1. DEFINITIONS

In these Conditions and in any Proposal or Offer Letter the following definitions shall apply:

1.1 "Coercive" means Coercive Systems Limited.

1.2 "The Customer" means the company, individual partnership or organization to whom the Offer Letter and Contract is addressed.

1 .3 ''Offer Letter/Quotation" means the letter from Coercive to the customer attached to these conditions.

1 .4 "Proposal" means Coercive proposal, specification or schedule of work attached to or referred 10 in the Offer Letter.

1.5 "Work" means any work or services which Coercive agrees 10 perform under the Contract.

1.6 "Goods" means any goods, equipment or report or service which Coercive agrees to supply to the Customer under the Contract.

1.7 "Contract" means the contract between Coercive and the customer to which these Conditions apply and includes the terms in the Offer Letter and Proposal.

2. CONFIDENTIALITY

Each party shall take all reasonable measures to keep confidential for a period of five years from the date of the Contract any secret or confidential ideas or information obtained from the other party, provided that this condition shall not apply to ideas or information which are in, or pass into, the public domain otherwise that through the fault of such first mentioned party, or which are rightfully obtained by first mentioned party at the date of the contract or are independently developed by it.

3. PUBLICATION

Subject to condition 2, Coercive may seek. and the Customer shall not unreasonably withhold, consent in writing to Coercive's publicizing its involvement in the work.

4. CUSTOMER RESPONSIBILITIES

The customer shall as and when requested by Coercive, provide all necessary instructions, information, specifications, goods, materials and access to personnel and facilities which may from rime to time be required to enable Coercive to meet its obligations under the Contract. Withom prejudice to any of Coercive's other rights, the Customer undertakes to pay all reasonable additional charges arising from its delay in providing or failure 10 provide any of the foregoing.

5. LIABILITY

5.1 Coercive shall not be liable for any delay in meeting. or failure to meet, its obligations under the Contract arising from any cause outside its control. !n the event of any such delay the period for the pe1fonnance of the Contrac1 shall be extended accordingly. Time shall 1101 be of the essence of the Contract

5.2 Coercive's liability for any loss or damage howsoever caused, including, but not limited to, direct, indirect, unforeseeable or consequential loss or damage (other than death or personal injury resulting from Coercive's negligence) suffered by the customer as a result of anything done or omitted by Coercive in connection with the Contract shall be limited to the amount paid for the perfom1ance of the Contract.

5.3 The customer shall indemnify Coercive against liability. other than for death or personal injury, which it may be under to any third party as a result thereto through the customer, of any report, design, software, equipment or product resulting from the performance of the Contract, other than any such liability, resulting from the proven default or negligence of Coercive.

5.4Except as specified in these Conditions, the Proposal or the Offer Letter. all warranties conditions and representations implied by statute trade usage or otherwise arc hereby excluded and the Customer undertakes that, in entering into the Contract, it has not relied on any representations of Coercive other than those specified in the Contract

6. TITLE, RISK, IPR AND TOOLING

6.1 Retention of Title Reserved.

Coercive shall retain title to all Goods, patents and other intellectual property rights to be supplied under or arising from the Contract until it has received payment in full of all sums due under the Contract in connection with the carrying out of the Work or the supply of Goods and under any other contract with the Customer in connection with the supply of any goods or services. Upon such payment in full the Customer shall become entitled only to such rights and benefits as are provided for in the Contract. For the purpose of this Condition Coercive has only received a payment when the amount of

!hat payment is irrevocably credited to its bank account.

6.2 The Customer shall store Goods owned by Coercive in such a way that they arc clearly identifiable as Coercive's property and shall maintain records of the persons to \whom it sells or disposes of such Goods, and of the payments made by such persons for such Goods. The Customer will allow Coercive to in inspect these records and the Goods themselves on request. All Goods supplied by Coercive in

the Customer's possession shall be presumed to belong to Coercive unless the Customer can prove otherwise.

6.3If the Customer fails to make any payment to Coercive when due, enters into bankruptcy, liquidation or other composition with its creditors, has an administrator or a receiver or manager appointed over all or part of its assets, or becomes insolvent, or if Coercive has reasonable cause to believe that any of these events is likely to occur Coercive shall have the right, without prejudice to any other remedies:

6.3.1 To enter without prior notice any premises where Goods owned by it may be, and to repossess and dispose of any goods owned by it so as to discharge any sums owned 10 it by the Customer.

6.3.2 To require the Customer not to resell or part with possession of any Goods owned by Coercive until the Customer has paid in full all sums owned by it to Coercive.

6.3.3 To withhold delivery of any undelivered Goods and cease to perform any work and stop Goods in Transit. Unless Coercive expressly elects otherwise any contract between it and the Customer for the supply of Goods and performance of Work shall remain in existence not withstanding any exercise by Coercive of its rights under this Condition.

6.4 The Customer shall bear the risk of loss or damage to any goods following delivery or deemed delivery whether or not title has passed, and shall insure all such Goods which are the property of Coercive to their full value against all the usual risks. Claims for non-delivery must be made within fourteen days of receiving notification of dispatch.

6.5 If the goods have been previously incorporated into or with other property, whether or not by the

buyer, the Company may nevertheless retake possession of the goods, but in so doing shall endeavor not to cause unnecessary damage.

6.6 Intellectual Prope11y

The Buyer shall not assume any rights over ownership or use of the vendors IPR. Any payments made by the Buyer towards non recurring engineering costs in any contact will not give any rights to title or use or imply any license to use in whatever fom1, foreground or background IPR which will remain fim1ly vesting with Coercive. Any transfer of IPR rights will only be accepted if made under a separate legalized specific contract for IPR which details exactly the nature rights, extent and use of the IPR that is being made available by Coercive to the Buyer.

6.7 Tooling and Ownership

Any payments made by the Buyer for tooling under, the contract will not give any rights or infer any rights title or license of the Buyer to use in whatever from the tooling and IPR of the tooling which will vest in Coercive at all times. The tooling will remain at Coercive's premises.

7. ASSIGNMENT

The Cus1omer may nor assign, transfer, sub-contract (other than as is customary in 1he trade) or in any way make over any of its rights or obligations to any third party without the written consent of Coercive.

8. TERMINATION

The Contract may be terminated at any time by either party giving at lease four weeks' notice (or such other period of notice as may be agreed) to the other party in writing and during the notice period Coercive will consult the Customer to agree a reasonable programme of Work leading up to tem1ina1ion. The Contract may be terminated forthwith by either pa11y if the other party commits a breach of the Contract which is incapable of remedy, or fails to remedy any other breach of the Contract within fourteen days of receiving notice of such a breach, or commits an act of bankruptcy, has a petition for its winding up presented which is not discharged within fourteen days, suffers the appointment of an administrator or receiver for all or any part of its business or assets, enters into any arrangement or composition with its creditors or takes or suffers any similar action in consequence of debt. Termination of the Contract howsoever arising shall be without prejudice to any rights which the Customer or Coercive have against each other which have accrued prior to or on such termination. In the event of termination under this Condition the Customer shall, without prejudice to any other

remedies pay Coercive for and in such event the buyer shall forthwith pay for all completed goods and shall immediately take delivery of or pay for the Company to store the goods at the buyer's risk and in addition shall indemnify the Company against all costs incurred and losses suffered in connection with the balance of the quantity ordered.

9. CHANGES TO TERMS AND CONDITIONS

The terms of the Contract may not be altered except by agreement in writing between Coercive and the Customer.

10. SEVERABILITY

ln the event that any provision or pan of any provision in the Contract shall be invalid or unforeseeable for any reason, such invalidity or unforeseeability shall not affect the validity and enforcement of any provision and any other part of any provision but the parties shall meet to discuss in good faith and agree an alternative provision or part of a provision which secures, as may be, the same commercial effect as the original.

11. GOVERNING LAW AND JURISDICTION

The Contract shall be governed by and construed in accordance with the laws of England and the parties accept the jurisdiction of the courts of England. Any claims under the Contract by the Customer shall be made in the United Kingdom in sterling.

12. DELIVERY

12.1 Unless agreed otherwise delivery is made ex-works and the goods shall be and thereafter remain at the buyer's risk from the time of delivery in accordance herewith. Carriage & Packing to the buyer's premises will be at the risk and cost of the buyer. Coercive accepts no liability for errors in dispatch or invoicing, or for loss or damage in transit (where it has undertaken to deliver to the buyer's premises) unless both Coercive and any carriers concerned are notified within two days in the case of damage or in the case of non-delivery within seven days after the goods are advised or should have been delivered

12.2 Any dare for commencement of delivery given by the Company is an estimate only and no liability is accepted for failure to deliver on a specific date. Failure by the buyer to give full information may result in delayed deliveries.

12.3 1f the buyer fails to accept delivery of the full quantity of goods ordered within the delivery period specified, the contract will, in the absence of agreement to the contrary, be deemed to be tem1inated 90 days thereafter by reason of the default of the buyer.

12.4In the case of orders for delivery of goods by call-offs/schedules each call-off shall be deemed to be sold under a separate contract and payment for each call-off is to be made on the due date as a Condition Precedent to future deliveries.

13. PAYMENT

Unless otherwise agreed in the contract all invoices shall be paid within 30 days of the invoice date, in the currency of supply and payment method as defined in the offer letter. For Invoices overdue Coercive without prejudice to its other rights, reserves the right to charge interest at an annual rare of 3% over HSBC Bank PLC's base rate.

14 VALIDITY OF OFFER

Unless otherwise specified all "Offer Letters/Quotations'' are valid for 60 days.

15. WARRANTY

Providing the goods supplied are operated within the limits defined in the Product Specification Coercive warrants its goods against defective design, materials or workmanship for a period of 12 calendar months, unless agreed otherwise in the contract, after the original goods have first been dispatched. At termination of this period all liability ceases. Any unauthorized repair, tampering or modification to the goods may invalidate the warranty, at Coercive's discretion.

In the case of goods distributed by Coercive where the point of supply has been agreed in the contract robe an address other than Coercive the customer will be responsible for all shipping costs in returning goods to and from the point of supply. Furthermore the ten11s of the warranty will be based upon those provided by the Manufacturer of the goods. Coercive will use its reasonable endeavors to ensure these benefits are passed on to the customer.

For all goods where the point of supply is Coercive. the customer should return all goods at his cost to Coercive and for valid warranty claims Coercive will be responsible for return carriage costs to UK destinations. Furthermore Coercive provides its own warranty on the goods which will have no lesser benefits than the Manufacturers in the case of distributed goods.

16. QUALITY

The goods shall confom1as to quantity and description with the particulars stated on the order, be of sound materials and workmanship, be equal in all aspects to the samples, pattens or specifications provided or given by either party, be capable of meeting any standard or performance specified in the order and if the purpose for which the goods are required is made known to the supplier either expressly or implicitly be fit for that purpose.

17. UNDERTAKINGS

Coercive makes no other warranties, promises or undertakings than those specifically mentioned herein.

QUALITY ASSURANCE & INSPECTION REQUIREMENTS (RELEASE CLAUSES)

A Subject to Purchasers inspection on delivery

B Subject to Purchasers inspection at Suppliers works.

C Supported by a Certificate of Conformity, to confirm that all supplies conform to order I specification / drawings etc

D Supported by a set of results obtained during inspection/test.

E Supported by a Certificate of Chemical Analysis & Mechanical Test.

F MOD Regulation - Approval Release Certificate.

G CAA Regulation - Approval Release Certificate.

H In accordance with our ISO 9001 systems approval. Supported by a C of C to confirm that all supplies conform to order I specification/ drawings etc

C of C supplied to confirm purchased materials and manufacturing processes used in the construction of the delivered article are supported by full traceability records.