EXHIBIT 10.1


 


[Portions herein identified by [***] have been omitted
pursuant to a request

for confidential treatment and have been filed separately with the

Commission pursuant to Rule 24b-2 of the Securities Act of 1934.]


 


AMENDMENT TO PURCHASE AND SUPPLY AGREEMENT


 


This AMENDMENT TO
PURCHASE AND SUPPLY AGREEMENT (this “Amendment”)
is made effective as of the 6th day of February, 2006, by and among
Cirrus Design Corporation (“Cirrus”)
and Ballistic Recovery Systems, Inc. (“BRS”).
Capitalized terms used herein but not defined herein shall have the meanings
set forth in the Purchase and Supply Agreement (as defined below).


 


BACKGROUND


 


A.            Cirrus
and BRS are parties to that certain Purchase and Supply Agreement dated as of September 17,
1999 (the “Purchase and Supply Agreement”).


 


B.            The
parties desire to amend certain sections of the Purchase and Supply Agreement
as set forth below to change the terms regarding product liability
indemnification and certain supply and pricing terms.


 


NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged by the parties hereto,
the parties agree as follows:


 


1.             Appendix
A to the Purchase and Supply Agreement is deleted in its entirety and restated
in its entirety as indicated on EXHIBIT 1 hereto. To the extent there is a
conflict between the terms and conditions of the restated Appendix A attached
hereto as EXHIBIT 1 and the Purchase and Supply Agreement, the restated
Appendix A shall prevail.


 


2.             Section 22
(INSURANCE AND INDEMNIFICATION OF BRS) is hereby added to the Purchase and
Supply Agreement as follows:


 


22.           INSURANCE AND INDEMNIFICATION OF BRS


 


22.1         Insurance
- Cirrus shall maintain at all times during the term of this Agreement a
products liability insurance policy in an amount of not less than $10 million. At
BRS’s request, Cirrus shall furnish BRS a certificate of insurance indicating
that such insurance policy is in full force and effect. Cirrus shall supply BRS
with 90 days’ notice of any change or cancellation of such policy.


 


22.2         Indemnification
of BRS - Cirrus and BRS acknowledge that Cirrus is the owner and type
certificate holder for the Cirrus Airframe Parachute System (“CAPS”) and that
Cirrus is wholly responsible for the design, sale, installation, warnings,
training, and instructions for operation of CAPS. Accordingly, Cirrus agrees to
indemnify, defend and hold BRS harmless from any and all actions, causes of
action, claims, demands, costs, losses, liabilities, expenses


 


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and damages
(excepting attorneys fees incurred by BRS without the express written approval
of Cirrus) arising out of or in connection with any claim for personal injury
or property damage alleged to have been caused by any defect in any CAPS
component (including, but not limited to, design, manufacture, training, and
installation), supplied by BRS during the term of this Supply Agreement, and
installed on a Cirrus aircraft, regardless of whether such claim is couched as
a breach of warranty, negligence, or strict liability claim and regardless of
whether the claim has been filed or served.


 


Notwithstanding anything
contained in Paragraph 22.2, Cirrus’ obligation to defend and indemnify BRS
pursuant to Paragraph 22.2 shall be subject to the following conditions:


 


a.             BRS
provides Cirrus with prompt written notice of any claim;


 


b.             Cirrus
shall have sole authority to select counsel and control BRS’s defense.


 


22.3         BRS
understands that Cirrus and BRS will be defended by common counsel and BRS waives
any claim of conflict of interest that may arise out of the defense of BRS
and Cirrus by such common counsel. Such waiver shall apply to claims to which
Paragraph 22.2 applies as well as to other, future litigation to which BRS and
Cirrus are parties but to which the indemnification contained in Paragraph 22.2
is inapplicable. Accordingly, this subparagraph 22.3 shall survive any
termination or expiration of this Agreement.


 


22.4         Cirrus
shall have sole authority to control the defense of all claims and any related
settlement negotiations. Cirrus shall not be responsible for any settlement
made without its written consent.


 


22.5         Cirrus’
obligation to indemnify shall cease immediately upon BRS’ failure to make
material shipments of goods to Cirrus, material breach of the underlying Supply
Agreement or, with respect to BRS, any of the following events:


 


a.             Merger;


b.             Sale
of all or substantially all assets associated with the production of CAPS
components;


c.             Bankruptcy;


d.             Insolvency.


 


Notwithstanding anything
contained in Paragraph 22.2, Cirrus’ obligation to indemnify shall not extend
to claims for punitive or exemplary damages or damages for willful, grossly
negligent, or wanton conduct. To the extent that punitive or exemplary or
willful, grossly negligent, or wanton conduct damages claims have been
asserted, counsel selected to defend Cirrus will defend such claims unless BRS,
at its sole expense, elects to retain separate counsel to defend BRS solely
with respect to punitive damages claims.


 


Notwithstanding anything
contained in Paragraph 22.2, Cirrus’ obligation to indemnify and defend BRS
shall not extend to claims for economic losses. Economic losses are


 


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losses for damage
or injury solely to the aircraft or any component thereof, as well as
consequential damages arising from such economic loss.


 


3.             Section 23
(EXCLUSIVITY FOR 3,600 POUND SYSTEM) is hereby added to the Purchase and Supply
Agreement as follows:


 


23.           EXCLUSIVITY FOR 3,600 POUND SYSTEM


 


BRS shall provide Cirrus
limited exclusivity for a 3,600-pound CAPS system for a 12-month period
beginning the date Cirrus introduces to the market or otherwise offers for
sale, a Cirrus airplane that contains the 3,600-pound CAPS system. This one-year
exclusivity is limited as follows:


 


a.             Cirrus
must consent and approve during such 12-month period of any sale of a
3,600-pound aircraft recovery system to a general aviation aircraft
manufacturer other than Cirrus.


 


b.             In
addition to any credits indicated under Appendix A hereof, to the extent BRS
sells any 3,600-pound aircraft recovery system to a general aviation
manufacturer other than Cirrus during such 12-month period, BRS must pay Cirrus
a mutually agreed upon royalty of $[***]
for each 3,600-pound aircraft recovery system sold.


 


4.             Except
as expressly provided herein, nothing in this Amendment shall be deemed to
waive or modify any of the provisions of the Purchase and Supply Agreement, or
any amendment or addendum thereto, and the Purchase and Supply Agreement will
remain unchanged and in full force and effect. In the event of any conflict
between the Purchase and Supply Agreement and this Amendment, this Amendment
shall prevail.


 


5.             This
Amendment shall be binding upon any assignee, transferee, successor or assign
of any parties to the Purchase and Supply Agreement.


 


6.             BRS
shall not disclose the existence, terms or conditions of this Amendment to
Purchase Supply Agreement or the original Purchase and Supply Agreement without
the prior written consent of Cirrus.


 


7.             This
Amendment may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
executing party with the same force and effect as if such facsimile signature page were
an original thereof.


 


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left blank.]


 


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IN WITNESS WHEREOF, the
undersigned have executed this Amendment to the Purchase and Supply Agreement
as of the date first written above.


 


	
   

  	
  CIRRUS DESIGN CORPORATION:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brent Wouters

  	
  2/6/06

  	
   

  
	
   

  	
  Name:

  	
  Brent Wouters

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BALLISTIC RECOVERY SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Williams

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Larry Williams

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
						



 


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EXHIBIT 1


 


APPENDIX A

CERTAIN PURCHASE/PRICING TERMS


 


TO THE
EXTENT THERE IS A CONFLICT BETWEEN THE TERMS AND CONDITIONS OF THIS APPENDIX A
AND THE PURCHASE AND SUPPLY AGREEMENT (WITH EXHIBITS), THIS APPENDIX A SHALL
PREVAIL.


 


1.             Cirrus agrees that
all purchase orders for CAPS must be delivered to BRS at least 12 months in
advance of the scheduled delivery date.


 


2.             Cirrus agrees that
NBRS shall bepaid net 15 days of delivery of CAPS to Cirrus.


 


3.             The fully delivered
fixed contract price of CAPS (“Fixed Contract Price”) shall be as follows:


 


	
  CAPS – SR20

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  CAPS – SR22

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  CAPS – SR20 Fleet

  	
   

  	
  $[***] (NOTE: Volume not to exceed 10% of total orders
  in any one given month unless mutually agreed to by Cirrus and BRS.)

  



 


4.             The parties agree
that the Fixed Contract Price shall be adjusted as follows:


 


a.             A credit of $[***]
will be applied by BRS for each CAPS unit provided that the indemnification is
provided as indicated in Section 22 (INSURANCE AND INDEMNIFICATION OF BRS)
of the Purchase and Supply Agreement, as amended. This credit shall be
independent of any credit indicated in 4(b) of Appendix A hereof.


 


b.             Provided Cirrus
orders an average of 13 CAPS per week (based upon the average over a rolling
90-day period), a credit of $[***] will be applied by BRS to each CAPS unit
provided.


 


5.             BRS shall credit
Cirrus $[***]
for each 3,600-pound aircraft recovery system that BRS sells to a manufacturer
of general aviation aircraft, other than Cirrus, over a 12-month period
beginning from the date Cirrus first offers for sale a Cirrus product which
utilizes such 3,600 pound aircraft recovery system.


 


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