Addendum to Special Business Provisions for BBJ Auxiliary Fuel System between Boeing and PATS, Inc. (April 16, 2003)
Boeing and PATS, Inc. have agreed to modify their existing business agreement regarding the supply and installation of auxiliary fuel systems and related equipment for BBJ aircraft. The addendum sets out payment terms for unrecovered costs, unit pricing, guaranteed quantities, delivery schedules, contract options, lead times, and conditions for liquidated damages. It also outlines Boeing's support for PATS in securing additional contracts. All other terms from the original agreement remain unchanged. The agreement is effective as of April 16, 2003, and specifies obligations through December 31, 2008.
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Exhibit 10.11.3
Special Business Provisions
BBJ Auxiliary Fuel System
Addendum 6-5723-03-064
April 16, 2003
Boeing and PATS, Inc. agree to modify the existing Special Business Provisions with an addendum addressing; settlement for unrecovered non-recurring costs, unit pricing, quantity, rate, contract term, delivery schedule, nature of contract, lead-time, aircraft downtime, and liquidated damages.
This addendum includes the following equipment and services; auxiliary fuel system (AFS), AFS installation, winglet installation, navlink kit and installation, service bulletin for tank conversion (does not include additional tanks), smoke and fire kit, smoke and fire installation, BBJ2 structural installation kit, and BBJ2 structural installation.
- 1.
- Settlement for Unrecovered Non-recurring Costs
- 2.
- Unit Pricing
Boeing to issue Purchases order for BBJ Auxiliary Fuel System unrecovered non-recurring for the amounts of $4,218,000 to be payable upon reaching an agreement, and $1,782,000 to be payable 1/1/2004.
- 3.
- Quantity, Rate and Term
Auxiliary fuel system pricing is based on the default six tank configuration (two forward tanks and four aft tanks) for BBJ and BBJ2. The pricing for 737 AEW&C is based on a five tank configuration (one forward tanks and four aft tanks). Pricing of AFS installations is based on the assumption that PATS will be the preferred BBJ Service Center. Pricing is retroactive to January 1, 2003. Pricing and escalation shall be per Table I of this addendum.
- 4.
- Delivery
The guaranteed quantity of 120 shipsets will be extended though December 31, 2008 at six (6) shipsets per year.
- 5.
- Nature of the Contract
Boeing to issue purchase orders for 6 auxiliary fuel systems to be fabricated between April 2003 and December 31, 2003, and 6 auxiliary fuel systems to be fabricated between January 2004 and December 31, 2004. Boeing to issue Purchase orders for 12 smoke and fire suppression kits to be fabricated between April 2003 and December 31, 2004.
- 6.
- Lead-time
- 7.
- Downtime
Boeing has the option to convert the existing contract to a requirement contract no earlier than January 1, 2005 with a twelve (12) month advance notice. Should Boeing elect to convert the contract to a requirements contract settlement will be based on Table II of this addendum.
Requirements contract lead-time on auxiliary fuel systems will be 12 months ARO. PATS requires 90 advance notification of aircraft installation input.
- 8.
- Liquidated Damages
Aircraft installation downtime will be negotiated based on the hangar workload at time of input.
PATS is relieved from liquidated damages as stated in the GTA until such time that Boeing will purchase 17 auxiliary fuel systems for delivery in a twelve month period.
- 9.
- BBJ Support
BBJ will support, with best efforts, helping PATS secure the KC767 Tanker auxiliary fuel system contract.
All other terms and conditions remain unchanged from existing GTA and Special Business provisions
| Boeing | PATS, Inc. | |
|---|---|---|
| Peter M. Castner | George Toly | |
| Name | Name | |
| /s/ PETER M. CASTNER | /s/ GEORGE TOLY | |
| Signature | Signature | |
| Purchasing Agent | Vice President Sales, Marketing and Contracts | |
| Title | Title | |
| Date: April 16, 2003 | Date: April 16, 2003 |
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- Exhibit 10.11.3
