TECHNICAL SERVICES PURCHASE AGREEMENT
RELATING TO
ENGINEERING SERVICES
THIS TECHNICAL SERVICES PURCHASE AGREEMENT ("Agreement") will become effective
when fully executed and will remain in effect through June 30, 2002. This
Agreement is entered into by and between The Aerostructures Corporation, (TAC),
a Delaware corporation with its principal office in Nashville, Tennessee
("Seller"), and American Utilicraft Corporation, (AUC), a Delaware corporation
with its principal office in Lawrenceville, Georgia.
RECITALS
WHEREAS;
(A) AUC will design and produce the FF-1080-200, commercial short haul
cargo airplane; and,
(B) Seller sells certain technical services in the support of such
airplanes; and,
(C) Seller desires to sell, and AUC desires to purchase, certain of
Seller's technical services in accordance with the terms in this
Agreement;
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the
parties agree as follows:
AGREEMENTS
1.0 DEFINITIONS
The definitions set forth below will apply to this Agreement and any Order.
Words in the singular will include the plural and vice versa.
(a) "Drawing" means a depiction of graphic or technical information
representing a Product or any part thereof and which includes any
specification relating thereto.
(b) "Engineering Services" means engineering-related design services.
(c) "FAA" means the United States Federal Aviation Administration or any
successor agency thereto.
(d) "Purchase Order" means authorization by the Procurement Representative
to place work under these terms and conditions.
(e) "Order" means each statement of work authorized by means of a work
authorization or "work order" issued by AUC and accepted by Seller
under the terms of this Agreement.
(f) "Procurement Representative" means the individual designated by AUC who
has the sole authority to bind AUC under this Agreement and any Order.
(g) "Product" means goods and services and the associated Work Product,
tangible and intangible, including services, documents, data, software,
software documentation and other information or items furnished to AUC
under any Order.
2
(h) "Work Product" means all items (whether in tangible or intangible form)
that result from Engineering Services performed by or on behalf of
Seller pursuant to this Agreement or any Order.
(i) "Work Product Rights" means the intellectual property rights, including
trade secret, copyright, and patent rights, in Work Product.
(j) "ELSOP" means External Load and Structural Optimization Program.
2.0 ORDERING
CONCEPT/TECHNICAL DEFINITION ORDER INITIAL STATEMENT OF WORK
(a) Seller agrees to develop a technical definition that will be used to
evaluate cost and technical viability for the FF-1080-200 Wing. This is
expected to include Concept Development Drawings for the Center and
Outer Wing Box (including wing splice), Nacelle Support, Fuselage
Interface, Leading Edge, Fixed Trailing Edge, Flap (structure, drive,
and motion), Aileron (structure and trim tab drive system layout), and
Wing Tip. Systems provisions to be considered include jacking and
mooring provisions, fuel system routing and interfaces, de-ice system
provisions, electrical system routing and provisions, and fire
protection system routing and provisions. All drawings shall be created
using CATIA. A preliminary drawing tree and preliminary xxxx of
material shall be furnished.
TAC is not responsible for system concept development or design. TAC is
responsible only for provisions for systems routing and structure for
the systems to attach to. The completeness of the systems routing and
provisions design on the concept drawings is a function of the maturity
of the information from the systems provider. If specific information
is not available for a particular system, a best practice assumption
will be made for the purposes of completing the concept drawings.
TAC furnished flap and aileron system motions and geometry shall be
provided for preliminary layout and pricing efforts only. Any aircraft
performance or stability and control issues related to these systems
shall be verified by AUC.
In addition, the seller will provide preliminary internal loads
development, preliminary finite element model, a preliminary test and
substantiation plan, and a parametric weights study.
(b) The period of performance is for December 01, 2000 to March 30, 2001.
(c) The agreed to price is $278,410.
2.1 ISSUANCE OF ADDITIONAL ORDERS
By mutual agreement of the parties, AUC may from time to time issue
additional Orders to Seller under this Agreement by adding to the
Initial Statement of Work. Each Order will contain a description of the
Engineering Services ordered and Work Product to be produced and
delivered to AUC, a reference to the applicable Drawings, quantities
and prices, the delivery schedule, the terms and place or process of
delivery and any special conditions.
Each Order, which incorporates this Agreement, will be governed by and
be deemed to include the provisions of this Agreement. Order terms and
condition, which directly conflict with this Agreement, do not apply
and may be ignored by seller.
3.0 AUTHORITY
AUC's Procurement Representative will have the sole authority to bind AUC in
contractual terms and conditions and pricing. AUC's Procurement Representative
or other authorized representative specifically identified in this Agreement may
give written or electronic authorization to Seller to commence
3
performance. If AUC's authorization specifies that a Purchase Order will be
issued, AUC and Seller will proceed as if a Purchase Order or Purchase Order
change has been issued. This Agreement arid the terms stated in the
authorization will be deemed to be a part of AUC's Order and the parties will
promptly and in good faith agree on any open Order terms. If AUC does not
specify in its authorization that a subsequent Order will be issued, the terms
and conditions of the authorization will be the Order and will incorporate this
Agreement by reference.
4.0 TITLE AND RISK OF LOSS
Title to and risk of any loss or damage to AUC provided items will remain with
AUC.
5.0 DELIVERY REQUIREMENTS
Any technical assistance will be strictly in accordance with the quantities, the
schedule, and other requirements specified in the applicable Additional Order.
6.0 ON-SITE REVIEW
6.1 REVIEW
At a mutually acceptable date, Seller will provide at Sellers facility,
a review explaining the status of an Order, actions taken or planned
relating to such Order and any other information relevant to that
Order. AUC's authorized representatives may enter Seller's plant, on a
non-interference basis, to assess Seller's performance of Orders.
6.2 SELLER'S PERSONNEL ON-SITE AT AUC
At all times when Seller's personnel are on AUC's premises, Seller's
personnel will comply with AUC's employee rules of conduct, including
without limitation, AUC's security end safety procedures and comply
with all applicable federal, state and local laws and regulations.
6.3 AUC'S PERSONNEL ON-SITE AT SELLERS
At all times when AUC's personnel are on Sellers premises, AUC's
personnel will comply with Sellers employee rules of conduct, including
without limitation, Sellers security and safety procedures and comply
with all applicable federal, state and local laws and regulations.
7.0 PACKING AND SHIPPING
If any Work Product requires shipment to AUC from Seller, Seller will prepare
for shipment and suitably pack such Work Product to prevent damage or
deterioration, taking into account the method of shipment, location of shipment
and destination of receipt, as well as time associated with shipment.
8.0 FEDERAL AVIATION ADMINISTRATION OR EQUIVALENT GOVERNMENT AGENCY INSPECTION
The FAA or arty equivalent government agency, accompanied by representative of
AUC, may inspect and evaluate that portion of Seller's plant including, but not
limited to, Seller's and subcontractors facilities, systems, data, equipment,
procedures. personnel, testing, and all work-in-process and completed
Engineering Services and Work Product which pertains to the effort under this
Agreement.
9.0 CHANGES
AUC's Procurement Representative identified in this Agreement may, without
notice to sureties, in writing direct changes within the general scope of this
Agreement. Seller will comply immediately with such direction. If such change
increases or decreases the cost or time required to perform an Order, AUC and
Seller will negotiate an equitable adjustment in the price or schedule, or both,
to reflect the increase or decrease. AUC will modify the Order in writing
accordingly. If Sellers proposal includes the cost of
4
property made obsolete or excess by the change, AUC may direct the disposition
of the property.
10.0 TERMINATION FOR CONVENIENCE
10.1 BASIS FOR TERMINATION; NOTICE
AUC may terminate the Orders issued hereunder, by written notice to
Seller. Any such notice of termination will specify the effective date
of any such termination.
10.2 Termination Instructions
On receipt of a notice of termination, unless otherwise directed by
AUC, Seller will:
A. Immediately stop the Engineering Services as specified in the
notice:
B. Immediately terminate its subcontracts and purchase orders
relating to the Engineering Services terminated:
X. Xxxxxx any termination claims made by its subcontractors or
suppliers;
D. Preserve and protect all inventory and Work Product produced
to date;
E. Take all reasonable steps required to return, or at AUC's
option and with prior written approval to destroy, all AUC
Proprietary Information in the possession, custody or control
of Seller;
F. Take such other action as may be necessary or as AUC may
direct in writing to minimize the cost of the termination; and
10.3 SELLER'S CLAIM
A. Sellers termination claim will be limited to:
(1). Reasonable costs, plus a 15% margin, return on sales.
allocable to the terminated Order incurred by Seller
plus;
(2). Reasonable costs, plus a 15% margin, allocable to the
terminated Order incurred by Seller in settling, any
termination claims made by its subcontractors,
suppliers, or lessors, or in complying with the
termination notice;
B. After payment of Seller's claim and at AUC's request, transfer
title (to the extent not previously transferred) and deliver
to AUC or AUC's designee all completed and partially completed
Work Product related to the Order so terminated, all in
accordance with the terms of such notice.
11.0 TERMINATION FOR DEFAULT
11.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events will
constitute an "Event of Default":
A. Any failure by Seller to provide an acceptable Assurance of
Performance within the time specified within the order, or
otherwise in accordance with applicable law; or.
B. (1) The suspension, dissolution or winding-up of Seller's
business, (2) Sellers insolvency, or its inability to pay
debts, or its nonpayment of debts, as they become due, (3) the
institution of 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, (4) an assignment by Seller for the benefit of its
creditors, or (5) any action of Seller for the purpose of
effecting or facilitating any of the foregoing; PROVIDED
HOWEVER, the sale and/or merger of the Seller to/with another
company or entity for reasons other than those specified here,
shall not Constitute an event of default.
X. Xxxxxxx' liability in the event of a Default Termination shall
be limited to the price of the
5
work terminated under the terminated order.
12.0 EXCUSABLE DELAY
If delivery of any Engineering Services and/or Work Product is delayed by
unforeseeable circumstances beyond the control and without the fault or
negligence of Seller or of its suppliers or subcontractors (any such delay being
hereinafter referred to as "Excusable Delay"), the delivery of such Engineering
Services and/or Work Product will be extended for a reasonable period. Excusable
Delays may include, but are not limited to, acts of God, war, riots, acts of
government, tires, floods, epidemics, quarantine restrictions, freight embargoes
strikes or unusually severe weather, but will exclude Seller's noncompliance
with any rule, regulation or order promulgated by any governmental agency for or
with respect to environmental protection. However, the above notwithstanding,
AUC expects Seller to use its reasonable best efforts to continue providing
Services.
13.0 INTELLECTUAL PROPERTY
Attachment A, the NONDISCLOSURE AGREEMENT dated November 1, 2000, will be the
controlling document concerning all proprietary, confidential, and/or trade
secret information or data belonging to AUC or Seller.
14.0 COMPLIANCE WITH LAWS
Seller will 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 and each Order.
15.0 HEADINGS
Section headings used in this Agreement and any Order are for convenient
reference only and do not affect the interpretation of the Agreement or Order.
16.0 DISPUTES
A court of competent jurisdiction may decide any dispute that arises under or is
related to this Agreement or any Order that cannot be settled by mutual
agreement of the parties. Pending final resolution of any dispute, Seller will
proceed with performance of this Agreement and/or the Order according to AUC's
instructions, so long as AUC continues to pay the amounts invoiced.
17.0 INDEPENDENT CONTRACTOR
Seller's relationship to AUC in the performance of this Agreement end each Order
is that of an independent contractor. Seller's personnel performing services
under this Agreement and each Order will be employees of Seller and not
employees of AUC. Seller will pay all wages, salaries and other amounts due its
employees in connection with this Agreement and each Order and will be
responsible for all reports and obligations respecting them relating to
governmental obligations such as social security, income tax withholding.
unemployment compensation, Xxxxxxx'x Compensation arid similar matters.
18.0 INCLUSION OF TAXES IN PRICE
Unless this Agreement or an Order specifies otherwise, the price of this
Agreement and each Order includes, and Seller is liable for and will pay, all
taxes, impositions, charges and exactions imposed on or measured by this
Agreement and each Order, except, if applicable, for sales or use takes on sales
to AUC ("Sales Taxes") for which AUC specifically agreed to pay and which are
separately stated on Seller's invoice. Prices will not include any taxes,
impositions, charges or exactions for which AUC has a valid exemption
certificate or other evidence of exemption.
6
19.0 PAYMENT
Monthly invoices will be submitted to AUC based upon the total value of the
order divided by the total number of months or the order. All invoices will be
on an end of month basis. Payment due dates will be computed from the date of
receipt of the invoice. Payment will be NET 30.
19.1 ALL INVOICES SHALL BE SENT SEPARATELY TO:
American Utilicraft Corporation
Attn: Xxxx X. Xxxxxx
000 Xxxxx Xxxx XX, Xxxxx X
Xxxxxxxxxxxxx, Xxxxxxx 00000
19.2 PROCESS
I All payments shall be made in U.S. dollars.
II Payments shall be made by wire transfer to:
ABA Number: 000000000
First Union Bank
Account Number 2020000202349
The Aerostructures Corporation
20.0 SOLICITATION
Seller agrees that it will not use its personnel assigned under any Order to
actively solicit for hire any of AUC's personnel at any time. AUC likewise
agrees that it will not use its personnel to actively solicit for hire any of
Seller's employees. After completion of this Agreement, unless prior written
approval is obtained, Seller and AUC agree that neither party will actively
solicit for hire the other's employees for a period of six months.
21.0 ENTIRE AGREEMENT/ORDER OF PRECEDENCE
21.1 ENTIRE AGREEMENT
This Agreement sets forth the entire agreement, and supersedes any and
all other prior agreements, understandings and communications between
AUC and Seller related to the subject matter hereof.
21.2 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 will
control:
A. This Agreement
B. An Order
C. Other exhibits or documents that are part of this Technical
Services Purchase Agreement.
22.0. AUC DESIGNEES
Only the following individuals are authorized to make contractual commitments
and discuss pricing and/or contract terms and conditions issues directly with
Seller on behalf of AUC:
Xx. Xxxx X. Xxxxxx, President. CEO, Chairman
7
23.0 APPLICABLE LAW
The law of the State of Georgia will govern this Agreement.
EXECUTED in duplicate as of the date and year first set forth above by the duly
authorized representatives of the parties.
AMERICAN UTILICRAFT CORPORATION THE AEROSTRUCTURES CORPORATION
By: /s/ Xxxx X. Xxxxxx By: /s/ X.X. Xxxxxxx
---------------------------------- --------------------------------
Name: Xxxx X. Xxxxxx Name: X.X. Xxxxxxx
Title: President, CEO Chairman Title: Contracts Director
Date: December 01, 2000 Date: December 01, 2000
8
