**Exhibit 10.31**

 

 

**31750Sherman Avenue**

**MadisonHeights, Michigan  48071**

 
| **Phone:** | ** ** | **248-577-0010** |
|------------|------------|------------------|
| **Fax**    | ** ** | **248-589-7883** |

 

**July 27,2005**

 

**Production Integration Proposal for**

****

 
| **Inquiry No.**  |       | VERBAL                              |
|------------------|------------|-------------------------------------|
| ** **       | ** ** | ** **                          |
| **Proposal No.** |       | 7072005                             |
| ** **       | ** ** | ** **                          |
| **Contact**      |       | Sr VP Prod Deve. & Mfg Eng |
|             |       | AJ Joseph   DiBiagio                |
| ** **       | ** ** | ** **                          |
| **Phone**        |       | (248) 577-0010                      |
| **Fax**          |       | (248) 585 4306                      |
| **E- Mail**      |       | ajjcd@tecstarinc.com                |
| ** **       | ** ** | ** **                          |
| **Program**      |       | AJ Joseph DiBiagio                  |
| **Manager**      |       | Phone                               |
|             |       | (248) 577-0010                      |
| ** **       | ** ** | **E-Mail**                          |
|             |       | ajjcd@tecstarinc.com                |

 
| **Attention:** | ** ** | **Ted M. McQuinn**                   |
|----------------|------------|--------------------------------------|
|           |       | **President**                        |
| **Phone:**     | ** ** | **(843) 740-7015 Ext 303**           |
| **Fax:**       | ** ** | **(843) 329-0380**                   |
| **E-mail:**    | ** ** | **ted.mcquinn@forceprotection.net**  |
| ** **     | ** ** | ** **                           |
| **Copy to:**   |       |                                 |
|           |       |                                 |
| **Attention:** | ** ** | **Mark V. Edwards**                  |
| ** **     | ** ** | **Sr. V.P. Vehicle Operations**      |
| **Phone:**     | ** ** | **(843) 740-7015 Ext 286**           |
| **Fax:**       | ** ** | **(843) 329-0380**                   |
| **E-mail**     | ** ** | **mark.edwards@forceprotection.net** |

 

**Theinformation reveled in this document is our proposal and must be consideredconfidential. The contents shall not be reproduced or disclosed without theprior written permission from Tecstar.**

 

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| 1       | Table of Contents          |                                                             |
|---------|----------------------------|------------------------------------------------------------------|
|    | ** **                 | ** **                                                       |   |
|    | **1.1**                    | **INTRODUCTION**                                                 |   |
|    |                       | *** ***                                                     | *** *** | *** *** |
|    |                       | ***1.1.1***                                                      | ***SCOPE OF WORK*** | *** *** |
|    |                       |                                                             | ***1.1.1.1*** | ***Work Instructions*** | *** *** |
|    |                       |                                                             | 1.1.1.2 | Router |   |
|    |                       |                                                             | 1.1.1.3 | Control Plans |   |
|    |                       |                                                             | 1.1.1.4 | ID Key Characteristics |   |
|    |                       |                                                             | 1.1.1.5 | Inspection Instructions |   |
|    |                       |                                                             | 1.1.1.6 | Floor Plan / Layout |   |
|    |                       |                                                             | 1.1.1.7 | List of Fixtures, Equipment &  Tools |   |
|    |                       |                                                             | 1.1.1.8 | Material Plan |   |
|    |                       |                                                             | 1.1.1.9 | Process Flow |   |
|    |                       |                                                             | 1.1.1.10 | Define Metrics |   |
|    |                       |                                                             | 1.1.1.11 | Repair Plan |   |
|    |                       | *** ***                                                     | *** *** | *** *** |
|    |                       | ***1.1.2***                                                      | ***PERSONNEL ORGANIZATION CHART*** | *** *** |
|    |                       | *** ***                                                     | *** *** | *** *** |
|    |                       | ***1.1.3***                                                      | ***TIMING GANTT*** | *** *** |
|    |                       | *** ***                                                     | *** *** | *** *** |
|    |                       | ***1.1.4***                                                      | ***PRICE SUMMARY*** | *** *** |
|    | ** **                 | ** **                                                       |   |
| ***2*** | ***OTHER CONSIDERATIONS*** |                                                             |
|    | *** ***               | *** ***                                                     |   |
|    | **2.1**                    | **Fixture Design**                                               | ** ** |
|    | ** **                 | ** **                                                       | ** ** |
|    | **2.2**                    | **Fixture/Tooling/  Equipment/Procurement**                      |   |
|    | ** **                 | ** **                                                       |   |
|    | **2.3**                    | **PM Creation, Gage Equipment  Calibration & Training** |   |
|    | ** **                 | ** **                                                       |   |
|    | **2.4**                    | **Line Training &  Process Evaluation**                 |   |
|    | ** **                 | ** **                                                       |   |
|    | **2.5**                    | **Line Setup**                                                   | ** ** |
|    | ** **                 | ** **                                                       | ** ** |
|    | **2.6**                    | **Material Flow Planning,  Set-up & Training**          | ** ** |

 

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| ***3*** | ***FUTURE CONSIDERATIONS*** |                                                               |
|---------|-----------------------------|--------------------------------------------------------------------|
|    |                        | ** **                                                         | ** ** |
|    | **3.1**                     | **SCOPE OF WORK FOR  FABRICATION & INTERGRATION SECTION** | ** ** |
|    | ** **                  | ** **                                                         | ** ** | ** ** |
|    |                        | ***3.1.1***                                                        | ***Work Instructions,  Router, Control Plans, ID Key Characteristics, Inspection Instructions, Floor  Plan / Layout List of Fixtures, List of Equipment, List of Tools, Material  Plan, Process Flow, Define Metrics and Repair Plan.*** |   |
|    |                        |                                                               |   |   |   |
|    | ***3.2***                   | ***SUPPLIER QUALITY  DEVELOPMENT***                                | ** ** |
|    |                        |                                                               |   |   |   |
|    |                        | ***3.2.1***                                                        | ***Supplier development,  Supplier Audits, Supplier Capabilities, Establish basic procedures, determine  adequate validation testing.*** |   |

 

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Tecstaris pleased to provide our proposal per your verbal request for quotation.

 

Bymeans of discussing with your CEO, Gordon McGilton, President Ted McQuinn and Sr.V.P. Operations Mark Edwards, Tecstar is offering to propose a ProductionIntegration plan. This proposal is for your Final Assembly segment of yourprocess and includes the listed deliverables under Scope of Work, PersonnelOrganization Chart, Timing Chart and Pricing Summary.

 

Followingoperations will be completed manually:

 

•                  Operation Instructions, Pictorial Based ExcelFormat

•                  Inspection Instructions in Excel and WordFormat

•                  Flow Charts in Excel or Word Format

•                  Floor Plans in Solid Works Format

 

Followingstipulations apply:

 

•                  Vehicle and complete part kit to arrive at Tecstarlocation on or before July 29, 2005

•                  Providing dedicated resource at Tecstar’sfacility

•                  Access to all drawings, BOM’s, currentprocess instructions and flow diagrams

•                  Office space, phone and internet access atForce Protection

•                  Force Protection facility access

 

Duringour review of the process to provide your deliverables, several additionalitems were identified to execute the plan that is outside of the originalscope. These items are listed under Other and Future Considerations.

 

Tecstaris impressed with your accomplishments and drive. Tecstar appreciates thisopportunity and is looking forward to working with Force Protection.

 

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**1.1.1****                    ****SCOPE OF WORK**

 

**1.1.1.1****                                  ****Work Instructions** will be developed for each operationidentified in the Final Manufacturing Process. Contained in these documentswill be items that identify the tools needed, parts required, quality of parts,fixture to be used, torque values required, revision control, pictorial viewsand step by step instructions. The document numbering system will correspond tothe process flow document. These documents are intended to be at 30% completionby November (reference timeline), with preliminary documents in place. 100%completion of manufacturing documents, fixture lists, and tool lists isDecember.

 

**1.1.1.2****                                  ****Control Plans**will be in the AIAG required format. ControlPlans will follow the process performed in the station and correspond with theprocess flow documentation. Each process step will include a reaction plan.Process Characteristics will be noted.

 

**1.1.1.3****                                  ****Router**will be developed to show the sequence ofeach process, process name, process description and amount of labor time perprocess step.

 

**1.1.1.4****                                  ****Key Characteristics**will be identified. These characteristicswill be on the control plan and linked to an inspection that will collecteither variable or attribute data. Current Characteristics will be used andreviewed with your VP of Quality. Additional Characteristics will be identifiedand also pre-reviewed with Force Protection.

 

**1.1.1.5****                                  ****Inspection Instructions**will be developed for Receiving (vehicleready for Final Assembly), In-Process and Final Inspection. The documentationis intended to “stay” with the vehicle (in a traveler) and then in the permanentvehicle file (for each individual vehicle). Current inspection and any proposedinspections will be reviewed with Force Protection.

 

**1.1.1.6****                                  ****Floor Plan Layout**will be supplied in Solid Works Format. ThisDrawing will contain the following: main final assembly station and subassembly location and foot print, material aisles, material staging area, workbench location, repair location, lighting requirements , air and electricaldrops, inspection area, dynometer area, water test and plant flow.

 

**1.1.1.7****                                  ****Fixtures/Tools/Equipment**lists will be supplied. Each list willidentify the type of product required, location of intended use and quantityrequired. This would also include the inspection equipment specifications. Thesedocuments are intended to be at 30% completion by November (referencetimeline), with preliminary documents in place. 100% completion ofmanufacturing documents, fixture lists, and tool lists is December

 

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**1.1.1.8****                                  ****Material Plan**for product to be located in or around eachstation will be developed. Identification and/or design of type of MaterialHandling Racks will be provided.

 

**1.1.1.9****                                  ****Process Flow Diagrams**will be created for each process including amaster overall flow. All movement will be identified to include store,transport, inspection and operation.

 

**1.1.1.10****                           ****Metrics (or Measurable)**will be developed for Key Characteristics andfor FTQ with the intention that the data collection will be manual.

 

**1.1.1.11****                           ****Repair Plan**will be developed including work instructionsand location of the Motor Bay. These instructions will be a combination of theprocess instructions.

 

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**Tecstar/Force ProtectionProduction**

**Integration Organizational Chart**

 

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# **1.1.4**                               Price Summary

 

Resources

 
| **Program Management**          | ** ** | **$** | ** ** | ** ** |
|---------------------------------|------------|-------|------------|------------|
| **Materials**                   | ** ** | **$** | ** ** | ** ** |
| **Quality**                     | ** ** | **$** | ** ** | ** ** |
| **Manufacturing**               | ** ** | **$** | ** ** | ** ** |
| **Technical  Writers**          | ** ** | **$** | ** ** | ** ** |
| **Design**                      | ** ** | **$** | ** ** | ** ** |
| **Facilities  Design**          | ** ** | **$** | ** ** | ** ** |
| **Technician  / Fabrication**   | ** ** | **$** | ** ** | ** ** |
| **Tooling  / Fixturing Design** | ** ** | **$** | ** ** | ** ** |

 

*These costs are based on the hourly billing rate for the personnel asoutlined on the organizational chart*

 

Systems

 
| **Quality Systems**                            | ** ** | **$**      | ** **       | ** ** |
|------------------------------------------------|------------|------------|------------------|------------|
| **Manufacturing  Systems**                     | ** ** | **$**      | ** **       | ** ** |
| **Engineering  Change Control Interpretation** | ** ** | **$**      | ** **       | ** ** |
| **Design  Software**                           | ** ** | **$**      | ** **       | ** ** |
| **Building  Lease**                            | ** ** | **$**      | ** **       | ** ** |
| **Travel**                                     | ** ** | **$**      | ** **       | ** ** |
| ** **                                     | ** ** | ** ** | ** **       |
| **TOTAL**                                      | ** ** | **$**      | **2,741,893.00** | ** ** |

 

**OTHER CONSIDERATIONS INITIAL ESTIMATE   **

 

**TERMS**

 

**30% onAcceptance of Proposal**

**30% atMid Stage**

**40% atCompletion**

 

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***2******                ******OTHER CONSIDERATIONS***

 

Whilecompiling this quote, Tecstar has identified specific items that will need tobe addressed. These items are not in the scope of this quotation. Per yourrequest, Tecstar would be glad to quote the following:

 

***2.1******                  ******Fixture Design***

 

***2.1.1******                                            ***Tecstar to design and build each fixturerequired. Cost would be per fixture, time and material. Quote would include fixture,delivery, design, fabrication and associated hardware necessary to support the fixtureduring the process and a tryout performed. Any air or electrical drops requiredwould be outside this scope***.***

 

***2.2******                  ******Fixture, Tooling &Equipment Procurement***

 

***2.2.1******                                            ***Tecstar to research sources, purchase anddeliver to Force Protection all tools, fixtures and equipment identified asneeded for the implementation of the Final Assembly System. This would alsoinclude Water Test Equipment, NBC Tester, Lift Hardware for the FinalInspection Station, Rolling Inspection Lighting and Material Handling Racks/Systemfor the Assembly Line.

 

***2.3******                  ******Preventative MaintenanceDevelopment, Gage Equipment Calibration & Training***

 

***2.3.1******                                            ***A preventative Maintenance Plan would becreated for all tools, fixtures and equipment for the Final Assembly System.This would also include Water Test Equipment and NBC Tester. This plan woulddetail items that are required to be performed per type of equipment by Day,Week, Month Semi and Annually. A replacement parts list would be included inthis plan.  Tecstar would also train ForceProtection personnel to perform all Preventative Maintenance and Calibration requirements.

 

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***2.4******                  ******Line Training and ProcessEvaluation***

 

***2.4.1******                                            ***Tecstar would provide training for allemployees station by station to include fixture use, tool usage and care,equipment requirements, In Process inspection and documentation. Training onControl Plans, Key Characteristics and Work Instruction details.

 

***2.5******                  ******Line Set Up***

 

***2.5.1******                                            ***Tecstar would install the Process Stations, Andonsystems, Production Material Areas, Air Lines, Oilers, Fixture supports, CatalogedSystems with Documentation, Lighting, Ramps, Tool Storage and Labeling, WaterTest Station, and NBC System.

 

***2.6******                  ******Material Flow Planning, Set-upand Training***

 

***2.6.1******                                            ***Tecstar would design the material,containment and shipping area and a corresponding canban system. Installationof signage, development of a lot traceability system, creation of workinstructions and supporting forms would also be included. Tecstar would trainthe material and production department in the new system.

 

***3******                ******FUTURE CONSIDERATIONS***

 

***3.1******                  ******Fabrication and IntegrationSections***

 

***3.1.1******                                            ***Tecstar to quote items 1.1.1.1 through1.1.1.11 for the Fabrication and Integration Section of the manufacturingprocess. Assistance in any service under “Other Considerations” could alsoquoted.

 

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***3.2******                  ******Supplier Quality Development***

 

**3.2.1****                                            **Tecstar Supplier Quality Engineers to auditeach supplier, determine supplier capabilities, work with suppliers to meetForce Protection requirements, develop and implement a Supplier Rating System. Tecstarto obtain alternate supplier options and products.

 

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