EXHIBIT 10.4
MARKETING AND SALES AGREEMENT
THIS MARKETING AND SALES AGREEMENT (the "Agreement") between Techsphere Systems
International, LLC and its Affiliated companies involved in the manufacture of
Airships with offices at 000 Xxxxxxx Xxxxx, Xxxxxxxx 00, Xxxxx 000, Xxxxxxxx
Xxxxxxx 00000 ("TSI") and Cyber Aerospace Corp., ("CYBER") with offices at 0000
Xxxxxxxx Xxxxx Xxxxx, Xxxx Xxxxx Xxxxxx, Xxxxxxx 00000 a corporation organized
under the laws of the State of Florida and an operating subsidiary of On Alert
Systems, Inc. a Navada Corporation (to be known individually as a "Party" and
collectively the "Parties") and is effective as of the 1st day of May, 2004
("Effective Date").
WHEREAS, TSI manufactures, constructs and assembles Low, Medium and High
altitude airships ("Airships") and CYBER, for the purpose of this Agreement,
primarily is engaged in marketing and sales to federal, state and local
government agencies and the various Military branches (collectively referred to
hereinafter as "Government Units"; and
WHEREAS, TSI has the exclusive world wide right and license to manufacture
the Airships according to the U.S. and Canadian patents owned by 21st Century
Airships, Inc. a Canadian Corporation; and
WHEREAS, CYBER desires to exclusively market and sell Airships manufactured
by TSI to Government Units and non-exclusively to telecommunication entities and
furthermore, TSI desires to utilize the experience and expertise of CYBER to
sell Airships to Government Units; and
WHEREAS, TSI has a Consulting, Lobbying and Sales Agreement dated January
3, 2003 with Sales Resources Consultants, Inc. a Virginia corporation with
principle office located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, 00000
(hereinafter "SRC") in which SRC agreed to introduce TSI to U.S. Government
prospects, including but not limited to Congressional committees, the CIA, NSA
and the DOD, as well as assist TSI in locating business opportunities within
U.S. Government Agencies and selected industries ("SRC Selected Industries") and
further it agreed to introduce TSI to its contacts in, and make arrangements for
introductions to, U.S. Government Agencies involved with, the Congressional
Intelligence Committees (with the initial Project referred as the "Intelligence
Committee Opportunity") that may have an interest in the use of airships to
obtain intelligence data and information; and
WHEREAS, CYBER is utilizing the consulting and sales expertise of Xxxxx
Xxxxxx, the majority shareholder and CEO of SRC, to assist CYBER in its sales
and marketing efforts to Government Units and other End Users as described
herein; and
WHEREAS, CYBER purchased the right to market and sell the Airships pursuant
to an Agreement with TSI dated March 10, 2004 which requires payment of Three
Hundred Thousand Dollars ($300,000) through certain debentures to TSI due on or
about July 15, 2004, and
WHEREAS, TSI desires to use the marketing and sales expertise of CYBER to
sell Airships to certain specified end users, while TSI retains the right to
lease the Airship and the operations of, or designate the entity to operate, the
ground control portion of the flight operations; and
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WHEREAS, the Parties desire to set forth their understanding as to the
marketing and sales efforts to be undertaken by CYBER, the pricing of Airships
and the obligations and conditions of manufacture imposed on TSI.
NOW THEREFORE, in consederation of the mutual premises and agreements
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follow:
1. GOVERNING TERMS AND SCOPE.
1.1 The terms and conditions of this Agreement shall govern the supply of
Airships to be manufactured by TSI for the exclusive marketing and sale by CYBER
to Government Unit End Users both within and outside of the United States of
America, and such telecommunications and other End Users agreed to by the
Parties in writing, pursuant to purchase orders ("Purchase Orders") issued by or
through CYBER for its Customers. Performance of a Purchase Order does not
constitute either Party's agreement to or acceptance of any new or different
terms of this Agreement; since this Agreement my be modified only by a separate
written instrument executed by the Parties and intended as a modification. All
Purchase Orders issued through a sale by CYBER shall be deemed to be subject to
the terms and conditions of this Agreement (and its duly executed Amendments)
whether or not such Purchase Orders specifically reference this Agreement. Third
party machinery, equipment and products integrated into the Airship by TSI are
subject to the license, warranty and available service as such third-party
supplier allows TSI to pass through or assign to the End User.
1.2 Subject to rights that SRC may assert as to Customers listed in Exhibit
1.2 pursuant to the January 3, 2003 Agreement described above, TSI grants CYBER
the exclusive world-wide right to market and sell Airships to military and
governmental End Users and a non-exclusive world-wide right to market and sell
Airships for telecommunication and other applications that TSI may offer End
Users, or as otherwise agreed by the Parties. TSI will manufacture Airships for
CYBER Customers only pursuant to a Purchase Order signed by the above described
End User. Attached as Exhibit 1.2 is the list of CYBER and SRC Customers
recognized by TSI as of the Effective Date.
1.3 The terms and conditions of this Agreement do not apply to, and TSI
will not manufacture Airships to be sold by CYBER for non-governmental or
non-telecommunication uses, unless otherwise agreed to by the Paries in writing
or as an amendment to this Agreement.
1.4 Definitions:
1. Affiliate - with respect to either Party, and corporation,
partnership, limited liability company, controlled by or under common
control with such Party or controlled by a majority of the
members/shareholders of a Party, includingt but not limited to, in the
case of TSI, Spherical Airships USA, Inc., Telesphere Communications,
Inc. or Techshpere Governmental Applications, Inc. and in the case of
CYBER, Proxity Networks, Inc., and On Alert Systems, Inc.
2. Airship - Low, Medium and High altitude airships manufactured by TSI
as described herein.
3. Change Order - the request by CYBER or its Customer upon acceptance by
TSI to change the specifications and pricing of the Purchase Order
previously accepted by TSI.
4. Contract Period - thirty six (36) month period beginning the Effective
Date of this Agreement, which shall be automatically renewed for
another Contract Period unless terminated as provided in this
Agreement.
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5. Contract Year - the twelve (12) month period beginning the Effective
Date of this Agreement.
6. Customer or CYBER's Customer - the ultimate Government Unit End User
or other end user of the Airship.
7. Delivery - the placement of title in the name of and the possession of
or right to use the Airship in CYBER's Customer.
8. End User - an entity which ultimately uses the Airship for its own
governmental, military or business purposes.
9. Final Purchase Price - the Purchase Price plus or minus all Change
Order pricing revisions, test flight fees, unpaid insurance and
storage fees and such other applicable costs set forth herein.
10. Purchase Order - the order place by CYBER for its Customer or by
CYBER's Customer and accepted by TSI with the name of the Customer and
a description of the specifications of an Airship to be manufactured
by TSI pursuant to the terms of this Agreement.
11. Government Unit End User - federal and local government agencies and
branches of the armed forces the United States and of any government
recognized by the government United States and to which said U.S.
government allows the sale or lease of the Airships.
12. Telecommunications End User - an entity in the business of the
transmission of encoded sound, pictures, or data over significant
distances, using radio signals or electrical or optical lines.
13. CYBER's Sales Commission - the commission CYBER shall receive for the
sale of the Airships, which, subject to Section 4, shall be no more
than fifteen percent (15%) of TSI's Sales Price quoted to CYBER based
on the specifications in the Purchase Order and Change Orders;
however, if TSI agrees to reduce its Sales Price per Airship because a
Customer places an order for a large number of Airships at one time or
TSI agrees to a reduced price on a special basis, CYBER will likewise
by the same percentage reduce its Sales Commission percentage per
Airship in an amount as agreed by the Parties on a Customer by
Customer basis.
2. PRICE.
2.1 The Purchase Price shall be FOB TSI's manufacturing facility. The
Purchase Price of each Airship will be based initially upon the specifications
given to and accepted by TSI in the Purchase Order; but, the Purchase Price may
change based upon Change Orders agreed to by the Parties during the manufacture
of the Airship(s). As of the date of this Agreement, the Parties agree that
until TSI has commenced the actual manufacture of Airships for each of the
altitudes described below, the Purchase Price to the Customer, including CYBER's
Sales Commission, except for previously agreed to and quoted projects Purchase
Prices for Low Altitude Airships described in Exhibit 2, shall, subject to the
exact specifications given by CYBER in the Purchase Order and Change Orders, be
as follows:
A. Low Altitude (less than 10,000 feet ASL) Airships - $5,000,000.00
B. Mid Altitude (above 10,000 feet and below 30,000 feet ASL) Airships -
$12,500,000.00
C. High Altitude (above 30,000 feet ASL) Airships - $28,000,000.00
3. TITLE AND DELIVERY.
3.1 TSI shall notify CYBER in writing of the completion of the manufacture
of an Airship ordered by CYBER and shall specify in the notice a date TSI
anticipates delivery of the Airship to CYBER's Customer (the "Estimated Delivery
Date").
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3.2 The Delivery of the Airship(s) shall be to the Customer either at the
storage area in TSI's manufacturing facility, if shipment will be made to its
Customer within thirty (30) days of Delivery, or any other storage location TSI
may designate if the anticipated date of shipment will be more than thirty (30)
days after Delivery. The Customer shall be charged a storage fee for storage at
a TSI facility after thirty (30) days from Delivery at the rate of Two Thousand
Five Hundred Dollars ($2,500.00) per month or any part thereof payable in
advance.
3.3 Delivery of the Airship(s) shall occur after payment in full as
described above, at which time TSI shall, pursuant to direction from CYBER's
Customer, either place the Airship(s) in TSI's storage area as described above
and post legible signs indicating that the Airship(s) is the property of a
specified Customer. Appropriate identification shall be permanently affixed to
each Airship upon Delivery to the TSI storage area. TSI shall not include in its
inventory or assets in connection with any financing arrangement that TSI may
enter Airships that have been identified upon Delivery as a CYBER Customer
Airship pursuant to this Agreement.
3.4 Risk of loss shall pass to CYBER's Customer upon Delivery in TSI's
storage area. All costs of insurance from the time that risk of loss passes to
the Customer shall be an additional expense charged to the Customer. TSI shall
cooperate fully with CYBER with respect to obtaining insurance protection for
the Airships. If CYBER's Customer does not provide proof of insurance at the
time the Airship is placed in storage, TSI will attemt to procure insurance
coverage for CYBER's Customer and will add the cost incurred thereof to the
Purchase Price, which shall be paid immeadiately upon presentation to CYBER's
Customer.
3.5 Neither Party shall be responsible for any losses resulting if the
fulfillment of any of the terms of this Agreement is delayed or prevented by
civil disorders, wars, acts of enemies, strikes, fires, floods, acts of God, or
by any other cause not within the control of the Party whose performance is
interfered with, and which, by the exercise of reasonable diligence, such Party
is unable to prevent, whether of the class of causes is enumerated or not.
4. PAYMENT.
4.1 Subject to the matters set forth below in this Section 4.1, payment of
the Purchase Price for an Airship from CYBER's Customer to TSI, unless modified
by mutual consent of both Parties shall be as follows:
A. One half of the Purchase Price described in the Purchase Order
("Down Payment"), upon TSI's acceptance of the Purchase Order.
B. Twenty-five (25%) percent of the remaining amount due per Airship
per Purchase Order, inclusive of Change Orders, shall be due upon CYBER's
receipt of written notice from TSI that it has completed the manufacture of
the Airship(s) envelope.
C. The remaining Twenty-five (25%) percent of the Purchase Price shall
be due at the time CYBER gives TSI instructions for Delivery of the
Airship(s).
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D. Payment shall be made as set forth herein; however, in the event a
Government Unit End User is required to pay according to a regulatory
prescribed payment schedule or if not, but TSI agrees in its acceptance of
the Purchase Order to accept a different payment schedule, payment shall be
made according to the payment schedule as per the Government Unit End User
payment policy or as otherwise agreed to in the Purchase Order.
E. The calculation of all sums due under this section shall be based
upon the actual Airship(s) manufactured and Delivered to CYBER's Customer.
F. TSI shall not make Delivery of an Airship to CYBER's Customer until
all sums (Final Purchase Price plus applicable taxes) have been paid in
full.
G. If payment in full has not made for the Airship(s) within ten (10)
business (i.e., weekday) days of the date TSI has given in written notice
of the anticpated Delivery Date to CYBER, TSI shall be authorized to sell
the Airship(s) to any other entity which will pay the full Purchase Price.
Within thirty (30) days of payment of the Final Purchase Price by the
purchasing third party, TSI will repay CYBER's Customer all sums it paid to
date, minus a handling charge of ten (10%) percent of the Down Payment.
H. Any sums not paid by the Delivery Date are subject to an interest
charge at a rate of 12% per year on all amounts overdue until payment
thereof.
I. Any and all Sales Commissions due and payable to CYBER for
marketing and sales activity will be paid to CYBER in a prorated manner
using the same formula as payment is received for the payment of the
airship, i.e., 1/2, 3/4, etc.
4.2 Subject to the matters set forth below in this Section 4.2, payment of
the Sales Commission for lease payments for an Airship from CYBER's Customer
unless modified by mutual consent of both parties shall be as follows:
A. If the Customer leases from any entity other than TSI or a TSI
Affiliated Vendor, the above terms in section 4.1 shall apply.
B. If the Customer leases from TSI or a TSI Affiliated Vendor, none of
the terms in Section 4.1 shall apply and payment of the Sales Commission
shall be made to CYBER within thirty (30) days of receipt of the lease
payment from the Customer. Any and all Sales Commissions due and payable to
CYBER for marketing and sales activity will be paid to CYBER in a prorated
manner based on the lease payment received according to the terms of the
lease.
4.3 The assumption in this section on Payment is that CYBER and SRC have
resolved the issue between the two entities regarding the Sales Commission each
entity will be paid for the Customer listed in Exhibit 1.2. Unless SRC agrees in
writing either that Exhibit 1.2 contains a list of only CYBER Customers or that
CYBER shall receive all Sales Commission for the Customers listed in Exhibit
1.2. TSI will reserve four (4%) of the Sales Commission of any Purchase Order
for an Exhibit 1.2 Customer to be paid to SRC.
5. OBLIGATIONS OF THE PARTIES.
5.1 ADDITIONAL OBLIGATIONS OF TSI.
5.1.1 TSI shall manufacture the Airships according to the
specifications in the Purchase Orders accepted by TSI. CYBER shall market
and sell Airships according to TSI's basic Airship specification which
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shall be given to CYBER as soon as possible after execution of this
Agreement. TSI shall allow CYBER and representatives of CYBER's Customer
the right to inspect the manufacture and assembly of the Airships at its
manufacturing facility during normal business hours; provided that CYBER or
its Customer has given TSI at least twenty four (24) hours advance notice.
5.1.2 TSI shall, subject to prior payment of the anticipated costs,
assist CYBER and/or its Customer with test flights of the purchased
Airships at such times and sites as agreed upon by the Parties. CYBER's
Customer shall reimburse TSI for all costs incurred by TSI in relation to
carrying out such test flights prior to the date of the test flight. TSI
shall notify CYBER and/or its Customer of TSI's anticipated costs at least
two weeks in advance of the test flight, which costs shall be paid to TSI
at least seven (7) days prior to the test flight. Any sums incurred by TSI
in addition to the anticipated costs shall be paid by CYBER's Customer
within thirty (30) days of receipt of the cost.
5.1.3 TSI shall allow CYBER's Customer to store its purchased Airships
at TSI's manufacturing plant storage facility or such other off-site
storage facility designated by TSI for a period of time not to exceed
thirty (30) days from the Date of Delivery without additional costs. A
minimum storage fee of Two Thousand Five Hundred Dollars ($2,500.00) per
month, or for any part thereof, in advance shall be charged to CYBER's
Customer for any dely by the Customer in removal of the Airship from the
storage facility or such other off-site storage facility used by TSI after
the above described thirty (30) day period.
5.1.4 During the manufacturing process, TSI shall insure the Airship
for its full value with CYBER's Customer as an additional insured, as its
interest may appear, until such time as title to the Airships is
transferred to CYBER's Customer, not to exceed thirty (30) days from the
Estimated Delivery Date given by TSI to CYBER or the Customer.
5.1.5 In the event a Government Unit or Telecommunications End User
cannot in good faith finalize the purchase of an Airship because of
conditions, requirements or restrictions ("Requirements") attached by
CYBER, TSI shall have the right to sell the Airship to the End User at a
price which shall allow TSI to pay CYBER the Sales Commission it would have
earned from the sale of the Airship without the additionsl Requirements and
recoup any other expenses peculiar to that Airship such as insurance,
permits, taxes, etc.
5.1.6 In the event a CYBER Customer requests a lease of an Airship,
TSI retains the right of first refusal to negotiate the lease of the
Airship, either directly or through a TSI Affiliated Vendor, to the CYBER
Customer, supply the ground crew work force and supply all of the
Customer's lease related needs.
5.2 ADDITIONAL OBLIGATIONS OF CYBER
5.2.1 In the event of a Government Unit End User has a regulatory
prescribed payment schedule for payment of the Final Purchase Price,
payment shall be made according to the payment schedule as required by the
Government Unit End User payment policy or, if not, then payment shall be
made within the time set forth herein.
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5.2.2 Each Telecommunication End User or such other permitted End User
shall warrant and represent in the Purchase Order that it is purchasing the
Airship for its own use in the telecommunications industry or such other
TSI permitted use, or in the case of a Government Unit End User it shall
warrant and represent that it is purchasing for its use or the use by
another Government Unit End User, and that if the purchaser sells, assigns,
leases or conveys the airship to another end user that is not a Government
End User or a TSI approved Telecommunications End User without the express
written consent of TSI, the purchaser shall be in breach of its Purchase
Order with TSI and the purchase of the Airship will be recinded.
5.2.3 In the event a CYBER Customer requests a lease of an Airship,
TSI retains the right of the first refusal to negotiate the lease of the
Airship, either directly or through a TSI Affiliated Vendor, to the CYBER
Customer, supply the ground crew work force and supply all of the
Customer's lease related needs.
5.2.4 In the event that CYBER desires to add components, integrated
equipment or devised (collectively the "CYBER Components") to an Airship
from sources other than a TSI Affiliated Vendor, it shall not condition the
sale of the Airship to its Customer upon the addition of the Components.
5.3 JOINT OBLIGATIONS
5.3.1 Non-Disclosure ("NDA") Covenant. The Parties to this Agreement
agree that the terms and conditions of this NDA Covenant are fully
applicable and binding upon themselves and al of the Party's employees
their affiliates, subsidiaries, representatives, agents, associates,
assigns, trustees, their heirs and/or assigns, legal representatives or
executors ("Representatives"). It is the understanding of the Parties that
each has or will disclose to the other Party certain entities that are
either under contract with the Party or with whom the Party is negotiating
concerning the establishment of a business relationship relating to the
matters set forth in this Agreement. Each Party irrevocably binds itself to
not deal directly or indirectly with any persons, trusts, businesses,
corporations or partnerships, or other entities introduced or disclosed to
the Party by the other Party ("Circumvent") for the purpose of fulfilling
the terms of this Agreement or any porposed business relationship between
the Parties, without the knowledgye and express written consent of the
other Party. Each Party agrees not to Circumvent the other Party and enter
into contracts with a person or entity doing buisness with the other Party
concerning the business related subject matters discussed pursuant to this
Agreement in any manner for a period of five (5) years from the date of
this Agreement.
6. TERM AND TERMINATION. This Agreement shall become effective on the Effective
Date, and, unless terminated sooner pursuant to this Article 6, shall
automatically renew for the above described three (3) year Contract Period;
further provided that] this Agreement, unless terminated earlier as provided
herein, shall be effective during the term of the 21st Century Airships, Inc.
License Agreement dated January 16, 2004. This Agreement shall be subject to
earlier termination in the event of any of the following upon thirty (30) days
written or such lesser time as set forth below:
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6.1 In the event of a material breach of this Agreement by one Party, the
non-breaching Party may, at any time after having given thirty (30) days written
notice of the breach to breaching Party, terminate this Agreement by a further
written notice of termination; provided that, if the breaching Party, prior to
receipt of the final written notice of termination has either cured the breach
or, in the sole determination of the non-breaching Party, has taken all
reasonable steps to begin effecting a cure, this Agreement shall remain in
effect. A material breach of this Agreement shall include, but not be limited
to, a failure by CYBER to place orders with TSI in accordance with the
requirements of section 2.3, and a failure by CYBER to make any payment to TSI
when due.
6.2 CYBER's assistance to its Customer in the sale of a TSI manufactured
Airship, either directly or indirectly, to a non-Government End User or a
non-Telecommunications End User without the prior written consent of TSI, unless
otherwise agreed to by the Parties in a separate written document.
6.3 In the event that either Party or any of its agents or employees
involved in this Agreement are convicted of any felony or either Party or any of
its agents or employees commit an act of fraud upon the United States or upon
the other Party as to the activities described in this Agreement.
6.4 The filing of a petition, pursuant to federal or state insolvency or
reorganization (bankruptcy) statute, by or against either Party, and said
petition is not dismissed or discharged within thirty (30) days of filing.
6.5 CYBER's failure to deliver Airship Purchase Orders which result in
payment to TSI of no less than Fifteen Million Dollars ($15,000,000.00) per
Contract Year, excluding Sales Commission to CYBER or, in the event CYBER is
unable to secure the described Purchase Orders, CYBER's failure to pay TSI the
sum of Fifteen Million Dollars ($15,000,000.00) in a Contract Year, with the
first Contract Year to which this subsection applies beginning on May 1, 2005,
which is the first anniversary of this Agreement. If the failure to deliver the
Airship to a Customer is caused by labor strikes, material shortages or a
natural disaster which prevents timely completion of the manufacture of the
Airship according to the Purchase order, thus preventing delivery to TSI of the
aforementioned Fifteen Million Dollars ($15,000,000.00) minimum requirement;
then the delivery time of the minimum requirement will be extended until
Delivery of the Airship to the Customer so that the Purchase Price can be
collected from Customer.
6.6 The date upon which the License Agreement with 21st Century Airships,
Inc. dated January 16, 2004 terminates in accordance with its terms.
6.7 By the mutual written agreement of the Parties.
6.8 CYBER's failure to pay TSI the full amount of the remaining Three
Hundred Thousand Dollars ($300,000.00) by July 15, 2004, which was payment in
part for the exclusive and non-exclusive sales and marketing rights set forth
herein.
7. LIMITED WARRANTY.
7.1. TSI WARRANTS THAT IT HAS FREE AND CLEAR TITLE TO, OR OTHERWISE HAS THE
RIGHT TO SUPPLY, ALL AIRSHIPS TO BE SUPPLIED TO CYBER'S CUSTOMERS HEREUNDER. THE
AIRSHIPS SHALL BE MANUFACTURED IN ACCORDANCE WITH PLANS TO BE SUPPLIED IN THE
PURCHASE ORDERS ACCEPTED BY TSI. TSI MAKES NO WARRANTY AND THERE IS NO IMPLIED
CONDITION THAT THE AIRSHIPS ARE MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE.
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THE SOLE RESPONSIBILITY OF TSI SHALL BE THAT IT WILL MANUFACTURE THE AIRSHIPS
AND INSTALL AVIONICS EQUIPMENT IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS
SUPPLIED BY CYBER WHICH HAVE BEEN ACCEPTED BY TSI, THAT THE AIRSHIPS WILL BE
FREE FROM DEFECTS IN MATERIAL AND WORKMANSHIP AND THAT TSI WILL REPAIR OR
REPLACE, AT ITS OPTION, ALL OR PART OF THE AIRSHIPS SUPPLIED HEREUNDER; WHICH,
DURING THE APPLICABLE TWO (2) YEAR WARRANTY PERIOD FOLLOWING THE DELIVERY DATE,
HAVE BEEN FOUND BY CYBER' CUSTOMER TO BE DEFECTIVE DUE TO TSI'S WORKMANSHIP OR
MATERIALS. TSI SHALL NOT BE RESPONSIBLE FOR THE FAILURE, REPAIR OR REPLACEMENT
OF ANY AIRSHIP OR ITS COMPONENT PARTS, DUE TO USE OF SAID AIRSHIP IN
ENVIRONMENTS OR AT ALTITUDES CONSIDERED OUTSIDE THE SCOPE OF THAT AIRSHIP'S
SPECIFIED OPERATING CAPABILITIES, IN HAZARDOUS WEATHER CONDITIONS OR IN HOSTILE
TERRITORIES. TSI SHALL ENSURE, TO THE EXTENT POSSIBLE, THAT ALL WARRANTIES
ISSUED BY THE MANUFACTURER OF THE AIRSHIP COMPONENT PARTS INSTALLED IN THE
AIRSHIPS AT TSI'S DIRECTION SHALL BE FULLY TRANSFERRED AND ASSIGNED TO CYBER'S
CUSTOMER AT DELIVERY. INSTALLATION BY CYBER'S CUSTOMER OF ANY EQUIPMENT OR
DEVICES WHICH INTERFER WITH THE AVIONICS EQUIPMENT INSTALLED BY TSI OR INCREASE
THE PAYLOAD WEIGHT LIMIT BEYOND THAT PRESCRIBED BY TSI SHALL VOID ALL WARRANTIES
GIVEN BY TSI OR ITS SUPPLIERS.
7.2. THE FOREGOING REPRESENTATIONS AND WARRANTIES AND ALL OTHER
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT ARE EXPRESSLY IN LIEU
OF ANY OTHER EXPRESS OR IMPLIED WARRANTIES AND ANY OTHER EXPRESS OR IMPLIED
CONDITIONS, INCLUDING ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER OBLIGATION ON THE PART OF TSI.
7.3. TSI WARRANTS THAT THE SALE OR USE OF THE AIRSHIPS SHALL NOT INFRINGE
UPON ANY UNITED STATES OR FOREIGN PATENT, AND TSI SHALL INDEMNIFY CYBER AGAINST
ALL JUDGMENTS, DECREES, COSTS, AND EXPENSES RESULTING FROM ANY INFRINGEMENT AND
SHALL DEFEND, UPON WRITTEN REQUEST OF CYBER AT ITS OWN EXPENSE, ANY ACTION WHICH
MAY BE BROUGHT AGAINST CYBER ITS VENDEES, LESSEES, LICENSEES, OR ASSIGNS, UNDER
ANY CLAIM OF PATENT INFRINGEMENT IN THE USE OF THE AIRSHIPS.
7.4. THE ABOVE WARRANTIES ARE SUBJECT TO PROPER USE AND APPLICATION FOR
WHICH THE AIRSHIP WAS INTENDED AND DO NOT COVER AIRSHIPS MODIFIED BY CYBER OR
ANY THIRD PARTY WITHOUT TSI'S WRITTEN APPROVAL.
8. CONFIDENTIAL INFORMATION.
Except as set forth herein, the Parties agree that the terms and conditions
of this Agreement shall remain confidential and no party shall distribute this
Agreement or any part thereof to anyone other than the Party's attorney,
accountant or as required by law. The Parties acknowledge and agree that all
Confidential and all physical embodiments thereof are confidential to and will
remain the sole and exclusive property of the Party that produced it. Each Party
will not reproduce, use, distribute, disclose or otherwise disseminate any
Confidential Information or any physical embodiment thereof, and will take no
action causing, or fail to take any action necessary to prevent causing, any
Confidential Information to lose its character as Confidential Information.
Before disclosing Confidential Information to any third party, including its
representative or agent, the disclosing Party will provide written notice that
such information is Confidential and must not be disclosed. The third party,
representative or agent must sign an acknowledgment that the information is
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confidential and will not be disclosed to anyone or used in any manner other
than as described herein without the prior written consent of the other party
which produced the Confidential Information. The term "Confidential Information"
means any and all data and information relating to the business of either party
(i) which has value to a party and is not generally known by its competitors or
the public; and (ii) which is treated by a party as confidential. Confidential
Information and includes the Trade Secrets (as defined under Georgia law) of the
parties. Confidential Information may include, but is not limited to,
information relating to the financial affairs, services offered, research, and
marketing of a party. Confidential Information includes proprietary information
disclosed to a Party by a third party that the Party is obligated to treat as
confidential.
9. DISPUTE RESOLUTION.
9.1. If a dispute arises out of or relates to this Agreement, or the breach
thereof, and if the dispute cannot be settled through negotiation, the parties
agree first to try in good faith to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association ("AAA"),
through a mediator selected by them, before resorting to arbitration.
9.2. If any controversy or claim arising out of or related to this
Agreement, or the breach thereof, cannot be resolved through good faith
mediation, the parties agree to submit the dispute to final and binding
arbitration before a single arbitrator under the AAA Commercial Arbitration
Rules, unless the use of other rules is agreed upon by the parties. Any dispute
as to the arbitrability of an issue shall be determined by the arbitrator. The
arbitrator shall have no authority to award punitive damages, but the arbitrator
shall have authority to award interest and costs of the arbitration. The
arbitrator may not, in any event, make any ruling, finding or award that does
not conform to the terms and conditions of this Agreement. The judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Such arbitration shall occur in Atlanta, Georgia, unless the parties
mutually agree upon another location.
10. NOTICE.
All notices and other communications contemplated, required or permitted by
this Agreement shall be in writing and shall be deemed to have been properly
given or served when deposited with the Unites States Postal Service, designated
as registered or certified mail, return receipt requested, postage prepaid and
addressed as hereinafter provided, or if delivered in person or by overnight
delivery service addressed as follows:
To: TSI To: CYBER
000 Xxxxxxx Xxxxx 771 Military Trail North
Building 10, Suite 100 Palm Beach Gardens, Florida 33410
Xxxxxxx, Xxxxxxx 00000
ATTN.: Xxxx ATTN.: Xxxxx Xxxxxxxx
Facsimile No. (000) 000-0000 Facsimile No. (00 0) 000-0000
11. GENERAL.
11.1 Any amendment, supplement, modification or waiver of any provision of
this Agreement must be in writing and signed by authorized representatives of
both Parties.
10
11.2 If any portion of this Agreement is found to be invalid or
unenforceable, the Parties agree that the remaining portions shall remain in
effect.
11.3 Any discretion vested in a Party to this Agreement shall not be
unreasonably, arbitrarily or capriciously exercised.
11.4 This Agreement integrates and supersedes all previous agreements, oral
or written, between the parties and constitutes the entire agreement of the
Parties as to the subject matter described herein.
11.5. Neither Party shall assign this Agreement without the prior written
consent of the other Party. Either Party may assign this Agreement or any part
thereof to its Affiliate without the prior written consent of the other Party.
"Affiliate" means any corporation, partnership, limited liability company,
controlled by or under common control with a Party and for Cyber the word
"Party"shall also mean OASI as it solely relates to this subsection.
11.6. The headings in this Agreement are inserted for convenience only and
not intended to affect the meaning or interpretation of this Agreement.
11.7. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall comprise
but a single instrument.
11.8 Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof, shall not be deemed a waiver of such terms,
covenants or conditions, nor shall any waiver or relinquishment of any right or
power hereunder, at any one time or more times, be deemed a waiver or
relinquishment of such right or power at any time or times.
11.9 The invalidity of any one or more of the words, phrases, sentences,
clauses, sections, subdivisions, paragraphs or subparagraphs contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof. In the event one or more of the words, phrases,
sentences, clauses, sections, subdivisions, paragraphs, or subparagraphs
contained herein shall be invalid, this instrument shall be construed as if such
invalid portion had not been inserted, and if such invalidity shall be caused by
the length of any period of time or the size of any area set forth in any part
hereof, such period of time or such area, or shall considered to he a period or
area which would invalidity.
11.13. This shall be in with and governed by the laws of State of Georgia
without regard to its conflicts of laws.
WHEREOF, the parties hereto have caused this Agreement to be executed on
the date set forth above by their duly authorized representatives identified
below.
CYBER AEROSPACE CORP: TECHSPHERE SYSTEMS INTERNATIONAL, LLC:
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxx Xxxxxx
------------------------- -------------------------
Chief Executive Officer President
Attest: Attest
/s/ illegible /s/ illegible
------------------------- -------------------------
Secretary [Seal] Secretary [Seal]
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Exhibit 1.2
CYBER
AND
SRC CUSTOMERS
Government End Users (exclusivity with TSI during term of Agreement):
House Permanent Select Committee on Intelligence
SCCI Central Intelligence Agency
National Security Agency (2)
National Reconnaissance Office
NGIA (National Imagery and Mapping Agency)
Defense Threat Reduction
Army G-2
Army Space and Missile Command
Army Communications-Electronics Command
NAVAIRSYSCOM
Space and Naval Warfare Systems Command
Air Force Air Force Logistics Command
Air Force Systems Command
Homeland (Coast Guard-Border Patrol)
DoD Battlespace
DOD Acquisition, Technology and Logistics
US Coast Guard
Homeland Defense
Border Protection/Customs
Office of Secretary of Defense Iraq Command
Southcom- Army
Air Force Special Operations Command
US Air Force
Israel Air Force
Israel Defense Force
Federal Aviation Administration
Army Security and Intel
Department of Energy
Non-Government End Users (no exclusivity and right to Sales Commission based on
acceptance of Purchaser Order):
L-3
Raytheon
Northrop Grumman
Lockhead
DRTA
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NSP
Mitsui Brussan Aerospace Corporation
Palm Solutions Group
X. Xxx Logistics
Xxxx Xxxxxxx University (Applied Physics Laboratory)
Penn State University
BellSouth
FLIR Systems
ThinGap Motor Technologies
D-Star Engineering, Inc.
Recon/Optical, Inc.
Inter-4 Company, Inc.
Xxxxxxx Kodak Company
Paradigm Group, Inc.
ITT Industries
Sierra Nevada Corporation
Southwestern Xxxx
Sprint
Quasar USA, Inc.
NanoSys, Inc.
Sciperio, Inc.
GynSync, Inc.
nScrypt, Inc.
Skyway Aircraft, Inc.
Sky Way Communications Holding Corp.
GE Capital
Key Federal Finance
Paz Logistic
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Exhibit 2
PREVIOUSLY AGREED TO PROJECTS
1 Central Intelligence Agency -3 Airships
2 Border Patrol -10 Airships
3 Israeli military -8 Airships
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