PURCHASE AGREEMENT BETWEEN ZODIAC SEATS UK LIMITED ...

PURCHASE AGREEMENT

BETWEEN

ZODIAC SEATS UK LIMITED

AND

[customer name]

FOR THE SUPPLY OF

[seat type]

FITTED TO

[aircraft type] AIRCRAFT

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Table of Contents Definitions ....................................................................................................................... 4 1 Specification and General Requirements ........................................................ 7 2 Responsibilities ............................................................................................... 7 3 Price and Payment Terms .............................................................................. 8 4 Taxes and Levies ........................................................................................... 9 5 Certification, Inspection and Delivery .............................................................. 9 6 Change Requests ..........................................................................................10 7 Documentation ..............................................................................................11 8 Buyer Furnished Equipment ..........................................................................11 9 Spare Parts ...................................................................................................12 10 Warranty ........................................................................................................13 11 Support Services ...........................................................................................13 12 Excusable and Non Excusable Delay ............................................................13 13 Termination ...................................................................................................14 14 Liability ..........................................................................................................15 15 Insurance .......................................................................................................16 16 Intellectual Property Rights ............................................................................16 17 Disclosure of Information ...............................................................................17 18 Assignment and Subcontractors ....................................................................17 19 Rights of Third Parties ...................................................................................18 20 Entire Agreement and Variation .....................................................................18 21 Remedies and Waivers ..................................................................................18 22 Survival..........................................................................................................18 23 Applicable Law and Jurisdiction .....................................................................19 24 Dispute Resolution ........................................................................................19 25 Notices and Requests ....................................................................................19 Appendix A Technical Specification ..................................................................................21 Appendix B Non-Recurring Charges .................................................................................22 Appendix C Recurring Charges ........................................................................................23 Appendix D Escalation Formula ........................................................................................24 Appendix E Project Plan and Delivery Schedule ...............................................................25 Appendix F Warranty Terms .............................................................................................26 Appendix G BFE List .........................................................................................................29 Appendix H Change Order Form.......................................................................................30 Appendix I Standard Operating Procedure – Inter stage Inspection Plan ........................31

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PURCHASE AGREEMENT

For xxx Seating BETWEEN ZODIAC SEATS UK LIMITED having its principal offices at Kestrel House, Lakeside, Llantarnam Industrial Park, Cwmbran, NP44 3HQ, United Kingdom (hereinafter referred to as “Zodiac”) and [CUSTOMER NAME], having its principle offices at xxxx (hereinafter referred to as “[CUSTOMER NAME]”) Each of which may be referred to individually as the “Party” or collectively as the “Parties” Witnesseth

1. WHEREAS [CUSTOMER NAME] has informed Zodiac of its intention to purchase from Zodiac [seat type] Seats for its [aircraft type] Aircraft

2. WHEREAS Zodiac is willing to furnish such Equipment, as hereinafter defined, to

[CUSTOMER NAME]

3. NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, it is hereby agreed that the following terms and conditions (the “Agreement”) shall apply to all Purchase Orders for the Equipment, which are issued by [CUSTOMER NAME] and accepted by Zodiac.

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Preliminary The following definitions shall apply to the following words and phrases in this Agreement: Definitions Aircraft means the [aircraft type] aircraft owned or operated by

[CUSTOMER NAME] to which the Equipment and Spare Parts will be attached to, incorporated in or installed in;

Airframe Manufacturer means the Boeing Company or Airbus SAS [manufacturer

name]; AOG means Aircraft on ground whereby the Aircraft cannot be

flown or can only be flown with restrictions; Airworthiness Authorities means the CAA, EASA, FAA as appropriate; BFE means Buyer Furnished Equipment which means

equipment, components, systems, sub-systems and/or materials relating to, for use with or incorporation into the Equipment that are to be furnished by [CUSTOMER NAME] on a without charge basis, being those items and materials set out at Appendix G to this Agreement;

CAA means the Civil Aviation Authority; CDR means Critical Design Review meeting at which the

Technical Specification in all its aspects shall be frozen; Change Order Form means the proforma detailed in Appendix H to this

Agreement pursuant to which changes to this Agreement may be requested in accordance with Clause 6 Change Requests;

Charges means the Non Recurring Charge, the Recurring Charges

and any other charges made by Zodiac to [CUSTOMER NAME] as set out in this Agreement;

CMM means Component Maintenance Manual; Confidential Information means all information, data and materials of whatever

nature whether in oral, written, electronic, or material form and which relate to the operations, plans, know-how, trade secrets, business affairs, personnel, Intellectual Property Rights, Zodiac’s and [CUSTOMER NAME]s suppliers or their respective associated companies of either Party and which are in relation to this Agreement and which may include;

• technical information, concepts, inventions, ideas,

trade secrets, services or potential services under development, software, data, drawings, designs, intellectual property, copyright, business plans and financial information.

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• processes, procedures, manufacturing, techniques, methodologies, customer/supplier lists, specifications, improvements, samples, and know how.

• information developed during the performance of this

Agreement. Days means calendar days, if not otherwise stated; Delivery means Delivery of the Equipment Ex-Works, Cwmbran as

defined in Incoterms 2010; Delivery Date means the date of Delivery of Products or Equipment, as

set out in the Delivery Schedule or elsewhere in this Agreement or the date of Delivery of Spare Parts, or as otherwise agreed between the Parties in accordance with the terms of this Agreement including the Delivery Date detailed on an accepted Purchase Order;

Delivery Schedule means the schedule setting out the Delivery Dates for the

Equipment detailed in Appendix E to this Agreement; EASA means the European Aviation Safety Agency; Equipment means the equipment to be designed, manufactured and

supplied by Zodiac hereunder, namely, the [seat type] Seats excluding BFE;

Facility means any factory or plant operated by Zodiac and any

base or workshop operated by [CUSTOMER NAME], the address of which has been notified in writing to the other Party;

FAA means the Federal Aviation Authority; FAI means the First Article Inspection; Incoterms means the trade terms published by the International

Chamber of Commerce, Paris, France; Initial Provisioning Spares means Spare Parts identified as being for the initial

support of the Equipment fitted to the Aircraft; Intellectual Property Rights means any patent, registered design, copyright (including

rights in software), design right, database right, trade mark, service mark, domain name, inventions, know how, trade secrets and other confidential information, and all similar property rights whether registered or not and any application or right to apply for registration of any of these rights anywhere throughout the world and the right to bring proceedings in respect of those rights anywhere throughout the world;

IP Claim means any claim that the Intellectual Property Rights in

the Equipment do not, in part or in whole, belong to Zodiac or are alleged to infringe a third party’s Intellectual Property Rights;

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Non Recurring Charge means the non recurring charge set out in Appendix B to

this Agreement; On Dock Delivery Date means the date by which the Equipment is due to be

delivered to the Airframe Manufacturer; PDR means the Preliminary Design Review; Products means the Equipment and BFE together; Project Plan means the plan set out in Appendix E to this Agreement; Purchase Order means the [CUSTOMER NAME] written purchase order,

excluding any terms and conditions printed on the reverse side thereof, identifying the Zodiac Equipment and/or Spare Part(s) to be purchased, their purchase price and other information as required by this Agreement;

Recurring Charges means the recurring charges for the Equipment set out in

Appendix C to this Agreement; Seat means the one single seat place of the Equipment to be

designed, manufactured and supplied hereunder called [seat name];

Ship Set means one set of Equipment required for one single

Aircraft; Spare Part means parts or components of the Equipment required for

the maintenance, repair, and overhaul of the Equipment purchased from Zodiac;

Support Period means the period of time commencing with Delivery of the

first (1st) Ship Set to [CUSTOMER NAME] and continuing for as long as the Equipment is installed in [CUSTOMER NAME]’s Aircraft;

Support Services means those services as detailed in Clause 6 herein;

Support Services; Technical Specification means the technical specification for the Equipment set

out in Appendix A to this Agreement;

Warranty Period means the time period of warranty cover for an item of Equipment as specified in Appendix F to this Agreement.

The word “including” shall not limit the generating of any preceding words or be construed as being limited to the same class as any preceding words where a wider construction is possible.

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1 Specification and General Requirements 1.1 Subject to the terms of this Agreement, [CUSTOMER NAME] commits to place

Purchase Orders for the Non Recurring programme and for the Ship Sets and take Delivery of the Ship Sets and pay the Charges for the following line-fit [or retrofit] Seating programme:

Aircraft Type Aircraft Quantity Pax Places per

Aircraft Total Requirement

[CUSTOMER NAME] shall place Purchase Orders for the Non Recurring programme and for the Ship Sets detailed in this Clause 1.1 on signature of this Agreement. [CUSTOMER NAME]’s placement or failure to place Purchase Orders hereunder shall not affect [CUSTOMER NAME]’s contractual obligation to pay the Charges and purchase its programme requirement as set out in this Agreement.

1.2 Unless as otherwise stated or varied in accordance with the terms of this Agreement or

unless agreed between the parties, the Delivery Dates for each of the Ship Sets is fixed in accordance with the Delivery Schedule detailed in Appendix E to this Agreement.

2 Responsibilities 2.1 Zodiac shall be responsible for the manufacture of the Equipment so that it meets the

Technical Specification. 2.2 The Equipment supplied shall meet all requirements for approval by EASA and be

certified for installation in the Aircraft according to the applicable approved certification criteria valid at the date of this Agreement. Should the certification criteria not be approved as of the date of this Agreement then Zodiac reserves the right to alter the Charges and Delivery Dates to accommodate the impact of any changes to the certification criteria in place as at the date of this Agreement. Any such changes to the terms resulting from such certification criteria approval shall promptly be notified to [Customer Name].

2.3 The Equipment delivered under this Agreement shall be provided with an EASA Form 1

Certificate. 2.4 Any mandatory changes issued and required by any of the Airworthiness Authorities

after receipt of a Purchase Order or after the execution date of this Agreement and which are applicable to the Equipment or BFE, may be subject to a price variation which will be highlighted by Zodiac at the time of the issuance of such mandatory change.

2.5 All material needed shall be supplied by Zodiac, with the exception of BFE Parts

(where applicable) and as specified in Appendix G to this Agreement. The Equipment price as set forth-in Appendix C to this Agreement includes installation of the BFE parts, if so required. Cost and risk of transportation of BFE parts to Zodiac’s Facility shall be borne by [CUSTOMER NAME].

2.6 Technical data as detailed in Clause 7, Documentation shall be provided to

[CUSTOMER NAME] for the purposes of the support of the Equipment supplied pursuant to this Agreement.

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2.7 A Project Plan detailing the major project milestones regarding engineering, manufacturing, testing and Delivery of the Equipment is included as Appendix E to this Agreement. Zodiac will inform [CUSTOMER NAME] promptly upon request about the progress of engineering, manufacturing, testing and shipping of the Equipment. Any change in any given schedule shall be confirmed without delay through revision to the same Project Plan.

3 Price and Payment Terms 3.1 The Non Recurring Charges for the Equipment, as may be amended from time to time

pursuant to a Change Request, are non refundable and will be paid by [CUSTOMER NAME] in accordance with Clause 3.1.1 below and are as set out in Appendix B to this Agreement.

3.1.1 The Non Recurring Charges will be invoiced in the following stages:

30% on notification of programme award 30% following Preliminary Design Review (PDR) 30% following Critical Design Review (CDR) 10% following First Article Inspection (FAI)

3.1.2 Invoices for the Non Recurring Charges will be submitted by Zodiac for payment

under this Agreement following each of the above milestones.

3.1.3 All invoices issued for the Non Recurring Charges shall be paid by [CUSTOMER NAME] seven (7) days after the date of the invoice.

3.1.4 Zodiac shall adjust the final instalment amount to ensure that it receives the final Total Non Recurring Costs (amended pursuant to any applicable Requests for Change), and shall invoice the [CUSTOMER NAME] accordingly.

3.2 The Recurring Charges for the Equipment are as set out in Appendix C to this Agreement.

3.2.1 Invoices for the Recurring Charges may be submitted by Zodiac for payment

following Delivery of each Seat, unless otherwise agreed or provided for under this Agreement.

3.2.2 The process for varying the Recurring Charges is set out in Appendix D to this Agreement.

3.2.3 The Recurring Charges for the Equipment excludes the cost of packaging for transportation.

[USD fluctuation] The USD prices in this Agreement are based on an exchange rate of 1 GBP to [ ] USD (“Applied Exchange Rate” for the year [ ]). This exchange rate will be reviewed on January 1st of each subsequent year (from 1st January [ ]). The average exchange rate for the previous year shall be determined based on the exchange rates published on the Financial Times website (“Average Exchange Rate”).

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Should the variation between the Applied Exchange Rate and the Average Exchange Rate for the previous year be equal to or less than [ ] US cents for the GBP (i.e. range between [ ] and [ ]), the Applied Exchange Rate for the prices in this Agreement will remain unchanged. Should the difference between the Applied Exchange Rate and the Average Exchange Rate be equivalent to more than [ ] US cents for the GBP (i.e. equivalent to [ ] or less or [ ] or more respectively), then the newly Applied Exchange Rate for the subsequent year will lead to an automatic adjustment of the Applied Exchange Rate to the new Average Exchange Rate of the previous year. For the avoidance of doubt, these adjustments would reflect only the excess beyond these limits. For example, if the Average Exchange Rate were to fall to [ ], the price adjustment would reflect only the excess of a [ ] reduction and not a reduction from [ ] to [ ]. Equally, if the Average Exchange Rate were to rise to [ ], the price adjustment would reflect the excess of a [ ] increase and not an increase from [ ] to [ ]. The new Applied Exchange Rate will be used to calculate the precise invoicing amount in USD, after any price increases resulting from the application of the above Escalation Formula have been applied.

3.2.4 All invoices issued for Recurring Charges shall be paid by [CUSTOMER NAME]

thirty (30) days after the date of the invoice.

3.3 Without prejudice to Zodiac’s other rights and remedies, Zodiac shall be entitled to

recover a late payment amount against Recurring or Non Recurring invoices calculated at a rate of eight percentage points (8%) per annum above the then current Bank of England base rate, which shall be applied to amounts not paid when due on a per day basis. Furthermore, without prejudice to Zodiac’s obligations to meet the Delivery Dates for the Products hereunder, Zodiac shall have the right to delay delivery of any Ship Set until such late payment, including any late payment penalty is received by Zodiac.

3.4 [CUSTOMER NAME] shall have no right of set off, retention or reduction in respect of

any invoice. 4 Taxes and Levies 4.1 Any and all taxes and levies imposed by governmental authorities of [CUSTOMER

NAME] in connection with this Agreement shall be borne by [CUSTOMER NAME]. 4.2 Any and all taxes and levies imposed upon Zodiac, by Zodiac governmental authorities

shall be borne by Zodiac. 4.3 Any Customs export or import duties imposed upon [CUSTOMER NAME] for

importation of BFE by governmental authorities shall be borne by [CUSTOMER NAME]. Any Customs import duties for [CUSTOMER NAME] furnished BFE imposed upon Zodiac, by governmental authorities shall be reimbursed promptly by [CUSTOMER NAME].

5 Certification, Inspection and Delivery

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5.1 Zodiac shall seek certification approval for the Equipment from the Airworthiness Authorities as appropriate by providing the Airworthiness Authorities with all required documentation and technical information in respect of the Equipment as required.

5.2 Delivery of all Equipment shall be Ex–Works (Incoterms 2010), Zodiac’s Facility,

Cwmbran in accordance with the Zodiac Ex-Works Delivery Schedule detailed in Appendix E to this Agreement.

5.3 Standard production lead-time for additional Ship Sets of Seats shall be twelve (12)

months subject to Zodiac available capacity at the time of receipt of the Purchase Order.

5.4 Zodiac will accept a deferral in the Delivery Date up to a maximum period of thirty (30)

Days providing the request is formally communicated to Zodiac no less than one-hundred and eighty (180) Days prior to the applicable original Delivery Dates. Any other Delivery Schedule revision requested by [CUSTOMER NAME] shall be subject to agreement by Zodiac and may be subject to other terms and conditions on a case-by-case basis.

5.5 [CUSTOMER NAME] will be entitled (but not obligated) to conduct a source inspection

of the first Ship Set of Equipment when the build of such Ship Set is complete at Zodiac’s Facility in Cwmbran provided that written notice of its requirement to do so is received by Zodiac no later than 60 days in advance of the Delivery Date of the first Ship Set. [CUSTOMER NAME] shall be entitled to inspect the aesthetic items of the Equipment to the pre agreed Standard Operating Procedure – Inter stage Inspection Plan detailed in Appendix J to this Agreement only and [CUSTOMER NAME] shall complete such inspection prior to the Ex-Works Delivery Date.

5.6 Upon Delivery Ex-Works (Incoterms 2010), risk of loss or damage to the Equipment

shall pass from Zodiac to [CUSTOMER NAME]. Upon payment for the Equipment in full title shall pass from Zodiac to [CUSTOMER NAME].

6 Change Requests 6.1 During the operation of this Agreement [CUSTOMER NAME] may request, or Zodiac

may identify, a need for additional equipment, alternative equipment or changes to the Equipment or its Technical Specification not included in this Agreement, including but not limited to any mandatory changes or changes required to meet the certification rules or interpretation of such certification rules issued by the Airworthiness Authorities or the Airframe Manufacturer after the date of this Agreement. If such a situation occurs, the relevant Party shall write to the other Party promptly outlining the details and the Equipment changes required using the Change Order Form in Appendix H to this Agreement.

6.2 For any changes, Zodiac shall provide [CUSTOMER NAME] with a quotation for

providing the change and will advise the impact of the change upon the Equipment, Delivery Dates, programme milestones, Charges, and any other commercial effect.

6.3 If Zodiac accepts the request and [CUSTOMER NAME] accepts the quotation, the

Parties shall execute an amendment to this Agreement including the Technical Specification as appropriate.

6.4 All post Delivery changes will be published by a Zodiac service bulletin and will be

incorporated into the CMM as applicable.

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7 Documentation 7.1 Zodiac shall supply to [CUSTOMER NAME], the following technical publications in the

following quantities on a free of charge basis:

Component Maintenance Manual – One (1) hard copy and two (2) soft copies in PDF format; and,

Illustrated Parts Catalogue – one (1) soft copy in DPF format; and,

Spare Parts Price List – one (1) soft copy in DPF format; and,

Recommended Initial Spares Provisioning List including price list for such

recommended Spare Parts – one (1) soft copy in DPF format; and, Certification documents of the CAA, FAA and EASA as appropriate – one (1) soft

copy via e-mail. Service Bulletins (as and when released) - One (1) soft copy via email.

7.2 All aforementioned technical documents shall be furnished in accordance with the

Project Plan. 7.3 All such publications will be provided in the English language. Additional copies

requested will be subject to a nominal charge. 7.4 A free of charge revision service will be provided in respect of upheld warranty and

Equipment-related airworthiness issues for as long as the Equipment is used in “[CUSTOMER NAME]’s” Aircraft fleet. Other revision services will be provided at charges to be agreed between the parties on a case-by-case basis.

8 Buyer Furnished Equipment 8.1 A list of the BFE to be provided by [CUSTOMER NAME] to Zodiac is detailed in

Appendix G to this Agreement. 8.2 All BFE will be delivered to Zodiac’s Facility DDP (Incoterms 2010) promptly in

accordance with the timetable agreed between [CUSTOMER NAME] and Zodiac (but in no event later than sixteen (16) weeks prior to the Equipment Delivery Dates set out in the Delivery Schedule at Appendix E) together with all required installation instructions where applicable. All shipping expenses or insurance costs, incurred as a result of the procurement or transportation of the BFE to Zodiac’s premises shall be borne by [CUSTOMER NAME].

8.3 [CUSTOMER NAME] warrants to Zodiac that all BFE shall meet and be in full compliance with all applicable regulatory requirements of the applicable Airworthiness Authorities in effect at the time of its incorporation into the Equipment and [CUSTOMER NAME] shall deliver to Zodiac any documentation required by the applicable Airworthiness Authorities.

8.4 Mislaid or damaged BFE caused by the default of Zodiac or Zodiac’s employees,

agents or subcontractors shall be promptly replaced by [CUSTOMER NAME] at Zodiac’s reasonable direct expense. Mislaid, damaged or incomplete BFE caused by the default of [CUSTOMER NAME] or “[CUSTOMER NAME]’s” employees or agents shall be promptly replaced by [CUSTOMER NAME] at “[CUSTOMER NAME]’s” expense.

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8.5 Charges quoted include the management and storage of BFE pending Delivery by

Zodiac of the Product. However, Zodiac will not be held responsible for the effects of late supply of BFE or BFE which is faulty and may request additional charges associated with receipt of such BFE, such charge could include but not be limited to out-of-sequence installation costs. In the event of late supply of BFE, or faulty BFE then:

8.5.1 The Delivery Schedule will be reviewed by the Parties and varied on

agreement. If there is no agreement then the Delivery Schedule will be extended by the period of delay in supplying BFE which is not faulty; and

8.5.2 Zodiac may charge [CUSTOMER NAME] for its reasonable costs incurred in storing Products or Equipment which cannot be delivered to [CUSTOMER NAME] due to a delay in providing non faulty BFE; and

8.5.3 Zodiac may invoice [CUSTOMER NAME] for the full sales price of the Equipment that cannot be Delivered in accordance with the original Delivery Schedule.

9 Spare Parts 9.1 Zodiac will provide to [CUSTOMER NAME] an Initial Spares Provisioning List (ISPL) to

enable [CUSTOMER NAME] to place Initial Provisioning Spares Purchase Orders at least sixty (60) days prior to Delivery of the first Ship Set of Equipment. The Initial Provisioning Spares ordered in accordance with this Clause 9.1 will be delivered with the first Ship Set of Seats.

9.2 Zodiac will provide [CUSTOMER NAME] within sixty (60) days of initial delivery of the

Equipment, a Spare Parts Price List detailing all of the Spare Parts for the Equipment. The Spare Parts Price List will be updated and re-issued annually. Zodiac will at all times act in good faith and will utilise Zodiac’s standard approach to spare part pricing. All Spare Parts orders will be supplied to the published lead-times in the Spare Parts Price List.

9.3 Spare Parts pricing will be fixed at the price level detailed in the first Spare Parts Price

List, provided to [CUSTOMER NAME] in accordance with Clause 9.2 herein, from the Delivery Date of the first Ship Set of Equipment until 31st December of the same year. On the 1st January of each year thereafter, Zodiac shall provide to [CUSTOMER NAME] a Spare Parts Price List, which shall set forth the prices for all Spare Parts valid from 1st of January of that year for the following twelve (12) month period.

9.4 [CUSTOMER NAME] may submit Purchase Orders for Spare Parts on an on-going

basis and at any time during the duration of this Agreement. Zodiac shall review such Purchase Orders and if Zodiac cannot meet the delivery schedule stated in the Purchase Order, it shall notify [CUSTOMER NAME] of the dates that it can make Delivery of the ordered Spare Parts within ten (10) working days of receipt of the Purchase Order.

9.5 Delivery of all Spare Parts will be Ex-Works (Incoterms 2010), Zodiac Facility,

Cwmbran, unless otherwise agreed between the Parties. 9.6 Zodiac shall provide a 24hr telephone line for Spare Parts required to address AOG.

Zodiac shall ship all Spare Parts required due to demonstrated AOG and which are in stock within 24 hours after acceptance of the Purchase Order which details the AOG

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Aircraft’s tail number and location. If Spare Parts are not in stock Zodiac shall notify [customer ref] of the action taken to address the AOG requirement and the expected delivery date.

9.7 Technical support will be supplied by telephone by Zodiac during UK office hours (8am

to 5pm Mon to Thurs and 8am to 1:30pm Fri) for 6 months following the first installation of Equipment in the first Aircraft.

9.8 Prior to the commencement of flight operations and then twice yearly, Zodiac and

[CUSTOMER NAME] will hold a Spares Parts conference. At the Spares Parts conference, the Spares Parts usage data will be discussed and the Spares Parts requirement agreed for the following six-month period.

10 Warranty 10.1 The provisions contained in Appendix F shall apply. 11 Support Services 11.1 Commencing with the Delivery of the first Aircraft Ship Set to [CUSTOMER NAME] and

continuing as long as Equipment is installed in the Aircraft, Zodiac will maintain at its factory adequate equipment and qualified personnel to provide to [CUSTOMER NAME] Support Services such as technical assistance, maintenance and overhaul assistance, Spare Parts, modification kits, component maintenance manuals, service bulletins, Spare Parts lists and repair services.

11.2 Zodiac shall provide a suitably qualified representative to support the first Ship Set

installation of each aircraft type; the timing of such support will be agreed in conjunction with [CUSTOMER NAME].

11.3 Zodiac shall perform a minimum of one (1) site visit per year to [CUSTOMER NAME]

Facilities after the first Ship Set of Equipment enters into service. Zodiac also undertakes to perform Site Visits at “[CUSTOMER NAME]’s” facilities as reasonably requested by [CUSTOMER NAME] if there are repetitive failures or design defects.

11.4 Training of “[CUSTOMER NAME]’s” technicians will be provided at the Zodiac

production facility free of charge to a maximum of 6 delegates for a maximum of 5 days. Timing of such training, numbers of personnel involved and other details will be mutually agreed. [CUSTOMER NAME] shall pay directly for all its travel, accommodation and subsistence costs. Zodiac will provide all training materials and notes for all delegates. Additional training or training required at any other location will be on separate terms and conditions to be agreed on a case-by-case basis.

12 Excusable and Non Excusable Delay 12.1 Excusable Delay

Zodiac shall not be liable for any delay or default in any of its obligations under this Agreement (and [CUSTOMER NAME] shall not be entitled to terminate this Agreement) due to causes beyond its reasonable control (including but not limited to war, fires, floods, terrorism, acts of god, strikes, the failure of the timely supply of BFE equipment, changes to the certification rules and delays caused by the Airworthiness Authorities or the Airframe Manufacturer). In the event of Zodiac realising that a delay in delivery may occur, Zodiac shall notify [CUSTOMER NAME] promptly in writing

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stating the anticipated period of delay, the reason for the delay and what action is being taken to overcome such delay. For non-BFE equipment, Zodiac shall use its reasonable efforts to remove the cause of delay, resume work as soon as reasonably possible and to make up for lost time. Once Zodiac has established the minimum resultant delay reasonably achievable to the program the Delivery Schedule will be extended accordingly.

12.2 Non Excusable Delay

12.2.1 Subject to Clause 12.1 above, if it becomes apparent to Zodiac that delivery of any item will become subject to delay, Zodiac shall forthwith notify [CUSTOMER NAME] in writing of the nature and detailed reasons for and foreseeable extent of such delay and shall, from time to time thereafter, notify [CUSTOMER NAME] whenever the nature of the foreseeable extent of such delay shall change.

12.2.2 If Zodiac fails to deliver any piece of the Equipment within fourteen (14) days of

the final agreed On Dock Delivery Dates, and the cause of the delay is not subject to Clause 12.1 above, then for each complete Day thereafter that Zodiac fails to Deliver such piece of Equipment, Zodiac shall pay to [CUSTOMER NAME] by way of liquidated damages 0.25% (one quarter of one percent) of the price of the piece of Equipment that has been delayed up to a maximum of 5% (five percent) of the value of the delayed piece of Equipment.

12.3 The liquidated damages scheme set out in Clause 12.2.2 above is intended to be a

genuine pre-estimate of anticipated actual loss. [CUSTOMER NAME] shall not be entitled to enforce the provisions of this Clause 12.2.2 where [CUSTOMER NAME] does not incur any cost, either directly or indirectly, associated with Zodiac’s failure to meet a Delivery Date. Any claim submitted under the provisions of this Clause 12.2 shall be accompanied by all supporting documentation detailing the actual cost incurred as a result of such delay.

12.4 The liquidated damages payable pursuant to Clause 12.2 shall be the sole remedy for

[CUSTOMER NAME] in relation to Delivery delay and is in lieu of all other damages, claims and remedies of [CUSTOMER NAME] provided for under this Agreement, arising at law, equity or otherwise for this subject matter.

13 Termination 13.1 Either Party may immediately terminate this Agreement or any Purchase Order by

giving notice in writing to the other Party if any one or more of the following events happens: 13.1.1 the other Party commits a material breach of any of its obligations under this

Agreement or Purchase Order which is incapable of remedy;

13.1.2 the other Party fails to remedy, where it is capable of remedy, or persists in any breach of any of its obligations under this Agreement or Purchase Order after having been required in writing to remedy or desist from such breach within a period of thirty (30) days;

13.1.3 the other Party has any distress or execution levied or enforced on any of its assets which is not paid out within fourteen days of it being levied;

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13.1.4 the other Party is deemed to be unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986; or

13.1.5 the other Party calls a meeting for the purpose of passing a resolution to wind it up, or such a resolution is passed; or

13.1.6 the other Party presents, or has presented, a petition for a winding up order; or

13.1.7 an application to appoint an administrator is made in respect of the other Party or a notice of intention to appoint an administrator is filed in respect of the other Party; or

13.1.8 any other steps are taken by the other Party or any other person to appoint an administrator over the other Party; or

13.1.9 the other Party has an administrator, administrative receiver, or receiver appointed over all or any part of its business, undertaking, property or assets; or

13.1.10 the other Party takes any steps in connection with proposing a company voluntary arrangement or a company voluntary arrangement is passed in relation to it; or

13.1.11 a secured lender to the other Party takes any steps to obtain possession of the property on which it has security or otherwise to enforce its security;

13.1.12 the other Party suffers or undergoes any procedure analogous to any of those specified in Clauses 13.1.4 to 13.1.6 inclusive above or any other procedure available in the country in which the other Party is constituted, established or domiciled against or to an insolvent debtor or available to the creditors of such a debtor;

13.2 This Agreement and any Purchase Order may not be terminated except as set out in Clause 13.1.

13.3 The termination of this Agreement shall be without prejudice to the rights and remedies of either Party which may have accrued up to the date of termination.

14 Liability 14.1 In no event shall either Party be liable for, and the other Party waives and releases any

claim (in contract, tort, breach of statutory duty or otherwise) against the other Party for:-

14.1.1 any indirect, special, incidental or consequential damages;

14.1.2 any lost revenues (direct or indirect);

14.1.3 any lost profit (direct or indirect), or

14.1.4 any loss of prospective economic advantage (direct or indirect),

each of any kind howsoever caused resulting from performance or failure to perform under this Agreement.

14.2 Zodiac’s total maximum aggregate liability for damages (including liquidated damages) arising under this Agreement or any Purchase Order including any indemnity in this

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Agreement or any Purchase Order (in contract, tort, breach of statutory duty or otherwise) howsoever arising shall not exceed ten percent (10%) of the total value of the Recurring Charges for the affected Shipset.

14.3 Nothing in this Agreement or any order shall exclude or limit any Party’s liability for death or personal injury arising from that Party’s negligence.

15 Insurance 15.1 During the term of this Agreement, the Seller will maintain product liability insurance

with a reputable insurance company.

16 Intellectual Property Rights 16.1 Except as otherwise expressly stated in this Agreement, Zodiac shall hold all right, title

and interest in designs, sketches, drawings, mock-ups, functional specifications, and any derivatives, including any and all Intellectual Property Rights for the Equipment and Spare Parts, unless otherwise agreed.

16.2 Zodiac herewith expressly and irrevocably warrants to [CUSTOMER NAME] that supply, operation, possession or use of the Equipment does not infringe the known Intellectual Property Rights of any third party.

16.3 If any item of Equipment or any component thereof is held to infringe any Intellectual Property Rights of a third party and [CUSTOMER NAME] is enjoined from using the same, Zodiac shall, at its own discretion and at its own expense either:

16.3.1 procure for [CUSTOMER NAME] the right to use the Equipment or any component thereof, free of any liability for Intellectual Property Right infringement, or

16.3.2 replace the Equipment or any component thereof with a non-infringing

substitute otherwise complying with all the requirements of the Agreement, or

16.3.3 if the foregoing options are not reasonably available, take back the infringing

item and refund in cash an amount equal to the purchase price paid by [CUSTOMER NAME] for such item.

16.4 The warranties given at Clause 16.2 and 16.3 above are subject to [CUSTOMER

NAME]:

16.4.1 providing all reasonable assistance (subject to being reimbursed for reasonably incurred costs agreed in advance with Zodiac) to Zodiac to secure the validity of the Intellectual Property Rights in the Equipment, and protect it against any third party challenges;

16.4.2 as soon as possible gives to Zodiac written notice of an IP Claim, and all details of the IP Claim from time to time in the knowledge or possession of [CUSTOMER NAME];

16.4.3 not without the prior written consent of Zodiac admit liability or make any offer, promise, compromise, settlement or communication with the third party in respect of the IP Claim;

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16.4.4 at the request of Zodiac, allow Zodiac sole conduct of the IP Claim and of any negotiations relating to the IP Claim (or to conduct any such IP Claim and related negotiations in a manner agreed between the Parties); and

16.4.5 provide to Zodiac at Zodiac’s cost such assistance as Zodiac reasonably requires in relation to the IP Claim.

17 Disclosure of Information 17.1 Each Party will treat all Confidential Information as strictly confidential and:-

(i) Will take all proper steps to prevent its use or disclosure;

(ii) Will not itself make use of any Confidential Information for any purpose other than the performance of its obligations under this Agreement;

(iii) Will not disclose Confidential Information to any third party or person (other than in accordance with Clause 17.2).

17.2 Each Party may disclose Confidential Information to any of its directors or employees

to the extent that disclosure is reasonably necessary for the purposes of this Agreement. Provided that the relevant Party will ensure that any such directors or employees are made aware of and comply with such Party’s confidentiality obligations under this clause and shall procure their compliance with it and be responsible for any breaches by them.

17.3 Each Party may disclose Confidential Information where such disclosure would

otherwise be prohibited by this clause if and to the extent:

(i) Required by law; or

(ii) It can be shown by that Party (to the other Party’s reasonable satisfaction) to have been known by it before disclosure to it by the other Party; or

(iii) It can be shown by that Party (to the other Party’s reasonable satisfaction) to have been subsequently lawfully disclosed to that Party by a third party who did not impose any restrictions on its disclosure and did not obtain it (whether directly or indirectly) from the other Party; or

(iv) The information was or becomes in the public domain (other than by reason of a breach of this article by the other Party).

17.4 Notwithstanding the termination of this Agreement for whatever reason, the obligations

and restrictions in this article shall continue for a period of ten (10) years after the date of such termination.

18 Assignment and Subcontractors 18.1 No Party may assign, sub-contract, or otherwise transfer any of its rights or obligations

under this Agreement without the prior written consent of the other Party which shall not be unreasonably withheld, except an assignment made pursuant to any merger,

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consolidation or reorganisation where the merged, consolidated or reorganised corporation or entity resulting there from has the authority and power effectively to perform the Parties obligations under this Agreement.

18.2 Zodiac may subcontract as it sees fit for the supply of any components of the

Equipment. None of Zodiac’s obligations under this Agreement will be impaired or affected by Zodiac subcontracting for supply of any components of the Equipment.

19 Rights of Third Parties 19.1 This Agreement does not, and is not intended to, confer any right on any third party;

and the Parties agree that the Contracts (Rights of Third Parties) Act 1999 does not apply to this Agreement.

20 Entire Agreement and Variation 20.1 This Agreement together with its Appendices constitutes the entire agreement, and

supersedes any previous agreement, arrangement or understanding (whether oral or written), between the Parties relating to its subject matter.

20.2 Order of precedence of terms (Contract, PO Acceptance etc.)

20.3 A variation of this Agreement is valid only if it is in writing and signed by or on behalf of

each Party.

20.4 [CUSTOMER NAME] irrevocably and unconditionally waives any right it may have to

claim damages for, and/or to rescind this Agreement or any Purchase Order because of breach of any warranty not contained in the Agreement or any misrepresentation whether or not contained in this Agreement, unless such misrepresentation was made fraudulently.

21 Remedies and Waivers 21.1 A failure to exercise or delay in exercising any right, remedy or power provided under

this Agreement or by law does not constitute a waiver of the right, remedy or power or a waiver of any other right, remedy or power. No single or partial exercise of any right, remedy or power prevents any further exercise of it or the exercise of any other right, remedy or power.

22 Survival 22.1 Except as stated otherwise in this Agreement, the following clauses will survive

termination of this Agreement for whatever reason; Clause 14 Liability, Clause 15 Insurance, Clause 16 Intellectual Property Rights, Clause 17 Confidentiality.

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23 Applicable Law and Jurisdiction 23.1 This Agreement regardless of where it is concluded or executed shall be governed by

and construed in accordance with the laws of England and Wales.

23.2 The applicability of the provisions of the United Nations Convention on Contracts for the International Sale of Goods is hereby expressly excluded from this Contract and any Purchase Order issued thereunder.

24 Dispute Resolution

24.1 In the event of any dispute or difference arising out or relating to this Agreement or the

breach thereof, the Parties hereto shall use their best efforts to settle such disputes or differences. To this effect, they shall consult and negotiate in good faith with each other to reach a just and equitable solution satisfactory to both Parties.

24.2 If they do not reach such a solution within a period of ninety (90) Days from the date one Party notifies the other Party, in writing, of a breach or other issue or discrepancy, then the disputes or differences shall be finally settled by arbitration in London under the rules of the London Court of International Arbitration.

24.3 The language to be used in any proceedings shall be English. If the original documents or exhibits are not in the English language, the Parties shall be entitled to submit such documents or exhibits in these languages accompanied by an English translation in the course of the proceedings.

25 Notices and Requests 25.1 All notices and requests in connection with this Agreement shall be given in writing and

may be transmitted by personal delivery, airmail or fax addressed as follows:

Attn.: Fax: Tel: Zodiac Seats UK Limited

Kestrel House Lakeside Llantarnam Industrial Estate Cwmbran NP44 3HQ United Kingdom Attn.: Fax: Tel:

Or such other address as the relevant Party may give for service of notices under this Agreement or a Purchase Order.

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25.2 Every such notice shall be deemed to have been served upon delivery if served by

hand or at the expiration of 5 business Days after despatch of the same if delivered by airmail post or at 10am local time of the recipient following despatch if sent by fax or email. To prove service of any notice it shall be sufficient to show in the case of a notice delivered by hand that the same was duly addressed and delivered by hand and in the case of notice served by post that the same was duly addressed prepaid and posted by airmail.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. For and on behalf of Zodiac Seats UK Limited

For and on behalf of [CUSTOMER NAME]

Name …………………………………………

Name…………………………………………

Title…………………………………………...

Title…………………………………………..

Signed………………………………………..

Signed….…………………………………….

Dated …………………………………………. Name …………………………………………

Dated…………………………………………. Name …………………………………………

Title…………………………………………...

Title…………………………………………...

Signed………………………………………..

Signed………………………………………..

Dated…………………………………………

Dated…………………………………………

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Appendix A Technical Specification

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Appendix B Non-Recurring Charges

Description Price (January 2009 levels) £ GBP

Design / Engineering

Tech Office (Certification)

Testing Costs

Services, Support & Tech Pubs

Prototypes

Tooling

Travel

Design House (Styling Mock-up)

Total

Royalty Fee

TOTAL

Non-Recurring Charge Assumptions 1. The Non Recurring Charge detailed above covers the “number of aircraft” Aircraft as long as there are no changes from the current LOPA and IFE configuration for the New aircraft. 2. Non Recurring Charge assume the Certification rules and the interpretation of the certification rules by all parties is stable from the date of execution of this Agreement until delivery of each Ship Set.

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Appendix C Recurring Charges Charges are in GBP and are at [date of levels quoted] levels

Description Price Per Pax Quantity per shipset

Shipset Total

Programme Total

TOTAL

Recurring Charge Assumptions:

• Trim assumes paint. • Removable panel on outside of seat (aisle seat) • Conventional seat covers • Basic lumbar/massage • Baseline reading light • Standard foams (non Lantal) • Demountable foot panel

The Recurring Charge is predicated on [CUSTOMER] purchasing the above stated number of Passenger Places. Should for whatever reason, the actual number of Passenger Places purchased by [CUSTOMER] be lower then Zodiac reserves the right to review and alter the Recurring Charge per Passenger Place for the remaining . The Recurring Charge stated in the table above assumes the Certification rules and the interpretation of the certification rules by all parties are stable from the date of execution of this Agreement until delivery of each Ship Set.

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Appendix D Escalation Formula The Recurring charges quoted in Appendix C are in January [2012] year levels. Any Shipset or set of Equipment delivered on or after 1st January [2013] will be subject to cumulative annual escalation from the January [2012] Base Price calculated in accordance with the formula below. Such calculation shall be made on the first day of January of each calendar year and such prices shall be valid for the following twelve month period. PN = PB * (O.25*LN/LB + 0.25*MN/MB + 0.50*ON/OB) PN = New Price PB = Base Price LN = MM19 cost index for Average Weekly Earnings 12 months prior to the validity of the

New Price. LB = MM19 cost index for Average Weekly Earnings 12 months prior to the validity of the

Base Price. MN = MM19 cost index for the Purchasing of Materials and Fuels 12 months prior to the

validity of the New Price. MB = MM19 cost index for the Purchasing of Materials and Fuels 12 months prior to the

validity of the Base Price. ON = MM19 cost index for General Expenses 12 months prior to the validity of the New

Price. OB = MM19 cost index for General Expenses 12 months prior to the validity of the Base

Price. The indices used are UK Government Office of National Statistics publication MM19, Aerospace and Electronics Cost Indices (2005=100, or as later updated and shown on www.ons.gov.uk), Table 4 – Cost Indices for the manufacture of aircraft and spacecraft and related machinery.

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Appendix E Project Plan and Delivery Schedule Project Plan Initial Project Plan attached as may be amended by agreement between the Parties in writing. Ship Set Delivery Schedule

Aircraft No. On Dock Delivery Date

Zodiac Ex-Works Delivery Date

1

2

3

4

5

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Appendix F Warranty Terms 1 If [CUSTOMER NAME] establishes to Zodiac’s reasonable satisfaction that there is a

defect in the design (to the extent that Zodiac is solely responsible for such design and with due regard to the state of the art at the time of such design by Zodiac), materials or workmanship of the Equipment or Spare Parts or there is some other failure by Zodiac in relation to the conformity of the Equipment or Spare Parts with the Agreement, then provided [CUSTOMER NAME] has given written notification of such alleged defect within thirty (30) days of the time when [CUSTOMER NAME] discovers or ought reasonably to have discovered the defect (and in any event within the Warranty Period for that item) Zodiac shall at Zodiac’s sole option and discretion and within a reasonable time:

a) repair or make good such defect or failure in such item of Equipment or Spare Part free of charge to [CUSTOMER NAME], at [CUSTOMER NAME]’s premises (or at its expense collect the item and repair it at Zodiac’s site); or

b) replace such item of Equipment or Spare Part with an item or Equipment or Spare Part which is in all respects in accordance with the Contract,

provided that performance of any one of the above options shall constitute an entire discharge of Zodiac’s liability under this warranty. Title to any item of Equipment replaced under this warranty shall transfer to [CUSTOMER NAME] upon incorporation into the Equipment and title to any related removed items shall transfer to Zodiac simultaneously, unless otherwise agreed between Zodiac and [CUSTOMER NAME].

2 Zodiac shall be under no liability under the warranty at Condition 1 above:

a) in respect of any defect arising from fair wear and tear, wilful damage, negligence, abnormal working conditions, failure to follow Zodiac’s instructions, misuse or alteration or repair of the Equipment or Spare Part by a person other than Zodiac unless permitted in accordance with Clauses 3 or 4;

b) for any item of Equipment originally provided by [CUSTOMER NAME] (BFE).

3 [CUSTOMER NAME] may repair any item of Equipment provided Zodiac’s prior written approval is obtained (not to be unreasonably withheld or delayed) and provided Zodiac has the option of carrying out the repair itself. Any request from [CUSTOMER NAME] to carry out a repair will be acknowledged by Zodiac within two (2) business Days and responded to within five (5) business Days.

4 Zodiac’s prior approval pursuant to paragraph 3 above is not required for emergency repairs or minor repair so long as it does not require more than twenty (20) minutes per passenger place and as along as the repair procedure is covered in the CMM.

5 If [CUSTOMER NAME] carried out repairs pursuant to paragraphs 3 and 4 then Zodiac shall within 30 days of written demand reimburse [CUSTOMER NAME] for:

a) the reasonable cost to [CUSTOMER NAME] (as evidenced by the invoice) for materials required for the repair:

b) the cost of labour so long as it does not exceed £30 per hour (as varied by agreement from time to time)

6 Repaired or replaced items of Equipment shall be warranted for the remainder of the Warranty Period from the date of discovery of the defect for valid warranty claims.

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7 In respect of proprietary components supplied to Zodiac by third parties for insertion in the Equipment and in lieu of any other warranty for such proprietary components Zodiac hereby assigns and transfers to [CUSTOMER NAME] any and all assignable rights that Zodiac has or may have under warranties and guarantees given to Zodiac by the supplier of such proprietary components. Zodiac also undertakes to execute and deliver all documents necessary in order to perfect such assignment and transfer, at Zodiac’s cost and request. If such warranties and guarantees are not assignable, Zodiac agrees to enforce their provisions on [CUSTOMER NAME] 's behalf and for [CUSTOMER NAME] 's benefit.

8 The warranties set out in this Agreement are the only warranties which shall be given by Zodiac and all warranties, conditions and other terms implied by statute or common law are, to the fullest extent permitted by law, excluded from the Agreement.

Warranty Periods

Warranted Product Warranty Period from original date of Equipment

Delivery

Warranty Remedy

Primary Structure: Seat legs Spars Intermediate Frames

Ten (10) years.

No charge repair or replacement at Zodiac’s option.

Secondary Structure: Seat Back Frames End Bay Structures Legrest Structures Composite Panelling Track Fittings

Five (5) years.


Other Parts: All ABS Plastic Fairings In-Arm Tables Cocktail Tables Arm Caps Access Panels Fixings All Mechanical Hinges

Three (3) years.


Other Parts: All Polycarbonate Plastic Fairings

Two (2) years.


Moving Parts: Headrest Mechanism Legrest Mechanism Recline Mechanism Seatpan Mechanism Video Deployment Arm Mechanism In-Arm Table Mechanism

Two (2) years.


IFE Installation Components: Three (3) years. No charge repair or replacement at Zodiac’s option.

Foam Seat Cushions: (as per Manufacturer's Warranty)

Three (3) years. Cushions are warranted to lose no more than fifty percent (50%) of their original compression and no more than twenty-five

Pro-rata one time material replacement, with all installation charges to be borne by [CUSTOMER NAME] as follows: First Year: Replacement at no

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percent (25%) of their Initial height.

charge. Second Year: Pro-rata replacement at fifty percent (50%) of Zodiac's then current list price. Third Year: Pro rata replacement at seventy five percent (75%) of Zodiac’s then current list price.

Electric actuation system

Three (3) years. No charge repair or replacement at Zodiac’s option

Dress Cover Assembly Leatherwork Assembly

As per manufacturer's warranty

No charge repair or replacement as per Manufacturer's Warranty

Other proprietary parts As per manufacturer's warranty

No charge repair or replacement as per Manufacturer's Warranty

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Appendix G BFE List The BFE required to be provided by [CUSTOMER NAME] to Zodiac to be fitted by Zodiac to the Equipment is as follows: [In Flight Entertainment – including monitors, handsets, cradles, harnesses, DSEB, etc. PC power Seat Fabrics or leather Life vests for Test and Fit-Check only Proximity Lights (if required) A full BFE listing shall be identified, agreed and incorporated into this Agreement at ITCM] All BFE will be delivered to Zodiac’s Facility DDP (Incoterms 2010).

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Appendix H Change Order Form

CHANGE PROPOSAL (CP)

Reference No.

Program:

Date: Rev: 001

Subject:

CP initiated by:

Description:

IMPACTS A. COST: Recurring: Non -recurring:

B. WEIGHT: N/A

C. LEADTIME:

D. CERTIFICATION:

ZODIAC APPROVAL: CUSTOMER APPROVAL:

Name: Date: Signature:

Name: Date: Signature:

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Appendix I Standard Operating Procedure – Inter stage Inspection Plan

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PURCHASE AGREEMENT BETWEEN ZODIAC SEATS UK LIMITED ...

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