Saxon Aerospace Inc. NDT General Terms And Conditions Of Service

These terms and conditions, together with any proposal, estimate or fee quote, form the agreement between you (the “Client”) and Saxon NDT (“Saxon”) providing the services contemplated therein.

1. INTERPRETATION

1.1 In this Agreement the following words and phrases shall have the following meanings unless the context otherwise requires:

(a) “Agreement” means this agreement;

(b) “Charges” has the meaning set forth in Clause 5.1;

(c) “Confidential Information” means all information in whatever form or manner presented which: (i) is disclosed pursuant to, or in the course of the provision of Services pursuant to, this Agreement; and (ii) (A) is disclosed in writing, electronically, visually, orally or otherwise howsoever and is marked, stamped or identified by any means as confidential by the disclosing party at the time of such disclosure; or (B) is information, howsoever disclosed, which would reasonably be considered to be confidential by the receiving party.

(d) “Force Majeure Event” has the meaning set forth in Clause 9.2;

(e) “Intellectual Property Right(s)” means copyrights, trademarks (registered or unregistered), patents, patent applications (including the right to apply for a patent), service marks, design rights (registered or unregistered), trade secrets and other like rights howsoever existing

(e) “Report(s)” mean status summaries or any other communication in any form describing the results of any work or services performed by Saxon under Agreement;

(f) “Services” means the services set out in any relevant Saxon Proposal, any relevant Client purchase order, or any relevant Saxon invoice, as applicable, and may comprise or include the provision by Saxon of a Report; and

(g) “Proposal” means the proposal, estimate or fee quote, if applicable, provided to the Client by Saxon relating to the Services.

1.2 References in this Agreement to a Clause refer to the corresponding Clause of this Agreement.

1.3 The headings and subheadings in this Agreement do not affect its interpretation.

2. THE SERVICES

2.1 Saxon shall provide the Services to the Client in accordance with the terms of this Agreement which is expressly incorporated into any Proposal Saxon has made and submitted to the Client.

2.2 In the event of any inconsistency between the terms of this Agreement and the Proposal, the terms of the Proposal shall take precedence.

2.3 The Client understands that reliance on any Reports issued by Saxon is limited to the facts and representations set out in the Reports which represent Saxon’s review and/or analysis of facts, information, documents, samples and/or other materials in existence at the time of the performance of the Services only.

3. SAXON’S OBLIGATIONS

3.1 Saxon agrees with the Client as follows:

(a) Saxon will comply with all relevant legislations and regulations in force as at the date of this Agreement in relation to the provision of the Services;

(b) the Services will be performed in a manner consistent with that level of care and skill ordinarily exercised by other companies providing like services under similar circumstances;

(c) Saxon will take reasonable steps to ensure that while on the Client’s premises, Saxon’s personnel comply with any health and safety rules and regulations and other reasonable security requirements made known to Saxon by the Client in accordance with Clause 4.3(f); and

(d) the Reports produced in relation to the Services will not infringe any legal rights (including Intellectual Property Rights) of any third party, except to the extent such infringement is directly or indirectly caused by Saxon’s reliance on any information, samples or other related documents provided by the Client or any of its agents or representatives.

3.2 In the event of a breach of Clause 3.1 (b), Saxon shall, at its own expense, perform services of the type originally performed as may be reasonably required to correct any defect in Saxon’s performance.

3.3 All other warranties, conditions and other terms implied by statute or common law (including but not limited to any implied warranties of merchantability and fitness for purpose) are, to the fullest extent permitted by law, excluded from this Agreement. No performance, deliverable, oral or other information or advice provided by Saxon (including its agents, sub-contractors, employees or other representatives) will create a warranty or otherwise increase the scope of any warranty provided.

4. CLIENT WARRANTIES AND OBLIGATIONS

4.1 The Client represents and warrants as follows:

(a) the Client has the power and authority to enter into this Agreement and procure the provision of the Services for itself;

(b) the Client is securing the provision of the Services hereunder for its own account and not as an agent or broker, or in any other representative capacity, for any other person or entity;

(c) any information, samples and related documents the Client (or any of its agents or representatives) supplies to Saxon (including its agents, sub-contractors and employees) is, true, accurate representative, complete and is not misleading in any respect. The Client further acknowledges that Saxon will rely on such information, samples or other related documents and materials provided by the Client (without any duty to confirm or verify the accuracy or completeness thereof) in order to provide the Services;

(d) any samples provided by the Client to Saxon will be shipped pre-paid and will be collected or disposed of by the Client (at the Client’s cost) within thirty (30) days after testing unless alternative arrangements are made by the Client. If such samples are not collected or disposed by the Client within the required thirty (30) day period, Saxon reserves the right to destroy the samples, at the Client’s cost; and

(e) any information, samples or other related documents (including without limitation certificates and reports) provided by the Client to Saxon will not, in any circumstances, infringe any legal rights (including Intellectual Property Rights) of any third party.

4.2 If the Services provided relate to any third party, the Client shall cause any such third party to acknowledge and agree to the provisions in this Agreement and the Proposal prior to and as a condition precedent to such third party receiving any Reports or the benefit of any Services.

4.3 The Client further agrees:

(a) to co-operate with Saxon in all matters relating to the Services and appoint a manager in relation to the Services who shall be duly authorized to provide instructions to Saxon on behalf of the Client and to bind the Client contractually as required;

(b) to provide Saxon (including its agents, sub-contractors and employees), at its own expense, any and all samples, information, material or other documentation necessary for the execution of the Services in a timely manner sufficient to enable Saxon to provide the Services in accordance with this Agreement. The Client acknowledges that any samples provided may become damaged or be destroyed in the course of testing as part of the necessary testing process and undertakes to hold Saxon harmless from any and all responsibility for such alteration, damage or destruction;

(c) that it is responsible for providing the samples/equipment to be tested together, where appropriate, with any required accessories or connecting pieces;

(d) to provide instructions and feedback to Saxon in a timely manner;

(e) to provide Saxon (including its agents, sub-contractors and employees) with access to its premises as may be reasonably required for the provision of the Services and to any other relevant premises at which the Services are to be provided;

(f) prior to Saxon attending any premises for the performance of the Services, to inform Saxon of all applicable health and safety rules and regulations and other reasonable security requirements that may apply at any relevant premises at which the Services are to be provided;

(g) to notify Saxon promptly of any risk, safety issues or incidents in respect of any item delivered by the Client, or any process or systems used at its premises or otherwise necessary for the provision of the Services;

(h) to inform Saxon in advance of any applicable import/ export restrictions that may apply to the Services to be provided, including any instances where any products, information or technology may be exported/ imported to or from a country that is restricted or banned from such transaction;

(I) to obtain and maintain all necessary licenses and consents in order to comply with relevant legislation and regulation in relation to the Services;

(k) not to use any Reports issued by Saxon pursuant to this Agreement in a misleading manner;

(l) not to distribute or publish the contents of any Reports, or any extracts, excerpts or parts thereof, without the prior written consent of Saxon (such consent not to be unreasonably withheld).

4.4 Saxon shall be neither in breach of this Agreement nor liable to the Client for any breach of this Agreement if and to the extent that its breach is a direct result of a failure by the Client to comply with its obligations as set out in this Clause 4. The Client also acknowledges that the impact of any failure by the Client to perform its obligations set out herein on the provision of the Services by Saxon will not affect the Client’s obligations under this Agreement for payment of the Charges pursuant to Clause 5 below.

5. CHARGES, INVOICING AND PAYMENT

5.1 The Client shall pay Saxon the charges set out in the Proposal, if applicable, or as otherwise contemplated for provision of the Services (the “Charges”).

5.2 The Charges are expressed exclusive of any applicable taxes. The Client shall pay any applicable taxes on the Charges at the rate and in the manner prescribed by law, on the issue by Saxon of a valid invoice.

5.3 The Client agrees that it will reimburse Saxon for any expenses incurred by Saxon relating to the provision of the Services and is wholly responsible for any freight or customs clearance fees relating to any testing samples.

5.4 The Charges represent the total fees to be paid by the Client for the Services pursuant to this Agreement. Any additional work performed by Saxon will be charged on a time and material basis.

5.5 Saxon shall invoice the Client for the Charges and expenses, if any. The Client shall pay each invoice within thirty (30) days of receiving it.

5.6 If any invoice is not paid on the due date for payment, Saxon shall have the right to charge, and the Client shall pay, interest on the unpaid amount, calculated from the due date of the invoice to the date of receipt of the amount in full, at 12% per annum.

6. INTELLECTUAL PROPERTY RIGHTS AND DATA PROTECTION

6.1 All Intellectual Property Rights belonging to a party prior to entry into this Agreement shall remain vested in that party. Nothing in this Agreement is intended to transfer any Intellectual Property Rights from either party to the other.

6.2 Any use by the Client (or the Client’s affiliated companies or subsidiaries) of the name “Saxon” or any of Saxon’s trademarks or brand names for any reason must be approved in writing and in advance by Saxon. Any other use of Saxon’s trademarks or brand names is strictly prohibited and Saxon reserves the right to terminate this Agreement immediately as a result of any such unauthorized use.

6.3 In the event of provision of certification services, Client agrees and acknowledges that the use of certification marks may be subject to national and international laws and regulations.

6.4 All Intellectual Property Rights in any Reports, document, graphs, charts, photographs or any other material (in whatever medium) produced by Saxon pursuant to this Agreement shall belong to Saxon. The Client shall have the right to use any such Reports, document, graphs, charts, photographs or other material for the purposes of this Agreement.

6.5 The Client agrees and acknowledges that Saxon retains any and all proprietary rights in concepts, ideas and inventions that may arise during the preparation or provision of any Report (including any deliverables provided by Saxon to the Client) and the provision of the Services to the Client.

7. CONFIDENTIALITY

7.1 Where a party (the Receiving Party) obtains Confidential Information of the other party (the Disclosing Party) in connection with this Agreement (whether before or after the date of this Agreement) it shall, subject to Clauses 7.2 to 7.4:

(a) keep that Confidential Information confidential, by applying the standard of care that it uses for its own Confidential Information;

(b) use that Confidential Information only for the purposes of performing obligations under this Agreement; and

(c) not disclose that Confidential Information to any third party without the prior written consent of the Disclosing Party.

7.2 The Receiving Party may disclose the Disclosing Party’s Confidential Information on a “need to know” basis:

(a) to any legal advisers and statutory auditors that it has engaged for itself;

(b) to any regulator having regulatory or supervisory authority over its business;

(c) to any director, officer or employee of the Receiving Party provided that, in each case, the Receiving Party has first advised that person of the obligations under Clause 7.1 and ensured that the person is bound by obligations of confidence in respect of the Confidential Information no less onerous than those set out in this Clause 7; and

(d) where the Receiving Party is Saxon, to any of its subsidiaries, affiliates or subcontractors.

7.3 The provisions of Clauses 7.1 and 7.2 shall not apply to any Confidential Information which:

(a) was already in the possession of the Receiving Party prior to its receipt from the Disclosing Party without restriction on its use or disclosure;

(b) is or becomes public knowledge other than by breach of this Clause 7;

(c) is received by the Receiving Party from a third party who lawfully acquired it and who is under no obligation restricting its disclosure; or

(d) is independently developed by the Receiving Party without access to the relevant Confidential Information.

7.4 The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent required by law, any regulatory authority or the rules of any stock exchange on which the Receiving Party is listed, provided that the Receiving Party has given the Disclosing Party prompt written notice of the requirement to disclose and where possible given the Disclosing Party a reasonable opportunity to prevent the disclosure through appropriate legal means.

7.5 Each party shall ensure the compliance by its employees, agents and representatives (which, in the case of Saxon, includes procuring the same from any sub-contractors) with its obligations under this Clause 7.

7.6 No license of any Intellectual Property Rights is given in respect of any Confidential Information solely by the disclosure of such Confidential Information by the Disclosing Party.

7.7 With respect to archival storage, the Client acknowledges that Saxon may retain in its archive for the period required by its quality and assurance processes, or by the testing and certification rules of the relevant accreditation body, all materials necessary to document the Services provided.

8. AMENDMENT

8.1 No amendment of this Agreement shall be effective or valid unless approved in writing by each of Saxon and the Customer.

9. FORCE MAJEURE

9.1 Neither party shall be liable to the other for any delay in performing or failure to perform any obligation under this Agreement to the extent that such delay or failure to perform is a result of:

(a) war (whether declared or not), civil war, riots, revolution, acts of terrorism, military action, sabotage and/or piracy;

(b) natural disasters such as violent storms, earthquakes, tidal waves, floods and/or lighting; explosions and fires;

(c) strikes and labour disputes, other than by any one or more employees of the affected party or of any supplier or agent of the affected party; or

(d) failures of utilities companies such as providers of telecommunication, internet, gas or electricity services.

For greater certainty, any failure or delay by Saxon caused by failure or delay on the part of a subcontractor of Saxon shall only be a Force Majeure Event (as defined below) where the subcontractor is affected by one of the events described above.

9.2 A party whose performance is affected by an event described in Clause 9.1 (a “Force Majeure Event”) shall:

(a) promptly notify the other party in writing of the Force Majeure Event and the cause and the likely duration of any consequential delay or non-performance of its obligations;

(b) use all reasonable efforts to avoid or mitigate the effect of the Force Majeure Event and continue to perform or resume performance of its affected obligations as soon as reasonably possible; and

(c) continue performance of any obligations that remain unaffected by the Force Majeure Event.

9.4 If the Force Majeure Event continues for more than sixty (60) days after the day on which it started, either party may terminate this Agreement by giving at least ten (10) days’ written notice to the other party.

10. LIMITATIONS AND EXCLUSIONS OF LIABILITY

10.1 Neither party excludes or limits liability to the other party:

(a) for death or personal injury resulting from the negligence of that party or its directors, officers, employees, agents or sub-contractors; or

(b) for its own fraud (or that of its directors, officers, employees, agents or sub-contractors).

10.2 Subject to Clause 10.1, the maximum aggregate liability of Saxon in contract, tort (including negligence and breach of statutory duty) or otherwise for any breach of this Agreement or any matter arising out of or in connection with the Services to be provided in accordance with this Agreement shall not in the aggregate exceed the payments made by the Client to Saxon within the twelve (12) months prior to the date the claim arose.

10.3 Subject to Clause 10.1, neither party shall be liable to the other in contract, tort (including negligence and breach of statutory duty) or otherwise for any:

(a) loss of profits;

(b) loss of sales or business;

(c) loss of opportunity (including without limitation in relation to third party agreements or contracts);

(d) loss of or damage to goodwill or reputation;

(e) loss of anticipated savings;

(f) cost or expenses incurred in relation to making a product recall;

(g) loss of use or corruption of software, data or information; or

(h) any indirect, consequential loss, punitive or special loss (even when advised of their possibility).

10.4 Any claim by the Client against Saxon (always subject to the provisions of this Clause 10) must be made within ninety (90) days after the Client becomes aware of any circumstances giving rise to any such claim. Failure to give such notice of claim within ninety (90) days shall constitute a bar or irrevocable waiver to any claim, either directly or indirectly, in contract, tort or otherwise in connection with the provision of Services under this Agreement.

11. INDEMNITY

11.1 The Client shall indemnify and hold harmless Saxon, its officers, employees, agents, representatives, contractors and sub-contractors from and against any and all claims, suits, liabilities (including costs of litigation and attorney’s fees) arising, directly or indirectly, out of or in connection with:

(a) any claims or suits by any governmental authority or others for any actual or asserted failure of the Client to comply with any law, ordinance, regulation, rule or order of any governmental or judicial authority;

(b) the breach or alleged breach by the Client of any of its obligations set out in Clause 4 above;

(c) any claims made by any third party for loss, damage or expense of whatsoever nature and howsoever arising relating to the performance, purported performance or non-performance of any Services to the extent that the aggregate of any such claims relating to any one Service exceeds the limit of liability set out in Clause 10 above; and

(e) any claims or suits arising as a result of any misuse or unauthorized use of any Reports issued by Saxon or any Intellectual Property Rights belonging to Saxon (including trade marks) pursuant to this Agreement.
11.2 The obligations set out in this Clause 11 shall survive termination of this Agreement.

12. INSURANCE POLICIES

12.1 Each party shall be responsible for the arrangement and costs of its own insurance policies.

12.2 Saxon expressly disclaims any liability to the Client as an insurer or guarantor.

12.3 The Client acknowledges that any employer’s liability insurance maintained by Saxon does not cover any employees of the Client or any third parties who may be involved in the provision of the Services. If the Services are to be performed at premises belonging to the Client or third parties, such insurance does not provide coverage for any non-Saxon employees.

13. TERMINATION

13.1 This Agreement shall commence upon the first day on which the Services are commenced and shall continue, unless terminated earlier in accordance with this Clause 13, until the Services have been provided.

13.2 This Agreement may be terminated by:

(a) either party if the other continues in material breach of any obligation imposed upon it hereunder for more than thirty (30) days after written notice has been dispatched by that Party by recorded delivery or courier requesting the other to remedy such breach;

(b) Saxon on written notice to the Client in the event that the Client fails to pay any invoice by its due date and/or fails to make payment after a further request for payment; or

(c) either party on written notice to the other in the event that the other makes any voluntary arrangement with its creditors or becomes subject to an administration order or (being an individual or firm) becomes bankrupt or (being a company) goes into liquidation (otherwise than for the purposes of a solvent amalgamation or reconstruction) or an encumbrancer takes possession, or a receiver is appointed, of any of the property or assets of the other or the other ceases, or threatens to cease, to carry on business.

13.3 In the event of termination of the Agreement for any reason and without prejudice to any other rights or remedies the parties may have, the Client shall pay Saxon for all Services performed up to the date of termination. This obligation shall survive termination or expiration of this Agreement.

13.4 Any termination or expiration of the Agreement shall not affect the accrued rights and obligations of the parties nor shall it affect any provision which is expressly or by implication intended to come into force or continue in force on or after such termination or expiration.

14. ASSIGNMENT AND SUB-CONTRACTING

14.1 Saxon reserves the right to use subcontractors or affiliates to perform any of its obligations herein, and to assign this Agreement to any company within the Saxon group on notice to the Client, provide that none of the foregoing shall relieve Saxon of any of its obligations herein.

15. GOVERNING LAW AND DISPUTE RESOLUTION

15.1 This Agreement and the Proposal shall be governed by the law of British Columbia. The parties agree to submit to the exclusive jurisdiction of the British Columbia courts in respect of any dispute or claim arising out of or in connection with this Agreement (including any non-contractual claim relating to the provision of the Services in accordance with this Agreement).

16. MISCELLANEOUS

Severability

16.1 If any provision of this Agreement is or becomes invalid, illegal or unenforceable, such provision shall be severed and the remainder of the provisions shall continue in full force and effect as if this Agreement had been executed without the invalid illegal or unenforceable provision. If the invalidity, illegality or unenforceability is so fundamental that it prevents the accomplishment of the purpose of this Agreement, Saxon and the Client shall immediately commence good faith negotiations to agree an alternative arrangement.

No partnership or agency

16.2 Nothing in this Agreement and no action taken by the parties under this Agreement shall constitute a partnership, association, joint venture or other co-operative entity between the parties or constitute any party the partner, agent or legal representative of the other.

Waivers

16.3 Subject to Clause 10.4 above, the failure of any party to insist upon strict performance of any provision of this Agreement, or to exercise any right or remedy to which it is entitled, shall not constitute a waiver and shall not cause a diminution of the obligations established by this Agreement. A waiver of any breach shall not constitute a waiver of any subsequent breach.

16.4 No waiver of any right or remedy under this Agreement shall be effective unless it is expressly stated to be a waiver and communicated to the other party in writing.
Whole Agreement

16.5 This Agreement and the Proposal contain the whole agreement between the parties relating to the transactions contemplated by this agreement and supersede all previous agreements, arrangements and understandings between the parties relating to those transactions or that subject matter. No purchase order, statement or other similar document will add to or vary the terms of this Agreement.

16.6 Each party acknowledges that in entering into this Agreement it has not relied on any representation, warranty, collateral contract or other assurance (except those set out or referred to in this Agreement) made by or on behalf of any other party before the acceptance or signature of this Agreement. Each party waives all rights and remedies that, but for this Clause, might otherwise be available to it in respect of any such representation, warranty, collateral contract or other assurance.

16.7 Nothing in this Agreement limits or excludes any liability for fraudulent misrepresentation.

Further Assurances

16.8 Each party shall, at the cost and request of any other party, execute and deliver such instruments and documents and take such other actions in each case as may be reasonably requested from time to time in order to give full effect to its obligations under this Agreement.