FPII Wolfhound Sub-contract

Supply Agreement

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FORCE PROTECTION INC | Force Protection Industries, Inc | Integrated Survivability Technologies Limited

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Title: FPII Wolfhound Sub-contract
Date: 5/11/2009
Industry: Aerospace and Defense Sector: Capital Goods

FPII Wolfhound Sub-contract, Parties: force protection inc , force protection industries inc , integrated survivability technologies limited

Exhibit 10.4

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

FPII Wolfhound Sub-contract

Force Protection Industries, Inc.		(1)

and

Integrated Survivability Technologies Limited		(2)

TABLE OF CONTENTS

		Page

1	DEFINITIONS AND INTERPRETATION	1

2	DEFCONS	6

3	SCOPE OF WORK	11

4	INTERPRETATION	11

5	SPECIFICATION AND BUILD STANDARD	11

6	RIGHTS AND RESPONSIBILITIES	12

7	TECHNICAL ASSISTANCE	13

8	PRICES & GAINSHARE	14

9	DELIVERY	15

10	RECTIFICATION OF DEFECTS ON DELIVERY	17

11	NOT USED	17

12	PAYMENT AND INVOICING	17

13	RELIABILITY AND ACCEPTANCE TRIALS	18

14	FORCE MAJEURE	18

15	QUALITY ASSURANCE	19

16	PARTS & LABOUR WARRANTY	21

17	RELIABILITY WARRANTY	21

18	GOVERNMENT FURNISHED ASSETS	21

19	SPECIAL JIGS, TOOLING & TEST EQUIPMENT (S&TE)	22

20	SUB-CONTRACTING	22

21	PROGRESS REPORTS, PROGRESS MEETINGS AND DESIGN REVIEWS	23

22	EXPORT LICENCES FROM US GOVERNMENT	24

23	CUSTOMS CLEARANCE	24

24	FPII PERSONNEL	24

25	SECURITY OF MOD PROPERTY	25

26	MARKING OF ARTICLES	25

TABLE OF CONTENTS

(continued)

		Page

27	REGISTRATION PLATES AND ALLOCATION OF REGISTRATION NUMBERS	26

28	SUPPLIER DEVELOPMENT SCHEME — SUPPLIER AND CUSTOMER PERFORMANCE MEASUREMENT	26

29	PUBLICITY	26

30	POTENTIAL HAZARD - RESPIRABLE DUST ON EQUIPMENT RETURNED FROM THEATRE	26

31	CONTRACTOR ON DEPLOYED OPERATIONS (CONDO)	27

32	RISK	28

33	OPTION TO PURCHASE FURTHER ITEMS	28

34	ENTIRE AGREEMENT	28

35	DATA HANDLING	29

36	DEFAULT	29

37	AGREEMENT AMENDMENT PROCEDURE	30

38	LIQUIDATED DAMAGES	31

39	INTELLECTUAL PROPERTY RIGHTS	33

40	ALLOCATION OF LIABILITY BETWEEN SUBCONTRACTS	33

41	DISPUTE RESOLUTION	35

42	RELIEF FROM OBLIGATIONS AND ADDITIONAL PAYMENTS	37

43	ANCILLARY SERVICES	37

44	COUNTERPARTS	37

THIS AGREEMENT is made on 1 April 2009

BETWEEN:

(1) FORCE PROTECTION INDUSTRIES, INC. a company incorporated and registered in Nevada with employee identification number (EN) 88-0361514 with a principal place of business at 9801 Highway 78, Building No. 1, Ladson, SC 29456 ( FPII ); and

(2) INTEGRATED SURVIVABILITY TECHNOLOGIES LIMITED a company incorporated and registered in England and Wales with company number 06805545 whose registered office is at Narrow Quay House, Narrow Quay, Bristol, BS1 4AH ( IST ),

each a “ Party ” and together the “ Parties ”.

BACKGROUND:

(A) IST is a joint venture company set up to supply integrated vehicles, technical publications, spares and services to the Authority under the MOD Contract.

(B) As part of a flow down of obligations from the MOD Contract, FPII has agreed to supply the Articles and provide the Services to IST in accordance with the terms of this Agreement.

IT IS AGREED as follows:

1 DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, the following words shall have the following meanings:

“ Acceptance ” means acceptance of the Articles for the purposes of this Agreement;

“ Actual FPII Delivery Date ” has the meaning given in Clause 38.2;

“ Actual NPA Delivery Date ” has the meaning given in Clause 38.3;

“ Agreement Amendment ” has the meaning set out in Clause 37.5;

“ Agreement Amendment Procedure ” has the meaning set out in Clause 37;

“ Articles ” has the meaning given in DEFCON 501, as incorporated into this Agreement pursuant to Clause 2.1;

“ Authority ” means the Secretary of State for Defence;

“ Build Standard ” has the meaning set out in Clause 5.1;

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for business in the City of London;

“ Contract Data Requirements List ” or “ CDRL ” has the meaning set out in the MOD Contract;

“ Change Proposal Form ” means the form set out at Annex T to the MOD Contract;

“ Contractor’s Technical Description ” means the document set out at Annex V to the MOD Contract;

“ DEFCONS ” means the precedent conditions maintained and updated by the Authority to cover specific contractual matters;

“ DEFFORMS ” means the precedent defence forms maintained and updated by the Authority to cover specific matters;

“ Delivery Schedule ” means in respect of SOR Items and/or SOW Items, the relevant dates set out in Schedule 1 for delivery

of such Items;

“ FPII Base Vehicle ” has the meaning given in Clause 38.2;

“ FPII Delay Days ” has the meaning given in Clause 38.2;

“ FPII Relevant Share ” has the meaning given in Clause 40.4;

“ FPII Vehicle Specification ” means on any date, the then current Wolfhound base vehicle specification as approved in writing between NPA, FPII and IST, such approval not to be unreasonably withheld or delayed

“ FSRs ” has the meaning set out in Clause 31.1;

“ Firm Price ” has the meaning set out in the MOD Contract;

“ GFA ” means those assets included in Schedule 2 from time to time;

“ Intellectual Property Rights ” or “ IPR ” means patents, designs, trade marks, service marks, trade names, logos, get-up, domain names, copyright (including rights in computer software), database rights, plant variety rights, semiconductor topography rights, rights in performances, moral rights, confidential information and know-how, whether registered or not including applications for registration and all similar forms of protection anywhere in the world.

“ IPR Claim ” means any claim of infringement or alleged infringement (including the defence of such infringement or alleged infringement) of any IPR used for the purposes of this Agreement or as otherwise agreed by the Parties for the fulfilment of their obligations under this Agreement;

“ IST Parts and Labour Warranty ” means the parts and labour warranty provided by IST to the Authority under the MOD Contract;

“ IST Relevant Share ” has the meaning given in Clause 40.4;

“ IST Reliability Warranty ” means the reliability warranty provided by IST to the Authority under the MOD Contract;

“ ITP ” means the Authority’s instruction to proceed issued to Force Protection, Inc. dated 4 December 2008 and updated on 12 February 2009;

“ JVA ” means: the joint venture agreement between Force Protection Advanced Solutions Limited, FPII, NPA and IST, dated on or about the date of this Agreement.

“ MOD Contract ” means the contract between IST and the Authority for the supply of Wolfhound integrated vehicles, technical publications, spares and services dated on or about the date of this Agreement;

“ MOD Forms ” means any forms maintained and updated by the Authority;

“ NPA ” means NP Aerospace Limited, a company incorporated and registered in England and Wales with company number 03472480 whose registered office is at 473 Foleshill Road, Coventry, West Midlands CV6 5AQ;

“ NPA Delay Days ” has the meaning given in Clause 38.3;

“ NPA Relevant Share ” has the meaning given in Clause 40.4;

“ NPA Integrated Vehicle ” has the meaning given in Clause 38.3;

“ NPA Subcontract ” means the contract between IST and NPA dated on or about the date of this Agreement for the supply of certain integration works to be performed on the vehicles supplied under this Agreement;

“ NPA Vehicle Specification ” means on any date, the then current integrated Wolfhound vehicle specification as approved in writing between NPA, FPII and IST, such approval not to be unreasonably withheld or delayed;

“ Payment Approval Request ” has the meaning given in Clause 12.1;

“ Pricing Model ” means the pricing model in relation to IST as agreed between IST, FPII and NPA from time to time;

“ Provisional Relevant Share ” has the meaning given in Clause 40.6;

“ QMAPS ” has the meaning given in Clause 15.1;

“ Relevant Share ” has the meaning given in Clause 40.4;

“ Relevant Share Determination ” has the meaning given in Clause 40.6;

“ Risk and Opportunity Management Plan ” or “ ROMP ” means the risk and opportunity management plan provided by IST under the MOD Contract;

“ Services ” has the meaning given in DEFCON 501, as incorporated into this Agreement pursuant to Clause 2.1;

“ Scheduled FPII Delivery Date ” has the meaning given in Clause 38.2;

“ Scheduled NPA Delivery Date ” has the meaning given in Clause 38.3;

“ Schedule of Requirements ” or “ SOR ” is as set out in Schedule 1;

“ Statement of Work ” or “ SOW ” is as set out in Schedule 1;

“ Total Delay Days ” has the meaning given in Clause 38.4; and

“ VAT ” means value added tax as provided for in the Value Added Tax Act 1994 and legislation (whether delegated or otherwise) supplemental thereto or in any primary or secondary legislation promulgated by the European Union or any official body or agency of the European Union and any similar sales, consumption or turnover tax replacing or introduced in addition to the foregoing.

1.2 Other capitalised terms which are used, but not defined, in this. Agreement shall have the meaning given to them in the MOD Contract.

1.3 In this Agreement, unless otherwise specified:

(a) the headings are for convenience only and shall not affect its interpretation;

(b) references to a clause, schedule or paragraph are to a clause, a schedule or a paragraph in this Agreement;

(c) any reference to this Agreement or to any other document shall include any permitted variation, amendment or supplement to such document;

(d) the schedules to this Agreement shall have the same effect as if contained in the body of the Agreement, and any reference to this Agreement shall include the schedules provided that, in the event of any inconsistency, provisions set out in the body of the Agreement shall take precedence over schedules;

(e) any reference to any statute shall include references to the same as it may have been, or may from time to time be amended/modified consolidated or re-enacted and to any regulation or subordinate legislation made under it (or under such an amendment, modification, consolidation or re-enactment) subject to the provisions of this Agreement which relate to change of law;

(f) reference to the plural shall include the singular and vice versa, and reference to one gender includes reference to all genders. Any reference to a person shall be to a legal person of whatever kind whether incorporated or unincorporated and to its successors, permitted assigns and transferees; and

(g) words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things.

2 DEFCONS

2.1 General obligations

(a) With respect to the following DEFCONS set out in this Clause 2.1(a), FPII shall:

(i) note the rights and obligations of the Authority and IST in such DEFCONS; and

(ii) assist IST in performing its obligations under such DEFCONS, including but not limited to providing such information as IST may

require so as to comply with its own obligations and assisting in the completion of any relevant DEFFORMS or MOD Forms:

(A) DEFCON 611 (Issued Property, Edition 06/06)

(B) DEFCON 632 (Third Party IPR – Rights and Restrictions, Edition 02/07); and

(b) With respect to the DEFCONS listed at Schedule 7, such DEFCONS shall be incorporated into this Agreement save that all references to the following terms shall be replaced as follows:

(i) “Contract” replaced with “Agreement”;

(ii) “Authority” replaced with “IST”;

(iii) “Contractor” replaced with “FPII”; and

together with such other amendments as are necessary (including but not limited to replacing “Authority” with “Authority and IST”) to give effect to rights which are clearly to be retained by the Authority either alone or in addition to IST. In addition to the specific obligations incorporated by such amended DEFCONS, FPII shall, as far as is reasonable, assist IST in performing its obligations under such DEFCONS pursuant to the MOD Contract.

2.2 DEFCON derived special conditions

The following DEFCONS shall be incorporated as amended by this Clause 2.2:

(a) DEFCON 516 (Racial Discrimination)

The Appendix to DEFCON 516 (Racial Discrimination) Edition 06/04 shall be incorporated into this Agreement save that references to ‘[the Subcontract]’ shall

be substituted by ‘this Agreement’, ‘[the Contractor]’ by ‘IST’ and ‘[Subcontractor]’ by ‘FPII’.

(b) DEFCON 608 (Access and Facilities to be Provided by IST)

(i) IST’s progress and quality standards in performing the work under the MOD Contract is to be monitored by the Authority. To assist with this obligation, as far as is reasonably practicable, FPII shall provide to the Authority’s and IST’s representatives all reasonable access to its premises and shall provide reasonable assistance to enable IST’s representatives to obtain necessary security clearances.

(ii) FPII shall provide, at no additional direct cost to the Authority or IST, such accommodation and facilities for representatives of the Authority as the Authority and/or IST may reasonably require in order to comply with the obligation under clause 2.2(b)(i). All accommodation provided shall be adequately furnished, lit, heated and ventilated and shall include suitable cloakroom and communication facilities.

(i) As required by clause 5 of DEFCON 643 Edition 07/04, the provisions set out in the Appendix to DEFCON 643 Edition 07/04 shall be incorporated into this Agreement save that references to ‘subcontract’ shall be substituted by ‘Agreement’, ‘Contractor’ by ‘IST’ and ‘subcontractor’ by ‘FPII’.

(ii) References in DEFCON 643 to “provisional prices” shall mean “maximum provisional prices”.

(iii) DEFCON 643 shall be amended to read “In the event of delay in fixing prices fair and reasonable maximum provisional prices shall be fixed by the Authority, and the Authority reserves the right to alter

from time to time the provisional prices so fixed. The Contractor shall pay to the Authority the amount by which any sum paid on the basis of maximum provisional prices exceeds the sum payable on the basis of prices finally fixed. In the event of any alteration of the maximum provisional prices similar provisions for payment and repayment shall apply.”

(d) DEFCON 648A (Availability of Information)

As required by clause 5 of DEFCON 648A Edition 07/04, the provisions set out in the Appendix to DEFCON 648A Edition 07/04 shall be incorporated into this Agreement save that references to ‘subcontract’ shall be substituted by ‘Agreement’ and ‘subcontractor’ by ‘FPII’.

(e) DEFCON 651A (Reference to the Review Board of questions arising in relation to relevant subcontracts including those with a subsidiary company or firm)

As required by clause 2 of DEFCON 651A Edition 07/04, the provisions set out in the Appendix to DEFCON 648A Edition 07/04 shall be incorporated into this Agreement save that references to ‘subcontract’ shall be substituted by ‘Agreement’, ‘Contractor’ by ‘IST’ and ‘subcontractor’ by ‘FPII’.

(f) DEFCON 656 (Break)

As required by clause 6 of DEFCON 656 Edition 03/06, IST has the power to determine this Agreement as is provided by clauses 1 to 5 of DEFCON 656 Edition 03/06, save that:

(i) references to ‘Authority’ shall be substituted by ‘IST’ throughout except in sub-clause 3(a)i. where it last occurs and in clause 4 of that DEFCON. References to ‘the Contract’ shall be substituted by ‘this Agreement’ and ‘the Contractor’ by ‘FFII’; and

(ii) the period of the notice of determination shall be such period as may be specified in this Agreement or, if no period is specified, twenty Business Days; and

(iii) IST shall not exercise the power to determine this Agreement unless the MOD Contract has been determined by the Secretary of State pursuant to the provisions of DEFCON 656.

(g) DEFCON 691 (Timber and wood containing products)

As required by DEFCON 691 Edition 08/02, the provisions set out in that DEFCON shall be incorporated into this Agreement save that references to ‘the Contractor’ shall be replaced by ‘IST’, ‘the Contract’ by ‘this Agreement’ and ‘his subcontractors’ by ‘FPII’.

(h) DEFCON 694 (Accounting for property of the Authority)

If the Authority agrees, in accordance with DEFCON 694, that FPII shall have responsibility in FPII’s Public Store Account (as defined in DEFSTAN 05-99) for property of the Authority issued in respect of the MOD Contract, then clauses 1, 2, 4 and 7 of DEFCON 694 Edition 06/06 shall be incorporated into this Agreement save that references to ‘the Contractor’ shall be replaced by ‘IST’, ‘the Contract’ by ‘this Agreement’ and ‘his subcontractors’ by ‘FPII’.

(i) DEFCON 696 (Final Summary Cost Statement – Post Costing)

As required by clause 9 of DEFCON 696 Edition 07/04, the provisions set out in the Appendix to DEFCON 696 Edition 07/04 shall be incorporated into this Agreement save that references to ‘the subcontract’ shall be substituted by ‘this Agreement’ and ‘the subcontractor’ by ‘FPII’.

(j) DEFCON 697 (Contractors on Deployed Operations)

The provisions set out in the Appendix to DEFCON 697 Edition 01/06 shall be incorporated into this Agreement with the following amendments:

(i) Clause 1(f) shall be amended to read as follows: “Contract” means the MOD Contract;

(ii) Clause 1(g) shall be amended to read as follows: “Contractor” means IST;

(iii) Clause 1(j) shall be amended to read as follows: “First Party” means IST; and

(iv) Clause 1(o) shall be amended to read as follows: “Second Party” manes FPII.

This DEFCON shall only apply in the event that FSRs are tasked under this Agreement.

3 SCOPE OF WORK

3.1 FPII shall be responsible for all aspects of work allocated to it in accordance with Schedule 1 in accordance with the provisions and requirements of this Agreement.

3.2 FPII accepts that IST shall be not be responsible for payment for work not detailed in this Agreement.

4 INTERPRETATION

In the event of:

(a) any conflict arising between the contents or order of precedence of any technical or administrative documents and the terms and conditions of this Agreement; or

(b) any ambiguity in relation to the incorporation and flow-down of DEFCONS pursuant to Clause 2,

FPII shall immediately seek direction from IST and subsequently follow any reasonable direction given by IST.

5 SPECIFICATION AND BUILD STANDARD

5.1 The build standard for Items No. 1 and 2 of the SOR shall, to the extent applicable to the scope of this Agreement as determined by Schedule 1 be that of the first-off vehicle produced to the Contractor’s Build Standard as amended through the Configuration Control procedures of the MOD Contract, to meet the performance and reliability requirements of the SOW and the Contractor’s Technical Description and acceptance by IST (the Build Standard ).

5.2 Work shall be carried out to the satisfaction of the Authority’s Project Manager as detailed in Box 2 of DEFFORM 111 or its authorised representative.

5.3 Any proposal by either Party to modify the Build Standard (or any deviation) shall be notified in writing to the other in accordance with DEF-STAN 05-57 (Configuration Management of Defence Material) giving full details of its reasons for the proposed modification (or deviation). Should the implementation of any proposed modification (or deviation) result in either Party incurring costs (directly or indirectly on ordering spares, revising literature or modifying equipment) the modification shall not be incorporated in any Article supplied under the Agreement unless agreed by the Parties in writing.

6 RIGHTS AND RESPONSIBILITIES

6.1 FPII is hereby appointed as a sub contractor and shall be entirely responsible for undertaking the work allocated to it as set out in this Agreement in accordance with the terms and conditions of this Agreement.

6.2 IST shall be responsible for all aspects of work allocated to it in accordance with Schedule 1 in accordance with the provisions and requirements of this Agreement.

6.3 Should FPII fail to complete any part of the work or supply any of the Articles as required by this Agreement to the reasonable satisfaction of IST (an FPII Failure ), it shall be FPII’s responsibility to rectify that FPII Failure to the reasonable satisfaction of IST at no additional cost to IST except to the extent that and for so long as such FPII Failure is caused by any undue delay by the Authority or any act or omission of IST and/or NPA (or their respective agents, employees, subcontractors or other representatives) (a Relevant FPII Dependency ).

6.4 FPII shall promptly notify IST when:

(a) an FPII Failure is caused by a Relevant FPII Dependency, providing details of the Relevant FPII Dependency; and

(b) an FPII Failure ceases to be caused by a Relevant FPII Dependency.

6.5 IST shall include corresponding provisions to Clauses 6.3 and 6.4 in the NPA Subcontract which will require NPA to promptly notify IST where it relies on an act or omission of FPII (or its agents, employees, subcontractors or other representatives) (a Relevant NPA Dependency ) to excuse its failure to complete any part of the work or supply any of the articles as required by that agreement or to meet any of the acceptance criteria as stated in that agreement to the reasonable satisfaction of IST (an NPA Failure ).

6.6 IST shall promptly notify FPII on becoming aware of any Relevant NPA Dependency and FPII shall use reasonable endeavours to remedy the situation so that NPA is no longer able to rely on the Relevant NPA Dependency as the reason for the NPA Failure.

6.7 Should IST and/or NPA formally or informally verify or express satisfaction with any design, drawing or data or if IST and/or NPA at any stage gives any advice or makes any comment or suggestion relating to any design, drawing or data under this Agreement, IST and/or NPA shall not thereby incur any liability and FPII shall remain solely responsible for the proper performance of this Agreement.

6.8 Any advice offered during the course of the Agreement by IST, NPA or the Authority, or any representative of IST, NPA or the Authority, shall be deemed to be given without responsibility on the part of IST, NPA or the Authority and FPII remains liable under the Agreement to produce the Articles or perform the Services in accordance with this Agreement.

7 TECHNICAL ASSISTANCE

7.1 IST may engage organisations to assist it with this Agreement. In such circumstances, these parties shall be deemed to be approved representatives of IST to whom FPII shall make available such information and facilities as are necessary to enable them to fulfil their obligations to IST.

7.2 Any contract placed by IST for the services mentioned in Clause 7.1 above shall include suitable provisions for the protection of the confidentiality of any information released under the said contract.

8 PRICES & GAINSHARE

8.1 The prices for the Articles and Services to be supplied by FPII to IST are firm i.e. non-variable for the duration of the contract and excluding VAT after allowing all cash and trade discounts. The prices shall be subject to formal price investigation by the Authority’s Cost Assurance Services ( CAS ) for all Articles pursuant to Condition 7.1 of the MOD Contract Until such time as the price investigation has been completed by CAS to agree a firm price in accordance with DEFCON 643 and DEFCON 648A, IST shall pay:

(a) For SOR Items la), lb) and lc): the maximum provisional prices detailed within the SOR, up to a maximum total price of $ [***] and £ [***] respectively for the total quantity of 97 vehicles, representing 80% of the total contract value for these items, upon successful delivery of the Articles. Payment of the remaining $ [***] and

£ [***] for SOR Items la), lb) and lc) combined shall be subject to the outcome of the CAS price investigation under the MOD Contract.

(b) For SOR Items 2 to 26 inclusive (subject to any options being taken): IST shall pay [***] % of the maximum provision al prices detailed within the SOR upon successful delivery of the Articles. Payment of the remaining [***] % for SOR Items 2 to 26 inclusive shall be subject to the outcome of the CAS price investigation under the MOD Contract.

In the event that firm prices have not been agreed under the MOD Contract within 6 months of contract award, the Parties shall refer to the dispute resolution procedures at Clause 41.

8.2 All prices shall be in UK Pounds Sterling (£) and/or US Dollars ($) in accordance with the Payment Plan and are inclusive of all royalties, commercial agreements, license fees, and US and UK taxes, with the exception of Value Added Tax (DEFCON 513 refers).

8.3 All prices include the cost of handling, packaging and transportation (including carriage insurance and freight) to the point of delivery or ex-works to the consignee and the cost of compliance with this Agreement.

8.4 The prices for Items No. 1 and 2 of the SOR includes those long lead items already agreed as part of the ITPs dated 12 February 2009 and 17 March 2009.

8.5 FPII shall actively seek innovative approaches in reducing cost. IST shall endeavour to assist FPII with this activity. In the event FPII is able to reduce cost against that detailed in the pricing model (as agreed by IST, NPA and FPII) and IST receives a corresponding payment under Condition 7.5 of the MOD Contract, IST shall promptly pay such amount to FPII.

8.6 FPII shall clearly record and make available at the request of IST all costs associated with this Agreement to allow this gainshare to be applied. Further, FPII shall at quarterly intervals produce a detailed account of any savings made against the agreed costs. On

completion of the Agreement both Parties shall review such records and to the extent that savings have been achieved the Parties shall share such savings in the agreed ratios. IST reserves the right to deduct its share of any savings from any outstanding sum due to FPII upon completion of the Agreement.

9 DELIVERY

9.1 Notwithstanding the provisions of DEFCON 507, as this requirement is an urgent operational requirement (a UOR ), delivery is of significant importance. All Items detailed in the SOR shall be delivered in accordance with the Delivery Schedule.

9.2 Delivery shall be included in the price of all items.

9.3 Subject to Clause 10, delivery shall be made as follows:

(a) SOR Items 1 a), b) and c)

(i) shall be delivered by FPII in accordance with the FPII Vehicle Specification to the location specified in the Delivery Schedule subject to the following inspection process being adhered to:

(A) at IST’s reasonable discretion, an inspection of any parts, or any performance requirements, of the Item by IST or a nominated representative, and IST providing its prior approval for the Item to be shipped from the United States to the United Kingdom, such approval not to be unreasonably withheld or delayed; and

(B) at IST’s reasonable discretion, an inspection of any parts, or any performance requirements, of the Item by IST or a nominated representative and IST providing its prior approval for the Item to be delivered to the location

specified in the Delivery Schedule, such approval not to be unreasonably withheld or delayed;

provided that IST shall only withhold or delay such approval if the relevant SOR Item does not comply with the FPII Vehicle Specification and;

(ii) risk of any damage, theft or loss shall rest with FPII until the base vehicle has been successfully delivered and is in the possession of IST (or its nominee) at such location. Should the vehicle have to be taken off such premises by FPII for remedial work, this risk shall pass back to FPII.

(b) SOR Items 2, 3 and 21

(i) shall be delivered by NPA under the NPA Sub-contract to IST at the relevant location set out in the MOD Contract or such other location as may be agreed between IST and NPA; and

(ii) risk of any damage, theft or loss shall rest with NPA from such time as FPII delivers SOR Item la), lb) or 1c) in accordance with Clause 9.3(a) above until such Items have been successfully delivered and are in the possession of the IST and/or the Authority at such location. Should such Items have to be taken off such premises by NPA for remedial work, this risk shall pass back to NPA.

10 RECTIFICATION OF DEFECTS ON DELIVERY

10.1 IST shall require NPA to promptly notify IST on becoming aware of any failure of SOR Item la), lb) or 1c) to comply with the FPII Vehicle Specification. With such notice NPA shall, to the extent reasonably practicable, be required to provide an outline of the feasibility, timing and costs likely to be associated with remedying the failure.

10.2 Promptly on becoming aware of any such failure (whether pursuant to a notice from NPA under Clause 10.1 or otherwise) IST shall promptly notify FPII and FPII shall be entitled to make representations to IST.

10.3 IST shall take such action as it deems reasonably necessary to remedy such failure.

11 NOT USED

12 PAYMENT AND INVOICING

12.1 All payments against this Agreement shall be made in UK Pounds Sterling (£) or US Dollars ($) and shall be claimed in accordance with this Clause 12. Upon completion and delivery of the Articles it is required to deliver pursuant to Schedule 1, FPII shall submit a payment approval request (a Payment Approval Request) to IST in respect of each payment to which it believes itself to be entitled in accordance with this Agreement and the Pricing Model.

12.2 The Payment Approval Request shall be completed in a manner that makes it clear, precisely what Articles payment is being claimed for and be substantially in the form of DEFFORM 522.

12.3 On receipt of a valid Payment Approval Request in accordance with this Clause 12, IST shall seek a corresponding payment from the Authority pursuant to the MOD Contract and shall notify FPII when it:

(a) submits its claim for the corresponding payment under clause 12.3 of the MOD Contract; and

(b) receives the corresponding payment from the Authority under the MOD Contract.

12.4 On receipt of notice from IST that it has received the corresponding payment from the Authority, FPII may submit an invoice to IST requiring payment of the relevant amount no later than 30 days from the date of receipt by IST of FPII’s invoice.

13 RELIABILITY AND ACCEPTANCE TRIALS

13.1 The Authority plans to trial the vehicle at the locations detailed in the SOW. Delivery of these trials shall not be construed as a contract deliverable for FPII.

13.2 FPII shall use best endeavours to support IST in delivering the equipment, personnel, training and support necessary to facilitate the trialling in accordance with the MOD Contract to allow the Authority to validate and verify the vehicles and ancillaries against the Authority’s SRD and SOW. IST reserves the right to change the location of trialling within the UK at no additional cost.

14 FORCE MAJEURE

14.1 Notwithstanding the provisions of Clause 36, if, by reason of any acts of nature, war, hostilities or of any fire at any of the premises of IST, FPII or those of their suppliers or the inability to obtain or maintain any necessary import and/or export licence or consent despite having used best endeavours to do so and providing that FPII has not infringed the terms of any licence, FPII shall have been delayed in completing its obligations under this Agreement, FPII shall, immediately upon becoming aware that any such delay has been caused, give to IST notice in writing of his claim for an extension of time for the completion of its obligations under this Agreement and IST shall (a) allow FPII an extension of time for such completion in respect of any delay caused by any of the circumstances before mentioned as shall be reasonable and (b) not hold FPII liable for breach of this Agreement by reason of such delay. Provided always that FPII shall not be entitled to any extension of time:

(a) unless it shall at all times have used all reasonable endeavours to prevent any such delay and to minimise any such delay and to do all that may be reasonably required to the satisfaction of IST to proceed with the work; and

(b) IST obtains a corresponding extension from the Authority under the MOD Contract.

14.2 The maximum extension of time granted under this condition for SOR Item 1 shall be agreed between the Parties following submission of the FPII’s written notice in accordance with Clause 14.1 above.

15 QUALITY ASSURANCE

15.1 For the duration of this Agreement FPII shall maintain its Quality Assurance (QA) process system in accordance with the Quality Assurance Management Plan and Strategy ( QMAPS ) and Schedule 1 and the following standards:

(a) AQAP 2070 NATO Mutual Government Quality Assurance (GQA) Process, Edition 1 dated 01 January 2004

(b) AQAP 2110 Quality assurance requirements for design, development and production, Edition 2 dated 01 December 2006

(d) AQAP 2210 Supplementary Software Quality Assurance Requirement, Edition 1, dated 01 November 2006

(e) STANAG 4107 Mutual Acceptance of Government Quality Assurance and Usage of the Allied Quality Assurance Publications, Edition 8 dated 06 July 2007

(f) Defence Standard 05-61 Part 1 - Deviations / Waivers, Issue 4 dated 26 April 2004

(g) Defence Standard 05-61 Part 4 - Contractors Working Parties, Issue 3 dated 25 October 2002

(h) Defence Standard 05-57 - Configuration management of Defence Materiel, Issue 5 dated 17 June 2005

(i) Defence Standard 03-32 - Pre-treatment and painting, Issue 4 dated 08 July 2005

(j) Defence Standard 05-99 - Managing Government Furnished Assets in Industry, Issue 3 dated 01 August 2008.

15.2 All requirements of this Agreement shall be subject to Government Quality Assurance. The Government Quality Assurance Representative for the purposes of this Agreement is as set out in the MOD Contract.

15.3 Any amendments made to the QMAPS during this Agreement shall be submitted for approval and acceptance through the formal Agreement Change Procedure at Clause 37.

15.4 FPII shall use reasonable endeavours to obtain certification to ISO 9000:2008 series of standards, or to a similar recognised national or international third party accreditation scheme.

16 PARTS & LABOUR WARRANTY

16.1 FPII acknowledges that IST is required to provide the Authority with a parts and labour warranty in accordance with Condition 16 and Annex R of the MOD Contract (the IST Parts and Labour Warranty ). In order to enable IST to provide the IST Parts and Labour Warranty, FPII provides IST with a warranty (on the same terms and subject to the limitations and exclusions which apply to the IST Parts and Labour Warranty) in respect of FPIN scope of work under this Agreement and all Articles provided by FPII under this Agreement. At the request of IST, FPII shall perform its warranty obligations directly to the Authority on behalf of IST.

16.2 If IST incurs any financial liability under the IST Parts and Labour Warranty, FPII shall indemnify IST in respect of the FPII Relevant Share of such liability.

17 RELIABILITY WARRANTY

17.1 FPII acknowledges that IST is required to provide the Authority with a reliability warranty in accordance with Condition 17 and Annex S of the MOD Contract (the IST

Reliability Warranty ). In order to enable IST to provide the IST Reliability Warranty, FPII provides IST with a warranty (on the same terms and subject to the limitations and exclusions which apply to the IST Reliability Warranty) in respect of FPII’s scope of work under this Agreement and all Articles provided by FPII under this Agreement. At the request of IST, FPII shall perform its warranty obligations directly to the Authority on behalf of IST.

17.2 If IST

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