EXHIBIT
10.1


 


MEMORANDUM
OF AGREEMENT


 


BETWEEN


 


THE
CSIR,


 


a statutory council established in terms of Act 46 of 1988,


herein represented by Mr. André Johan Nepgen, in his


capacity as Director of the Operating Unit of Defence, Peace,


Safety & Security (“DPSS”) of the CSIR,


he being duly authorized thereto.


(hereinafter referred to as “the CSIR”)


 


and


 


FORCE PROTECTION INDUSTRIES, INC.


 


A
corporation incorporated and registered in the State of Nevada, United States
of America and


with
its address at 9801 Highway 78, Ladson, South Carolina, United States


(previously
named Technical Solutions Group, Inc.),


with
Registration Number:
            


(hereinafter referred to as FPI)


 


Herein represented by Mr. Gordon McGilton in
his capacity as Chief Executive Officer.


 


 


WHEREAS


 


•                                          FPI and CSIR desire to further develop their business and contractual relationship
initiated under Memoranda of Agreement dated March 8, 2002 (“prior agreement/s”)
(FPI being previously named Technical Solutions Group Inc, the party named in
such former agreement);


 


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•                                          Pursuant to such
prior agreements, CSIR irrevocably transferred to FPI certain proprietary Information
and technology relating to the SYSTEMS
in exchange for FPI’s agreement to pay CSIR a royalty in the event that FPI
sold and delivered the SYSTEMS based on such technology during the term of such
agreement;


 


•                                          In the prior agreements, CSIR agreed to continually transfer information and technology relating to the SYSTEMS exclusively to FPI for a period
of five years, terminating on 7 March 2007 (during which period CSIR agreed not
to transfer the same information or technology to any third party), and the
Parties now wish to extend the period of such exclusivity during the term hereof;


 


•                                          TSG manufactured
and sold mine protected and up armoured vehicle systems, such as LION, COUGAR
and BUFFALO, to the USA and elsewhere.


 


•                                          Mechem and TSG
jointly developed mine protected and up armoured vehicles systems, such as
LION, COUGAR, and BUFFALO.


 


•                                          The CSIR acquired
Mechem’s R&D, and particularly the vehicles design and testing, capability
on 1 April 2001, which included the mine protected and up armoured vehicles
development capability.


 


•                                          The CSIR
continues to research, develop, test and evaluate up armoured vehicle systems.


 


•                                          FPI
and the CSIR have each, in their own right, developed and are employing certain
proprietary market intelligence, vehicle designs and technologies, or otherwise
have the requisite capabilities and capital equipment that are to be used in
executing the intent of this agreement.


 


•                                          FPI
and the CSIR desire to exploit world wide market opportunities by exclusively
developing, manufacturing and selling the SYSTEMS in the United States and
elsewhere through FPI and using its combined proprietary information and
intellectual property rights, capabilities, expertise, proprietary
intelligence, hardware and software designs and technologies to attain these
objectives.


 


•                                          FPI
and the CSIR are desirous to formulate the terms and conditions of which the
aforementioned will be done.


 


 


NOW THEREFORE THE PARTIES
HERETO AGREE AS FOLLOWS:


 


	
  1.

  	
   

  	
  The preamble hereto shall
  form an integral part of this Agreement.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  “Agreement” means this
  Memorandum of Agreement’

  



 


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  2.2

  	
   

  	
  “Effective Date” means,
  notwithstanding date of signature hereof, 8 March 2007.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  “SYSTEMS” means the TEMPEST, COUGAR (including
  HEV, JERRV, ILAV, MRAP and other variants hereof) and BUFFALO
  vehicles (including vehicles with different names previously used to
  designate such vehicles), which specifications have been jointly developed by
  Mechem and TSG to manufacture and market the vehicles as well as vehicle
  capsules, and excludes any other product or service offered by the CSIR or
  FPI not developed jointly by both Parties including but not limited to the
  CHEETAH.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  “Information” means:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.4.1

  	
  technical and scientific
  information including but not limited to design specifications, design
  criteria, drawings, design data, design methodology and design parameters;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.4.2

  	
  commercial information
  including but not limited to market intelligence, information about contracts
  or prospective clients, and competitor information, or information about a
  party’s in-house capability and/or research programmes;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.4.3

  	
  information disclosed in
  such a way that it could reasonable be deducted to be confidential in nature;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.4.4

  	
  information clearly
  identified or marked as confidential or secret.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  “Parties” means FPI and
  the CSIR.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  “Intellectual Property
  Rights” means

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.6.1

  	
  Intellectual property
  rights thereto recognized by statute and/or registrable in terms of statutory
  provisions including patents, registered designs, copyright, utility models
  and trademarks;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.6.2

  	
  Intellectual property
  rights thereto recognized by statute, but not registrable in terms of
  statutory provisions including copyright and unregistered designs;

  
							



 


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  2.6.3

  	
  Intellectual property
  rights thereto not recognized by statute and not registrable under statute,
  but recognized by and protected under common law, such as know how and trade
  secrets.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  “TSG” means Technical
  Solutions Groups, Inc, which changed its name to  Force Protection
  Industries, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
   

  	
  Any reference to the
  singular includes the plural and vice versa, if appropriate;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
   

  	
  Any reference to a gender
  includes the other gender, if appropriate.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  OBJECTIVE OF THE
  AGREEMANT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  FPI and the CSIR agree
  that FPI is exclusively responsible for the manufacture of the SYSTEMS, by
  manufacturing the SYSTEMS at its facility in the United States of America or
  elsewhere, or by manufacturing sub-systems thereof at the CSIR’s facilities
  in Pretoria or anywhere else in South Africa under direction of the CSIR, or
  enter into agreements with a third party to manufacture the SYSTEMS
  elsewhere, depending on market and business conditions at the time.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  CONFIDENTIALITY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  The Parties shall:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1.1

  	
  Treat as strictly
  confidential and secret all Information given or made known to them arising
  from this association;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1.2

  	
  Keep all such Information
  obtained secret towards third parties and only use it in co-operation with
  each other for the purpose expressly agreed upon by the Parties and to
  disclose same to their employees only on the basis of the need to know;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1.3

  	
  Accept responsibility for
  the observance of these secrecy provisions by their employees.

  



 


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  4.2

  	
   

  	
  The above undertakings
  shall not apply to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2.1

  	
  Information that at the
  time of disclosure is published or otherwise generally available to the
  public.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2.2

  	
  Information which after
  disclosure by the disclosing party is published or becomes generally
  available to the public; otherwise than through any act or omission on the
  part of the receiving party.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2.3

  	
  Information that the
  Parties can show was in their possession at the time of disclosure and which
  was not acquired directly or indirectly from each other.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2.4

  	
  Information rightfully
  acquired from others who did not obtain it under pledge of secrecy to either of
  the Parties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2.5

  	
  Information which a party
  is obliged to disclose in terms of an order of court, subpoena or other legal
  process.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  The provisions in respect
  of this clause 4 shall endure, notwithstanding expiration or termination of
  this Agreement, for a period of 5 years following its expiration or
  termination.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  RIGHTS AND OBLIGATIONS
  OF THE CSIR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The CSIR has transferred
  to FPI, on exclusive basis for five years in terms of the prior agreement,
  all proprietary Information and Intellectual Property Rights pertaining to
  the SYSTEMS including, but not limited to, designs, drawings, full technical
  specifications, test data, suppliers lists, know-how, and data relevant to
  the SYSTEMS. The CSIR shall not transfer this Information and Intellectual
  Property Rights to any other party for the duration of this Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  RIGHTS AND OBLIGATIONS
  OF FPI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  FPI has the right, as of
  the Effective Date of this Agreement, to sub-license the rights pertaining to
  the SYSTEMS acquired from the CSIR in terms of the prior agreement, to a

  
							



 


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  third party without the
  prior written permission of the CSIR provided that such sub-licence is
  subject to all the applicable terms of this Agreement and that there is no
  change in any royalty payments to CSIR as per clause 7.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  FPI agrees not to cede,
  transfer, change ownership, declare, reveal, disclose or otherwise dispose of
  its own proprietary Information and Intellectual Property Rights pertaining
  to the SYSTEMS without advising the CSIR in writing beforehand.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  VEHICLE FEE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  In full consideration of
  the transfer by the CSIR to FPI of Information and Intellectual Property
  Rights pertaining to the SYSTEMS, FPI undertakes and agrees to pay a royalty
  fee to the CSIR in US Dollars for all vehicles sold and/or manufactured by
  FPI

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •

  	
  from date of the
  termination of the agreement between the CSIR and TSG and the signature date
  of this Agreement; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •

  	
  For a period of five years
  from the Effective Date.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  at the following rate for
  each vehicle sold by FPI as foreseen in paragraph 3.1:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.1

  	
  COUGAR (4x4 and 6x6) and
  any variants including, without limitation, the Hardened Engineer Vehicle
  (HEV), the Joint Explosive Ordnance Disposal Rapid Response Vehicle (JERRV)
  the Iraqi Light Armoured Vehicle (ILAV), and the Mine Resistant Ambush
  Protected Vehicle (MRAP) :          US$750.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.2

  	
  BUFFALO:

  	
  US$3,000.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1.3

  	
  TEMPEST:

  	
  US$1,500.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Payment of the vehicle fee
  by FPI to the CSIR for the period between the Effective Date and the date of
  signature by the last Party to sign (“the signature date”), will be effected
  within 30 days of the signature date and for payments due thereafter will be
  effected within 45 days of the end of each quarter, subject to receipt of
  full payment for vehicles delivered to a customer.

  
										



 


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  7.3

  	
   

  	
  In the event of total or
  partial non-fulfilment of a contract or, in the case of force majeure, the
  CSIR will only be entitled to a vehicle fee on that part of a contract that
  has actually been executed and in proportion to payments actually received.

  
	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  An audited certificate
  shall be supplied by FPI to the CSIR every six months from the Effective Date
  of this Agreement of the quantities of the SYSTEMS by category manufactured,
  delivered and paid for by customers as well as a forecast for the following
  six months.

  
	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  FPI shall permit the CSIR
  at any time during business hours to have a representative of the CSIR’s
  choice, provided that he/she is a qualified chartered accountant or lawyer,
  examine those books of account and records (including information stored in
  computer readable form) and to take copies of all such documents, books and
  records to determine whether all appropriate accounting of vehicle fees
  hereunder and payments thereof have been made, subject to U.S. Government
  Regulations (including export controls) and execution of a confidentiality
  agreement with such a representative.

  
	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  After the validity of this
  Agreement has expired or after it has been terminated in terms of clause 13,
  the CSIR shall be entitled, on the basis stipulated in 7.1 to 7.3 above, to all
  royalty fees due in terms of this Agreement on any contracts concluded prior
  to this Agreement having expired or terminated.

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  INTELLECTUAL PROPERTY
  RIGHTS

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  FPI  agrees
  to take all the necessary steps to protect and support the Intellectual
  Property Rights that it has acquired from the CSIR under the prior
  agreements.

  
	
   

  	
   

  	
   

  
	
  8.2

  	
   

  	
  Any new Intellectual
  Property Rights, as a result of a modification, development, enhancement or
  improvement of the SYSTEMS by FPI will remain the exclusive property of FPI.
  Similarly any new Intellectual Property Rights created as a result of a
  modification, development, enhancement or improvement of the SYSTEMS by the
  CSIR will remain the exclusive property of the CSIR provided that FPI will
  have the right to use any such new Intellectual Property Rights relating to
  the SYSTEMS with respect to the SYSTEMS. Except as expressly provided in this Agreement, FPI shall not use the

  



 


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  CSIR’s
  modifications, developments, enhancements or improvements without the express prior
  written consent of CSIR.

  
	
   

  	
   

  	
   

  
	
  8.3

  	
   

  	
  The CSIR does not warrant
  the novelty of any of its Intellectual Property Rights nor any possible
  patent to be valid and likewise does not warrant that the exploitation
  thereof will not constitute an infringement of any third party’s intellectual
  property. The CSIR, however, declares that as far as it is aware no such
  prior infringement exists.

  
	
   

  	
   

  	
   

  
	
  8.4

  	
   

  	
  Should any claim be made
  claiming patent or trademark infringement of any Intellectual Property Rights
  acquired by FPI from the CSIR, the CSIR may elect, at its sole discretion, to
  defend such claims at its cost.

  
	
   

  	
   

  	
   

  
	
  8.5

  	
   

  	
  Notwithstanding any
  indication to the contrary in this Agreement, CSIR acknowledges and agrees
  that nothing contained herein shall be construed as a limitation on FPI’s
  sole and exclusive right to design, develop, manufacture, market, test ,
  sell, service and repair the BUFFALO, TEMPEST, COUGAR and CHEETAH. CSIR
  confirms that, except as may be otherwise provided for in any other agreement
  in force between the Parties, it has no claim of right, title or interest in
  or to FPI’s past, present, or future vehicles or other products, and
  acknowledges that as far as CSIR is reasonably aware of FPI exclusively owns
  all right, title and interest in and to the BUFFALO, TEMPEST, COUGAR, CHEETAH
  and the variants thereof and all Intellectual Property Rights embodied in the
  BUFFALO, TEMPEST, COUGAR and CHEETAH, and action it so desires with respect
  to its technology, Intellectual Property Rights and Information, and/or with
  respect to the design, data and technical information relating to the
  BUFFALO, TEMPEST, COUGAR and CHEETAH.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The only obligations
  between the Parties with respect to the subject matter of this Agreement are
  set forth in this Agreement and there is no other right, claim, interest,
  entitlement, license, commitment or ownership with respect thereto between
  the Parties. CSIR agrees that it shall not grant or purport to grant to any
  third party any rights of whatever kind in or to the BUFFALO, TEMPEST, COUGAR
  or any of FPI’s other products, and shall not disclose or use for any purpose
  other than as provided in this Agreement any of FPI’s Information or
  Intellectual Property Rights in its possession. Unless otherwise provided for
  elsewhere, the obligations of this paragraph regarding the

  



 


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  protection of FPI’s
  Information and Intellectual Property Rights shall remain in effect during
  the term of this Agreement.

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  SYSTEMS SUPPORT AND
  PRODUCT LIABILITY

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  The CSIR may, at the
  request of FPI, provide manufactured components, services, personnel and such
  equipment and training that may be required enabling FPI to design, develop,
  modify, upgrade, manufacture, test or market the SYSTEMS worldwide. This
  shall be at the cost of FPI.

  
	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  The Parties acknowledge
  that the SYSTEMS and the application thereof may potentially involve and/or
  result in damage to property and injury to or death of persons. FPI expressly
  acknowledges and accepts full liability for the manufactured SYSTEMS and the
  CSIR shall not be held responsible for guarantees given by FPI for the
  SYSTEMS or any part thereof including design or material guarantees.

  
	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  INDEMNITY

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Having previously
  transferred all of the CSIR’s Information and Intellectual Property Rights
  pertaining to the SYSTEMS to FPI, the CSIR shall be not be held responsible
  for any damage, loss caused by any actions, omissions, death or injury sustained
  by FPI or any third party caused by any faulty designs, material used,
  actions, omissions, negligence or misconduct by FPI.

  
	
   

  	
   

  	
   

  
	
  10.2

  	
   

  	
  The CSIR, in terms of this
  Agreement, is exempted from liability towards persons due to damage,
  suffering or otherwise, resulting from any cause ascribable to the neglect or
  wilful misconduct of FPI, its employees, agents or representatives, or
  ascribable to the manufacture or use of the SYSTEMS or any part thereof.

  
	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  APPLICABLE LAW

  
	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  This agreement shall be
  governed by and construed in all respects, in accordance with the laws of
  England and Wales, excluding its conflicts of laws provisions.

  



 


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  12.

  	
   

  	
  DURATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  12.1

  	
   

  	
  This Agreement shall
  endure for a period of five years from the Effective Date, unless terminated
  by mutual consent of the Parties or in terms of Article 13 or 14 below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.2

  	
   

  	
  The Parties, in accordance
  with Article 17.1, may after expiry hereof, renew this Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  TERMINATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Either the CSIR or FPI
  shall be entitled to terminate this Agreement forthwith:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.1

  	
  Upon the commencement or
  happening of any occurrence connected with the insolvency, dissolution,
  administration, receivership or liquidations of the other party;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.2

  	
  Upon any change in the
  control of and/or management constitution and/or circumstances of the other
  party which is detrimental to the terminating party’s interest hereunder
  except, subject to the provisions of clause 16 hereafter, pursuant to a
  merger, consolidation, sale on other transfer of all or substantially all the
  assets of either party. In such case the terminating party will only exercise
  its rights after full consultation with the other party.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.3

  	
  Should an interdict be
  granted in either the Republic of South Africa or the United States
  interdicting either of the Parties to use or utilize the technology on which
  the SYSTEMS are based.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1.4

  	
  Should the Government of
  either the Republic of South Africa or the United States decline to issue the
  necessary import/ export permits or decline to issue other permits or
  approvals necessary for the execution of this Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.2

  	
   

  	
  In the case of termination
  as envisaged above, the Parties will have no claims or liability against or
  towards each other, other than with respect to existing agreements and
  liabilities at the date of termination.

  
									



 


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  14.

  	
   

  	
  BREACH

  
	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  In the event of either
  party committing a material breach of the terms and conditions of this
  Agreement, the aggrieved party shall, without prejudice to any other rights
  which it might have been entitled to, give written notice to the breaching
  party to rectify the breach within fourteen days and after failing to correct
  the breach according to a corrective action plan, give further written notice
  to rectify the breach within thirty says and failing to do so, cancel this
  Agreement and claim damages.

  
	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  DISPUTES

  
	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  It is the intent of the
  parties that any dispute be resolved informally and promptly through good
  faith negotiation between them. Either Party may initiate negotiation
  proceedings by written notice to the other party setting forth the
  particulars of the dispute. The Parties agree to meet in good faith to
  jointly define the scope and a method to remedy the dispute. If these
  proceedings are not successful, a representative of the senior management
  from each party shall meet personally in good faith attempt to resolve the
  matter. Should any disputes remain unresolved after completion of the
  two-step resolution process set forth above, the Parties shall promptly
  submit any dispute to arbitration with an independent arbitrator, save for a
  dispute relating purely to non-payment in which event the aggrieved party may
  in its sole discretion submit such a dispute or claim to a court with
  jurisdiction to hear the matter.

  
	
   

  	
   

  	
   

  
	
  15.2

  	
   

  	
  Any dispute arising out of
  this Agreement or the interpretation thereof not resolved in accordance with
  paragraph 15.1 , both while in force and after its termination, shall be
  submitted to and determined by arbitration in accordance with the rules of
  Conciliation and Arbitration of the International Chamber of Commerce (ICC).

  
	
   

  	
   

  	
   

  
	
  15.3

  	
   

  	
  The arbitration shall be
  held in London, England, unless otherwise agreed to and shall be held in a
  summary manner with a view to it being completed as soon as possible.

  
	
   

  	
   

  	
   

  
	
  15.4

  	
   

  	
  There shall be one
  arbitrator appointed by ICC in accordance with its rules.

  



 


11

















 


	
  15.5

  	
   

  	
  The arbitration
  proceedings shall be held in the English language.

  
	
   

  	
   

  	
   

  
	
  15.6

  	
   

  	
  The decision of the
  arbitrator shall be final and binding on the Parties, and may at the request
  of either party be made an order of court of competent jurisdiction, and each
  of the Parties hereby agrees to submit itself to the jurisdiction of such
  court.

  
	
   

  	
   

  	
   

  
	
  15.7

  	
   

  	
  If any arbitration is
  brought to enforce or interpret any part of this Agreement, the arbitrator
  shall make a ruling which the arbitrator considers just and equitable in the
  circumstances, which may include a ruling that the prevailing party will be
  entitled to reasonable attorneys’ fees and costs, including, without
  limitation, discovery costs, witness fees, expert fees, and any other related
  to the preparation and presentation of proof, which shall be set by the
  arbitrator in the same action, in addition to any other relief to which the
  party may be entitled. The award of such costs, including a determination as
  to the “prevailing party”, if deemed applicable by the arbitrator, shall be
  determined, at the conclusion of any arbitration, by the arbitrator before
  whom the dispute was brought, based on the assessment of which party’s major
  arguments or positions taken in the, arbitration could fairly be said to have
  prevailed over the other Party’s major arguments or positions on major
  disputed issues, as to the final award.

  
	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  ASSIGNMENT

  
	
   

  	
   

  	
   

  
	
  16.1

  	
   

  	
  Except pursuant to a
  merger, consolidation, sale or other transfer of all or substantially all the
  assets of either Party, the Parties’ rights and obligations under this
  Agreement may not be transferred either in whole or part to any third party,
  without the prior written consent of the other party, which consent will not
  be withheld unless the circumstances are directly detrimental to the other
  party. This restriction shall not apply to assignments made to either Party’s
  corporate parent, or subsidiary.

  
	
   

  	
   

  	
   

  
	
  16.2

  	
   

  	
  In the event of an
  assignment by FPI, such assignment shall only be of force and effect if FPI
  agrees to remain surety for the payment obligations of royalties due under
  this Agreement.

  



 


12

















 


	
  17.

  	
   

  	
  AMENDMENTS

  
	
   

  	
   

  	
   

  
	
  17.1

  	
   

  	
  No alteration, variation,
  addiction or agreed cancellation of this Agreement shall be of any force or
  effect unless reduced to writing as an addendum to this Agreement and signed
  by the Parties or their duly authorized signatories.

  
	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SEVERABILITY

  
	
   

  	
   

  	
   

  
	
  18.1

  	
   

  	
  If any provision of this
  Agreement is or becomes illegal, void or invalid, it shall not affect the
  legality and validity of the other provisions.

  
	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  AGENCY AND PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
  19.1

  	
   

  	
  No party shall present
  itself as the representative or agent of the other party for any business,
  legal or any other reason, nor shall it have the power of authority to commit
  the other party, unless it receives the other party’s prior written consent.

  
	
   

  	
   

  	
   

  
	
  19.2

  	
   

  	
  Nothing in this Agreement
  shall be interpreted as establishing a partnership or joint venture between
  the Parties and both Parties shall act as independent contractors.

  
	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  GENERAL

  
	
   

  	
   

  	
   

  
	
  20.1

  	
   

  	
  The foregoing constitutes
  the entire agreement between the Parties with respect to the subject matter
  hereof and supersedes and cancels all prior representations, understandings
  and commitments (whether verbal or written) made between the Parties, with
  respect to or in connection with, any matters or things to which this
  agreement applies.

  
	
   

  	
   

  	
   

  
	
  20.2

  	
   

  	
  The Parties hereby agree
  that two original copies of this Agreement will be signed by each of the
  Parties and that each party will be entitled to an original signed copy of
  the Agreement.

  
	
   

  	
   

  	
   

  
	
  20.3

  	
   

  	
  No failure or delay on the
  part of any Party in exercising any right, power or privilege hereunder shall
  operate as a waiver thereof, nor shall any single or partial exercise of any
  right, power or privilege preclude another or further exercise thereof, or
  the exercise of any other right, power or privilege. The rights and remedies
  herein expressly provided are

  



 


13

















 


	
   

  	
   

  	
  cumulative and not
  exclusive of any rights or remedies that the Parties would otherwise have.

  
	
   

  	
   

  	
   

  
	
  20.4

  	
   

  	
  No indulgence, leniency or
  extension of time that either party (“the grantor”) may grant or show to the
  other shall in any way prejudice the grantor or prevent the grantor from
  exercising any of its rights in the future.

  
	
   

  	
   

  	
   

  
	
  20.5

  	
   

  	
  The Parties shall pay
  their own costs relating to the preparation and settlement of this Agreement.

  
	
   

  	
   

  	
   

  
	
  20.6

  	
   

  	
  Notices hereunder shall be
  deemed to be validly given, if delivered by hand or sent by telex, telefax,
  e-mailed or by recorded delivery post to the duly authorized representatives
  signing this Agreement. Such notices shall be deemed effective on the date of
  receipt at the following address:

  
	
   

  	
   

  	
   

  



 


FPI


9801 Highway 78, Building # 1


Ladson, South Carolina
29456


United States


Marked for the attention of: Chief Executive Officer


 


	
  Telefax:

  	
   

  	
  (843) 553-1311

  
	
  E-mail:

  	
   

  	
  gordon.mcgilton@forceprotection.net

  



 


The CSIR (DPSS)


 


Physical address:   Meiring Naude Road,
Scientia, Pretoria, South Africa


Postal:            P O Box 395,
Pretoria, 0001


Marked for the attention of: The Executive Director:
DPSS


 


	
  Telefax:

  	
   

  	
  +27 12 841 4683

  
	
  E-mail:

  	
   

  	
  anepgen@csir.co.za

  



 


 


14

















 


	
  20.7

  	
   

  	
  Either party shall be
  entitled to change its domicilium citandi et executandi by giving written
  notice thereof to the other, provided that such change shall not take effect
  until receipt by such other party of such notice.

  
	
   

  	
   

  	
   

  
	
  20.8

  	
   

  	
  The headings appearing in
  this Agreement have been used for reference purposes only and shall not
  affect the interpretation of this Agreement.

  
	
   

  	
   

  	
   

  
	
  20.9

  	
   

  	
  This Agreement shall only
  become effective and legally binding on the parties once it has been signed
  by both Parties.

  
	
   

  	
   

  	
   

  
	
  20.10

  	
   

  	
  Whether due to delay,
  breach of contract or warranty, tort (including but not limited to negligence
  and strict liability), or any other cause, neither shall be liable to the
  other for an special, indirect, incidental, punitive, or consequential
  damages of any nature, including but not limited to loss of actual or
  anticipated profits, except for any breach of the confidential provisions
  hereunder.

  



 


 


Signed at Pretoria, South Africa this 19th day of October 2007


 


	
   

  	
   

  	
  /s/ AJ Nepgen

  	
   

  
	
  Witness 1

  	
   

  	
  For the CSIR:

  	
   

  
	
   

  	
   

  	
  AJ Nepgen, Executive
  Director:

  	
   

  
	
   

  	
   

  	
  Defence, Peace, Safety
  & Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wistness 2

  	
   

  	
   

  	
   

  



 


 


 


        Signed at Charleston, South Carolina
this 29th day of October 2007


 


	
   

  	
   

  	
  /s/ G McGilton

  	
   

  
	
  Witsness 1

  	
   

  	
  For FPI

  	
   

  
	
   

  	
   

  	
  G McGilton, Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness 2

  	
   

  	
   

  	
   

  



 


 


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