1XXX - CONTRACT INFORMATION

The Seller shall comply with following requirements and flowdown all applicable sections to its subcontractors:

This Agreement is made and entered into in the State of California, and this Agreement and all disputes arising out of or relating thereto shall be governed by the laws of the State of California, without regard to any otherwise applicable conflict of law rules or requirements.

Seller agrees that any action, suit, litigation or other proceeding (collectively "litigation") arising out of or in any way relating to this Agreement, or the matters referred to therein, shall be commenced exclusively in the Los Angeles County Superior Court or the United States District Court for the Central District of California, Western Division, and hereby irrevocably and unconditionally consent to the exclusive jurisdiction of those courts for the purpose of prosecuting and/or defending such litigation. Seller hereby waives and agrees not to assert by way of motion, as a defense, or otherwise, in any suit, action or proceeding, any claim that (a) Seller is not personally subject to the jurisdiction of the above-named courts, (b) the suit, action or proceeding is brought in an inconvenient forum or (c) the venue of the suit, action or proceeding.

Seller hereby assumes all risk of loss or damage to the subject property while in Seller's possession and/or control. Seller agrees to promptly report all incidents of loss, damage or destruction of the subject property to the cognizant MDC Purchasing Representative. Furthermore, Seller agrees to identify subject property as MDC or Government owned, shall maintain accountability records, shall perform required maintenance and shall periodically inventory subject property in accordance with sound business practices. Seller also agrees to notify the cognizant MDC Purchasing Representative when the subject property will no longer be required, and shall request disposition instructions from the MDC Purchasing Representative.

1. TITLE AND LICENSE RIGHTS

a. Seller hereby grants to MDC all right, title and interest in and to all inventions, works of authorship, improvements, developments, methods, processes, designs, software, technical information and data, manufacturing know-how and equipment, and other proprietary rights, whether or not patentable (all of which are hereinafter, individually and collectively called proprietary rights) first conceived, created or actually reduced to practice in the work performed under this contract.

b. MDC hereby grants to Seller a worldwide, royalty-free, nonexclusive and irrevocable license to use the aforesaid proprietary rights for any purpose other than to make for others goods which are substantially the same as made and furnished under this contract.

c. Seller further grants to MDC a nonexclusive, royalty-free, irrevocable, worldwide right and license under any of Seller's patents and to use any of Seller's proprietary information (including Seller's "manufacturing know-how") to the extent necessary to enable MDC to make, or have made by others for it, use and sell goods furnished under this contract, unless otherwise agreed in writing by MDC. Seller, at MDC's written request, shall identify the patents and provide a description of its manufacturing know-how involved in the performance of this contract as may be necessary to enable MDC to practice the rights granted herein.

d. Seller further agrees to promptly disclose in writing any item reasonably appearing to be patentable and to execute or have executed any instruments of assignments, application papers and rightful oaths relating to the aforesaid proprietary rights, as may be required to enable MDC to file and prosecute patent applications thereon in any country and to record title to such applications.

e. Each document, article, design and other similar items relating to proprietary rights shall be appropriately identified to reflect ownership in MDC and shall be furnished to MDC. All designs, specifications and drawings that relate to proprietary rights shall be placed by Seller on MDC formats and on no other and shall contain a proprietary rights notice indicating MDC's ownership.

2. FURNISHING OF DATA

Seller agrees to furnish to MDC (at no cost), at such times as may be directed by MDC, the originals of all data originated by Seller under this contract and as to such of the data as may remain undelivered, these shall be furnished at the earlier of (1) the termination of this contract for default or (2) the completion of this contract.

3. REPRODUCTION, USE AND DISCLOSURE RIGHTS

Seller grants to MDC the right to reproduce, use and disclose, for purposes as MDC desires, all or any part of any report, drawing, specification, blueprint, technical information or data delivered or specified to be delivered to MDC by Seller under this contract.

Seller shall, in the alternative and upon MDC's request, provide MDC's aircraft customers or their designated simulator manufacturers at no extra charge, existing technical data pertaining to Seller's product and required for Certification or Flight Training Simulation. Seller and such third parties may enter into data exchange agreements as required to protect Seller's proprietary interests in such technical data.

This Clause shall have precedence over any other Clauses herein relating to the transfer of Seller technical data and will be included in any subcontract placed by Seller.

Reports of reportable items, and disclosure of subject inventions, interim reports, final reports, utilization reports, and other reports required by the Clause, as well as any correspondence with respect to such matters, should be directed to the New Technology Representative unless transmitted in response to correspondence or request from the Patent Representative. Inquiries or requests regarding disposition of rights, election of rights, or related matters should be directed to the Patent Representative. This Clause shall be included in any subcontract hereunder requiring a "New Technology" Clause or a "Patent Right -- Retention by the Contractor (Short Form)" Clause, unless otherwise authorized or directed by the MDC Purchasing Representative. Respective responsibilities and authorities of the named representatives are set forth in 18-27.375-3 of the NASA FAR Supplement.

Reports of inventions and subcontracts, including interim reports, final reports, utilization reports, and other reports required by the above cited Clause, as well as any correspondence with respect to such matters, should be directed to the Contracting Officer unless transmitted in response to correspondence or request from MDC. Inquiries or requests regarding disposition of rights, election of rights, or related matters should be directed to the Contracting Officer. This Clause shall be included in any subcontract hereunder requiring a "Patent Rights -- Retention by the Contractor (Long Form)" Clause, unless otherwise authorized or directed by the MDC Purchasing Representative.

Seller shall provide reliability guarantees for MDC acceptance. If the actual reliability values experienced in-service are less than the Seller guaranteed reliability values, the Seller shall, at its expense:

1. Promptly conduct an analysis of the causes and determine or develop the corrective action required.

2. Submit corrective action recommendations for MDC approval.

3. Implement corrective action as necessary on production units to upgrade the reliability to the required level.

4. Prepare and release service bulletins as required with MDC coordination.

1. Seller waives any claim against MDC, known or unknown, arising directly or indirectly from performance of the terminated portion of this Purchase Order/Contract (which terminated portion is described herein) and from the termination thereof. MDC releases Seller from any obligation to perform further work or make further deliveries under said terminated portion.

2. If this Purchase Order/Contract, or any portion thereof, has been issued under a Government Prime Contract or Subcontract, Seller also waives any claim against the Government, known or unknown, arising directly or indirectly from performance of the terminated portion of this Purchase Order/Contract and from the termination thereof.

Seller shall reimburse MDC for any and all profit or fee amounts paid to or otherwise recovered by the Government or a higher-tier contractor pursuant to Paragraph (c) of FAR 52.203-10, "Price or Fee Adjustment for Illegal or Improper Activity," arising out of or resulting from any action or omission to act in violation or alleged violation of the act by Seller, any director, officer, employee, agent, other representative, consultant, or subcontractor at any tier of Seller, or any such person or entity acting for or on behalf of any of them. Seller's liability pursuant to this Clause shall extend to and include profit or fee amounts determined as provided in Paragraph (c) of FAR 52.203-10 for any such violations or alleged violations which, together with violations or alleged violations by any other person or entity, result in payments to or other recoveries by the Government from MDC.

The rights and remedies provided in this Clause are not exclusive but are in addition to any other rights and remedies provided by law or under this Purchase Order/Contract.

Unless otherwise prescribed in this Purchase Order/Contract, MDC shall withhold five percent (5%) of the amounts due under Clause 1070, but the total amount withheld shall not exceed $50,000. The amounts withheld shall be retained until the execution and delivery of a Release by Seller as provided in the paragraph below.

Sellers and each assignee under an assignment entered into under this Purchase Order/Contract and in effect at the time of final payment under this Purchase Order/Contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this Purchase Order/Contract, a Release discharging MDC, its officers, agents, and employees of and from all liabilities, obligations, and claims arising out of or under this Purchase Order/Contract, subject only to the following exceptions:

1. Specified claims in stated amounts, or in estimated amounts if the amounts are not susceptible of exact statement by Seller.

2. Claims, together with reasonable incidental expenses, based upon the liabilities of Seller to third parties arising out of performing this Purchase Order/Contract, that are not known to Seller on the date of the execution of the release, and of which Seller gives notice in writing to the MDC Purchasing Representative not more than two (2) years after the date of the release or the date of any notice to the Seller that MDC is prepared to make final payment, whichever is earlier.

While performing under this Purchase Order/Contract, Seller agrees that neither it nor any subcontractor will concurrently perform work for MDC's benefit at the same MDC location using the same skills and/or disciplines under the following conditions:

1. If this is a lump sum type Purchase Order/Contract, then no concurrent work shall be undertaken pursuant to a Time-and-Materials or Labor-Hour type contract/subcontract.

2. If this is a Time-and-Materials or Labor-Hour type Purchase Order/Contract, then no concurrent work shall be undertaken pursuant to a Lump Sum type contract/subcontract.

Questions regarding the boundaries of an "MDC location" shall be directed to the MDC Purchasing Representative. Seller shall be responsible for requesting advice from MDC to determine the existence of concurrent conflicting type contracts between MDC and Seller's proposed subcontractors. Any contract in violation of the foregoing shall be voidable by MDC at MDC's election.

For purposes of this Purchase Order/Contract, the following order of precedence shall apply in the event of any inconsistency between the face of this Purchase Order/Contract, its attachments, its specifications, the terms and conditions of the previously negotiated Purchase Order/Contract, and attachments to the previously negotiated Purchase Order/Contract: (a) purchase clauses or quality clauses called out on the face of this Purchase Order/Contract; (b) terms and conditions written in full text on the face of this Purchase Order/Contract; (c) specifications applicable to this Purchase Order/Contract; (d) attachments to this Purchase Order/Contract incorporated herein by reference; (e) special terms and conditions called out by the previously negotiated Purchase Order/Contract; (f) general terms and conditions called out by the previously negotiated Purchase Order/Contract; (g) specifications applicable under the previously negotiated Purchase Order/Contract to the items ordered on this Purchase Order/Contract; and (h) all other attachments incorporated by reference into the previously negotiated Purchase Order/Contract. MDC's specifications shall prevail over any subsidiary documents referenced therein. Seller shall not use any specification in lieu of those contained in this Purchase Order/Contract without written consent of MDC's authorized Purchasing Representative.

The Purchase Order/Contract number associated with the underlying terms and conditions, which terms and conditions are incorporated herein by this reference, is identified on the face of this Purchase Order/Contract where this clause is referenced.

1. The Seller, in performance of this Purchase Order/Contract, shall be responsible for selecting personnel who are well qualified to perform the required services, for supervising his personnel and for keeping them informed of all improvements, changes and methods of operation.

2. MDC may direct the Seller to remove, and the Seller shall remove, any employee from assignment to performance of any services under this contract for reasons of security or misconduct.

3. When the reason for the removal request is due solely to misconduct on the part of the employee, replacement shall be at the Seller's expense.