Conditions of Sale

1 Interpretation

In these Conditions the following words have the following meanings:

1.1 “the Buyer” means the person(s), firm or company who purchases the Goods from the Company;

1.2 “the Company” means EMD Drive Systems Ltd (Company Number 00886763) of Kings Road, Halstead, Essex CO9 1HL;

1.3 “Contract” means any contract between the Company and the Buyer for the sale and purchase of the Goods arising pursuant to the delivery of an Order Acknowledgement by the Company to the Buyer or otherwise by explicit written agreement between the Company and the Buyer, incorporating these Conditions and any applicable Special Conditions;

1.4 “Goods” means any goods agreed in the Contract to be supplied to the Buyer by the Company;

1.5“Special Conditions” means all specific conditions relating to the Goods (including but not limited to descriptions, prices, place and time of delivery) contained in or referred to in the Company's written Order Acknowledgment. If there is a conflict between these Conditions and the Special Conditions then the Special Conditions shall prevail; and

1.6 “Order Acknowledgement” means the Company's written order acknowledgement form, containing any Special Conditions.

2 Quotations, orders, formation of Contract

2.1 Subject to any variation under Condition 2.5, the Contract shall be on these Conditions to the exclusion of all other terms and conditions (including any terms or conditions which the Buyer purports to apply).

2.2 Any quotation is issued by the Company on the basis that no contract will come into existence until the Company despatches an Order Acknowledgement to the Buyer but the terms contained in any quotation (including prices) will normally remain fixed if a Contract is made within 30 days of the date of the quotation provided that the Company has not previously withdrawn it.

2.3 The Company will be under no liability for any order received until the Order Acknowledgement in respect of it is delivered to the Buyer or (if earlier) the Company delivers the Goods to the Buyer at which time a Contract will be formed between the Company and the Buyer incorporating these Conditions.

2.4 These Conditions apply to all of the Company's sales with the Buyer. Each Order Acknowledgement made by the Company in relation to orders placed by the Buyer from time to time shall in each instance constitute a separate Contract incorporating these Conditions.

2.5 A Contract may only be cancelled or varied with the Company's written consent and any representations about the Goods shall have no effect unless expressly agreed in writing and signed by a duly authorised representative of the Company. The Company can cancel a Contract, without liability to the Buyer on any basis, provided that written notice is given to the Buyer as such prior to the delivery of the relevant Goods.

2.6 Any advice or recommendation given by the Company or its employees or agents to the Buyer or its employees or agents as to the storage, application or use of the Goods which is not confirmed by the Company in writing is followed or acted upon entirely at the Buyer's own risk, and accordingly the Company shall not be liable for any such advice or recommendation which is not so confirmed.

3 Prices

3.1 The Prices for all Goods ordered by the Buyer are those as stated in the Order Acknowledgement.

3.2 The Company shall have the right at any time to revise prices to take account of an increase in costs including, without limitation, costs of labour, materials, carriage or overheads.

4 Payment

4.1 Unless otherwise stated in the Special Conditions, payment shall be made in cleared funds by bank transfer, credit card or by cheque within 30 days of the date of the Company's relevant invoice for such Goods. The Buyer shall make no deduction of any type from such payments unless it has a valid court order requiring an amount equal to such deduction to be paid by the Company to the Buyer.

4.2 Time for payment shall be of the essence and failure by the Buyer to pay in accordance with the provisions of this Condition 4 shall entitle the Company, without prejudice to its rights to damages, to suspend any outstanding deliveries or to cancel the Contract.

4.3 In addition to the Company's rights under Condition 4.2, the Buyer shall be liable to pay interest (compounded monthly) on any amounts outstanding (both before and after judgment) at the rate of 4 per cent above The Royal Bank of Scotland base rate for the time being in force, accruing on a daily basis until payment is made. As an alternative, the Company also reserves the right to claim interest under the Late Payment of Commercial Debts (Interest) Act 1998.

4.4 All payments payable to the Company under the Contract shall become due immediately upon termination of the Contract despite any other provision.

4.5 The Company reserves the right on giving the Buyer written notice as such to suspend, amend or revoke any credit terms offered from time to time to the Buyer in circumstances where the Buyer is late in making payment for Goods ordered through the Company.

5 Delivery

5.1 Unless otherwise agreed in writing by the Company, delivery of the Goods shall take place at the location specified in the Special Conditions. If the Goods are being despatched by or on behalf of the Company to the agreed location of the Buyer, delivery will take place at the point the Goods are unloaded at that location. If the Goods are being collected for despatch by or on behalf of the Buyer at the premises of the Company, delivery will take place at the time specified in the Special Conditions (whether or not the Goods have been collected) or in the absence of such an agreed time, at the point the carrier begins to load the Goods.

5.2 The Company reserves the right to suspend despatch of any Goods or suspend making them available for delivery on giving the Buyer written notice as such where any amounts remain owing by the Buyer to the Company.

5.3 Any dates specified by the Company for delivery of the Goods are intended to be an estimate and time for delivery shall not be made of the essence by notice.

5.4 Subject to the other provisions of these Conditions, the Company will not be liable for any loss (including loss of profit), costs, damages, charges or expenses caused directly or indirectly by any delay in the delivery of the Goods (even if caused by the Company's negligence), nor will any delay entitle the Buyer to terminate or rescind the Contract unless such delay exceeds 30 days.

5.5 Any liability of the Company for non-delivery of the Goods shall be limited to replacing the Goods within a reasonable time or issuing a credit note at the pro rata Contract rate against any invoice raised for such Goods.

6 Risk and Title

6.1 The Goods are at the risk of the Buyer from the time of delivery.

6.2 Ownership of the Goods shall not pass to the Buyer until the Company has received in full (in cleared funds) all sums due to it in respect of:

6.2.1 the Goods; and

6.2.2 all other sums which are or which become due to the Company from the Buyer on any account.

6.3 Until ownership of the Goods has passed to the Buyer, the Buyer must:

6.3.1 hold the Goods on a fiduciary basis as the Company's bailee;

6.3.2 store the Goods (at no cost to the Company) separately from all other goods of the Buyer or any third party in such a way that they remain readily identifiable as the Company's property;

6.3.3 not destroy, deface or obscure any identifying mark or packaging on or relating to the Goods;

6.3.4 maintain the Goods in satisfactory condition insured on the Company's behalf for their full price against all risks to the reasonable satisfaction of the Company. On request the Buyer shall produce the policy of insurance to the Company; and

6.3.5 hold the proceeds of the insurance referred to in Condition 6.3.4 on trust for the Company and not mix them with any other money, nor pay the proceeds into an overdrawn bank account.

6.4 The Buyer may resell the Goods before ownership has passed to it solely on the following conditions:

6.4.1 any sale shall be effected in the ordinary course of the Buyer's business at full market value and the Buyer shall hold such part of the proceeds of sale as represent the amount owed by the Buyer to the Company on behalf of the Company and the Buyer shall account to the Company accordingly; and

6.4.2 any such sale shall be a sale of the Company's property on the Buyer's own behalf and the Buyer shall deal as principal when making such a sale.

6.5 The Buyer's right to possession of the Goods shall terminate immediately if:

6.5.1 the Buyer has a bankruptcy order made against him or makes an arrangement or composition with his creditors, or otherwise takes the benefit of any Act for the time being in force for the relief of insolvent debtors, or (being a body corporate) convenes a meeting of creditors (whether formal or informal), or enters into liquidation (whether voluntary or compulsory) except a solvent voluntary liquidation for the purpose only of reconstruction or amalgamation, or has a receiver and/or manger, administrator or administrative receiver appointed of its undertaking or any part thereof, or a resolution is passed or a petition presented to any court for the winding up of the Buyer or for the granting of an administration order in respect of the Buyer, or a notice of intention to appoint an administrator is filed at Court or any proceedings are commenced relating to the insolvency or possible insolvency of the Buyer; or

6.5.2 the Buyers suffers or allows any execution, whether legal or equitable, to be levied on his/its property or obtained against him/it, or fails to observe/perform any of his/its obligations under the Contract or any other contract between the Company and the Buyer, or is unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 or the Buyer ceases to trade; or

6.5.3 the Buyer encumbers or in any way charges any of the Goods.

6.6 The Company shall be entitled to recover payment for the Goods notwithstanding that ownership of any of the Goods has not passed from the Company.

6.7 The Buyer grants the Company, its agents and employees an irrevocable licence at any time to enter any premises where the Goods are or may be stored in order to inspect them, or, where the Buyer's right to possession has terminated, to recover them.

7 Force Majeure

7.1 The Company shall be under no liability for any delay or failure to perform in the event that the manufacture, supply or delivery of the Goods is prevented or delayed by any act or circumstances beyond the Company's reasonable control including but not limited to Act of God, legislation, war, fire, drought, failure of power supply, lock-out, strike or other action taken by employees in contemplation or furtherance of a trade dispute or owing to any inability to procure materials required for their performance of the Contract.

7.2 The Company shall notify the Buyer of any circumstance arising under Condition 7.1 and if such circumstance prevails for more than 35 days then either party shall have the option by giving notice in writing to the other to bring the Contract to an end.

8 Specifications

8.1 Published specifications, drawings, descriptions, photographs, measurements or capacities are approximate only and shall not form part of the Contract. The Company reserves the right to make any changes in any specification referred to in the Contract which are required to conform with any applicable statutory or regulatory requirements or, where the Goods are to be supplied to the Company's specification, which do not materially effect their quality or performance. Any such specifications, drawings, descriptions, photographs or measurements are confidential to the Company and must not be disclosed to any third party.

8.2 If the Goods to be manufactured or any process is to be applied to the Goods by the Company in accordance with a specification submitted by the Buyer, the Buyer shall indemnify the Company against all loss, damages, costs and expenses awarded against or incurred by the Company in connection with or paid or agreed to be paid by the Company in settlement of any claim of infringement of any patent, copyright, registered design, design right, trade mark or other industrial or intellectual property rights of any other person which results from the Company's use of the Buyer's specification.

9 Warranty

9.1 The Company warrants that (subject to the other provisions of these Conditions) Goods which are manufactured by the Company shall for a period of 12 months from the date of delivery:

9.1.1 be of satisfactory quality within the meaning of the Sale of Goods Act 1994; and

9.1.2 be reasonably fit for any particular purpose specified in any literature or written specification agreed in writing or published by the Company, and not withdrawn prior to delivery of the Goods, or any other purpose for which the Goods are being bought if the Buyer had made known that purpose to the Company in writing and the Company has confirmed in writing that it is reasonable for the Buyer to rely on the skill and judgement of the Company;

providing written notification of any defect is given promptly to the Company after its discovery and in any event not later than the end of such 12 month period. Time shall be of the essence in respect of notification of all claims.

9.2 In respect of Goods not manufactured by the Company, the Company shall endeavour to assign for the benefit of the Buyer such rights (including guarantee or warranty rights) as the Company has against such manufacturer but shall not be liable for such Goods beyond this Condition 9.2.

9.3 The Company reserves the right to require that all faulty Goods be returned to the Company. In that event the Company shall refund the cost of carriage by normal means on returned Goods and the repaired, refurbished or replacement Goods will be delivered free of charge by the Company to the location of the faulty Goods. Where Goods are repaired or refurbished under this Condition the remainder of the warranty period of the original Goods applies. Where Goods are replaced a new 12 month warranty period will apply to such Goods.

9.4 The Company shall not be liable for a breach of any of the warranties in this Condition 9 if:

9.4.1 the Buyer makes any further use of such Goods after giving notice of such defects; or

9.4.2 the defect arises because the Buyer failed to follow the Company's oral or written instructions as to the storage, installation, commissioning or use of the Goods, or, if there are none, good trade practices; or

9.4.3 the Buyer alters or repairs such Goods without the written consent of the Company.

9.5 The Company's sole obligation under this Condition 9 shall be at its option to repair or replace the Goods or any part thereof or refund the price of such Goods at the pro rata Contract rate. The Company's liability under this Condition 9 shall be in lieu of any warranty or condition express or implied, whether by statute or otherwise, including, but without limitation, any implied warranties as to satisfactory quality or fitness for purpose.

10 Limitation of Liability

10.1 Subject to Condition 9, the following provisions set out the entire financial liability of the Company (including any liability of the acts or omissions of its employees, agents and sub-contractors) to the Buyer in respect of any breach of these Conditions and any representation, statement or tortuous act or omission, including negligence arising under or in connection with the Contract.

10.2 All warranties, conditions and other terms implied by statute or common law (save for conditions implied by section 12 of the Sale of Goods Act 1979) are, to the fullest extent permitted by law, excluded from the Contract.

10.3 Nothing in these Conditions excludes or limits the liability of the Company for death or personal injury caused by the Company's negligence or fraudulent representation.

10.4 Subject to Conditions 10.2 and 10.3:

10.4.1 the Company's total liability in Contract, tort (including negligence or breach of statutory duty), misrepresentation or otherwise, arising in connection with the performance or contemplated performance of the Contract shall be limited to the Contract price; and

10.4.2 the Company shall not be liable to the Buyer for any indirect or consequential loss or damage (whether for loss of profit, loss of business, depletion of goodwill or otherwise), costs, expenses or other claims for consequential compensation whatsoever which arise out of or in connection with the Contract.

10.5 If due to the Buyer's particular circumstances the limitation in Condition 10.4 is unacceptable to the Buyer then the Buyer shall notify such circumstances to the Company who may then accept an extended liability to a level agreed in writing prior to the Contract being entered into, upon payment of the cost of a single insurance premium (if such an insurance policy is available).

11 Termination

Without prejudice to any other rights to which it may be entitled under the Contract, the Company may give notice in writing to the Buyer terminating the Contract (and all Contracts) with immediate effect if:

11.1 the Buyer commits a material breach of any of the terms of the Contract and (if such breach is capable of remedy) fails to remedy that breach to the reasonable satisfaction of the Company within 7 days of being notified in writing of the breach; or

11.2 any of the events or circumstances set out in Conditions 6.5.1 to 6.5.3 (inclusive) occur or are applicable.

12 General

12.1 Any information which the Company discloses relating to the Goods, which is not in the public domain at the time of disclosure, shall be confidential and shall not be disclosed to any third party or used by the Buyer to enable the Buyer to manufacture the Goods or use the same as a springboard to develop the Buyer's own products.

12.2 All notices required to be served by one party upon the other shall be in writing and may be served on the other at its address set out in the Special Conditions. All such notices may be served by first class pre-paid letter or facsimile transfer and (in the absence of proof of earlier receipt) shall be deemed to be served: in the case of an inland letter 24 hours after proven despatch or posting; in the case of any airmail letter 72 hours after proven despatch or posting; and in the case of facsimile transfer at 9 a.m. on the business day of the recipient party next following its despatch and receipt by the transmitting party of machine confirmation of successful transmission to the recipient party's receiver number.

12.3 Any indulgence granted by the Company to the Buyer and any failure by the Company to insist upon strict performance of these Conditions shall not be deemed a waiver of any of the Company's rights or remedies nor be deemed a waiver of any subsequent default by the Buyer.

12.4 The invalidity, illegality or unreasonableness in whole or in part of any of these Conditions shall not affect the validity of the remainder of such Condition or these Conditions.

12.5 The Company reserves the right to amend or replace these Conditions from time to time on giving the Buyer written notice as such.

12.6 No Contract is assignable by the Buyer without the written consent of the Company and each Contract is between the Company and the Buyer as principals but the Company may without consent assign or sub-contract all or any of its rights and obligations under a Contract.

12.7 The interpretation and application of every Contract shall be in accordance with English Law and both parties hereby agree to submit to the non-exclusive jurisdiction of the English Courts.

12.8 The parties to this Contract do not intend that any provisions of this Contract will be enforceable by virtue of the Contract's (Rights of Third Parties) Act 1999 by any person that is not a party to it.