FLYTREX PARTNERS

Flytrex Services Agreement

This Services Agreement (this “Agreement”), dated CURRENT_DATE (the “Effective Date”), is entered into by Flytrex Inc., a company incorporated under the laws of Delaware, having its principal place of business at 440 N Barranca Ave #3393 (“Flytrex”), is pleased to enter into this agreement with BUSINESS_NAME, having its principal place of business at BUSINESS_ADDRESS ("Company”). Each of the foregoing may be referred to as a “Party”, and together as the “Parties”.

Background. Flytrex and its affiliates have developed a proprietary system for the delivery and shipping of certain goods through unmanned aerial vehicles(drones) and a cloud-based command and control system, ordering system and user interfaces (the “System”). ThisAgreement sets forth the terms and conditions pursuant to which Flytrex and/oran operator on its behalf shall use the System to provide a drone-based delivery service to Company’s customers (“Customers”).

Now Therefore, the parties agree as follows:

1.              Operation of Services. Flytrex shall provide the services (the “Services”) set forth in any agreed statement of work agreed between the parties (each, an “SOW”). Exhibit B sets forth the SOW for the services to be provided by Flytrex. Additional SOWs may be agreed between the parties. No additional SOW shall be effective under this Agreement unless signed by the parties and referencing this Agreement. Each additional SOW shall be attached to this Agreement as a subsequently numbered exhibit (e.g., ExhibitB2, Exhibit B3, etc.) . Flytrex may provide a third party operator to operate the System in order to provide the Services, including as set forth in Exhibit B (the “Operator”). The System shall only be used to deliver items ordered through the Flytrex interface. The System shall not be used to transport goods which do not comply with Exhibit C.

2.              Regulatory. The implementation of the Services may be subject to limitations and restrictions imposed by applicable regulatory authorities, including but not limited to the Federal Aviation Administration (“FAA”), the satisfaction of which shall be a condition to proceeding with the Services. Company shall notify Flytrex promptly in writing of any government or regulatory inquiries concerning the System or Services, and shall cooperate with Flytrex in formulating any responses to such inquiries. The Parties shall not provide any response to such inquiries that has not been approved in writing by Flytrex. The parties shall work together to ensure that the Services are provided in compliance with applicable law and regulatory requirements.  

3.              Intellectual Property. Flytrex shall have all right, title and interest in all intellectual property rights in the System, all documentation provided in respect of theSystem, all works created as a result of the Services, and all enhancements and modifications in all of the foregoing, and all intellectual property rights therein. Company shall not receive any software (whether executables or source code) in respect of the System. Company shall have no rights to the System except as expressly set forth herein. If Company shall provide Flytrex with any feedback in respect of the Services or System, Flytrex may use such feedback without any obligation of payment or attribution. No licenses are granted hereunder by estoppel or by implication. Customer shall not, and shall not permit any third party, to (a) reverse engineer or attempt to find the underlying code of, the System; (b) modify the System, (c) sublicense, sell, distribute theSystem or make available the Services to any third party except Customers, (d)use the Services to provide services to third parties as part of a timeshare or service bureau arrangement, or (e) bypass any security measure or access control measure of the System.

4.              Consideration. In consideration for the provision of the Services, Flytrex shall collect all amounts in respect of delivered items and make payment of the amounts paid by Customer set forth in Exhibit A, and retain applicable Delivery Charges, all according to the payment terms set forth therein.

5.              Confidential Information. Each Party (“Receiving Party”) agrees to keep confidential during and after the termination of this Agreement and not disclose or use except in performance of its obligations under this Agreement, confidential or proprietary information related to the business or technology of another Party (the “Disclosing Party”), that the Receiving Party learns in connection with the Services or its performance under this Agreement (“ConfidentialInformation”). Confidential Information includes all information that is marked as proprietary or confidential, or which Receiving Party should reasonably understand to be confidential given its content and the circumstances of disclosure. For clarity, Confidential Information of Flytrex shall include all non-public information concerning the System, performance data of the drones and System, the pricing of Services pursuant to thisAgreement, and all information concerning deliveries made using the System and the recipients of such deliveries. Receiving Party shall restrict disclosure ofConfidential Information to those of its employees with a reasonable need to know such information and which are bound by written confidentiality obligations no less restrictive than those set out herein. The non-disclosure and non-use obligations hereunder do not apply to any information which is required to be disclosed by law, regulation, court order or a bonafide law enforcement investigation, provided Receiving Party provides prompt written notice of the required disclosure to Disclosing Party and cooperates with DisclosingParty as reasonably necessary to limit or eliminate such requirement. ReceivingParty will use at least the same degree of care in keeping the ConfidentialInformation confidential as it uses for its own confidential information of a similar nature, but in any event no less than reasonable care given the valuable nature of the Confidential Information.

6.              System Data. Flytrex collects certain data regarding the use of the System (“System Data”). System Data includes the location, performance data and flight data and logs of each drone, any personal data concerning recipients of shipments through the System, and all data concerning shipments performed hereunder. Flytrex shall have all right, title and interest in all System Data. Flytrex shall process all System Data in accordance with applicable law. In addition, Flytrex may use all System Data for the purposes of analyzing and improving its Systems, and may disclose anonymized or aggregated System Data to its commercial partners. Flytrex may disclose such data as required by law, regulation or court order, or in order to cooperate with a bonafide law enforcement investigation. Flytrex may use sub processors in any jurisdiction to process such data. Flytrex may transfer such System Data as part of a sale of Flytrex’s business, assets or share capital.

7.              Warranty; Disclaimer. Each Party represents and warrants to the other that this Agreement has been duly executed and delivered and constitutes a valid and binding agreement enforceable against such Party in accordance with its terms. In addition, each Party represents and warrants that, subject to receipt of applicable drone and aviation regulatory approvals, (i) no authorization or approval from any third party is required in connection with such party’s execution, delivery, or performance of this Agreement; and (ii) the execution, delivery, and performance of this Agreement does not violate the terms or conditions of any agreement or any other legal or regulatory obligation to which it is a party or by which it is otherwise bound. Flytrex represents and warrants that the System will perform in material compliance with the applicable specifications. In addition, Flytrex represents and warrants that the System does not, to the best of its knowledge, (a) infringe the intellectual property rights of any third party or (b) contain any viruses, malware or other malicious software. To the extent that Flytrex provides any drones, such drones are procured by Flytrex from third parties and Flytrex does not make any warranties or representations in respect of the drones or the software therein. EXCEPT AS SET FORTH HEREIN, THE SYSTEM, SERVICES AND DRONES ARE PROVIDED “AS IS” AND FLYTREX DISCLAIMS ANY IMPLIED OR STATUTORY WARRANTIES IN RESPECT THEREOF, INCLUDING ANY IMPLIED OR STATUTORY WARRANTIES OFNON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Flytrex has no responsibility or liability in respect of the contents of any items delivered by the Services, or the satisfaction of any customer in respect of such items, and the foregoing shall be the responsibility of Company.

8.              Indemnification.

 8.1            Flytrex Indemnification. Flytrex shall defend Company (and its affiliates, officers, directors and employees) from and against any and all third party claims asserting that the Services or the System (a) infringe the intellectual property rights of a third party in the United States or (b) are being operated by Flytrex or its subcontractors in violation of applicable law, and Flytrex shall indemnify and hold harmless Company from all damages, costs, losses, liabilities or expenses (including court costs and reasonable attorneys’ legal fees) which a court or regulatory body may award against Company in a final, non-appealable decision. Notwithstanding the foregoing, Flytrex shall have no responsibility or liability for any claim to the extent resulting from or arising out of (a) negligence by Company, or (b) the violation by Company of the terms of this Agreement, (c) any interference by Company or any Customer with the operations of a drone, including the unauthorized access of Company or any third party into the Delivery Center or any area designated for Flytrex operations, or (d) any item furnished for delivery by Company, or the failure of Company to furnish such item.

8.2            Company Indemnification. Company shall defend and indemnify Flytrex and Operator(and their affiliates, officers, directors and employees) from and against any and all damages, costs, losses, liabilities or expenses (including court costs and attorneys’ fees) which the foregoing may suffer or incur in connection with any actual claim, demand, action or other proceeding by any third party arising out of any item delivered by the Services or the dissatisfaction of any customer regarding such items.

8.3            Procedure. The obligations of any party to provide indemnification under this Agreement will be contingent upon the party seeking indemnification(i) providing the indemnifying party with prompt written notice of any claim for which indemnification is sought, (ii) cooperating fully with the indemnifying party (at the indemnifying party’s expense), and (iii) allowing the indemnifying party to control the defense and settlement of such claim, provided that no settlement may be entered into without the consent of the indemnified party if such settlement would require any action on the part of the indemnified party other than to cease using any allegedly infringing or illegal content or services. Subject to the foregoing, an indemnified party will at all times have the option to participate in any matter or litigation through counsel of its own selection at its own expense.

9.              Liability; Limitations. In no event shall Flytrex (or its affiliates, directors, officers, employees or consultants) have any liability for any consequential, indirect, special or punitive damages, arising out of or relating to the Services, System or drones or the arrangements contemplated herein, including in respect of lost profits, lost business opportunities or lost data. In no event shall the aggregate liability of Flytrex (or its affiliates, directors, officers, employees or consultants) for the provision of the System (including any drones) or under any provision of this Agreement exceed the amount of insurance required to be maintained by Flytrex pursuant to the terms of this Agreement. Flytrex shall have no liability or responsibility to the extent any damage or loss is the result of the actions or omissions of Company or the unauthorized access of Company, or any third party into the Delivery Center or any area designated for Flytrex operations

10.              Term and Termination. This Agreement shall be in effect commencing as of the Effective Date and shall continue in effect until terminated in accordance with the terms and conditions of this Agreement (the “Term”).Either Flytrex or Company may terminate this Agreement if the other party shall have materially breached this Agreement and not cured such breach within 15days of receiving written notice of such breach from the non-breaching party.Either Flytrex or Company may terminate this Agreement upon written notice of30 days. Upon termination of this Agreement for any reason, Company shall cease all use of the Services and System and Flytrex shall cease providing Services for Company. Sections 3 (Intellectual Property), 4(Consideration), 5 (Confidential Information), 6 (System Data), 7 (Warranty;Disclaimer), 8 (Indemnification), 9 (Limitation of Liability), 10 (Term andTermination), 12 (Publicity), 15 (Miscellaneous) of this Agreement shall survive the termination of this Agreement for any reason. Neither party shall have any liability for the termination or expiration of this Agreement in accordance with the terms and conditions hereof.

11.              Insurance. Flytrex shall have in place and maintain in full force and effect at all times during the Term the insurance policies further detailed in Exhibit D.

 12.              Publicity. Company agrees to act as a reference customer for Flytrex. Flytrex may include a reference to Company and Company’s logo on Flytrex’s website and marketing materials. The timing and any text related to press releases or announcements with regards to the Services shall be agreed by Flytrex prior to publication. Any publication or presentation in respect of the System orServices provided including on the website or other marketing materials ofCompany shall prominently note that the Services are provided using Flytrex technology.

13.              Anti-Bribery. All Parties, and their respective directors, officers, employees promoters, supervisors, or agents, or any individual or entity acting on behalf of any of the foregoing, shall comply with all applicable laws, regulations, codes and sanctions relating to anti-bribery and anti-corruption (including but not limited to the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any other law enacted pursuant to the OECD Convention on Combating Bribery ofForeign Public Officials in International Business Transactions).

14.              Force Majeure.  No Party shall be liable for any loss, injury or damage due to its delay or failure to perform any provision of this Agreement or any services, when such delay or failure is caused by a force majeure event, which shall mean any circumstances beyond the reasonable control of such Party (including, without limitation, acts of God, fire, flood, epidemic, pandemic, eruption, storms or other weather events, earthquake, tsunami, tidal wave and other natural disasters, strikes, lockouts, labor or manpower troubles or other industrial disturbances, nuclear incidents, unavoidable accidents, government regulations or actions of a regulatory body, riots and terrorism). Upon the occurrence of any such circumstance, the affected Party shall notify the other Parties of the impact on the performance of this Agreement.

15.              Miscellaneous. This Agreement sets forth the entire understanding between the parties with respect to the subject matter herein, and supersedes all other agreements and discussions concerning the subject matter of this Agreement. The parties are independent contractors, and neither party is authorized to make any warranties or representations on behalf of the other party or enter into any agreements on behalf of the other party. If any clause of this Agreement is determined to be void or unenforceable by a court of competent jurisdiction, such clause shall be interpreted as necessary to give maximum force to the provisions thereof, and the validity and enforceability of the remainder of this Agreement shall not be affected. In the event of any conflict or inconsistency between the body of this Agreement and any exhibit or SOW, the terms of the body of this Agreement shall govern, except to the extent set forth expressly otherwise in an agreed exhibit or SOW. No Party shall assign any of its rights or obligations hereunder without the prior written consent of all other Parties, and assignments in violation of the foregoing shall be void.Notwithstanding the foregoing, Flytrex may assign all of its rights and obligations hereunder to a purchaser of all or substantially all of the assets or share capital of Flytrex, or a successor in interest to the drone delivery business of Flytrex. All notices in connection with this Agreement must be in writing and shall be given by certified mail, return receipt requested, to the addresses set forth in the preamble of this Agreement, or to another address in respect of which a party provides notification that it should be used for the provision of notice hereunder. This Agreement and the rights of the parties hereunder shall be governed and construed in accordance with the laws of theState of New York, exclusive of conflict or choice of law rules. Any dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach or termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration in accordance with the JAMS International ArbitrationRules. The seat of the arbitration will be New York, New York, provided that hearings may be held in any location convenient for the parties. The language to be used in the arbitral proceedings will be English. Judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. nothing in this Agreement shall prevent either party from seeking any provisional/ preliminary relief (including, but not limited to, injunctions, attachments or other such orders in aid arbitration) from any court of competent jurisdiction.

16.              Electronic Acceptance. By clicking “I Agree,” “Accept,” or a similar button, or by otherwise indicating your assent electronically, you acknowledge and agree that this agreement is legally binding and enforceable in the same manner as a signed written contract.

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‍Exhibit A: Drone Delivery Service Consideration

Flytrex shall collect all amounts actually paid by the end user purchaser of such items, including applicable taxes and other government charges. Flytrex shall make payment of such collected amounts to Company, less (a) applicable Delivery Charges,(b) the Applicable Discount, and (b) Chargebacks. Flytrex shall make payment of the foregoing amounts to Company within 30 days of the conclusion of the calendar month in which such amounts were received by Flytrex. Together with such payment, Flytrex shall provide a report calculating applicable amounts owed to Company, and other applicable information such as the number of flights and items delivered, flight time averages, and customer satisfaction as reported to Flytrex. The foregoing payments do not include applicable taxes and government charges, such as sales, services or value-added taxes, which shall be added by Flytrex to the applicable invoice.

In this Agreement:

 (a)   “Delivery Charges”means an amount that Flytrex may, in its discretion, directly charge Customers as a markup on items or for receipt of any delivery via the Services.

 (b)   “Applicable Discount”means APPLICABLE_DISCOUNT of the List Price The “List Price” means the price that Customer would ordinarily charge its own customers for in-store purchase of the item, according to the price list published or generally made available by the Customer.

 (c)    “Chargebacks” means amounts refunded or not collected as a result of refunds, returns, credits or chargebacks. Flytrex may adjust later payments in respect of Chargebacks that were not accurately reflected in earlier payments to Company.

A flight is defined as completing (1) flying from the DistributionCenter to the delivery point, and (2) lowering of the package to the ground.Records of the System shall be determinative except in the event of manifest error.

 Additional payment terms may be set forth in any specific statement of work agreed between the parties.

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‍Exhibit B: SOW‍

This Exhibit B sets forth the Services thatFlytrex shall provide to Customer.

1. Overview: Under this SOW Flytrex will establish a drone delivery network connecting a designated Company store with nearby customers. The service will be operated by Flytrex, or a Flytrex official operator as set forth in more detail below. Flytrex will assign unmanned platforms controlled and managed via Flytrex control software to enable the safe execution of the delivery service.

As detailed below, the delivery service will be operated from a drone delivery Distribution Center (DC) located in proximity to the Company store(s), offering on-demand, drone deliveries to customers’ yards and designated public locations. Customers will use a Flytrex proprietary ordering app to choose items for order. Once an order is placed using the app, a Flytrex or Flytrex operator runner collects the items for each order from the store and brings them to the DC for delivery. Customers get notified through the app about the status of their order and are required to approve the package release upon arrival of the drone above the selected delivery point.

2. Scope of Work: Flytrex will offer drone delivery services from its Distribution Centers (DC) to nearby customers located within a predetermined distribution area, in compliance with the regulatory requirements, and deliver the order directly to the customers’ yards and/or to predefined public delivery points. The service will be operated in accordance with the Federal Aviation Administration regulation and will be subject to its limitations. Flytrex may from time to time notify Company regarding Distribution Centers located in proximity to Company retail locations, and the parties shall agree as to whether Flytrex shall service any particular Company retail location through the Services. Flytrex shall only provide the Services with respect to mutually agreed Company retail locations.

3. Responsibilities: The Parties’ responsibilities under this SOW are as follows:

3.1. Regulations - Flytrex  will lead the regulatory compliance and certification process with the FAA.
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3.2. Site planning - Flytrex will perform operational site planning including safety risk assessment and management.
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3.3. Distribution Center - Flytrex will allocate and coordinate the use of the area assigned for the operations of the services.
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3.4. Drone delivery system - Flytrex will set up the drone delivery system, including drones and ground control station.
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3.5. System operation - System will be operated by Flytrex or a Flytrex certified and FAA approved operator. Trained and qualified crew will execute delivery missions via Flytrex system and will be in charge of all the operational aspects, including system deployment and aircraft maintenance.
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3.6. Insurance - Flytrex will provide third party liability insurance for the operation.
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3.7. Ordering app - Orders will be placed by Customers using Flytrex ordering app. The orders shall be transmitted to Company via a tablet device provided by Flytrex to Company, which may thereafter have the order inputted into Company’s ordering system. Flytrex retains title in the tablet, and the tablet shall be returned to Flytrex upon termination or expiration of this Agreement.
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3.8. Product catalog - Flytrex will identify a list of selected Company items for sale that comply with the drone payload specifications. Items must comply with the requirements set forth in Exhibit C. Company is responsible for the quality of the Product until delivery to Flytrex or Operator, as applicable. Flytrex or Operator, as applicable, is responsible for ensuring that the delivery of the product via the Services does not adversely impact the quality of the products as delivered to Flytrex or Operator, as applicable.
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3.9. Pickup runner - Flytrex will be in charge of picking up the order from the Company store to the DC.

3.10. PR - PR content and timing will be  mutually coordinated by Company and  Flytrex.

3.11. Customer  payment collection - Flytrex  will collect and process all customer payments, including through third party  payment processors.

3.12. Customer  service support - Flytrex  will be in charge of all customer support. Company will provide reasonable  assistance where necessary.

4. Mobile Application: The Flytrex mobile application will enable Customers to place their orders using their smartphones during the Operating Hours. The orders shall be transmitted to Company via a tablet device provided by Flytrex to Company, which may thereafter have the order inputted into Company’s ordering system. The Company’s ordering menu will be based on a detailed list of items and images provided by Company. Company should update Flytrex in respect of any change in the content, appearance, pricing, or any other item characteristics that might affect customer satisfaction from the Services. Customers executing orders through the mobile application shall be required to agree to standard terms and conditions and privacy policy of Flytrex. Flytrex may use the branding, logo and trademark of Company and of items for sale in the Flytrex mobile application in a manner reasonably acceptable to Company solely for the purpose of indicating the Company and associated items to customers.

5. Distribution Center: The delivery service will be operated from a drone delivery Distribution Center in proximity to the Company’s stores. Drones will take off and land from this Distribution Center. Once an order has been processed on the Mobile Application, a Flytrex or Operator runner will collect the items and bring them to the Distribution Center for delivery. Flytrex shall provide Customers with notifications regarding order status through its Mobile Application.

6. Delivery: During Operating Hours, Operator or Flytrex will handle the package and operate the aerial delivery. Customer will be notified once the drone is hovering above delivery point and upon Customer’s confirmation the package will be lowered on a wire down to the ground from the hovering drone. Customers are required to provide such confirmation prior to delivery. In the absence of Customer’s confirmation the drone will head back without releasing the package and Customer will be notified of the cancellation.

7. Delivery Area: Such delivery points may be subject to approval by applicable regulatory authorities. Deliveries shall only be available for pickup at such pre-defined delivery points.

8. Operator: Flytrex may operate the services through a third-party drone operator. Flytrex or Operator will operate the System from a location determined by Flytrex and will be responsible for package pick up and handling, ground operation and aerial delivery, in compliance with applicable law and regulatory requirements.

9. Operations: Services may not be available at all times, depending on external flight, weather and other conditions outside of the control of Flytrex or Operator. Operator or Flytrex, as applicable, will only commence flight operations when, in the sole discretion of Operator and Flytrex, conditions permit the provision of the services. Conditions which may interfere with the provision of the services can include, without limitation: wind speeds in excess of 17.8 mph, temperatures below 41 degrees F, rain/freezing rain, poor visibility, lightning within 20 miles of route, approaching weather systems that compromise flight operations, any FAA or other governmental or regulatory flight restrictions (such as NOTAMS/TFR).

10. Fees: Fees are set forth in Exhibit A.

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Exhibit C: Items for Carriage

Packages shall weigh up to 6.6lb.

 Package dimensions shall be up to 15" x12" x 8"

 The System shall not be used to deliver the following items

1.     Items exceeding the above permitted size or weight
2.     Dangerous items, including but not limited to weapons, explosives, flammable, corrosive, bio-hazardous etc.
3.     Items including strong magnets, above 5 microtesla
4.     Radio transmitters or any other electrical device that is turned on or can turn on by itself
5.     Bulk materials or liquids that are not stored in a robust, closed container

Delivery of alcoholic beverages is subject to the parties agreement on a means of validating age of end users.

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Exhibit D: Insurance Requirements

Flytrex will at all times during the Term have and maintain in full force and effect the following types of insurance with limits that are at least the greater of the minimum limits indicated below or such limits as required by law, statute or regulation, with reliable insurance companies acceptable to Flytrex.  These policies will contain a waiver of subrogation in favor of Flytrex, where permitted by law, and provide that each policy is primary, non-contributory and not excess coverage to any other insurance available to Flytrex.  

 A. Commercial General LiabilityInsurance: (including Products/Completed Operations, Personal and Advertising Injury andContractual Liability) written on an Insurance Services Office (ISO) form CG 0001 or equivalent with no endorsed coverage deletions providing coverage of at least $1,000,000 per occurrence.

B. Aircraft Liability Insurance: UAS insurance covering liability arising from use of each UAS used in connection with the Services, providing coverage of at least $1,000,000 per occurrence covering bodily injury and property damage.

C. Workers Compensation: providing coverage as required by applicable statute.

D. Employer’s Liability Coverage: providing coverage of not less than $1,000,000 per accident and, as respects injury by disease, $1,000,000 per employee.

E. Umbrella/ExcessLiability Insurance: applying limits at least above the underlying commercial general, business automobile, and aircraft liability with limits of at least $2,000,000per occurrence.

Flytrex may use a combination of primary and umbrella or excess insurance to satisfy the requirements herein, so long as the umbrella/excess insurance provides terms of coverage that are no less broad than the underlying liability insurance.

Flytrex will cause the Commercial General, Aircraft Liability, Business Auto, and anyUmbrella/Excess Liability policies used to satisfy these requirements to nameCustomer as an additional insured.