LMI AEROSPACE INC
10.2 - SPECIAL BUSINESS PROVISIONS - BOEING
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<TYPE>EX-10
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<FILENAME>lmi8ksbp03.txt
<DESCRIPTION>10.2 - SPECIAL BUSINESS PROVISIONS - BOEING
<TEXT>


                           SPECIAL BUSINESS PROVISIONS


                                     Between


                               THE BOEING COMPANY


                                       and


                             Leonard's Metals, Inc.

                                 POP-65344-0667

<PAGE>

                                TABLE OF CONTENTS

TITLE PAGE
TABLE OF CONTENTS
AMENDMENT PAGE
RECITAL PAGE

1.0      DEFINITIONS..........................................................8

2.0      CONTRACT FORMATION...................................................8
         2.1       Order......................................................8
         2.2       Entire Agreement...........................................9
         2.3       Incorporated by Reference..................................9
         2.4       Order of Precedence........................................9
         2.5       Survival...................................................10

3.0      PERIOD OF PERFORMANCE AND PRICES.....................................11
         3.1       Performance................................................11
                   3.1.1       Period of Performance..........................11
                   3.1.2       Option to Extend...............................11
         3.2       Pricing....................................................11
                   3.2.1       Product Pricing................................11
                   3.2.2       Manufacturing Configuration....................11
                   3.2.3       Packaging......................................11
                   3.2.4       Local Transportation Devices...................12
         3.3       Subject Matter of Sale.....................................12

4.0      GOVERNING QUALITY ASSURANCE REQUIREMENTS.............................12

5.0      APPLICABLE LAW.......................................................12

6.0      PRODUCT SUPPORT AND ASSURANCE........................................12
         6.1       Warranty...................................................12

7.0      PAYMENT..............................................................13
         7.1       Recurring Price............................................13
         7.2       Nonrecurring Price/Special Charges.........................13
         7.3       Payment Method.............................................13

8.0      SCHEDULE ACCELERATION/DECELERATION...................................13

9.0      NOTICES..............................................................13
         9.1       Addresses..................................................13

10.0     OBLIGATION TO PURCHASE AND SELL......................................14

11.0     COST AND PERFORMANCE VISIBILITY......................................15

12.0     CHANGE PROVISIONS....................................................15
         12.1      Reserved...................................................15
         12.2      Computation of Equitable Adjustment........................15
         12.3      Obsolescence...............................................15
         12.4      Change Absorption (Nonrecurring/Recurring).................15
                   12.4.1    Prior to 100% Engineering Release
                             (Drawing Revision Level New).....................
                   12.4.2    Subsequent to 100% Engineering Release.........
         12.5      Planning Schedule..........................................17
         12.6      Total Cost Management System...............................17
                   12.6.1    Continuous Cost Improvement Process..............17
                   12.6.2    Continuous Improvement Initiatives...............18
                   12.6.2.1  Submission of Cost Reduction Proposal............18
                   12.6.2.2  Acceptance and Cost Sharing......................19
                   12.6.3    Boeing Generated Technical and
                             Cost Improvements................................19
                   12.6.4    Value Engineering................................19
                   12.6.5    Lean Manufacturing...............................20
         12.7      Reduction in Quantity to be Delivered......................21
         12.8      Critical Manufacturing Reorder Lead-Time...................21
         12.9      Derivative Aircraft........................................21

13.0     SPARES AND OTHER PRICING.............................................22
         13.1      Spares.....................................................22
                   13.1.1    Spares Support...................................23
                   13.1.2    Reclassification or Re-exercises.................23
                   13.1.3    Spare Pricing....................................23
                   13.1.3.1  Aircraft On Ground (AOG), Critical Spares
                             and POA Requirement..............................23
                   13.1.3.2  Expedite Spare (Class 1).........................24
                   13.1.4    Spares Special Handling..........................24
         13.2      Expedite of Production Requirements........................24
         13.3      Tooling....................................................24
                   13.3.1    Responsible Party................................24
                   13.3.2    Boeing Furnished Tooling.........................25
         13.4      Pricing of Boeing's Supporting Requirements................26
         13.5      Pricing of Requirements for Modification or Retrofit.......26
                   13.5.1    Boeing Responsibility or Regulatory
                             Requirement......................................26
                   13.5.2    Contract Aftermarket Modification or Retrofit
                             Work Performed by Boeing.........................26
         13.6      Pricing of Similar Products................................26



14.0     STATUS REPORTS/REVIEWS...............................................26
         14.1      General Reports / Reviews..................................26
         14.2      Diversity Reporting Format.................................27
         14.3      Program Manager............................................27
         14.4      Certified Tool List........................................27
         14.5      Problem Reports............................................27
         14.6      Order Readiness Matrix (ORM)...............................28

15.0     INTERNATIONAL COOPERATION............................................28
         15.1      Market Access and Sales Support............................28
         15.2      Offset Assistance..........................................28
         15.3      Credit Against Aircraft Sales..............................29

16.0     BOEING FURNISHED MATERIAL/SUPPLIER BANKED MATERIAL...................29

17.0     PARTICIPATION........................................................29
         17.1      Other Boeing Entities......................................29
         17.2      Boeing Subcontractors/Suppliers............................30
         17.3      Notification of Contract...................................30
         17.4      Notification of Price Reductions...........................30

18.0     INVENTORY AT CONTRACT COMPLETION.....................................30

19.0     OWNERSHIP OF INTELLECTUAL PROPERTY...................................31
         19.1      Technical Work Product.....................................31
         19.2      Inventions and Patents.....................................31
         19.3      Works of Authorship and Copyrights.........................31
         19.4      Pre-Existing Inventions and Works of Authorship............31
         19.5      Inapplicability............................................31

20.0     ADMINISTRATIVE AGREEMENTS............................................31

21.0     GUARANTEED WEIGHT REQUIREMENTS.......................................31

22.0     SELLER DATA REQUIREMENTS.............................................31

23.0     DEFERRED PAYMENT.....................................................31

24.0     SOFTWARE PROPRIETARY INFORMATION RIGHTS..............................32

25.0     CONFIGURATION CONTROL................................................32

26.0     INFRINGEMENT.........................................................32

27.0     RAW MATERIAL PROGRAM.................................................32
         27.1      Boeing Raw Material Strategy...............................32
         27.2      Casting and Forging Strategy...............................33

28.0     DIGITIZATION OF PROPRIETARY INFORMATION AND MATERIALS................33

29.0     INSURANCE FOR ON-SITE SUPPORT........................................33
         29.1      Indemnification Negligence of Seller or subcontractor......33
         29.2      Commercial General Liability...............................33
         29.3      Automobile Liability.......................................33
         29.4      Workers' Compensation......................................33
         29.5      Certificates of Insurance..................................33
         29.6      Self-Assumption............................................33
         29.7      Protection of Property.....................................33

30.0     BOEING TECHNICAL / MANUFACTURING ASSISTANCE REGARDING
         SELLER'S NONPERFORMANCE..............................................33

31.0     U. S. CUSTOMS INVOICE REQUIREMENTS...................................34
         31.1      U.S. Customs Requirements..................................34
         31.2      The Boeing Company Requirements............................34

32.0     STRATEGIC ALIGNMENT AND WORK MOVEMENT................................34

Signature Page

Attachment 1       Work Statement and Pricing
Attachment 1A      Continuous Cost Improvement Goals
Attachment 2       Non-U.S. Procurement Report
Attachment 3       Rates and Factors
Attachment 4       Boeing AOG Coverage
Attachment 5       Boeing AOG/Critical Shipping Notification
Attachment 6       Seller Data Requirements
Attachment 7       Supplier Data Requirements List Engineering/Customers
Attachment 8       Commodity Listing and Terms of Sale
Attachment 9       Cost and Performance Reviews
Attachment 10      Quality Assurance Requirements
Attachment 11      Second Tier Support

Attachment 12      Value Engineering Methodology

Attachment 13      SBP Exceptions


<PAGE>


                                   AMENDMENTS

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Amend           Description                              Date         Approval
Number
------------------------------------------------------------------------------







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<PAGE>

                           SPECIAL BUSINESS PROVISIONS


THESE SPECIAL BUSINESS  PROVISIONS (SBP) are entered into as of March 20th, 2003
by and between Leonard's Metals, Inc., a Missouri corporation with its principal
office in St. Charles,  Missouri ("Seller"),  and The Boeing Company, a Delaware
corporation  acting by and through its Boeing Commercial  Airplanes,  a Delaware
corporation.  Hereinafter,  the Seller and Boeing may be  referred to jointly as
"Parties" hereto.

Now,  therefore,  in consideration of the mutual covenants set forth herein, the
Parties agree as follows:


<PAGE>

                           SPECIAL BUSINESS PROVISIONS

1.0      DEFINITIONS

The definitions  used herein are the same as those used in the GTA. In addition,
the following terms are defined as follows:

     A.   "Drawing"  means an  automated  or manual  depiction  of  graphics  or
          technical  information  representing a Product or any part thereof and
          which includes the parts list and specifications relating thereto.

     B.   "End Item  Assembly"  means any Product which is described by a single
          part number and which is comprised of more than one component part.

     C.   "Shipset"  means the  total set of  Production  Articles  provided  by
          Seller  hereunder  necessary for production of one Program Airplane or
          Derivative.

     D.   "Spare  Parts" or "Spares"  means  Production  Articles or  components
          thereof,  and materials,  assemblies  and items of equipment  relating
          thereto, which are intended for Boeing's use or sale as spare parts or
          production  replacements.  The term "Spare Parts" includes, but is not
          limited to, Boeing Proprietary Spare Parts. 2.0 CONTRACT FORMATION

2.1      Order

Any Order to which these SBP shall apply shall incorporate this SBP by reference
in one or more of the following ways:

     A.   Include a statement substantially as follows:

          This Order is subject to and incorporates by this reference SBP

          POP-65344-0667  between The Boeing Company and Leonard's Metals,  Inc.
          dated March 20th, 2003.

     B.   List a number  assigned to represent  the SBP in the  "REFERENCE  P.O.
          NO." block of the Order,  or in a block with a similar  title.  Due to
          computer  programming  limitations,  different  divisions  may  assign
          different numbers to represent the same SBP.

     C.   Utilize the number  assigned to represent the SBP as the first portion
          of  the  Order  number,  followed  by a  dash,  followed  by a  unique
          identifier  for the Order.  For  example,  if  contract  MDC5002D  was
          assigned to represent a SBP, Orders issued under that SBP would have a
          number of 5002D-XXXXX.

Each Order incorporating this SBP by any method listed above will be governed by
and be deemed to include the provisions of this SBP.

2.2      Entire Agreement

The Order sets  forth the entire  agreement,  and  supersedes  any and all other
prior agreements  understandings  and  communications  between Boeing and Seller
related to the subject matter of an Order.  The rights and remedies  afforded to
Boeing or Customers  pursuant to any  provisions  of an Order are in addition to
any other rights and remedies afforded by any other provisions of this Order, by
law or otherwise.

2.3      Incorporated by Reference

General  Terms  Agreement  ("GTA")  BCA-65344-0596  dated March 20th,  2003 (the
"Agreement") is incorporated in and made a part of this SBP by this reference.

In addition to any other documents  incorporated elsewhere in this SBP or GTA by
reference,  the following  documents are incorporated in and made a part of this
SBP by reference with full force and effect, as if set out in full text.

     PUGET SOUND / WICHITA

     Boeing Document D33200-1 "Boeing Suppliers' Tooling Document"

     Boeing Document D953W001,  "General  Operations  Requirements  Document For
     Suppliers - External/internal Suppliers/Program Partners"

     Boeing Document D37520-1, -1A, -1B, Supplier's Part Protection Guides

     Boeing  Document  D6-81628,   "Shipping  Label,  Barcoded  Preparation  and
     Placement"

     Additional TULSA

     Form 49-5704,  Flysheet 5704 --  INSTRUCTIONS  FOR SHIPPING,  PACKAGING,  &
     MARKING, revised September 15, 1999.

     Form 49-5716,  IDENTIFICATION,  BOEING DETAIL PARTS OR ASSEMBLIES,  revised
     September 15, 1999.

2.4      Order of Precedence

In the event of a  conflict  or  inconsistency  between  any of the terms of the
following documents, the following order of precedence shall control:

     A.   These  Special  Business  Provisions  ("SBP")  including   attachments
          (excluding all documents listed below), then

     B.   General  Terms  Agreement  ("GTA")  (excluding  all  documents  listed
          elsewhere on this listing), then

     C.   Purchase Contract, if any, then

     D.   Order (excluding all documents listed elsewhere on this listing), then

     E.   The Design Change Transmittal, or the Flysheet 9, if any, then

     F.   The  Subcontracted  Parts - Revision,  Authorization,  and Transmittal
          ("SPRAT"), if any, then

     G.   Engineering Drawing by Part Number and, if applicable, related Outside
          Production,  Specification  Plan  (OPSP),  Specification  Plan  Detail
          (SPCD) or Supplier Specification Plan (SSP) then

     H.   All documents  incorporated  by reference in SBP Section 6.0,  Product
          Support and Assurance, of this SBP, then

     I.   Administrative Agreement, if any, then

     J.   Any other Boeing generated exhibits,  attachments,  forms,  flysheets,
          codes or documents  that the Parties  agree shall be part of this SBP,
          then lastly

     K.   Any Seller generated documents that the Parties agree shall be part of
          this SBP.

In resolving any such conflicts, these documents shall be read as a whole and in
a manner most likely to accomplish their purposes.

Seller shall promptly report to Boeing in writing any  inconsistencies  in these
documents, even if the inconsistency is resolvable using the above rules.

2.5      Survival

Without   limiting   any  other   survival   provision   contained   herein  and
notwithstanding any other provision of this SBP or the GTA to the contrary,  the
representations,  covenants, agreements and obligations of the Parties set forth
in GTA Section  12.3  "Termination  Claim",  GTA Section  16.0  "Termination  or
Wrongful  Cancellation",  GTA Section 18.0  "Responsibility  for Property",  GTA
Section 20.0 ` Proprietary  Information  and Items",  GTA Section 24.0 "Boeing's
Rights in Seller's Patents,  Copyrights, Trade Secrets and Tooling", GTA Section
27.0 "Property  Insurance",  GTA Section 29.0  "Non-Waiver/Partial  Invalidity",
this SBP Section 2.5 "Survival",  SBP Section 5.0 "Applicable  Law", SBP Section
29.0  "Insurance"(if   applicable),   and  SBP  Section  41.0  "Supplements  and
Modifications"(if  applicable),  shall survive any cancellation,  termination or
expiration  of  this  SBP,  any  assignment  of  this  SBP  or any  payment  and
performance  of any or all of the other  obligations  of the Parties  hereunder.
Termination  or  cancellation  of any part of this SBP shall not alter or affect
any part of this SBP, which has not been terminated or cancelled.

3.0      PERIOD OF PERFORMANCE AND PRICES

3.1      Performance

3.1.1    Period of Performance

Except as otherwise provided below, the period of performance for this SBP shall
be for delivery of Products beginning on January 1, 2004 and ending on December
31, 2006.

Except as otherwise stated in any applicable Administrative Agreement, for Tulsa
and Long  Beach  requirements,  period of  performance  set out  above  shall be
defined as order placement with potential delivery beyond December 31, 2006.

3.1.2    Option to Extend

     "SECTION DELELTED"

3.2      Pricing

3.2.1    Product Pricing

The prices of Products ordered under this SBP are set forth in SBP Attachment 1.
Prices are in United States Dollars. F.O.B. point is as follows: Seller's Plant,
for Puget Sound and  Wichita.  Destination,  for Tulsa,  OK.  (Melbourne,  Ark.,
McAlester, Texas).

3.2.2    Manufacturing Configuration

Unit pricing for each Product or part number shown in SBP  Attachment 1 is based
on the latest  revisions of the engineering  drawings or  specifications  at the
time of the signing of this SBP and any amendments thereof.

3.2.3    Packaging

The prices shown in SBP Attachment 1 include all packaging  costs.  Seller shall
package Product in accordance with the applicable  requirements set forth in the
documents  referred to in SBP Section 2.3 for the location issuing the Order. 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.  Upon  Boeing's  request,  Seller  will  provide
discreet packaging costs.

3.2.4    Local Transportation Devices

         Not Applicable

3.3      Subject Matter of Sale

Subject to the  provisions  of this SBP,  Seller shall sell to Boeing and Boeing
shall purchase from Seller certain Products as set forth in SBP Attachment 1.

4.0      GOVERNING QUALITY ASSURANCE REQUIREMENTS

In addition to those general  quality  assurance  requirements  set forth in the
GTA,  the  work  performed  under  this  SBP  shall  be in  accordance  with the
requirements set forth in SBP Attachment 10.

5.0      APPLICABLE LAW

This  contract  shall be  governed  by the laws of the State of  Washington.  No
consideration  shall  be given  to  Washington's  conflict  of law  rules.  This
contract  excludes the  application  of the 1980 United  Nations  Convention  on
Contracts  for  the  International  Sale of  Goods.  Seller  hereby  irrevocably
consents to and submits itself exclusively to the jurisdiction of the applicable
courts of King County  Washington and the federal courts of Washington State 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 SUPPORT AND ASSURANCE

6.1      Warranty

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, including documents, if any, set
forth below are incorporated herein and made a part hereof:

"Boeing  Designed,   Sub-Contracted   Products  Manufacturers  Warranty"  Boeing
Document M6-1124-3,

Boeing may choose  initially not to extend the Seller's full warranty of Product
to Customers.  This action shall in no way relieve  Seller of any obligation set
forth in the warranty  documents listed above.  Boeing,  at its sole discretion,
may extend  Seller's  full  warranty  of Product to its  Customers  at any time.
Furthermore,  Seller agrees to support the Product as long as any aircraft using
or supported by the Product remains in service.

7.0      PAYMENT

7.1      Recurring Price

Unless  otherwise  provided  under the  applicable  Order or  written  agreement
between the Parties, payment shall be (net) thirty (30) calendar days.

Except as otherwise  provided on applicable Order identifying  Pay-From Receipt,
payment due dates,  including  discount periods,  shall be computed from (a) the
date of receipt of the  Product,  (b) the date of receipt of a correct  (proper)
invoice or (c) the scheduled  delivery date of such Product,  whichever is last.
Unless  freight and other charges are itemized,  any discount  shall be taken on
the full amount of the  invoice.  All  payments  are subject to  adjustment  for
shortages, credits and rejections.

7.2      Nonrecurring Price/Special Charges

Unless  otherwise  provided in the  applicable  Order,  any  Nonrecurring  price
payable by Boeing under SBP  Attachment 1 will 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  and  where  required,  a
completed certified tool list (CTL).

7.3      Payment Method

All  payments  hereunder  shall be made by check  payable to the order of Seller
deposited  in  the  U.S.  postal  system  via  first-class  mail  to an  address
designated in writing by Seller.

8.0      SCHEDULE ACCELERATION/DECELERATION

Notwithstanding GTA Section 10.0, Boeing may revise the delivery schedule and/or
firing order 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

For all matters requiring 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 Procurement Representative. Notices and other communications
shall be given in writing by personal  delivery,  United  States  mail,  express
delivery,  facsimile,  or electronic  transmission  addressed to the  respective
party as follows:

       To Boeing:  Attention:  Peggy McDonald     Mail Code: 5X-65
                   BOEING COMMERCIAL AIRPLANES
                   SUPPLY MANAGEMENT AND PROCUREMENT DIVISION
                   P.O. Box 3707
                   Seattle, Washington 98124-2207

        To Seller: Attention: Rick Darrow
                   Leonard's Metals, Inc.
                   3600 Mueller Road
                   St. Charles, MO 63301

10.0     OBLIGATION TO PURCHASE AND SELL

Boeing and Seller agree that in  consideration of the prices set forth under SBP
Attachment 1, Boeing shall issue Orders for Products from time to time to Seller
for  all of  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 specifies 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.

F.   Boeing  gives at least six (6) months  notice to Seller that the Product is
     used in the  manufacturing  of an  airplane  component,  assembly  or other
     product  previously  manufactured  in-house by Boeing and which  component,
     assembly or other product Boeing has resourced to a third party supplier.

For purposes of this SBP Section 10.0, Boeing is defined as those organizations,
divisions, groups or entities set forth specifically in SBP Attachment 1.

Seller  represents and warrants to Boeing that discounts  offered fairly reflect
manufacturing,  selling,  or delivery cost savings  resulting from this quantity
sale and that such discounts are reasonably available to all other purchasers.

11.0     COST AND PERFORMANCE VISIBILITY

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 cost reduction initiatives as set forth in SBP Section 12.6.

The Cost and Performance  Review (CPR) process is the preferred tool,  which the
Parties will use to measure Seller's  performance to the goals and objectives of
Boeing as set forth in SBP Section  12.6.  Boeing and Seller  shall  implement a
structured  process  called  CPR to review and  identify  areas,  processes  and
strategies  to  improve,  reduce or  eliminate  which will result in the desired
effect of reducing  costs and/or  improving  cycle times for the  Product(s) set
forth in this SBP. The CPR process will address  those  activities,  which are a
direct result of both parties involvement. Seller will provide the resources and
data  sufficient to support the CPR process in accordance with the structure set
forth in SBP Attachment 9.

12.0     CHANGE PROVISIONS

12.1     Reserved

12.2     Computation of Equitable Adjustment

The Rates and Factors set forth in SBP  Attachment 3, which by this reference is
incorporated  herein,  shall be used to determine the equitable  adjustment,  if
any, (including equitable  adjustments,  if any, in the prices of Products to be
incorporated in Derivative Aircraft),  to be paid by Boeing pursuant GTA Section
10.0 for each individual change.

12.3     Obsolescence

Seller may not submit a claim for obsolete material or Product resulting from an
individual change order that has a total claim value of One Thousand Dollars
$2500.00 or less.

12.4     Change Absorption (Nonrecurring/Recurring)


12.4.1   Prior to 100% Engineering Release (Drawing Revision Level New)

Notwithstanding  the provisions of GTA Section 10.0, no equitable  adjustment in
the prices or schedules  of any Order shall be made for any change  initiated by
Boeing made prior to the date on which all engineering  drawings that change the
technical requirements, descriptions, specifications, statement of work, drawing
or  designs  ("Technical   Change(s)")  have  been  released  by  Boeing  ("100%
Engineering  Release") provided,  however, that an equitable adjustment shall be
made for:

A.   Any Technical Change which is a change between raw material classifications
     such as a change  from  aluminum  to  steel or  titanium  to  plastic.  Not
     included as a Technical Change for purposes of this SBP Section are changes
     within a raw material classification such as a change from 7050 Aluminum to
     7075 Aluminum;

B.   Any  Technical  Change,  which  adds or  deletes  a  process  specification
     including  but not  limited to chem  milling,  chrome  plating,  anodizing,
     painting, priming and heat-treating.

Claims for  equitable  adjustment  for  Technical  Changes shall be submitted in
writing within thirty (30) days after 100% Engineering Release.

12.4.2   Subsequent to 100% Engineering Release

Notwithstanding  the  provisions of GTA Section  10.0,  no equitable  adjustment
shall be made to the  recurring  or  Nonrecurring  prices after the date of 100%
Engineering  Release for any change initiated by Boeing unless the value of such
change  (debit or credit) is greater  than or equal to two  percent  (2%) of the
then current unit price for the Product  (recurring) or is greater than or equal
to two percent (2%) of the total then current nonrecurring price as set forth in
SBP  Attachment 1. For purposes of this SBP Section 12.4,  the then current unit
price  or  total  nonrecurring  price  shall  be  the  price  identified  in SBP
Attachment  1 plus any and all price  adjustments  agreed to  previously  by the
Parties.

Claims shall be made  individually  for each  Product and for each change.  Each
claim shall be considered  separately  for  application  of the two percent (2%)
threshold.  Changes may not be combined for the  purposes of  exceeding  the two
percent (2%) threshold set forth herein.

12.5     Planning Schedule

Any planning  schedule,  forecast,  or any such  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.  Unless  otherwise  set forth in the
Administrative  Agreement as  applicable,  any such estimate shall be subject to
adjustment from time to time, and such adjustment  shall not constitute a change
under GTA Section 10.0 nor a termination under GTA Section 12.0.

12.6     Total Cost Management System

The Total Cost Management System (TCMS) is Boeing's  overarching cost management
strategy and visibility  tool  incorporating  internal and external  supply base
cost management  activities such as CCIP, Lean manufacturing,  Value Engineering
Innovation and Raw Material Strategies.  Seller will prepare a TCMS support plan
addressing all applicable  strategies.  The plan will include strategy  specific
method of support, internal implementation,  flow down to sub-tier suppliers, if
applicable,  and a yearly  update  schedule.  Seller shall submit a TCMS support
plan to the appropriate Boeing Procurement  Representative  within six (6) weeks
of new or follow-on contract award.

12.6.1   Continuous Cost Improvement Process

The timely implementation of the Continuous Cost Improvement Process (CCIP) is a
material  duty of the Seller.  The CCIP is an ongoing,  year-after-year  plan to
achieve cost  reductions.  The goal is to work together to reduce costs in order
to reduce  Product  unit prices in the manner set forth in SBP  Section  12.6.2,
while maintaining or improving margins, profits, and quality levels, and meeting
schedule and other  contractual  requirements.  The  implementation  of the CCIP
requires  establishing  cost improvement  targets,  developing and agreeing on a
cost improvement plan,  implementation of the plan by the Seller, regular review
and status reporting with the Procurement  Representative,  appropriate  support
from the Procurement Representative,  and corrective action as necessary to meet
the cost improvement targets.

Boeing may assist Seller in areas such as Lean  Manufacturing,  Advanced Quality
System,  Accelerated  Improvement  Workshop (AIW), Value Engineering,  packaging
cost reduction activities,  and other initiatives.  Seller is not limited to the
Boeing  initiatives  and may  implement  any  improvement  consistent  with  the
requirements of this SBP.

Boeing and Seller agree to  establish  CCIP target cost  reductions  in order to
reduce  Product unit prices in the manner set forth in SBP Section  12.6.2,  and
delivery and quality  performance goals, on or before January 1 of each year for
the period of  performance of this SBP. Said target price  reductions;  delivery
and quality performance goals shall be set out in SBP Attachment 1A, "Continuous
Cost Improvement Goals".

12.6.2   Continuous Improvement Initiatives

Boeing and Seller  agree to work  together  to identify  continuous  improvement
initiatives which:

A.   Decrease Seller's costs by affecting the manufacturing and assembly process
     at Seller's facilities and Seller's subcontractor facilities;

B.   Reduce Boeing's product weight without impairing any essential functions or
     characteristics of the product;

C.   Produce a net reduction in the cost to Boeing of  installation,  operation,
     maintenance  or production of the Product;  and/or  improve  producibility,
     reliability, expected life, or maintainability of the Product.

Proposed changes shall not impair any essential  functions or characteristics of
the Products or Tooling.

12.6.2.1   Submission of Cost Reduction Proposal

Proposals  shall be submitted  to Boeing's  Procurement  Representative.  Boeing
shall not be liable for any delay in acting upon a proposal.  Boeing's  decision
to accept,  postpone, or reject any proposal shall be final. If there is a delay
and the net result in savings no longer  justifies  the  investment,  Boeing and
Seller will not be  obligated  to proceed  with the  initiative.  Seller has the
right to  withdraw,  in whole or in part,  any  proposal  not accepted by Boeing
within the time period specified in Seller's 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 advantage 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.   An implementation schedule, including need dates for any Boeing actions and
     the time by which a proposal  must be  approved so as to obtain the maximum
     cost reduction.

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.

12.6.2.2   Acceptance and Cost Sharing

Boeing may accept,  in whole or in part, any continuous  improvement  initiative
proposal by issuing a change  order.  Until such change has been issued,  Boeing
and Seller shall remain  obligated to perform in  accordance  with the terms and
requirements   of  the  Order.   Where  Boeing  and  Seller  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. Where a saving is identified
and  documented,  the  Parties  agree to reduce the Product  unit price.  Seller
suggestions  disapproved by Boeing may be given due consideration in achievement
of cost reduction goals.

12.6.3   Boeing Generated Technical and Cost Improvements

At any time during the  Seller's  performance  under this SBP,  Boeing may offer
specific recommendations to Seller for the incorporation of new technologies and
process  improvements  intended  to reduce  Seller's  costs or  improve  product
performance.  These  recommendations may include, but are not limited to, Boeing
proprietary  information  and Boeing  owned  patents.  Upon  receipt of any such
recommendation,  Seller shall provide a price reduction proposal to Boeing. Upon
Boeing's  agreement with the price proposal,  Seller shall implement the change.
Boeing  shall be  entitled  to * % of the price  reduction  and Seller  shall be
entitled to * % and the Shipset  price shall be adjusted  accordingly  for those
shipsets affected by the change.

*    The text noted by asterisks has been redacted in connection  with a request
     to the Securities and Exchange  Commission  for  confidential  treatment of
     such text. A copy of this Agreement including the redacted  information has
     been submitted to the  Securities  and Exchange  Commission as part of such
     request.

12.6.4   Value Engineering

From time to time Seller may submit to Boeing  proposals  for Value  Engineering
changes.  Boeing  and  Seller  will  define  and agree to (i) the  Project  work
statement,  (ii) the value of Recurring savings per Shipset to be shared,  (iii)
the negotiated  division of the savings between Boeing and Seller,  and (iv) the
first affected unit.  Each party will bear their own  Nonrecurring  investments.
All implemented  price  reductions carry from the first affected unit to the end
of the SBP.

Boeing reserves the right to not incorporate any Value Engineering  concept that
is not in Boeing's or  Customers'  best  interests.  This  includes,  but is not
limited  to, any  proposed  change  that  adversely  affects  Boeing's  internal
assembly  processes,   marketing  capabilities,   certification  processes,  and
interface capabilities with other supplier's hardware.

12.6.5   Lean Manufacturing

Upon Statement of Work (SOW) issuance and prior to commencement of production
planning, Seller's executive management will;

A.   Host  a  Boeing  Lean  Supplier  Development  Specialist  (SDS)  visit  and
     participate in a facility-wide Lean Diagnostic if not previously  conducted
     by Boeing and host  follow-on  visits as  specified  by the Subject  Matter
     Expert (SME).

B.   Use their best efforts to implement the SDS's recommendations, particularly
     those tied directly to or in support of 7X7-X production

C.   Provide a Lean  Manufacturing  Implementation  Plan or  modification  to an
     existing  plan that is  inclusive of all Boeing work and contains a section
     specific to 7X7-X. The 7X7-X section must demonstrate incorporation of Lean
     Manufacturing concepts within the following  part/assembly  development and
     implementation phases;

     1.   Part/Assembly  design (if Seller  has Design  Delegation  Level 4 or 5
          responsibility)

     2.   Tooling design

     3.   Production  process  setup  (door to door)  The  non-program  specific
          (company-wide) portion of the plan must address Lean deployment to;

          a.   Recurring training

          b.   Sub tier interface

          c.   Delivery to Boeing

          d.   Manufacturing support organizations (Enterprise Lean)

The Seller Lean Implementation  plan must be reviewed and determined  acceptable
by the SDS and Boeing Procurement Team within a jointly agreed schedule.  Within
one year of  commencement  of  production,  Boeing and  Seller  agree to use the
following  metrics to establish an enterprise level baseline followed by monthly
measurements  to evaluate Lean driven cost  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 SBP price,  the parties will  determine the amount of savings,
which will result from the improvements  and share the savings.  Where a savings
is identified and documented, the parties agree to reduce the recurring price by
that amount determined by the Parties.

12.7     Reduction in Quantity to be Delivered

     "NOT APPLICABLE"

12.8     Critical Manufacturing Reorder Lead-Time

Critical  Manufacturing  Reorder  Lead-time  (CMROLT) shall be identified in SBP
Attachment 1 by part number for the items listed herein. As defined in this SBP,
Critical  Manufacturing  Reorder  Lead-time  shall  include  administrative  and
manufacturing  (including queue,  setup, run and move) lead times. CMROLT is the
minimum  number of  manufacturing  days prior to  delivery  date that Boeing can
issue a purchase order release for a line delivery  quantity  against a Purchase
Contract.

The CMROLT defined  herein shall be fixed and guaranteed by the Seller,  and may
only be revised upon written notice to the Boeing Procurement Representative.

Seller  shall not  manufacture  or  fabricate  items in  advance  of the  CMROLT
required  to  comply  with the  delivery  schedule  of any  subsequent  Purchase
Order(s).  Notwithstanding  any  other  provision  of this  SBP,  Seller  is not
entitled to any  equitable  adjustment  or other  modification  of any  Purchase
Order(s) for any  manufacture,  fabrication  or  procurement  of products not in
conformity  with the  requirement  of this SBP without first  obtaining  written
consent of the Boeing Procurement  Representative.  Nothing in this Clause shall
be construed as relieving Seller of any of its obligations under this SBP or any
subsequent Purchase Contract(s) and/or Order(s).

12.9     Derivative Aircraft

Boeing  may,  but is not  obligated  to direct  Seller  within  the scope of the
applicable  Order and in accordance  with the  provisions of GTA Section 10.0 to
supply  Boeing's   requirements  for  Products  for  Derivative  aircraft  which
correspond to those Products being  produced  under the  applicable  Order.  For
purposes  of this SBP  Section,  Derivative  Aircraft  means any model  airplane
designated  by Boeing as a derivative of an existing  model  airplane and which:
(1) has the same number of engines as the existing model airplane;  (2) utilizes
essentially  the  same  aerodynamic  and  propulsion   design,   major  assembly
components,  and systems as the existing  model  airplane;  (3)  achieves  other
payload/range  combinations  by  changes  in  body  length,  engine  thrust,  or
variations in certified gross weight; (4) has the same body cross-section as the
subject  model  aircraft;  and (5) is  designated  as a Derivative to the FAA by
Boeing. A Derivative does not include any subject model aircraft, which has been
or was  currently in  production  as of the date of execution of the  applicable
SBP.  Furthermore,  Boeing reserves the right to extend application of the above
Products and prices to other aircraft models as required.

13.0     SPARES AND OTHER PRICING

13.1     Spares

For purposes of this SBP Section,  the following  requirements  and  definitions
shall apply:

A.   AIRCRAFT ON GROUND (AOG) - means the highest Spares  priority.  Seller will
     expend best efforts to provide the earliest  possible shipment 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 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  shipment 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 of any such  Critical  Spare within
     the same working day of receipt of a Critical  Spare  request.

C.   EXPEDITE  (CLASS I) - means a Spare  required in less than Seller's  normal
     lead-time.  Seller will expend best efforts to meet the requested  shipment
     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 lead-time.

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 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
     of any such POA within two (2) hours of a POA 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 at the time of the Order.

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 part using Boeing's Proprietary Materials.

13.1.1   Spares Support

Seller  shall  provide  Boeing with a written  Spares  support  plan  describing
Seller's process for supporting AOG and Critical  commitments and  manufacturing
support.  The plan must provide Boeing with the name and number of a twenty-four
(24) hour contact for coordination of AOG, Critical  requirements.  Such contact
shall be  equivalent  to the  coverage  provided by Boeing to its  Customers  as
outlined in SBP Attachment 4 "Boeing AOG Coverage".

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  SBP  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  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.

13.1.3   Spare Pricing

*


*    The text noted by asterisks has been redacted in connection  with a request
     to the Securities and Exchange  Commission  for  confidential  treatment of
     such text. A copy of this Agreement including the redacted  information has
     been submitted to the  Securities  and Exchange  Commission as part of such
     request.

13.1.3.1   Aircraft On Ground (AOG), Critical Spares and POA Requirement

The price for AOG and Critical  Spares and POA  requirements  shall be the price
for such  Products  listed on SBP  Attachment  1 in effect  when such Spares are
ordered multiplied by a factor not to exceed *.

*    The text noted by asterisks has been redacted in connection  with a request
     to the Securities and Exchange  Commission  for  confidential  treatment of
     such text. A copy of this Agreement including the redacted  information has
     been submitted to the  Securities  and Exchange  Commission as part of such
     request.

13.1.3.2   Expedite Spare (Class 1)

The price for Expedite Spares shall be the price for such Products listed on SBP
Attachment 1 in effect when such Spares are ordered  multiplied  by a factor not
to exceed *.

*    The text noted by asterisks has been redacted in connection  with a request
     to the Securities and Exchange  Commission  for  confidential  treatment of
     such text. A copy of this Agreement including the redacted  information has
     been submitted to the  Securities  and Exchange  Commission as part of such
     request.

13.1.4   Spares 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).  If Boeing  directs
delivery of Spares to a place other than the F.O.B.  point as  designated in SBP
Section 3.2.1,  Boeing shall reimburse  Seller for shipping  charges,  including
insurance,  paid by Seller  from the plant to the  designated  place of delivery
which exceed the cost of shipping to the F.O.B.  point.  Such  charges  shall be
shown separately on all invoices.

13.2     Expedite of Production Requirements

Any expedite charges to be paid for short flow production  requirements shall be
pre-approved  by the  Procurement  Representative.  Seller shall provide data to
verify  expedite  charges.  If Seller  fails to meet their  committed  delivery,
Boeing shall not be obligated to pay the agreed upon amount.

13.3     Tooling

13.3.1   Responsible Party

Seller  shall  absorb the first $ * of cost for Puget  Sound and $ * of cost for
Tulsa/Wichita  for  each  individual   occurrence  associated  with  all  Boeing
furnished tooling,  supplier  manufactured  tooling, and non-acountable  tooling
required for the manufacture and delivery of products  including but not limited
to rework,  repair,  replacement  and  maintenance of the tooling (after initial
review and repair of Boeing furnished tools to bring them to acceptable levels).
Programming  when required will be reviewed on an individual case by case basis.
Repair of tooling damaged by seller through misuse or poor  workmanship  will be
the  responsibility  of the Seller.  If the tool assertions are greater than $ *
for Puget Sound or $ * for Tulsa/Wichita, seller can submit a detailed assertion
to procurement agent for consideration.  Engineering changes that cause any tool
rework will be handled  with  detailed  assertion to the  procurement  agent for
their approval.  Seller shall not use tools, which contain,  convey,  embody, or
were made in accordance with or by reference to any Proprietary  Information and
Materials of Boeing,  to manufacture  parts for anyone other than Boeing without
the prior written authorization of Boeing.

Puget Sound Example:

Tool rework cost is $ *. Cost will be at seller's expense.

Tool rework cost is $ *.  Cost will be at buyer's expense total $ *.

Tulsa/Wichita Example:

Tool rework cost is $ *. Cost will be at seller's expense.

Tool rework cost is $ *. Cost will be at buyer's expense total $ *.

*    The text noted by asterisks has been redacted in connection  with a request
     to the Securities and Exchange  Commission  for  confidential  treatment of
     such text. A copy of this Agreement including the redacted  information has
     been submitted to the  Securities  and Exchange  Commission as part of such
     request.


When Boeing agrees to pay for Tooling to support the manufacture and delivery of
applicable  Product(s)  identified  herein, the amount shall be set forth in SBP
Attachment 1. The costs of necessary  repair and  maintenance  to the Tooling is
included  in such  amount.  In  addition  to the  requirements  set forth in SBP
Section 7.2, the Seller shall comply with the applicable Terms and Conditions as
set forth in SBP Section 2.3 for the Boeing location issuing the Order. Invoices
received with incorrect,  improperly prepared or incomplete certified tool lists
will be  returned  for  correction  prior to  payment.  Invoices  shall be dated
concurrent  with,  or  subsequent  to,  shipment  of the  Products.  No  repair,
replacement,  maintenance  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.

13.3.2   Boeing Furnished Tooling

In the event Boeing  furnishes  Tooling to Seller,  Seller shall comply with the
applicable  Terms and  Conditions as set forth in SBP Section 2.3 for the Boeing
location furnishing the Tooling. No repair,  replacement,  maintenance 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.

13.3.3   Additional Tooling Requirement

Upon expiration, termination or cancellation of this SBP or any Product included
herein  and for up to one year  thereafter,  Seller  shall at no cost to Boeing,
prepare and package for shipment any and all Tooling in the  possession or under
the effective  control of Seller or any of its  Subcontractors  associated  with
this SBP or the  applicable  Product within 30 days of receipt of written notice
from  Boeing.  Included  as part of this  preparation  would be the  transfer of
title, where applicable,  of such Tooling free and clear of all liens, claims or
other rights of Seller or any third party.  Where the parties determine that the
hours  associated  with the  transfer of tools are  excessive,  the parties will
negotiate a fee to be paid for the preparation and packaging costs.

Seller hereby authorizes Boeing or its representatives to enter upon its, or any
of Seller's  Subcontractors,  premises at any time during regular business hours
upon one (1) day's advance  written  notice,  for the limited  purpose of taking
physical  possession  of any or all of the  aforesaid  items.  At the request of
Boeing,  Seller shall promptly  provide to Boeing a detailed list of such items,
including the location thereof, and shall catalog, crate, package, mark and ship
such items  expeditiously  and in an orderly  manner and otherwise in the manner
requested by Boeing,  which request may specify incremental or priority shipping
of certain items. Seller shall, if instructed by Boeing, store or dispose of any
or all of the aforesaid items in any reasonable manner requested by Boeing.

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 SBP Attachment
1.

13.5     Pricing of Requirements for Modification or Retrofit

13.5.1   Boeing Responsibility or Regulatory Requirement

Any Products  required by Boeing to support a modification  or retrofit  program
which  results from a regulatory  requirement  or which Boeing may be liable for
the cost associated with such program shall be provided to Boeing at a price not
more than the applicable price as set forth in SBP Attachment 1.

13.5.2   Contract Aftermarket Modification or Retrofit Work Performed by Boeing

Any Products  required by Boeing to support  modification or retrofit  programs,
which Boeing  performs under  contract,  shall be provided for not more than the
applicable price as set forth in SBP Attachment 1.

13.6     Pricing of Similar Products

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

14.1     General Reports / Reviews

When requested by Boeing, Seller shall update and submit, as a minimum,  monthly
status reports or data requested by Boeing using a method  mutually  agreed upon
by Boeing and Seller.  Boeing has the right to impose more frequent reporting on
Seller to achieve program objectives.

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).

Program  reviews  will be held at Seller's  facility or Boeing's  facilities  as
requested  by Boeing.  The topics of these  reviews may include raw material and
component part status, manufacturing status, production status, Seller's current
and future capacity assessments, Boeing supplied components, inventory, Boeing's
requirements,   changes,  forecasts  and  other  issues  pertinent  to  Seller's
performance  under  this  SBP.  Reviews  will  allow  formal  presentations  and
discussion of status reports as set forth above.

Formal  management  reviews shall be held  periodically  by Boeing and Seller to
evaluate total cost performance  (including overhead,  man-hours (production and
support)).  During these  reviews,  Seller shall present and provide actual cost
performance data with respect to this SBP.

14.2     Diversity Reporting Format

Seller shall report to Boeing on a quarterly  basis,  starting  from the date of
this  SBP  award,  all  payments  to  small  businesses,   small   disadvantaged
business/minority   business   enterprises,   women-owned   small  business  and
historically  black  colleges  and  universities  and minority  institutions  in
dollars  and as a  percentage  of the  contract  price  paid to  Seller to date,
proving  the  information  shown  on  the  Second  Tier  Report  located  in SBP
Attachment 11.

14.3     Program Manager

     "NOT APPLICABLE"

14.4     Certified Tool List

If applicable,  Seller shall provide a Certified  Tool List for all  accountable
tools thirty (30) days after  delievery of the first  production unit to Boeing,
in  accordance  with SBP Section  2.3.  Subsequent  to  submittal of the initial
Certified  Tool List,  Seller shall  provide  Certified  Tool Lists for any new,
reworked or re-identified  tools, thirty (30) days after completion of the first
affected  production  part. All tooling  manufactured and acquired by Seller for
use in  performance  of the  Program  shall be in  accordance  with all  tooling
requirements specified in SBP Section 2.3.

14.5     Problem Reports

Seller  shall   provide  a  detailed   report,   notifying   Boeing  of  program
problems/issues  that could impact Seller's  ability to deliver Products on time
and otherwise in conformance with the terms of the GTA and SBP. The report shall
contain a detailed description of the problem, impact on the program or affected
tasks, and corrective/remedial action, with a recovery schedule.  Submittal of a
report in no way relieves  Seller of any  obligations  under the GTA and SBP nor
does it  constitute  a waiver of any  rights and  remedies  Boeing may have with
respect to any default.

Problem  reports  shall be  submitted to the Boeing  Procurement  Representative
within  twenty-four (24) hours of known problem to Seller.  Where problems arise
prior to a normal  status  reporting  date,  Seller  shall  report  said  events
immediately  or within 24  hours.  Status  reports  shall  include,  but are not
limited to, the following topics:

A.   Delivery schedule updates, schedule impact issues and corrective action;

B.   Technical/manufacturing   progress   since  the  previous   report  period,
     including   significant   accomplishments,   breakthroughs,   problems  and
     solutions;

C.   Identification of changes to key manpower or staffing levels;

D.   Identification of the critical  events/activities  expected within the next
     month and a discussion of potential risk factors;

E.   Progress on open Action Items, including closure dates;

F.   Purchased components and raw material status;

G.   Identification of Quality issues and resolutions;

H.   Manufacturing and Quality inspection progress of First Article products;

I.   Status on tool design and fabrication, as applicable, until completion;

J.   Inventory   status  of  castings  and  forgings   procured  by  Seller  (if
     applicable).

14.5     Order Readiness Matrix (ORM)

     NOT APPLICABLE

15.0     INTERNATIONAL COOPERATION

15.1     Market Access and Sales Support

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 countries where Seller may subcontract
in support of Boeing's market access and international  business strategy.  With
respect to work covered by this SBP, and if directed by Boeing, Seller agrees to
procure from subcontractors, in countries selected by Boeing, goods and services
with a value to be determined  by Boeing after  coordination  with Seller.  Such
direction may occur at any time during the performance of this SBP. Although not
required to do so,  Seller may satisfy such  obligation  through  purchases  not
related to this SBP. If Seller is directed by Boeing to subcontract  any part of
its Product(s)  and Seller  anticipates an increase or decrease to the price for
such Product(s) as a result of such direction,  Seller shall immediately  notify
Boeing in  writing.  Boeing  shall  respond  within  thirty (30) days on whether
Seller is to proceed.

15.2     Offset Assistance

Seller shall use its best  reasonable  efforts to  cooperate  with Boeing in the
fulfillment of any non-United  States offset program  obligation that Boeing may
have accepted as a condition of the sale of a Boeing product.  In the event that
Seller  is  either  directed  by  Boeing,  or on its own  solicits  bids  and/or
proposals  for, or procures or offers to procure any goods or services  relating
to the work  covered by this SBP from any source  outside of the United  States,
Boeing shall be entitled,  to the  exclusion  of all others,  to all  industrial
benefits and other  "offset"  credits which may result from such  solicitations,
procurements  or offers to procure.  Seller  shall take any actions  that may be
required on its part to assure that Boeing receives such credits. . Seller shall
document on SBP 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 SBP 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.  If Seller is directed by Boeing
to  subcontract  any part of its  Product(s) to a country in which Boeing has an
offset  obligation,  an equitable price  adjustment,  increase or decrease,  for
Seller's costs and expenses will be considered by Boeing.

15.3     Credit Against Aircraft Sales

     NOT APPLICABLE

16.0     BOEING FURNISHED MATERIAL/SUPPLIER BANKED MATERIAL

     NOT APPLICABLE

17.0     PARTICIPATION

17.1     Other Boeing Entities

Seller agrees that any Boeing division or Boeing  subsidiary  ("Boeing  Entity")
not  specifically  included in this SBP may, by issuing a purchase  order,  work
order,  or other release  document,  place orders under this SBP during the term
hereof or any written extension thereof, under the terms, conditions and pricing
specified  by this SBP.  Seller  agrees that the prices set forth  herein may be
disclosed by Boeing on a confidential basis to Boeing entities wishing to invoke
this SBP Section 17.1. Seller shall notify the Boeing Procurement Representative
named in SBP Section 9.0 of Boeing Entities not specifically  referenced  herein
who frequently use this SBP.

17.2     Boeing Subcontractors/Suppliers

Seller agrees that any  subcontractor  or supplier  (hereinafter  referred to as
"Boeing Subcontractor")  performing work for a Boeing Entity,  including but not
limited to  inventory  management,  may issue an order or  contract  with Seller
independent  of this SBP.  Seller  agrees to sell Products or support a schedule
and or a  quantity  change  to  such  Boeing  Subcontractor  for  its use in its
contracts with Boeing at the prices set forth herein or at a price that reflects
the  pricing  methodology  used under this SBP.  Boeing  assumes no  obligation,
including payment obligation,  with respect to such independent contract. Seller
agrees  that the  prices  set  forth  herein  may be  disclosed  by  Boeing on a
confidential  basis to any  Boeing  Subcontractor  wishing  to  invoke  this SBP
Section  17.2.   Seller  may  request  written   verification  from  the  Boeing
Subcontractor  that the Products  ordered  pursuant to the authority of this SBP
support  Boeing  requirements.  Seller  shall  periodically  inform  the  Boeing
Procurement  Representative  of each such request  invoking  this  participation
right.

17.3     Notification of Contract

In the  event a  purchaser  known by  Seller  to be a Boeing  Entity  or  Boeing
Subcontractor  places an order for supplies or services  covered by this SBP but
fails to reference  this SBP or otherwise  seek the prices  established  by this
SBP,  Seller  shall notify such  purchaser of the  existence of this SBP and the
prices established hereunder and shall offer such prices to such purchaser.

17.4     Notification of Price Reductions

If Seller is awarded an additional order or contract by another Boeing Entity
that results in any price less than that established under this SBP, Seller
agrees to notify the Boeing Procurement Representative immediately of said price
reductions and shall extend all such price reductions to this SBP.

18.0     INVENTORY AT CONTRACT COMPLETION

Subsequent to Seller's  last delivery of  Product(s),  Products  which  contain,
convey,  embody or were  manufactured  in  accordance  with or by  reference  to
Boeing's  Proprietary  Materials  including  but not limited to finished  goods,
work-in-process  and  detail  components  (hereafter  "Inventory")  which are in
excess of Order quantity shall be made available to Boeing for purchase.  In the
event  Boeing,  in its sole  discretion,  elects not to purchase the  Inventory,
Seller may scrap the Inventory.  Prior to scrapping the Inventory,  Seller shall
mutilate or render it unusable. Seller shall maintain, pursuant to their quality
assurance system,  records certifying  destruction of the applicable  Inventory.
Said certification shall state the method and date of mutilation and destruction
of the subject Inventory.  Boeing or applicable  regulatory  agencies shall have
the right to review and inspect these records at any time it deems necessary. In
the event  Seller  elects to  maintain  the  Inventory,  Seller  shall  maintain
accountability  for the  inventory  and  Seller  shall not sell or  provide  the
Inventory to any third party without prior specific written  authorization  from
Boeing. Failure to comply with these requirements shall be a material breach and
grounds for default  pursuant to GTA Section  13.0.  Nothing in this SBP Section
18.0  prohibits  Seller from making legal sales directly to the United States of
America Government.

19.0     OWNERSHIP OF INTELLECTUAL PROPERTY

19.1     Technical Work Product

All technical work product,  including, but not limited to, ideas,  information,
data, documents,  drawings,  software,  software documentation,  software tools,
designs,  specifications,  and processes produced by or for Seller, either alone
or with others,  in the course of or as a result of any work performed by or for
Seller which is covered by this SBP will be the exclusive property of Boeing and
be delivered to Boeing promptly upon request.

19.2     Inventions and Patents

     NOT APPLICABLE

19.3     Works of Authorship and Copyrights

     NOT APPLICABLE

19.3     Pre-Existing Inventions and Works of Authorship

     NOT APPLICABLE

19.4     Inapplicability

     NOT APPLCABLE

20.0     ADMINISTRATIVE AGREEMENTS

     Administrative   Agreements  are  used  for   administrative   matters  not
     specifically  addressed elsewhere and set forth-certain  obligations of the
     Parties relating to the  administration  of each Order. The  Administrative
     Agreements, if any, are identified and incorporated in SBP Section 2.3.

21.0     GUARANTEED WEIGHT REQUIREMENTS

         NOT APPLICALBE

22.0     SELLER DATA REQUIREMENTS

     NOT APPLICABLE

23.0     DEFERRED PAYMENT

     NOT APPLICABLE

24.0     SOFTWARE PROPRIETARY INFORMATION RIGHTS

     NOT APPLICABLE

25.0     CONFIGURATION CONTROL

     NOT APPLICABLE

26.0     INFRINGEMENT

Seller will indemnify,  defend,  and hold harmless Boeing and its Customers from
all claims, suits, actions, awards (including,  but not limited to, awards based
on intentional  infringement of patents known 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
Products by either Boeing or its  Customers.  Boeing  and/or its Customers  will
duly notify  Seller of any such claim,  suit or action;  and Seller will, at its
own expense,  fully defend such claim, suit or action on behalf of Boeing and/or
its Customers.  Seller shall have no obligation under this SBP Section 26.0 with
regard to any  infringement  arising from: (i) Seller's  compliance  with formal
specifications  issued by Boeing  where  infringement  could not be  avoided  in
complying  with  such  specifications  or  (ii)  use  or  sale  of  Products  in
combination with other items when such infringement would not have occurred from
the use or sale of those  Products  solely for the  purpose  for which they were
designed or sold by Seller. For purposes of this SBP Section 26.0 only, the term
Customer  shall not include the United  States  Government;  and the term Boeing
shall include The Boeing Company and all Boeing  subsidiaries  and all officers,
agents, and employees of Boeing or any Boeing subsidiary.

27.0     RAW MATERIAL PROGRAM

27.1     Boeing Raw Material Strategy

During the term of this SBP, Seller shall procure from Boeing (or its designated
service  provider  who will act on behalf of  Boeing)  all raw  material  of the
commodity type specified on the SBP Attachment  entitled  "Commodity Listing and
Terms of Sale" (SBP Attachment 8) necessary to support any Order issued pursuant
to this  Agreement.  From time to time,  Boeing  may  amend  the SBP  Attachment
entitled  "Commodity  Listing and Terms of Sale" by adding or deleting commodity
types. Any such amendment,  or revisions to the raw material  pricing,  shall be
subject to  adjustment  under GTA Section 10.1  (Changes),  provided that Seller
shall take no action to  terminate  its  existing  supply  agreements  when such
termination  would result in an assertion for an adjustment until the Seller has
received  approval  from Boeing.  The provision of any raw material by Boeing to
Seller shall be according to Boeing's  standard terms of sale, the text of which
is  included  in the SBP  Attachment  entitled  "Commodity  Listing and Terms of
Sale".  Boeing shall advise Seller of any designated service provider to be used
at the time the Order is issued. Upon request by Boeing,  Seller must provide to
Boeing  documentation  (e.g.,  packing slips,  invoices)  showing  Seller's full
compliance with the obligations under this SBP Section.

27.2     Casting and Forging Strategy NOT APPLICABLE

28.0     DIGITIZATION OF PROPRIETARY INFORMATION AND MATERIALS

Seller grants, to Boeing a license under Seller's  copyrights for the purpose of
converting Seller's  Proprietary  Informations and Materials to a digital format
("Digital Materials") and make such Digital Materials available to its employees
for  company  internal  use  through  a  computer  data base  system.  Except as
otherwise  specifically  agreed to in writing by the  parties,  said license set
forth hereunder  shall survive  termination or cancellation of this SBP relative
to Digital  Materials  included in Boeing's  computer  data base system prior to
receipt of such  notice of  termination  or  cancellation.

29.0     INSURANCE FOR ON-SITE SUPPORT NOT APPLICABLE

29.1     Indemnification Negligence of Seller or subcontractor

29.2     Commercial General Liability

29.3     Automobile Liability

29.4     Workers' Compensation

29.5     Certificates of Insurance

29.6     Self-Assumption

29.7     Protection of Property

30.0     BOEING  TECHNICAL  /  MANUFACTURING   ASSISTANCE   REGARDING   SELLER'S
         NONPERFORMANCE

Seller shall reimburse Boeing for all reasonable  Boeing  resources  expended in
providing  Seller  and/or  Seller's  subcontractors  technical or  manufacturing
assistance in resolving Seller  nonperformance  issues at the established Boeing
internal  wage rate,  which shall  include  fringe  benefits,  multiplied by the
estimated hours recorded by Boeing, plus the estimated Material costs associated
with providing such assistance.  In addition, Seller shall, at Boeing's request,
pay for normal and customary  expenses  relating to living expenses,  travel and
any other  reasonable  expenses  related to the provision of technical  services
reasonably  deemed necessary by Boeing to help resolve  Seller's  nonperformance
situation.  For purposes of  determining  the necessary  resources,  Boeing will
coordinate with Seller prior to identifying  those  resources  including but not
limited to the  applicable  numbers,  estimated  time frames,  etc. Where Seller
disagrees  with Boeing's  proposed  resources,  Seller will provide to Boeing an
alternate  resource  recommendation  including actions to be performed by Seller
for Boeing's review and approval. The Parties will work to agree on the resource
plan to be  implemented.  Such  reimbursement  may be offset against any pending
Seller  invoice,  regardless of Boeing model or program.  Boeing's  rights under
this  clause  are  in  addition  to  those  available  to  Boeing  for  Seller's
nonperformance issues,  including those where a demand for an Adequate Assurance
of Performance may be made under GTA Section 17.0. Seller's responsibility under
this Section 30.0 is limited to those situations which are clearly  attributable
to Seller or Seller's  subcontractors or supplier's failure or potential failure
to perform.

31.0     U. S. CUSTOMS INVOICE REQUIREMENTS

     NOT APPLICABLE

31.1     U.S. Customs Requirements

     NOT APPLICABLE

31.2     The Boeing Company Requirements

     NOT APPLICABLE

32.0     STRATEGIC ALIGNMENT AND WORK MOVEMENT

32.1     Novation

Subject to the conditions  set forth below,  Boeing may novate this Agreement or
any Order,  in whole or in part,  to a third party who is under an obligation to
supply  Boeing with  components,  kits,  assemblies  or systems that require the
Seller's Product. At the time of such novation,  Seller releases Boeing from any
and all claims,  demands and rights,  which  Seller has or may  thereafter  have
against Boeing in connection with such novated  Agreement or Order.  Boeing will
require that its novatee expressly assume all obligations and perform all duties
owed to  Seller  under  the  novated  Agreement  or  Order.  Promptly  after the
novation, Boeing will notify Seller of the novation and its effective date.

Seller agrees to continue production of novated Products under the terms of this
Agreement  through the  applicable  period of  performance.  In the event either
party  (Seller and the third  party)  seek to alter the terms of this  agreement
after  novation,  Seller commits to provide  Products for a period not less than
six months nor more than  sufficient  leadtime to establish a new source  unless
otherwise agreed to by the parties (Seller and the third party).

EXECUTED in duplicate as of the date and year first set forth above by the duly
authorized representatives of the Parties.


BOEING                                 SELLER


THE BOEING COMPANY                     Leonard's Metal, Inc.
By and Through its Divisions
Boeing Commercial Airplanes


/s/ Peggy McDonald                     /s/  Rick Darrow
-------------------------------        -------------------------------
Name: Peggy McDonald                   Name:  Rick Darrow
Title:  Procurement Agent              Title:  Program Manager
Date:                                  Date:

</TEXT>
</DOCUMENT>
