Deposit Agreement

AEROFEX AERO-X DEPOSIT AGREEMENT
(“Depositor”) is entering into this deposit agreement (“Deposit Agreement”) with Aerofex for the purchase of an Aerofex Aero-X Vehicle according to the following terms and conditions. As used herein, “Aerofex” refers to Aerofex, Inc., a California corporation. This is a binding agreement. Please read it carefully.

Preface
This Deposit Agreement outlines the Deposit terms for an Aerofex Aero-X vehicle (“Vehicle”). The Deposit terms for purchase of the Vehicle are as follows:

  • Aero-X Vehicle Specifications (see Exhibit A)
  • Estimated Price: $85,000 + CPI1
  • Deposit Amount: $5,000
  • Deposit Refundable: Yes, a processing fee may be applied under certain circumstances defined below
  • Transferable: No
  • Position Numbers for purchase will be allocated on a first-come, first-served basis.

In consideration of the mutual covenants set forth herein and other good and valuable consideration, Aerofex and Depositor (each a “Party,” and collectively the “Parties”) agree as follows:

Section 1 DEPOSIT
Depositor agrees to pay the Deposit Amount set forth above (”Deposit”) towards the delivery of one (1) Aero-X Vehicle from Aerofex. The Deposit shall be refundable, with certain restrictions provided below.

Section 2 POSITION LIST
Section 2.1 Upon receipt of a signed Deposit Agreement and Deposit, Aerofex will assign Depositor a delivery position (”Position Number”) on the Aerofex position list. Position Numbers are offered on a first-come, first-served basis, and are subject to prior commitment and availability, as determined by Aerofex in its sole discretion. Production Vehicles designated for Aerofex marketing campaigns, factory or dealer demonstrations, training, testing, or any other Aerofex-related activities regarding Vehicles not intended for sale to the general public, are not considered part of the position list.

Section 2.2 The estimated date of delivery for the Vehicle (”Estimated Delivery Date”) shall be determined by Aerofex. Aerofex will periodically update the Estimated Delivery Date based on current production and manufacturing planning. Actual Delivery Date will be listed in the Aero-X Vehicle Purchase Agreement.

Section 3 PURCHASE AGREEMENT
Section 3.1 No later than six (6) months prior to Estimated Delivery Date, Aerofex will inform Depositor in writing of the expected initiation of production of the Vehicle (”Production Notice”) and shall include a Vehicle Purchase Agreement governing the purchase of the Vehicle. Unless this Deposit Agreement has been earlier canceled, Depositor shall, within fourteen (14) calendar days of the date of the Production Notice, select any optional equipment or services for the Vehicle and return to Aerofex a signed Vehicle Purchase Agreement. The Vehicle Purchase Agreement will include various terms and conditions, including any applicable conditions of purchase as required by then applicable federal and/or state laws.

Section 3.2 Vehicle shall be delivered at Aerofex’s United States facilities.
1 Estimated Price is as of May 1, 2014 and the CPI increase is calculated from that date.

Section 4 SPECIFICATIONS
Section 4.1 The preliminary Aero-X Vehicle Specification is shown in Exhibit A. Aerofex will, as part of the Vehicle Purchase Agreement, inform Depositor of the detailed specifications for the Vehicle, which will include final dimensions, standard equipment, performance specifications, documentation, options, etc. Any specifications referred to on Exhibit A, our website, or otherwise in any materials or information provided by Aerofex
(other than the Vehicle Purchase Agreement) are preliminary only and may be changed at any time.

Section 4.2 Depositor expressly acknowledges that Depositor has not relied on any oral or written representations except as specifically stated in this Deposit Agreement. Depositor acknowledges that the Aero-X Vehicle is a new type of vehicle, and that all renderings showing the operational vehicle are notional. Aerofex makes no guarantees as to the actual suitability of the Vehicle for any particular purpose of Depositor. Depositor acknowledges that operation of the Vehicle may be subject to local laws, regulations and restrictions, and Aerofex makes no representations as to its usability in any particular jurisdiction.

Section 5 PRICE AND PAYMENT SCHEDULE
Section 5.1 The Estimated Price herein is subject to change at Aerofex’s sole discretion. The final purchase price (”Final Purchase Price”) will be the then-current Aerofex list market price on the Actual Delivery Date, including the then-current Aerofex list price of any selected optional equipment or services, and will be listed in the Vehicle Purchase Agreement.

Section 5.2 A progress payment schedule shall be provided to Depositor, which shall show the Final Purchase Price minus the Deposit and Taxes (defined below), and the dates the progress payments will be due. The Deposit will be shown as the first progress payment already made. This schedule will be set forth in the Vehicle Purchase Agreement with the final payment and Taxes due no later than the Vehicle Delivery Date. Payments are subject to verification by Aerofex.

Section 5.3 The executed Vehicle Purchase Agreement will supersede this Deposit Agreement.

Section 5.4 The Deposit shall be held in a holding account of Aerofex, currently with Silicon Valley Bank (”Holding Agent”). Aerofex is responsible for the costs of the holding account and is entitled to any interest earned on deposited funds. The Holding Agent may be changed by Aerofex at its sole discretion. Depositor agrees to provide information that may be requested by the Holding Agent, including without limitation, information to
confirm the Holding Agent’s compliance with state and federal laws against terrorism and money-laundering activities. The Holding Agent is only authorized to accept instructions from Aerofex. When a Depositor cancels the Deposit in accordance with this Deposit Agreement, Aerofex will direct the release and return the Deposit (less cancellation or other fees if applicable) to the Depositor. When a Depositor executes a Vehicle Purchase
Agreement, Aerofex will direct the release of the Deposit to be applied toward the Purchase Price as the first progress payment (as provided in the Vehicle Purchase Agreement). If Depositor fails to timely execute a Vehicle Purchase Agreement, Aerofex will direct the release and return of the Deposit to Aerofex.

Section 5.5 The Final Purchase Price is exclusive of any sales or use tax, value-added taxes, duties, registration fees, or any charges that may be levied by governmental authorities in connection with the purchase, sale, transfer, use, registration, export, import of the Vehicle (collectively “Taxes”). Taxes required by law to be charged at the point of sale will be collected by Aerofex.

Section 6 TERMINATION

Section 6.1 Depositor may cancel this Deposit Agreement by providing written notice to  Aerofex no later than fourteen (14) calendar days after the date of the Production Notice. In the event Depositor timely cancels this Deposit Agreement, Depositor’s Deposit will be refundable less a $500.00 processing fee. However, in the event Depositor timely cancels the Deposit Agreement for the reason stated in the cancellation notice that the Final Purchase Price of the Vehicle in the Vehicle Purchase Agreement with standard equipment is higher than the Estimated Purchase Price (other than economic escalations from July 1, 2008 using the Consumer Price Index for Urban Wage Earners and Clerical Workers [CPI-W; U.S. City Average] as published by the U.S. Department of Labor, Bureau of Labor Statistics, for the period from the date of this Deposit Agreement until the date of the Production Notice), the $500.00 processing fee will not be deducted from the refund. Aerofex will refund the Deposit to Depositor by check within forty-five (45) days after receipt of a timely cancellation notice. No interest shall accrue, or be paid, to Depositor on the refund of Deposits or other pre-delivery payments.

Section 6.2 Aerofex may terminate this Deposit Agreement upon written notice to Depositor.
Reasons for termination may include, but are not limited to the following:

  1. Depositor fails to enter into an Vehicle Purchase Agreement within twenty-one (21) days after the date of the Production Notice; or
  2. Depositor fails to comply with this Deposit Agreement; or
  3. A proceeding under any law of bankruptcy, insolvency or reorganization or relief of debtors is instituted by or against Depositor.

Section 6.3 If this Deposit Agreement is cancelled by Depositor, or as a result of 6.2 (1) through (c), Depositor shall lose its delivery position should Depositor reinstate its Deposit.

Section 7 LIMITATION OF LIABILITY
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE MAXIMUM LIABILITY AEROFEX SHALL HAVE TO DEPOSITOR FOR ANY BREACH OF THIS DEPOSIT AGREEMENT OR OTHERWISE ARISING OUT OF OR RELATING TO THIS DEPOSIT AGREEMENT SHALL BE A FULL REFUND OF THE DEPOSIT MADE BY DEPOSITOR. IN NO EVENT SHALL AEROFEX BE LIABLE FOR CONSEQUENTIAL, INDIRECT, PUNITIVE, INCIDENTAL OR SPECIAL DAMAGES WHATSOEVER ARISING OUT OF OR RELATING TO THIS DEPOSIT AGREEMENT.

Section 8 ATTORNEYS’ FEES
Should any litigation be commenced (including any proceedings in a bankruptcy court) among Aerofex and Depositor in connection with this Deposit Agreement, the prevailing party in such proceeding, as determined by the court, will be entitled to reimbursement of its reasonable attorneys’ fees, expenses, and court costs incurred in the litigation.

Section 9 GOVERNING LAW AND VENUE
Section 9.1 This Deposit Agreement shall be governed by the laws of the State of California, regardless of the choice of law provisions of California or any other jurisdiction.

Section 9.2 The Parties agree that the state and federal courts located in Los Angeles County, California have exclusive jurisdiction and venue under this Deposit Agreement, and Aerofex and Depositor consent to, and hereby waive, any and all objections that they may have as to jurisdiction and/or venue in any of the above courts, including any claim that any action or proceeding has been brought in an inconvenient forum.

Section 10 SEVERABILITY
In the event that any part of this Deposit Agreement is declared by any court or other jurisdictional or administrative body to be null, void, or unenforceable, such provision shall be severed to the extent unenforceable under the applicable law, and all of the other provisions of the Deposit Agreement shall remain in full force and effect.

Section 11 TRANSFERABILITY
Depositor agrees not to Transfer (as defined below) the Deposit Agreement or any rights therein (including, without limitation, the Deposit Amount or the Delivery Position) without the prior written consent of Aerofex, which may be withheld in its sole discretion. “Transfer” means any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, whether voluntary, involuntary or by operation of law, including, but not limited to, transfers pursuant to divorce or legal separation, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors. Any purported or attempted Transfer without Aerofex’s prior written consent shall be null and void. Depositor shall indemnify and hold harmless Aerofex for all costs and expenses incurred (including, without limitation, reasonable attorney’s fees and costs) related to or

Section 12 MODIFICATIONS
This Deposit Agreement may be amended or modified, and any of the terms, covenants, representations, warranties, or conditions may be waived, only by a written instrument executed by Aerofex, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition or breach shall not be deemed to be a further continuing waiver of any such condition or breach, or of the breach of any other provision
of this Deposit Agreement. This Deposit Agreement shall be binding upon and inure to the benefit of the Parties’ successors, executors, heirs and permitted assigns.

Section 13 NOTICES
Section 13.1 Any notice to be given under this Deposit Agreement may be sent by email or by pre-paid overnight delivery (FedEx, US Express Mail, etc.) to Depositor’s address given with this Order or to the address below for Aerofex. Each notice or demand shall be deemed to have been given or made when actually received or twenty-four (24) hours after being sent, whichever occurs first.

Aerofex Corporation
PO Box 638
Manhattan Beach, CA 90267
depositagreement@aerofex.com

Section 13.2 Depositor acknowledges that “documents” associated with this Deposit Agreement may be digital and that such “documents” are agreed to be equivalent to “paper” documents. Also, communications to/from the email address specified by Depositor shall constitute delivery of the equivalent of “signed” documents.

Section 14 WARRANTIES
DEPOSITOR AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THE VEHICLE PURCHASE AGREEMENT, AEROFEX MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY EXCLUDES AND DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. ALL OTHER OBLIGATIONS OR LIABILITIES OF AEROFEX, WHETHER UNDER A THEORY OF NEGLIGENCE OR STRICT LIABILITY, CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR RELATING TO THE SALE, USE OR OPERATION OF THE VEHICLE, OR OTHERWISE, ARE EXCLUDED BY AEROFEX AND HEREBY EXPRESSLY WAIVED BY DEPOSITOR.

Section 15 BINDING
This Deposit Agreement shall become binding upon Aerofex’s acceptance (by return email to Depositor confirming the execution and delivery of this Deposit Agreement) and receipt by Aerofex of unconditional payment of the Deposit. Depositor acknowledges and agrees that it has read, understood and agrees to the provisions hereof. Prior to acceptance, this offering is subject to change in Aerofex’s sole discretion at any time. There are no assurances by Aerofex that the terms and conditions of this Deposit Agreement, including the Purchase Price or Deposit amount, are or will be the same for all purchasers. This Deposit Agreement constitutes the entire agreement among the parties and supersedes all prior written or oral understandings concerning its subject matter.

Exhibit A
STANDARD VEHICLE SPECIFICATIONS (Preliminary)

AERO-X surface effect vehicle

Performance

  • Occupancy: 2 persons
  • Altitude: 0 to 12 feet above surface level
  • Airspeed: 0 to 45 mph (72 kmh)
  • Takeoff Speed: 0 mph
  • Useful Load: 310 lbs (140 kgs)
  • Duration: 1.25 hours

Specifications

  • Dimensions:
  • Length: 14.8 feet (4.5 m)
    Width: 6.8 feet (2.1 m)
    Height: 4.1 feet (1.25 m)
  • Dry weight: 785 lbs (356 kg)
  • Fuel: automotive gasoline

Design Features

  • Intuitive pilot interface
  • Fixed-pitch carbon fiber fans
  • Four-wheel gear with castoring aft wheels
  • Two-position control bars
  • Carbon fiber composite primary structure

Powertrain

  • Normally aspirated three-rotor rotary engine
  • Direct-drive composite driveshafts
  • Oil-cooled gearboxes

Safety Features

  • 3:2 engine redundancy
  • Powertrain monitoring system
  • Redundant control system
  • Ducts shrouding rotating fans
  • Roll bar
  • Zero forward speed vertical take-offs and landings
  • Mounting provisions for whole vehicle airbags (optional)

Standard Equipment

  • Tachometer with indicator lights
  • Mounting, USB, and power provisions for auxiliary equipment

Accept >