MUFON - BIGELOW CONTRACT

PURCHASE AGREEMENT FOR THE ACQUISITION OF INFORMATION
 
This Purchase Agreement ("Agreement") dated this ______________________ day
of ________________, 200__, defines a contract between Mutual UFO Network
("MUFON"), with an office located at 155 E. Boardwalk Drive, Ste. 300, Fort
Collins, CO  80525, hereinafter referred to as "Seller" and Bigelow
Aerospace Advanced Space Studies, LLC, ("BAASS"), a Nevada Limited Liability
Company with an office located at 4640 S. Eastern Avenue, Las Vegas, Nevada
89119, hereinafter referred to as "Buyer".
 
1.0              This Agreement, all exhibits and other documents incorporated herein by reference, whether or not attached hereto, constitute the complete and exclusive statement of the Agreement between the parties hereto.  This Agreement supersedes any previous understanding or agreement between Seller and Buyer (oral or written) with respect to the subject matter hereof.
2.0              Engagement of Services:  Buyer is engaging Seller to:
                 a.                   Purchase field investigation services that provide diversified information covering the topic of aerial phenomenology and any spacecraft, mobile objects, or events that could be considered anomalous. 
                  b.                  Provide to Buyer services including the Seller's existing CMS database in Read Only format and all other data.
                  c.                   Purchase from Seller field investigation services and all information and material derived from those services, including, but not limited to:  Physical evidence, signature
information from detection devices (including third-party witness photographs, film, data from detection devices, ground or air-derived radar data from FAA or other sources, and satellite data), ground disturbance site information and evidence including photographs and other material including effects on humans, foliage, trees, soil, fauna and insects, photographs of
casts of footprints, film, any other photographs, electronic information, interview transcripts, any testimony, including recordings (audio, video, stenographic, etc.) of first-hand accounts and observations, as well as any other item that may be recovered from prior, present, and future field investigations, submitted by MUFON which shall be hereinafter referred to as the "Product " Buyer is only obligated to return original case files, photos and audio recordings to Seller providing there is a written agreement to return such property belonging to Seller or other established ownerships.  Such agreements shall be executed on a case by case basis.  Seller agrees to provide the labor, resources and equipment necessary to deliver the Products to Buyer upon the scheduled and terms and described within this Agreement. Strict conformity of the Product with all dimensions and specifications described in this Agreement and/or any Exhibit or attachment shall be deemed a material term of this Agreement.          
3.0              Warranty of Performance.  Buyer agrees to Five Thousand US Dollars ($5,000.00) per month to be spent from the Fifty Six Thousand US Dollar ($56,000) monthly payment stipulated in paragraph 8 below for a special Rewards Program.  Seller intends to disburse Five Thousand US Dollars ($5,000.00) per month according to the following formula in order to fund a Rewards program that encourages and enhances the quantity and quality of the information Product.  Buyer agrees to accept the following formula for the disbursement of such funds.  Seller warrants that it shall follow this disbursement formula throughout the term of this Agreement.  Seller's rewards disbursement formula is as follows:
                  a.                   One monthly prize for the dispatcher accumulating the most performance points as described by the MUFON SIP Project Incentives schedule attached as Exhibit A.  This prize will be $500.00.
                  b.                  There will be monthly prizes for the first place and second place State Coordinators as described by monthly accumulation of performance points.  First prize will be $750 and second prize will be $500.
                  c.                   There will be monthly prizes for the first, second and third place field investigators based on monthly accumulation of performance points.  First prize will be $1,500, second prize will be $1,000 and third prize will be $750.                                
4.0              Scope of the Agreement.  This Agreement shall not be interpreted as having any characteristics or force as a partnership agreement of any kind between the parties hereto.  Buyer shall not at any time and is specifically precluded from providing during the term of this
Agreement any advice, consultation or management to Seller.                  
5.0              Term.  The term of this Agreement shall be one year from the date of execution subject to the terms and conditions of Paragraph 6.0 below.  Buyer shall have an option to renew this Agreement at the conclusion of each one-year period.  Buyer shall notify Seller of its intent to exercise this option in writing five (5) days prior to the expiration of the Agreement subject to Paragraph 5.0 below. Seller can terminate this agreement at any time upon Fifteen (15) days written notice to Buyer providing Seller refunds to Buyer a prorated amount of monies previously distributed from Buyer to Seller for the remaining unused time in that particular month.  Under no circumstances shall such notice be permitted to be delivered when insufficient time is available to allow said notice to expire within the current month of delivery.
6.0              Product Delivery:  The Parties understand and agree that  time is of the essence. The Product shall be delivered in the following manner:
                  a.                   Buyer shall be given Administrator Access to Seller's CMS in order that Buyer may have "real-time" access to such information within 24 hours of the execution of this Agreement.
                  b.                  Weekly written reports shall be delivered by Seller to Buyer via facsimile by 5:00 pm PDT on the Friday of each week throughout the term of this Agreement to a destination facsimile number given to Seller in writing by Buyer.  The Weekly report shall set
forth in detail all field investigation activities encompassing all applicable items set forth in Paragraph 2.0 above occurring for the previous seven-day period. 
                  c.                   The Weekly report shall also set forth the investigation plan for the next seven days for each active case investigated.
                  d.                  Monthly written reports and monthly financial statements shall be delivered via FedEx to Buyer by the tenth (10th) day of each calendar month following execution of this Agreement. Seller shall deliver two copies each of the written and financial statements to Buyer at 4640 S. Eastern Avenue, Las Vegas, NV  89119 or such other address as may be directed in writing by Buyer.   The monthly written report shall include an executive summary and a detailed exposition of all MUFON activities of the previous month as they pertain to this Agreement. It shall also set forth all field investigation activities encompassing all
applicable items set forth in Paragraph 2.0 above occurring for the month being reported.  The monthly financial statement shall encompass all items set forth in Paragraph 8.0 below.
                  e.                   All other information and evidence as described in Paragraph 2 shall be delivered via FedEx to Buyer at 4640 S. Eastern Avenue, Las Vegas, NV  89119, or such other address as may be directed in writing by Buyer.  Seller agrees to properly safeguard and protect all evidence strictly in accord with the specifications regarding protection of the field investigation site, establishing chain of custody, and preservation of evidence prior to shipping as required by Buyer.
7.0              Seller Product and Performance Review:  Buyer shall review the quality and quantity of the Product delivered through approximately the first four to five months of the term of this Agreement ("The Performance Review").   The Performance Review shall take place during the second half of June, 2009 and will require Buyer to determine three possible actions based upon Seller's performance.  Those actions are:
                 a.                   Immediate termination effective June 30, 2009, of the contract for Seller's failure to provide the quality and quantity of information to the satisfaction of Buyer.  
                  b.                  Continuation of the Agreement under the same terms and conditions as agreed.
                  c.                   Continuation of the Agreement with a merit-based increase in price for the Product.
                                   
                  In the event continuation of the Agreement is chosen, a second Performance Review shall be conducted during the second half of October, 2009.  The criteria for the second Performance Review and any subsequent Performance Review shall be a, b, and c above.  The critical decision date for the June, 2009 Performance Review shall be June 26, 2009, and the critical decision date for the October, 2009 Performance Review shall be October 27, 2009 with the termination date, if applicable, to be October 31, 2009.
8.0              Price and Payment:  Subject to Paragraph 6.0 above, the total fixed price payable to Seller for the goods and services of this Agreement is Six Hundred Seventy-two Thousand US Dollars ($672,000US) payable in twelve monthly installments of Fifty-six Thousand US Dollars
($56,000US).  The total fixed price paid by Buyer to Seller shall be for the Product as described in Paragraph 2.0 above and deliverables as described in Paragraph 5.0 above. Seller agrees to be responsible for and pay all sales tax, use tax, and all contributions for health insurance, social security charges, employment taxes, customs duties, if any, and any and all other surcharges, fees, worker's compensation premiums or other labor related taxes, fees or premiums  arising in connection with the performance of the scope of work of this contract.  This is a "Turn-key" price Agreement. Seller will not and shall not seek to pass-along any additional costs that it may incur in connection with any activity that it may require in order to produce or deliver the Product as set forth in Paragraph 2 or deliverables as defined in Paragraph 5.  In the event Buyer is found to be liable for any of the costs described above, Seller shall indemnify Buyer to the full
extent as set forth in paragraph 10.0 below. 
9.0              Financial Statements.  As a condition of this contract, MUFON shall submit an itemized account of disbursements, on an approved BAASS format, on a monthly basis, no later that the 10th of each month. Further, BAASS may, at its discretion, request and receive within 10 days additional detailed information relative to any allocation or expenditure of monies paid to MUFON. This supporting information may include (but not be limited  to) invoices, receipts, statements, contracts, time/payroll reports, independent contractor submissions, and summarizing schedules, which shall allow easy correlation from the detail to the total expenditures.
10.0          Terms:  The first prorated payment shall be made to Seller within three business days after complete execution of this Agreement.  Each month thereafter payment shall be made on or before the fifth day of each month. 
11.0          Modifications:  This Agreement may only be modified by a written instrument, signed by both parties.  Such a written instrument is only valid if signed by Robert T. Bigelow and identifies specifically the sections of this Agreement affected along with the specific changes caused by signing the written instrument.
12.0          Non-Waiver:  Failure of Buyer to insist on any term of this Agreement shall not release Seller from any warranties or obligations under this Agreement and shall not be deemed a waiver of any right of Buyer to insist upon strict performance hereunder of any of its right and/or
remedies.
13.0          Hold Harmless:  Seller assumes all risks in furnishing the goods and services ordered hereunder and shall indemnify, defend and hold harmless Buyer or any affiliates from and against any and all such claims, debts, demands, judgments, awards, losses, liabilities, interest, attorneys fees, costs and expenses arising out of any failure of Seller to perform any of the terms and conditions of this Agreement.
14.0          Indemnity Against Patent Infringement: 
 A.        Seller shall indemnify, hold harmless, and defend, at Seller's expense, Buyer and/or Buyer's customers against any and all losses, damages, liabilities, claims, settlements, and judgments resulting from an allegation of infringement or misappropriation of an intellectual property right (whether or not successful), as well as attorney's fees, expert's fees, consultant's fees, court costs, and related expenses incurred by Buyer and/or Buyer's customers in defending such an action.  Seller shall provide to Buyer a suitable substitute product with Buyer's written approval and at Seller's expense if an injunction issues covering the subject matter of this
Agreement.  This indemnity shall not apply to products that are made to a specific and detailed design furnished by Buyer.      
B.        Seller shall notify Buyer in writing of any claim of infringement or misappropriation related to the subject matter of this Agreement immediately upon Seller's receipt of notification of such claim(s).  Buyer shall have the option to control the defense and related negotiations of any suit, proceeding, or action of infringement or misappropriation against Buyer without expense or liability pursuant to the terms of this Agreement. 
15.0          Intellectual Property Rights.  Intellectual property rights and the nature of ownership of physical materials and the particular permissions surrounding destructive testing shall be determined on a case by case basis through written permission from MUFON when and where such materials are offered to Buyer. Seller shall notify Buyer in writing of any claim of infringement or misappropriation of Intellectual Property immediately upon Seller's receipt of notification of such claim(s).  Buyer shall have the option to control the defense and related negotiations of any suit, proceeding, or action of infringement or misappropriation against Buyer without expense or liability pursuant to the terms of this Agreement.              
16.0          Compliance:  Seller shall produce, furnish and deliver all Products to be provided in strict compliance with any and all terms of this Agreement.  
17.0          Warranty:  Exhibit A attached to this Agreement shall specify the term for any additional warranties by Seller pertaining to all deliverables subject to this Agreement.

18.0          Applicable Law and Jurisdiction:  The parties agree 1) to personal jurisdiction in the State of Nevada; 2) the laws of the State of Nevada shall govern the validity, performance and enforcement of the terms and conditions of this Agreement, and; 3) any proceedings with respect to the performance or enforcement of this Agreement shall be brought in a court of competent jurisdiction in the State of Nevada.
19.0          Severability:  If any portion of this Agreement is held invalid, the Parties agree that such invalidity shall not affect the validity of the remaining portions of this Agreement, unless applying the remaining portions would frustrate the purpose of this Agreement.
20.0          Acceptance:  Seller can only accept this Agreement on the exact terms set forth.  The Seller can only make acceptance by executing this Agreement and initialing all attached exhibits within seven (7) calendar days of the Agreement date.
21.0          Delegation of Performance:  No delegation of performance by Seller is permitted unless the delegation is approved in a writing specifically identifying the authorization to delegate and signed by an executive of Buyer.
 
MUTUAL UFO NETWORK                 BIGELOW AEROSPACE ADVANCED SPACE STUDIES,
LLC      
                           
Authorized Signature                          Authorized Signature     
                   Robert T. Bigelow        
Printed Name                                      Printed Name     
                        Operating Manager        
Title              Title    
_______/_______/_______            _______/_______/_______  
Date               Date     

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