Epic Exhibit A

Case 3:09-cv-00628-AC

Document 13-2

Filed 07/10/2009

Page 1 of 5

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AIRFRAME PURCHASE AGREEMENT

This F'Urchasygreement ("Purchas,e Agreement") is made and entered into as ofthis'?O day or ~' 2041' ff by and between EPIC AIR, LLC, a Delaware limited liability company ("EA"), and i?U.lE SLtlAVO,uu" L..LL ("Purchaser").

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Purchaser Contad Information: If Purchaser is an entity,

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state'theOrgani:z2Jtion:~~-#-A%1;L()I..(.PuaeIePhOneWOr1<# S""c,/ 3d 7.J :S-..J...J Address S"tJl/ /./. fJceCv1 &. ~ ~ oCell#oHome#ftl ~Ci7 S-S-JJ City, State

CJc£.JJ-#@tx;/E' , ' ­ Zip code

33'(·/5S-

'3':;7 ~ /7 -79 :;..(". r/chfi!.. /u u "6~//a.. col'{ Fax#

E-Mail

The contract consists of this Purchase Agreement, Exhibit A (Purchase Price and Payment Schedule) and Exhibit

B (Epic Airframe

Kit).

RECITALS

rACS").

A. EA will perform rts duties and obligations hereunder directly or through contractOl"';, pa~tners or affiliates Affiliate").

rEA

B. Purchaser desi~ to purchase an EPIC airframe kit as defined on exhibit B ("EPIC Airframe Kit") from EA and EA desi~ to sell an EPIC Airframe to Purchaser for a purchase price as defined in exhibit A ("Purchase Price") which is exclusive of all sales, excise, transfer and similar taxes as well as all other duties, imposts, charges and fees "Imposts") for whos'~ payment (collectively, Purchaser is ~ponsible,

"rl

C. EA is the designer and manufacturer of the unassembled Epic Airframe Kit. This aircraft kit is intended for use in the amateur category of the FAA "FAR" n~ulations. The Purchaser desi~ to build an Epic aircraft from a kit purchased from EA and understands and agrees with the following terms and conditions in consideration of the purchase of the kit. D. Purchaser will complete construction of the EPIC aircraft ("EPIC") via a Completion Assistance Agreement rCompletion AgreE!mei1t") beltween Pu~haser and Aircraft Completion services, LLC

C_ _

fui<;'~

E, In the event that EA and Purchaser previously entered into a Deposit Agreement ~arding an EPIC Airframe Kit ("Deposit Agreement"), the amount of the Deposit (as defined in the Deposit Agreement) shall be retained by EA and credited against the Purchase Price.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: Section 1.

PURCHASE OF EPIC AIRFRAME

Purchaser shall purchase and EA shall sell Purchaser an EPIC Airframe Kit pursuant to the te~ of this Airframe Purchase Agreement Section 2,

PURCHASE PRICE AND TERMS

The entire Purchase Price shall be paid by Purchaser in accordance with the payment schedule covered by Exhibit A. The full amount of Purchaser's Deposit, if any, shall be credited against the Purchase Price as provided for in Exhibit A and the unpaid balance shall be paid by Purchaser in accordance with the payment terms in Exhibit A

Confidential: EPIC AIR, LLC Page I of? Copyright (;I 2006 AIR UC. All rights reservecl Revised 04/04/08

AIR Initials

Iltl'11T

A~

1ft..::~~

Case 3:09-cv-00628-AC

SectioJ1l3.

Document 13-2

llIAPOS1§...

Purchaser iis responsible for the payment of alii Imposts imposed with respect to Purc:hwser's EPIC AirfrClnnE~ Kit. Purchaser shan pay aU such Imposts or re1mburse EA for the pHyment ttllereof pronlptly after Purchasers receipt of EA~s wnitten s1tatemE::nt with resPE~Gt theneto.

Filed 07/10/2009

Page 2 of 5

(which ..nay be in the form of an email or a fax). If Purchaser fails to designate a carriE!r, EA may select a carrier at its discretion. AJI deliveries are FOB Bend,

Oregon. Trtle ito th~~ EPIC Airframe Kit and risk of loss or damage shall pass from EA to Purchaser upon delivery of Purchasers EPIC Airframe Kit to the designated carrier. (b) Ship~{)sts. All shipping and transport expenses

and duties shall be borne by Purchaser. ACS will provide shipping assistance to the Purchaser under the CompJe1ion Aglreen1ent

Secticml 4. ~\IRFRAME DELIVERY Pf3.!:~~TY

EA shall make oommercicilly rE~3sonabfe efiforts to deUvt3r EPIC Airframe Kits in the samE~ orcfer ilhat the: purchase ,agreennents are nUrTlbered so that, for exarrlp}E~, thE~ EPIC Airframe Kit c()vere~d by purchase' agreernent #1 would be deliverE~d 1~rst. TIle parties, how€~ver, acknowiedg€~ that ilnt€!rveninH events, conditions and circumstances malY pn~vent EA from stric1.1y adhering to this delivery sequE~nce, and thus there is no ~;Juaranty that the EPIC Airiiramle Kits will

be delivered in 1tle same order that the purchase agreHrnl3nts are numwed.

Sectioln

(a)

VVithin fiftef~n (15) .a day other

business days, a business day b€~in~1

than a Saturday, Sunday or federal banking holiday J Busi",e5S Day") after Purchas;E~r's rec~ipt of EA's written statement (which 1T1ay be in the fOm"l of an email or a feDC) that Purchaser's EPIC Airframe KIt is com pl€~b~ and ready for shipment, Pun:;hasHr shall either accept Purchasl3"'s EPIC AiTiiramle Kit or providE~ a y.rrltten pund, fist to EP~ dE~tamng items described on Exhibit B that nE~d to be added, completed or com~cted~ In the 19vent lEA. n:~ceives from Purchaser a pund't fist before ttu~ lend of such

e

period, EA shalf utilize rE~sonabk:~ comnllerdal efforts

to rernedy the iterns set forth in 1hE~ first punch Jist. EA shall then provide written n{Jtice 'fo Pun;haser statin!~ that the -first punch Ii~i items have been remedited and Purchaser shall hav€~ ten (10) Business Days to either accept PurcJliasE~r's EPIC Airfrarne Kit or to defrver a second punch fist regardinu items identified in the fiirst punch Jist that have not been rem ed ieKi. This pr()(;E~SS shall be repeat€!d until Purchaser accep"!ts, its EPIC Ailrframe Krt. At any time, Purchaser may tlerrninate any of these pelrlods by delivery to lEA of Purchaser's 'Nritten acceptance of its EPIC Airframe Kit (whiGlh rnay be in the fornl of an emaH or a fax). In addition in the event that the: appnopriate punch list is not reoeivE~ before the end of any of the above-..fd€~ntffied PE~riods, Purchaser shalf be deemed to have accepted its EPIC PJrfrnmle Kit as of the end of ttH~ period in question. Within ten (10) Bush1ess Days after Purchas€!r's acceptance of its EPIC tUrfr.arne Kit, Purchaser sha" dE~ignclte a C31lrier to wtlic:h EA should denver Purchaser's EPIC J!\,irfram€~ Kit, which designation shalf be made in writing deJlven~d to EA I'

_J~J-

Cus10mer fnitia~

preserv€~,

package or handle Purchaser's EPIC

Airframe! Kit.

(
section 6.

5. .QIEUVEHY

t~~~f~Trtie and .Ris~.

(c) Pad<;ing. EA shalf preserve, pack;age and handle Purchaser's EPIC Ahirarne Kit so as to materially proted ~t from loss or damage. EA shan be responsible for any loss or dam:age arising from the sole negligence of EA which oc:curs while EA is atternpting to properly

RISKS REGARDING THE EPIC

Injury or death can occur as the result of the existence

or occurrence of llTlechanical and structural failures, adverse weather conditions, human error and other factors during the operation of an aircraft. The EPIC is intended to qualify as an Wamateur-builf' Amateur­ Builf') aircraft as such tenn is defined in FAR. No EPIC has ever been submitted for a type certificate, its design does not meet the requirements of Part 23 of FAR or any other regulatory design standard. The Amateur·~uift cat~~ry is an anonlaly in the highly regulated world of general aviation; no governmental standard exists for the design, development and testing of these aircraft

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The category \vas introduced decades ago under the conditions and purpose of individual education and recreation. While the EPIC developer chose certain design criteria and t1ests to satisfy itself that the product was suitE~d for ithe intended purpose, devefopment and test budgets for designers and manufacturers of experimental JlU11atE~ur-8uift aircraft are substantially different than those of designers and manufacturers of certified aircraft. Since the Purchaser is required to apply for and obtain the Experimental Certificate (with the assiistancH air ACS under the Completion Agreement), the Purchaser win have the duty and obligation to m:ake the appropriate application for the Purchaser's EPIC. EA has followed design criteria and performed tests to satisfy itself that the EPIC will be appropciate for its intended use as defined by EA. Ukewise; EA has followed design criteria and

Confidentnll: EPIC AIR, LLC Page 2: of7 Copyright (~2006 AJR U.C. All rights reserved.. Revised 04/04108

AIR Initials

Case 3:09-cv-00628-AC

Document 13-2

perforrned t(ests to satisfy itseff that ttu:~ connpliated EPIC shouki be appropriate for its opt~ration as an Amateur-Built aincraft Modi'ficatjions and/or subs1itu1jons of any equipment and/or parts included in the EPIC or equipment and parts not proc1ured or installed pursuant to the Completion Agreement may resuH~

in

diminished

or

irnpa;red

structural,

control andJor perfolmClnce charclctE~ristiGs which may creatE~ incne~ased risks of severe personal injury, death or property damage. aerodynamiG.

Section 7.

~SSUMPnON OF RISK; RELEASE ,~ND_

!NOE~~rrY..

Purchctser aclknowfedges that Purchaser understands the risks invotved in the owrnership and operation of an Arnateur-Buitt aircraft Hike the EPIC, inc1uclin~J the risks identified above. EX:CI:PT FOR BRE)~CIH ()F 'NARRAN"rv CLAIMS AF~~SING UNDI:IR SE;CTlOIN 10 PURCt-iASEf~ Tal THE GREA·nEST EXTI:NT ALLOWE[) BY .ePPLK:ABLE LAW" HERE:BY WAIVES AND RIELEASES EA, EA AFFIiLliA\TES AND EA OFFI!CERS, ME'''SI:RS AND EMPLC)YEES FROM EVERY KIND A~ID "NPE OF CLAIM, D~~AGjE AND INJIUIR'Y RESULTING y

FROM OR ARISING OUT

C~IF

THE

DE:SIGN,

CONS·n~UCnON,

MAlNTENAN CiE OR OPEFU~lnON OF PURCHASER'S EPIC AIRFRAME KIT j~ND/OIR TIiE EPIC. TC) THE lGREJ'TEST EXTENII' ALLO\l'VED BY APPLICJA,BLlE LAW, PURC:.ij\sEIR SHiALL INDEMNIIFY, DE:lFEND AND HOLD EA, EA AFFrUATES AND Ej~Clfi EA OFFICIEI~, MEMB.ER AND EMPLC)YEE HARNILESS AGAINST EVERY KIND AND TY1PE: 4::>F' CLAIM, DAMAf31E AI'lO INJURY AGAINS"r EA, iR~ESUIL TING FROM OR ARJ~SING OUT OF THE: DE:SIGN, co NSlrFtUCTION" OPERJ\TIONIOR MAJN'TlENANICE OF PURCtiASEJR'S EPIC AJRFRAJ~E

KIT,

PURCHASI:R'S EPIC OR OWNERSHllfl ntEf~EOF, INCLUDING CLAIMS BASE: 0 ()Nt THE NEGLJC3lENCE OF EA, EA AFFJ:UATE:S ,AND EA OFFtCE:R~ MEMBERS AND E:I~PUOlYEES. The PURCI-IJ\SEf~'S

Filed 07/10/2009

Page 3 of 5

"'confidential" prior to disclosure to Purchaser or within a reasonable tirne thereafter; and (ii) all infonnation or data concerning or related to the EPIIC Airframe Kit, the EPIC or EA's other products (including the discovery, reseanch, improvement, development, invention, manufacture, or safe thereof) or EA's business operations (including sales costs, profits, pricing methods, documentation, procedures, organizations, employee lists, and processes). (b) Exdusions.. N<:l~twithstanding any provision to the contrnry, the provisions of this section 8 shalf not apply to any infoffi13tion that (i) is ri!ghtfulfy known to Purchasl~r prior to disclosure; ,(if) is rightfully obtained by Purchaser from a third party without any obligation of confidentiality; (iii) ~s made available by EA to the public without restrictions; (iv) is independ~~ntly deve40ped by Purchaser without: reference to any Confidential Information of lEA; or (v) is disclosed by Purchaser with the prior written approval of EA

(c) Nondisdosure., Wffihout EA's express written ronsent Purchlaser shall not disdoS1e to any person or entity (other thcln Purchaser's agents or employees who have a need to know and are under similar confidenitiarrty obligations), or utilize in any way that is hannfu110 EA's business, any Confidential Information, whether written, oral, or visual whic;h Purchaser may obtain from EA, or otherwise discover in the performance of this Purchase Aglreement. Without limiting the generality of the abovE~, Purchaser shall maintain all such Confidential Information in confidence using no less than a reasonable degree of care. PurchaSi:~r shaEI takE~ reasonable steps to ensure that no unauthorized person or entity has access to Confidential Infomlation, and that all authorized persons having access to Confidential Information refrain from any unauthorized disclosure.

Section ~9. GOV1ERNMENTAL COMP~;" EA shall funlish to Purchaser any information possessed by EA and required to comply with the requirem4~nts of any governmental agency including, without fimitation, obtaining an Experlimental Certificate from the FAA.

Section 110. m~; UMrTEDWARRANTY

assurrlption of risk, release and indemni~f contained in this Section 7 are material factc)rs in de1tennining the PurcihaS€~ Price for PunchaSE~r's EPIC Airframe Kit. If these IefJal protections for EA were substalntiany reduced, the Purchase Pri(~a inevitably would be substantially increased

EA warrants that the EPIC Airfralme Kit shall (a) materially conform to aU portions of the specifications that relate to the EPIC Airframe Kit described on Exhibit ~~, (b) be 1ree from defects in materia' and workmanship, and (c) be free and clear of aU liens and other encumbrancos. EA MAKES NO OTHER REPRESENTATIONS OR WARRANTlES REGARDING PURCHASER'S EPIC AIRFRAME KIT, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERW'lSE, AND WHETHER COl\rrAINED IN ANY PROVlSI()N OF THilS PURCHASE AGREEMENT OR ARISING FRO''I1 C()MMUNICATlON OF ANY KIND

Sectio~n ~I. CO~NTlALlNFOBMAIJ.!~!i..

(a) Co!lfu:1enti~.!Jn!clrmation. As uSled in this &~ction 8, the itenn "Confidential Inform atlion" shall m~~an: (i) an informa1ion of EA to be oonsk1ered c:onfidl9ntial, and marked or disclosed! (y, WT1iting or \J'erbaflly) as

Ocmfidentud: EPIC AIR., LLC CU51Dlner

Initials

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Copyright (12006 AIR LLC. All rights reserveli Revised 04/04/08

AIR Initials

Case 3:09-cv-00628-AC

Document 13-2

WITH PUI~CHJ~SER, AND EA SPECIIFIGJ~LlY DISCLAIMS AN"Y IMPLIED 'NARH.~NTY OR CONDIT10N OF r~ERCHi\NTAl31ILITY()R Fnl'~ESS FOR A PARTlCUlAR PURPOSE:. NC) EN'Pl.C)'YEE OR AGENT 1DF 5~ IS AUTHORIZED T() ALTER OR EXPAlND THE Ln~ITED HEPRESENTATIC}NS AND WARIRANTIES M)~E BY EA IN THIS SIEGT1()!N 10. IN -n-i1E EVENT OF A BREACH OF A REPRESENTATIC)N OH WARH.ANn( PHOVIDED IN THIS SECTION 10, PURCHASER'S SOLE AND EXCLUSrvE REMEDY WILL lBE RJEPAIH OR REPL'p,CEMENT OF THE DEFECTIVE OR NONC()NFClRMING ITEM OH RE~10VAL (OR OVER) ()F ANY 1LIEN OR BONDlNlG ENCUrIABRA,NCE. IN NC) EVENT \~lILL EA BE UABLE FOR AN'Y" INDIRECT. ()ONSEQIUEI'n·,AL OR QlTHEH O.A~MAGES RESULTlNG FRt:JMI A BREACH OF THIS SECTION 10.

Seeti,on 11. !~~·noN AND ASS![~~~!.UC!:"

EA shall have the power and authority, in its unfetterEKJ discretion, to assign any or aU 01F its ri~}hts hereundjer to an lEJ\ Affiliate or lEA Affifiat~~ and to delegate any or .an of its duties and obl~}ations hereunder to an EA Affiliate or EA A1fmab~. In the event that EA delegates any of its duties or obligations to an EA Affiliate that expressly assurnes perfomnance of such duties or obligations, EA shall no long«3r in any way be responsible fOf, or liable regardi:ng, such assumed duties or obligations, includinf;J, 'ivithout limitation, 1their perforrnance. SubsE~quent to such a delegation, Purchaser shalf look only to such ;assuming EA Afi~rrate and slich EA Affiliate~ shall be the sole party responsible fbf,. or liable n~}ardjng. such assumed durtifl..5 or obligations. includingl. wi1hout firnitation, their perfonnance. In the event of any such delegation of lduties heneuncler to an 8\ Affiliate, such EA Affiliate vvill also be ~~ntitled to aSS€irt the rights and benefits accruin9 to EA, under this PU1rc:ha~3 Agn~ement. This F'urchase ~,reement, including EPIC Airframe Kit deJ[ivery rights accruing then~und€~r, are not assign<Jble or transferable by Pun:haser wirthourt the prior ~vritten Gonsent of EA

Section '12. 9THER?ROVlSJONS j=1Jrchaser's Legal Goun~~§!!_ EJI\ s1rongfy that Purchaser have thiis Purchase Agreern€nt revie1Ned by lega l[ counsel before PurchasHr executes ~ particularly gwen the facf: that this Pun:tlase Agrreement frmits and/or €!Iiminates various important rights that Purchaser rnight otherViis~~ enjoy vis-a-vis EA and the lEA J~ffiJiatE~s. (a)

recomtnl€~nds

(b) 1n<1!~~lent C90tractors. The relationship of the parties under this Purchase Agreeme~n1: is 1Jhat of

Customer

Jniti~

Filed 07/10/2009

Page 4 of 5

indepenclent contractors and neither party is an emplo~~. agen~ pclrtner or joint venturer of the other. (c) Gove!!1!!J:gJLaw. This Purchase Agreement shall be governed by and construed under ttlf~ laws of the State of Oregon. The parti~~ consent to the exclusive jurisdiction of the state and Federal courts in Deschutes County. ~aregon. Ei1ther party, acting in good faith, may at its respective so~e discretion request arbitration as a method of dispute resolution rather than litigation. If either party n~uests arbitration, then upon mutual agreement of the parties (and such agreement to arbitrate will not be unreasonably withheld by either party) the following will apply: a) Arnerican Arbitration Associatiion ~in conduct saki arbitration; b) the substantiive lav.r of the State of ()regon win apply; c) the procedural rules of 1he Arnerican Arbirtraoon Association will applry; d) there win be a panel of three (3) arbitrators, onE~ (1) each chos·en exclusively by each party and one (1) dlosen by both parties by mutual agreement, if the parties cannot c:lgree to the third arbitrator, the American Arbitration Association will appoint one; e) all hearings and findings wilt be kept confidential and win not be public record; and f) choice of venue fortrn~ actual hearings WIll be Bend, Oregon.

(d) Atton~:ees' Costs and ~1ses. In any action or prc>ceE~ing betwE~n the parties he~reto (inel uding any arbitration), the prevailing party '/trill be entitled to recover its reasonable attorneys' fees and other reasonable costs and expenses incurred r in addition to any other relief to which it may be entitled. (e) Sev€~rabilitv and Waiver. If any provision of this PurchasE~ Agreement is held te> be invalid or unenforoeabJe by a court of competent jurisdiction, then the remaining provisions 'will neverttu~1ess remain in full force and effe!ct rt the fundafnen~ll purpose of the contract is not mat€~rially impacted. and the parties wHl negotiate! in good faith a substitute valid and enforceable provision which most nearly effects the parties' intent in entering into this Purchase Agreement. Neither party's failure to exercise any of its rights hereunder shall constitute or be def~med a waiver or forfeiture of any such rights.

(f) Late EIDTIJlents. All customer payments are due when invoiced. TWlanty days after the invoice date, aU invoices are past due and subject to an eighteen percent clnnuaJ simple interest chargre. Additionally. if customer payments go past due sixty (60) days, EA at its option can stop progress, withhold materials and parts; and allrocate company resources to other customer projects. For every additional week past twenty (~~O) days, EA at its option (;an place aircraft behind one (1) aircraft in the production line. (g) ~3ack. If (~storner fails to make payments beyond sixty (60) days past the invoice due date. EA at its option can buy back the aircraft at 50% of the payment history.

Confidential: EPIC AIR, LLC

Page 4 of7 GJpyriglrt qd 2006 AIR LLC. All rights reserved. Revised Mf04f08

AIR Jfnitials

Case 3:09-cv-00628-AC

Document 13-2

(h) !~l!~Aq~~nent This docunlent and its attachrnents represent th€~ entire agreenlent between the parties as to the mattelS slat forth herein and supers1ede all prior disc;ussions, reprP~)4~ntations or understandings between them, except for prior or contemlporaneous agreemE~nts specifically referen~:Kf herein . The captions and h~:~adings used in this Purchase Agreement are 1:or convenienCE~ in

referenGH. onl~ are~ not to be consbued in any ~vay as terms or be used to interpret the provisions of this

Filed 07/10/2009

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only be modifjf~d by written anrendrnent signed by an authorizE~ representative of eaGh party. (I) Counterparts. This Purchase Agreement may be A fax transmission of a signed in counterparts. stgnature~ page WIll be considered an original signature page. At the reque$t of a party, a party will confirm a fax-translmitted signature page by delivering an original signature~ page

to the requestin£I part

Purchase Agreemant. This Purchase Agn~rnent rnay

IN WrnNESS WHEREOF, the parties

heln~to

have

ent.:~rE~d into

this Purchasla Agreement as of the day and year first

written. By signinf~ below Purchaser aC~Jlowk~~feS that n has read, understood and agn~ to comply with the statenlents. specifications, waivers, terms and conditions of this Purchase A,greement fOT the Epic Airframe Kit. Thjs Purchase AgreemE~nt will berome bjndjn!~) on the parti€~s Ofdiy upon acceptance by EA as evidenced by a signature of an authorized

repn~entative befo'Vv.

~~_.~~~ *-/2£/ "E;'L~UJLD. ER

1/,/

"

Date~~

Consent of Spouse,

~~I'J~

.u?~_

Epic AJ~ li(:

a Delaware Limii~ed Liability COIT1pany

By:

_

Name:

if applicable: Title:

Date

Customer Injtia~

_

Date

Confidential: EPIC AIR LLC Page 5 of7 Copyright 0 2006 AIR LLC. All rights reserved. Revised 04lO4/08

AIR Initials