Subscription Agreement

This Subscription Agreement, including all schedules and appendices hereto (the "Agreement"), is between Corporation of Balclutha. ("Last Bastion") and the purchaser or user of BastionLinux products and services that accepts the terms of this Agreement ("Client"). The effective date of this Agreement ("Effective Date") is the earlier of the date that Client signs or accepts this Agreement or the date that Client uses Last Bastion's products or services.

1. Background

   This Agreement establishes the terms and conditions under which Last Bastion will provide Software and Services to Client. "Software"means BastionLinux and other software programs branded by Last Bastion and/or its affiliates including all modifications, additions or further developments thereto delivered by Last Bastion. "Last Bastion Network" ("LBN") is the collection of services and technology related to software delivery, updates and upgrade, management, and provisioning for systems running BastionLinux. "Services" means LBN, Subscription Services, and any Learning Services (defined below) purchased under this Agreement. "Subscription Services" mean fee-bearing subscriptions (generally for a period of one or three years) for a certain scope of support services for the Software. The parties agree that the terms of this Agreement will govern future purchases by Client of Software and Services from Last Bastion unless otherwise agreed by the parties in writing.

2. Assistance

   Client will provide Last Bastion access to the Installed Systems (as defined below) and other Client information, systems, and software ("Client Information") as reasonably requested by Last Bastion to enable Last Bastion to provide the Services. Client understands and agrees that the completeness and accuracy of and extent of access to the Client Information provided to Last Bastion may affect Last Bastion's ability to provide Services. Client will obtain any third party consents necessary to grant Last Bastion access to the Client Information that is subject to proprietary rights of, or controlled by, any third party. Client may, for legitimate security concerns, deny Last Bastion certain access to Client Information and the Installed Systems, provided, however, that Last Bastion shall be relieved from performing Services which reasonably require such access.

3. Payment

   3.1 Fees and Expenses. Fees for the Services (the "Fees") are stated in Great British Pounds, must be paid in Great British Pounds, and are exclusive of out-of-pocket expenses. Client will reimburse Last Bastion for reasonable expenses incurred in connection with the performance of Services involving travel. Unless otherwise stated in this Agreement, any renewal of this Agreement will be at the same price per Installed System paid during the initial term. For Subscription Services, Client agrees to pay Last Bastion for each Installed System. An "Installed System" means a system on which Client installs or executes all or a portion of the Software, which may be, without limitation, a server, work station, virtual machine, blade, node, partition, or engine, as applicable. The parties agree that the terms of this Agreement will govern future purchases by Client of additional units of any or all of the Services listed herein. Unless otherwise agreed by the parties in writing, during the term of this Agreement, such additional units can be purchased and renewed at the rates set forth herein, exclusive of expenses, if any.

   3.2 Invoices. If Client is paying by credit card, Client authorizes Last Bastion to bill Client's credit card for the Services for the initial term and for the amount due at the time of renewal. If Last Bastion has approved Client to be invoiced, Last Bastion will invoice Client for the Fees at the time of execution of this Agreement and upon the submission of any future purchase order. Any and all payments made by Client pursuant to this Agreement are non-refundable. Client will make payment within thirty (30) days of the date of the invoice; provided, however, that Fees for Learning Services are due prior to the delivery of such Learning Services. Last Bastion reserves the right to suspend or cancel performance of all or part of the Services and/or change its credit terms if actual payment has not been received within sixty (60) days of the invoice date.

   3.3 Taxes. All Fees are exclusive of any Taxes. Client will pay to Last Bastion an amount equal to any Taxes arising from or relating to this Agreement, including without limitation, sales, service, use or value added taxes, which are paid by or are payable by Last Bastion. "Taxes" means any form of taxation, levy, duty, customs fee, charge, contribution or impost of whatever nature and by whatever authority imposed (including without limitation any fine, penalty, surcharge or interest), excluding, however, any taxes based solely on the net income of Last Bastion. If Client is required under any applicable law or regulation, domestic or foreign, to withhold or deduct any portion of the payments due to Last Bastion, then the sum payable to Last Bastion will be increased by the amount necessary so that Last Bastion receives an amount equal to the sum it would have received had Client made no withholdings or deductions.

4. License and Ownership

   4.1 Software. Client will have the license rights to the Software set forth in Appendices 1, 2 and 3, as applicable.

   4.2 Freedom to Use Ideas. The ideas, methods,concepts, know-how, structures, techniques, inventions, developments,processes, discoveries, improvements and other information and materials developed in and during the course of this Agreement may be used by either party, without an obligation to account, in any way that party deems appropriate, including by or for itself or its clients or customers, notwithstanding anything to the contrary contained in this Agreement.

   4.3 Marks. No right or license, express or implied, is granted hereunder for the use of any of Last Bastion, Last Bastion affiliate, or Client trade names, service marks or trademarks, including, without limitation, the distribution of the Software utilizing any Last Bastion or Last Bastion affiliate trademarks.

5. Reporting and Inspection\

   5.1 Reporting. Client will promptly notify Last Bastion if the number of Installed Systems exceeds the number of Installed Systems for which Client has paid the applicable fee. In its notice,Client will include both the number of additional Installed Systems and the date(s) on which such Installed Systems were put into use. Last Bastion will invoice Client for the applicable Services for such Installed Systems on a pro-rata basis and Client will pay for such Services in accordance with this Agreement.

   5.2 Inspection. During the term of this Agreement and for one (1) year thereafter, Last Bastion or its designated agent may inspect and review Client's facilities and records in order to verify Client's compliance with this Agreement. Any such inspection and review will take place only during Client's normal business hours and upon no less than ten (10) days prior written notice from Last Bastion. Last Bastion will give Client written notice of any non-compliance, including the number of underreported Installed Systems, and Client will have fifteen (15) days from the date of such notice to make payment to Last Bastion for the applicable Services provided to the underreported Installed Systems. If Client had underreported the number of Installed Systems by more than five percent (5%), Client will also pay Last Bastion for the cost of such inspection.

6. Term and Termination

   6.1 Term. The term of this Agreement and the provision of Services hereunder begins on the Effective Date and continues for a period of one (1) year unless a different term is specified by the parties at the time of purchase. Thereafter, the term for Subscription Services (defined in Appendix 1) will renew for successive terms of one (1) year each, unless a different term is agreed to by the parties at the time of renewal, and unless either party gives written notice to the other of its intention not to renew at least sixty (60) days before commencement of the next term. Client must use any other Services purchased during the initial term; if unused, such Services will be forfeited.

   6.2 Termination. If Client or Last Bastion materially breaches the terms of this Agreement, and such breach is not cured or remedied within thirty (30) days after written notice of the breach is given to the breaching party, then the other party, by giving written notice of termination to the breaching party, may terminate this Agreement; provided, however, that no cure period will be required for a breach of Section 9 hereof. Without prejudice to any other right or remedy of Last Bastion, in the event either party terminates this Agreement, Client will pay Last Bastion for all Services provided up to the effective date of termination.

   6.3 Effect of Termination. If this Agreement is terminated for any reason, Sections 3, 4, 5.2, 6.3, 8, 9, 10.2, 12 and13 of this Agreement will survive such termination.

7. Continuing Business

   Nothing in this Agreement will be understood to preclude or limit Last Bastion from providing software, materials, or services for itself or other clients, irrespective of the possible similarity of such software, materials or services to those which might be delivered to Client.

8. Limitation of Liability and Disclaimer of Damages

   8.1 Limitation of Liability. FOR ALL EVENTS AND CIRCUMSTANCES, LAST BASTION AND ITS AFFILIATES' AGGREGATE AND CUMULATIVE LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ON ACCOUNT OF PERFORMANCE OR NON-PERFORMANCE OF OBLIGATIONS, REGARDLESS OF THE FORM OF THE CAUSE OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STATUTE OR OTHERWISE WILL BE LIMITED TO DIRECT DAMAGES AND WILL NOT TO EXCEED THE AMOUNT THAT CLIENT PAID TO LAST BASTION UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE FIRST EVENT GIVING RISE TO LIABILITY.

   8.2 Disclaimer of Damages. NOTWITHSTANDING ANYTHING\ TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN NO EVENT WILL LAST BASTION OR ITS AFFILIATES BE LIABLE TO CLIENT OR ITS AFFILIATES FOR: ANY CLAIM BASED UPON A THIRD PARTY CLAIM; ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES, WHETHER ARISING IN TORT, CONTRACT, OR OTHERWISE; OR FOR ANY DAMAGES ARISING OUT OF OR IN CONNECTION WITH ANY MALFUNCTIONS, DELAYS, LOSS OF DATA, LOST PROFITS, LOST SAVINGS, INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATORY PROFITS, EVEN IF LAST BASTION OR ITS AFFILIATES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

9. Confidentiality

   Client and Last Bastion agree to maintain the confidentiality of Last Bastion's pricing and product roadmap as well as other proprietary information received by the other party that is marked confidential, including non-public technical and business information for a period of two (2) years after the termination of this Agreement. This section shall not apply to any publicly available or independently developed information.

10. Representations and Warranties

    10.1 General Representations and Warranties. Last Bastion represents and warrants that: (a) the Services will be performed in a professional and workmanlike manner by qualified personnel; (b) it has the authority to enter into this Agreement with Client; and (c) to Last Bastion's knowledge, the Software does not intentionally include malicious or hidden mechanisms or code for the purpose of damaging or corrupting the Software.

    10.2 Disclaimer of Warranty. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 10, THE SERVICES AND THE SOFTWARE ARE PROVIDED "AS IS" AND WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE. THE WARRANTIES IN THIS SECTION 10 ARE THE SOLE AND EXCLUSIVE WARRANTIES (EXPRESS OR IMPLIED) WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY LAST BASTION, ITS AFFILIATES, DEALERS, DISTRIBUTORS, AGENTS OR EMPLOYEES WILL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF ANY WARRANTY PROVIDED HEREIN. LAST BASTION DOES NOT GUARANTEE OR WARRANT THAT THE USE OF THE SERVICES OR SOFTWARE WILL BE UNINTERRUPTED OR ERRORFREE.

11. Open Source Assurance Program

    If any portion of the Software is found to infringe any third party intellectual property rights and Client has complied with all of the terms of this Agreement, then for each Installed System for which Client is current in its subscription fees, Last Bastion will, at its expense and option: (i) obtain the rights necessary for Client to continue to use the Software consistent with this Agreement; (ii)\ modify the Software so that it is non-infringing; or (iii) replace the infringing portion of the Software with non-infringing code. The  foregoing will not apply to claims arising from: the combination of the Software with products or services not provided by Last Bastion; the modification of the Software pursuant to specifications of Client; the modification of the Software other than as directed by Last Bastion; or use of the Software in a manner not permitted or contemplated hereunder.

12. Governing Law/Consent to Jurisdiction\

    The validity, interpretation and enforcement of this Agreement willbe governed by and construed in accordance with the laws of the British Virgin Islands without giving effect to the conflicts of laws provisions thereof or the United Nations Convention on Contracts for the International Sale of Goods. All disputes arising out of or relating to this Agreement will be submitted to the exclusive jurisdiction of the state or federal courts of competent jurisdiction located in British Virgin Islands, and each party irrevocably consents to such personal jurisdiction and waives all objections to this venue.

13. Miscellaneous

    (13.1) Notices. Notices must be in English, in\r\nwriting, and will be deemed given when delivered by hand or five (5) days after being sent to the respective addresses indicated on the first page hereof or to the facsimile numbers set forth below, using a method that provides for positive confirmation of delivery. (13.2) Assignment.This Agreement is binding on the parties to this Agreement, and nothing in this Agreement confers upon any other person or entity any right, benefit or remedy of any nature whatsoever, save for the partie's affiliates as expressly provided in this Agreement. This Agreement is assignable by either party only with the other party's prior written consent, which will not be unreasonably withheld. Notwithstanding the foregoing, Last Bastion may assign this Agreement to its affiliate, subsidiary or pursuant to a merger or a sale of all or substantially all of such party's assets or stock upon written notice and without the prior approval of Client. (13.3) Subcontracting. Last Bastion may subcontract Services under this Agreement to third parties or affiliates without the prior approval of Client; provided, however, that (a) subcontractors must agree to keep any proprietary information received from Last Bastion or Client confidential, and (b) Last Bastion remains responsible to Client for the performance of its obligations hereunder. Client acknowledges and agrees that to provide the Services, it may be necessary for Client Information to be transferred between Last Bastion, its affiliates, and/or subcontractors, which may be located worldwide. (13.4) Independent Contractor. Last Bastion is an independent contractor and nothing in this Agreement will be construed to create an employee relationship between Client (or any Client personnel) and Last Bastion (or any Last Bastion personnel). Each party will be solely responsible for payment of its personnel including applicable taxes, deductions, other payments and benefits. (13.5) Force Majeure.  Except with respect to the payment of Fees owing under this Agreement, neither party will be liable for nonperformance or delays caused by acts of God, wars, riots, strikes, fires, floods, earthquakes, government restrictions, terrorist acts or other causes beyond its reasonable control. (13.6) Non-solicitation. Client agrees not to solicit or hire any personnel of Last Bastion with whom Client has had contact in connection with this Agreement; provided that Client may hire an individual employed by Last Bastion who, without other solicitation, responds to advertisements or solicitations aimed at the general public.  (13.7) Dispute Resolution. If Client is not satisfied with the Services provided by Last Bastion, Client agrees to give Last Bastion a written description of the problem(s) and to make a good faith effort to amicably resolve the problem with Last Bastion before commencing any proceeding. Last Bastion also agrees to make a\ good faith effort to amicably resolve any problem with Client before commencing any proceeding. No claim or action, regardless of form, arising out of this Agreement may be brought by either party more than one (1) year after the cause of action has accrued. (13.8) Headings.  All headings contained in this Agreement are inserted for identification and convenience, and will not be deemed part of this Agreement for purposes of interpretation. (13.9) Severability. If any provision of this Agreement is held invalid or unenforceable for any reason but would be valid and enforceable if appropriately modified, then such provision will apply with the modification necessary to make it valid and enforceable. If such provision cannot be so modified, the parties agree that such invalidity will not affect the validity of the remaining provisions of the Agreement; provided, however, that if Sections 3, 8 and 10 cannot be modified to be valid and enforceable, this Agreement will be deemed invalid in its entirety. (13.10) Waiver. The delay or failure of either party to exercise any rights hereunder will not constitute or be deemed a waiver or forfeiture of such rights. No waiver will be valid unless in writing and signed by an authorized representative of the party against whom such waiver is sought to be enforced. (13.11) Complete Agreement. This Agreement constitutes the exclusive terms and conditions with respect to the subject matter hereof, notwithstanding any different or additional terms that may be contained in the form of purchase order or other document used by Client to place orders or otherwise effect transactions hereunder. This Agreement represents the final, complete and exclusive statement of the agreement between the parties with respect to subject matter hereof and all prior written agreements and all prior and contemporaneous oral agreements with respect to the subject matter hereof are merged therein. Any claim relating to the provision of the Services by Last Bastion, its affiliates and their personnel will be made against Last Bastion alone. (13.12) Amendment. This Agreement may not be amended, supplemented or modified except by a written instrument signed by the parties hereto, which instrument makes specific reference to this Agreement. (13.13) Counterparts and Facsimile Signature. This Agreement may be executed in counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument. The parties may exchange signature pages by facsimile and such signatures will be effective to bind the parties. (13.14) Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT.