Section 20.0 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
the Services in combination with other items when such infringement
would not have occurred from the use or sale of those Services solely
or the purpose for which they were designed or sold by Seller. For
purposes of this Section 20.0 only, 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.
21.0 NOTICES
21.1 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
below:
To Boeing:
BOEING COMMERCIAL AIRPLANE GROUP
MATERIEL DIVISION
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Mail Stop: 20-03
To Seller:
PRIDE AVIATION, INC.
0000 Xxxxxx Xxxxx
Xxx Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
President
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21.2 Effective Date
The date on which any such communication is received by the addressee
is the effective date of such communication.
21.3 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.
22.0 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 this Agreement,
the Order or the Services, 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.
23.0 INDEMNIFICATION AND INSURANCE
Seller agrees to indemnify and hold harmless Boeing, Customer, and their
assignees, directors, officers, agents, and employees from and against
all claims, liabilities, losses or damages, including costs and expenses
(including attorneys' fees) incident thereto or incident to successfully
establishing the right to indemnification, for injury to or death of any
person or persons, including employees of Seller and Customer but not to
employees of Boeing, or for loss of or damage to any property, including
the Aircraft while it is on Seller's premises, arising out of or in any
way connected with Seller's negligent performance of the Services
pursuant to this Agreement.
Seller warrants and represents to Boeing that it shall maintain in full
force and effect for the inclusive period that the Aircraft will be on
Seller's premises and or Seller's representatives may be working on the
Aircraft, Hangarkeepers Legal Liability Insurance with a combined single
limit in an amount not less that $200,000,000. Seller shall provide
Boeing with a certificate of insurance evidencing such coverage and
naming Boeing as an additional insured.
24.0 NOTICE OF DAMAGE
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.
25.0 RESPONSIBILITY FOR PERFORMANCE
Seller shall be responsible for the requirements of this Agreement and
the Order. Seller shall bear all risks of providing adequate facilities
and equipment to perform the 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 the Order. Sufficient information may include
but is not limited to Order number, Agreement number or the name of
Boeing's Materiel Representative. No subcontracting by Seller shall
relieve Seller of its obligation under the Order.
Seller represents that it has the requisite expertise and governmental
authorization to perform its responsibilities under this Agreement in
accordance with the terms of the Agreement and all applicable laws.
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25.1 Subcontracting
Seller may not procure any Services from a third party in a completed
or a substantially completed from without Boeing's prior written
consent.
Where required by the requirements of the Order, no raw material and/or
material process may be incorporated in the Services 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.
25.2 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 Services. Seller agrees that Boeing and Customer may rely on
Seller as an expert, and Seller will not deny any responsibility or
obligation hereunder to Boeing or Customer on the grounds that Boeing
or Customer provided recommendations or assistance in any phase of the
work involved in performing or supporting the Services, including but
not limited to Boeing's acceptance of specifications, test data or the
completed Services.
25.3 Assignment
The 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 the 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 the 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 the Order or any other agreement between the
parties.
Boeing may settle all claims arising out of the Order, including
termination claims, directly with Seller. Boeing may unilaterally
assign any rights or title to property under the Order to any
wholly-owned subsidiary of The Boeing Company.
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26.0 WARRANTY
26.1 Seller's Warranties
Seller warrants each Service and Correction of any Service will:
A. be free from defects in materials and workmanship,
B. conform to the requirements of the Order, including, but not
limited to, the applicable descriptions, specifications and
drawings, and,
C. to the extent not manufactured pursuant to detailed design
furnished by Boeing, be free from all defects in design and be
fit for the intended purpose.
26.2 Warranty Periods and Remedies
If, prior to delivery of any Service to Customer, or within thirty-six
(36) months following delivery of any Boeing model 747 or 767 Aircraft,
or within forty-eight (48) months following delivery of any Boeing
model 777 Aircraft, the Service fails to comply in any respect with the
warranty set forth in Section 26.1, Seller will, at Boeing's direction,
A. make all Corrections necessary to provide Boeing or Customer
with a Service which complies with the warranty or
B. reimburse Boeing or Customer for material and direct labor
costs incurred by or for which Boeing or Customer is obligated
to pay with respect to such Corrections. Such Corrections may
be performed at Boeing's or Customer's facility or other
designated facility provided:
(i) Boeing submits in writing to Seller, reasonable
evidence that a defect exists, including a statement
of work required to accomplish a Correction, and
(ii) the total reimbursement for Boeing's or Customer's
material and direct labor costs does not exceed
Seller's reasonable estimate of the then current cost
for Correction. In no event will the reimbursement for
material and direct labor costs exceed the then current
Seller's estimate of the cost of the original Service.
The hourly rate for direct labor for a Correction made by Boeing or
Customer to be used in determining costs for a Correction will be the
warranty labor rate in existence between Boeing and Customer at the
time of the Correction or 150% of the Customer's average direct labor
rate, whichever is greater. The warranty labor rate in existence
between Boeing and its Customers for 1997 is $42.50 per hour.
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26.3 Warranty of Corrections
26.3.1 As to a Correction of a defect in material or workmanship or failure to
conform to the requirements of the Order, Seller's warranty obligation
will be for the remainder of the initial warranty period specified in
Section 26.2.
26.3.2 As to a defect in the Seller's design, Seller's warranty obligation
will be for the remainder of the initial warranty period specified in
Section 26.2 or within eighteen (18) months after the Correction,
whichever is later.
26.3.3 Boeing's remedies for Corrections will be the same as those established
in Section 26.2.
26.4 Limitations of Warranty obligations
The warranties provided in Section 26.1 shall not apply if:
A. Seller does not receive written notice of a defect within (3)
three months after the expiration of the applicable warranty
period set forth in Sections 26.2, 26.3.1 and 26.3.2.
B. The Services delivered have not been maintained in conformity
with Boeing's applicable manuals, service bulletins or written
instructions.
C. A Correction is improperly performed by Boeing or Customer.
27.0 NON-WAIVER
Boeing's failure at any time to enforce any provision of the Order does
not constitute a waiver of such provision or prejudice Boeing's right to
enforce such provision at any subsequent time.
28.0 HEADINGS
Section headings used in this Agreement are for convenient reference
only and do not affect the interpretation of the Agreement.
29.0 PARTIAL INVALIDITY
If any provision of the Order is or becomes void or unenforceable by
force or operation of law, the other provisions shall remain valid and
enforceable.
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30.0 APPLICABLE LAW: JURISDICTION
The 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 Superior Court
for King County, State of Washington and to the jurisdiction of the
United States District Court for the Western District of Washington for
the purpose of any suit, action or other judicial proceeding arising out
of or connected with the 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.
31.0 AMENDMENT
Oral statements and understandings are not valid or binding. Except as
otherwise provided in Section 8.0, the Order may not be changed or
modified except by a writing signed by Seller and Boeing's Materiel
Representative.
32.0 TAXES
32.1 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
where applicable sales or use taxes on sales to Boeing ("Sales Taxes")
for which Boeing has not supplied a valid exemption certificate or un-
less otherwise indicated in the Order.
32.2 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.
32.3 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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33.0 PLACARDS
At the time of delivery of the Aircraft by Boeing to Seller, Seller
shall install placards on the control yokes and engine nacelles of the
Aircraft. Such placards shall remain in place until the Aircraft is
redelivered by Seller to Boeing, be prominent, and state as follows:
The Boeing model XXXXXX Aircraft bearing manufacturer's serial
number XXXXXX is the property of The Boeing Company. While this
Aircraft is temporarily in the possession of Pride Aviation,
Inc., it is the sole property of The Boeing Company which
retains all right, title, and interest in it.
34.0 PRICES
34.1 Product Pricing
The pricing of Services are listed in the ATTACHMENT C Pricing
Schedule. All prices are firm fixed prices in United States dollars.
34.2 Option Pricing
Seller irrevocably grants to Boeing the option to purchase additional
Services under the terms and conditions set forth in ATTACHMENT C of
this Agreement, increased or decreased by any equitable adjustments
required of Boeing under Section 8 (Changes).
34.3 Exercise of Option
Boeing may exercise such option by written notice to Seller at any time
prior to completion of the Services; provided however, that such option
must be exercised in sufficient time to permit Seller to support Boeing
required Aircraft delivery schedule. Seller agrees to provide Boeing
with written notice at least sixty (60) days prior to the date when,
in Seller's opinion, the option must be exercised. Boeing may extend
the option exercise date by purchasing long lead materials or services,
or authorizing Seller to purchase such materials or services on terms
acceptable to Boeing, if such purchase would have the effect of
extending the date for assuring production continuity.
Boeing reserves the right to (a) not exercise the option and commence
new negotiations with Seller for additional quantities of Services; or
(b) purchase such additional quantities of Services from third parties.
The purchase of such additional quantities of Services from third
parties shall not abrogate any of Seller's obligations to Boeing
pursuant to the Agreement.
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35.0 PAYMENT
Unless otherwise provided under the applicable Order, payment shall be
net thirty (30) calendar days as computed from (a) the completion of the
Services, (b) the date of receipt of a correct invoice or (c) the
scheduled Aircraft completion date, whichever is last. All payments are
subject to adjustment for credits and rejections.
36.0 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 the Order. The rights and
remedies afforded to Boeing or Customer pursuant to any provisions of
the Order are in addition to any other rights and remedies afforded by
any other provisions of the Order, by law or otherwise.
EXECUTED in duplicate as of the date and year first written above by the duly
authorized representatives of the parties.
THE BOEING COMPANY PRIDE AVIATION, INC.
by and through its division
Boeing Commercial Airplane Group
/s/ XXXXXXX X. XXXXXX /s/ XXXX XXXXXXXXXX
--------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxx Xxxxxxxxxx
Title: Buyer Title: President
Date: 9/17/97 Date: 9/17/97
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Attachment A
STATEMENT OF WORK
EXTERIOR DECORATIVE PAINT OF BOEING AIRCRAFT
GENERAL
Seller shall apply exterior decorative paint to the Aircraft at their facilities
in accordance with the following:
1. Apply exterior markings and decals per applicable Boeing decorative
paint Drawings, Boeing paint document D6-1816, and control panel 175
Q&IR paper.
2. All work is to be accomplished in accordance with Boeing Drawings,
documents, and planning.
3. Boeing will provide on-site quality control to perform those functions
necessary to assure the product quality and support the Quality
Assurance system.
4. Boeing will provide manufacturing technical assistance.
5. Seller will assist in any process inspection conducted by Boeing
Quality Assurance or Customer personnel.
MATERIAL
1. Seller will provide all bulk material (i.e. Alkosol 27, Alodine, 1000,
Pace B82 Soap, etc.) required per the Drawings.
2. Seller will provide all consumables (i.e. sandpaper, tapes, solvents,
paper, etc.) required per the Drawings.
3. Seller will receive store an control materials per the requirements of
the Drawings.
4. Boeing will provide primers, paints, paint templates, premast, decals,
stencels, and window mask per the Drawings.
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Attachment A
TRAINING
Seller shall provide training to Boeing employees for all applicable systems
and equipment of Seller and its subcontractors that such employees will be
using at Seller's facilities, including but not limited to hazard communication
and other safety requirements and procedures.
WASTE AND EMERGENCY RESPONSE
Seller will be responsible for the management of all wastes, including wastes
produced by Boeing activities on-site. Seller will also be responsible for
providing or arranging for emergency response to spills of hazardous materials
and petroleum, including spill control, cleanup and required reporting, and will
provide and arrange for all emergency response equipment and personnel. Seller
will provide instruction to on-site Boeing personnel regarding any procedures
to be utilized for spill prevention and notification of emergency response
personnel. In support of activities such as defueling and fueling of the
Aircraft, Seller will take measures as necessary to prevent spills of fuel from
being released to the storm sewers.
RECEIVE AND DEFUEL
1. Boeing crews will receive and oversee the defueling of the Aircraft
upon arrival at Seller's facilities.
2. Seller, or Seller's approved subcontractor, will conduct the Aircraft
defueling, fuel storage, and refueling of the Aircraft.
3. Seller will assist with ground support to move the Aircraft into the
paint facility.
4. Boeing Quality Assurance personnel will conduct the Aircraft receipt
inspection in accordance with applicable Boeing requirements.
PRE-FLIGHT AND DISPATCH
1. Boeing will oversee the refueling of the Aircraft by Seller or Seller's
approved subcontractor.
2. Boeing will conduct the pre-flight and dispatch of the Aircraft.
3. Seller will assist with ground support to move the Aircraft to the
flight line.
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Attachment A
PREPARATION FOR REMOVAL OF THE TEMPORARY PROTECTIVE COATING
1. Do not paint previously painted flight control surfaces (i.e. rudder,
flaps, elevators, etc.).
2. Seller will repaint any repairs on previously painted surfaces per
Drawings.
3. Seller will mask the Aircraft for removal of the TPC per Drawings (i.e.
windows, landing gear, etc.)
4. Seller will sand all previously primed surfaces per Drawings (i.e.
lower and upper wings, wing to body fairings, stabilizers, etc.).
REMOVAL OF THE TEMPORARY PROTECTIVE COATING (TPC)
1. Seller to remove the TPC per Drawings (Alkosol 27).
PREPARATION OF ALL SURFACES TO BE PAINTED
1. Seller will solvent clean all areas per document D6-1816.
2. Seller will wash all previously painted surfaces with Pace B-82 Soap
per Drawings.
WATER SCRATCH ALL SURFACES TO BE PAINTED
1. Seller will water scratch all metal surfaces to be painted and attain a
water break free surface per document D6-1816.
2. Boeing Quality Assurance and Customer representatives will inspect all
areas for acceptance.
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Attachment A
ALODINE 1000 PREPARATION
1. Seller will mask all high strength steel aircraft components prior to
Alodine 1000 application per document D6-1816.
2. Seller will apply Alodine 1000 per document D6-1816 to all bare metal
areas to be painted.
3. Boeing Quality Assurance will monitor the Alodine 10000 application per
document D6-1816.
MASKING THE AIRCRAFT FOR PRIMER APPLICATION
1. Seller will mask all required areas per Drawings.
2. Boeing Quality Assurance will monitor the masking process.
ACCEPTANCE OF THE SURFACES TO BE PAINTED
1. Boeing Quality Assurance and Customer Representatives will inspect all
areas for acceptance prior to primer application.
MIXING AND APPLYING PRIMER
1. Seller will mix and apply primer to all surfaces to be painted per
Drawings and the requirements of document D6-1816.
2. Boeing Quality Assurance will monitor the mixing and application of the
primer.
INSPECTION OF THE PRIMER APPLICATION
1. Boeing Quality Assurance will inspect the primer application per the
requirements of document D6-1816.
4
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6-5675-JKH-97002
Attachment A
MASKING FOR THE TOPCOATS AND DECORATIVE PAINT APPLICATION
1. Seller will mask all areas per Drawings.
2. Boeing Quality Assurance will monitor the masking application and
authorize the application of topcoat and decorative paint.
MIXING OF TOPCOATS AND DECORATIVE PAINTS
1. Seller will mix all paint in accordance with document D6-1816.
2. Boeing Quality Assurance will monitor all application processes.
APPLYING TOPCOAT AND DECORATIVE PAINT
1. Seller will apply all topcoats and decorative paint per Drawings and
document D6-1816.
2. Boeing Quality Assurance will monitor all application processes.
MAINTENANCE AND EMERGENCY STENCILING
1. Seller will apply all markings per Drawings.
2. Boeing Quality Assurance will monitor the stenciling process.
FINAL INSPECTION
1. Seller will assist in the final inspection process.
2. Boeing Manufacturing and Quality Assurance personnel will inspect the
Aircraft for acceptance to the requirements of the Drawings.
3. Seller will rework any and all rejected areas and obtain Boeing
acceptance prior to the Customer inspection process.
4. Customer will inspect the Aircraft for final acceptance.
5. Seller will rework any and all rejected areas and obtain Customer
acceptance prior to pre-flight operations.
5
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6-5653-JKH-XXX
Attachment B
BOEING PROPRIETARY
AIRCRAFT DELIVERY SCHEDULE
PHASE 1
Aircraft Line # Boeing Drawing Arrival Date Customer
-------- ------ -------------- ------------ --------
000-000 000 444W1001 11/1/97 UAL
000-000 000 444W1001 11/13/97 UAL
000-000 000 444W1005 11/25/97 GUN
000-000 000 444W1007 12/6/97 TII
000-000 000 444W1001 1/6/98 UAL
000-000 000 444W1015 1/15/98 SVA (Exotic)
000-000 000 444W1013 1/23/98 SIA
PHASE 2 - OPTION
Aircraft Line # Boeing Drawing Arrival Date Completion Date
-------- ------ -------------- ------------ ---------------
* Estimate three (3) Aircraft per month, February-March 1998, for a total of six
(6) Aircraft. [Probably two 767 A/Ps, plus one 777 or 747 per month]
PHASE 3 - OPTION
Aircraft Line # Boeing Drawing Arrival Date Completion Date
-------- ------ -------------- ------------ ---------------
* Estimate two (2) 777-200 Aircraft per month, September 1998 through September
1999, for a total of 26 Aircraft.
09/15/97
