Document:

Deed of Undertaking, dated as of April 22, 2008

 ANNEX F 
 Execution Copy 
 DATED 22 APRIL 2008 
 CYPRESS MERCHANT BANKING PARTNERS II L.P. 
 and 
 CYPRESS MERCHANT BANKING II C.V. 
 and 
 55TH STREET PARTNERS II L.P. 
 and 
 THE PRUDENTIAL ASSURANCE COMPANY LIMITED 
 and 
 DANKA BUSINESS SYSTEMS PLC

  

	 	

 DEED OF UNDERTAKING 
  

	 	

 Skadden, Arps, Slate, Meagher & Flom (UK) LLP 

 40 Bank Street 
 Canary Wharf 
 London E14 5DS 
  

 F-1 

 THIS DEED is executed and delivered on the 22nd day of April 2008 
 BY: 
  

	(1)	CYPRESS MERCHANT BANKING PARTNERS II L.P., a Delaware limited partnership (“Cypress Partners”); 

  

	(2)	CYPRESS MERCHANT BANKING II C.V., a limited partnership organized and existing under the laws of the Netherlands (“Cypress Banking”);

  

	(3)	55TH STREET PARTNERS II L.P., a Delaware limited partnership (collectively with Cypress Partners and Cypress Banking, the “Cypress Shareholders”);

  

	(4)	THE PRUDENTIAL ASSURANCE COMPANY LIMITED, a company incorporated in England and Wales and registered under the Companies Act 1985 with number 15454 and with its registered
office at Laurence Pountney Hill, London EC4R 0HH (“Prudential”); and 

  

	(5)	DANKA BUSINESS SYSTEMS PLC, a public company incorporated in England and Wales and registered under the Companies Act 1985 with number 01101386 and with its registered office
at Masters House, 107 Hammersmith Road, London W14 0QH (the “Company”). 

 WHEREAS: 
  

	(A)	The Company, together with its wholly-owned subsidiary Danka Holding Company (the “Seller”), has entered into a Stock Purchase Agreement dated as of 8 April
2008 (the “SPA”) with Konica Minolta Business Solutions U.S.A., Inc., a New York corporation (the “Purchaser”). 

  

	(B)	Pursuant to the SPA, the Seller has, conditional on, among other things, obtaining the approval of the Company’s shareholders at the EGM in accordance with the requirements of
the Listing Rules, agreed to sell to the Purchaser the entire issued share capital of its wholly-owned subsidiary Danka Office Imaging Company (the “Disposal”). 

  

	(C)	The Board intends to propose a resolution at the EGM that, conditional upon the Disposal being approved by the Company’s shareholders and all conditions to Completion under the
terms of the SPA (other than a condition relating to the passing of shareholder resolutions at the EGM) having been satisfied or waived, the Company be placed into members’ voluntary liquidation, with the result that after payment or provision
for all known actual and contingent liabilities of the Company and the costs and expenses of the MVL, the Company’s remaining cash, including the net proceeds of the Disposal, will be distributed to the Company’s shareholders .

  

	(D)	The relevant provisions of the Articles require the entirety of the amount which the Board expects to be available for distribution to the Company’s shareholders in the MVL to
be paid to the holders of the Participating Shares, leaving no amount available for distribution to the holders of the Ordinary Shares. 

  

	(E)	As at the date of this Deed, the Participating Shareholders hold all of the Participating Shares in issue. 

  

	(F)	In order to effect as orderly and efficient a liquidation of the Company as possible, the Participating Shareholders have agreed to provide the agreements and undertakings set forth
in this Deed. 

  

	(G)	A draft of the Circular containing, among other things, the proposed form of the Resolutions, has been provided to the Participating Shareholders prior to the execution and delivery
of this Deed. 

  

 F-2 

 NOW THIS DEED WITNESSETH as follows: 
  

	1.	INTERPRETATION 

  

	1.1	In this Deed and the recitals hereto: 

  

			
	 “ADSs”
	  	means the American Depositary Shares issued by the Depositary, each of which represents two Ordinary Shares;
		
	 “Affiliate”
	  	means in relation to a party, any person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the party, and for these
purposes a party shall be deemed to control a person if such party possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the person, whether through the ownership of voting securities,
control of voting rights, by contract or otherwise;
		
	 “Articles”
	  	means the articles of association of the Company;
		
	 “Board”
	  	means the board of directors of the Company;
		
	 “Business Day”
	  	means a day (other than a Saturday or Sunday) on which banks are open for general business in the City of London;
		
	 “Circular”
	  	means the circular convening the EGM to be posted to the Company’s shareholders and to be prepared in compliance with the requirements of the Listing Rules;
		
	 “Completion”
	  	means completion of the Disposal in accordance with the terms of the SPA;
		
	 “Conditions”
	  	means the conditions set forth in Clause 2 of this Deed;
		
	 “Depositary”
	  	means The Bank of New York Mellon in its capacity as the depositary for the ADSs;
		
	 “Disposal”
	  	has the meaning ascribed thereto in recital (B) above;
		
	 “Distribution”
	  	has the meaning ascribed thereto in Clause 3(a);
		
	 “EGM”
	  	means the extraordinary general meeting of the Company’s shareholders to be convened to consider and, if thought fit, approve, among other things, the Disposal and the MVL;
		
	 “Listing Rules”
	  	means the listing rules made by the Financial Services Authority in exercise of its functions as competent authority pursuant to Part VI of the Financial Services and Markets Act
2000;
		
	 “Liquidators”
	  	means the proposed liquidators of the Company whose appointment as such is to be considered and, if thought fit, approved by the Company’s shareholders at the EGM;
		
	 “MVL”
	  	means the proposed members’ voluntary liquidation of the Company;
		
	 “Notice”
	  	has the meaning ascribed thereto in Clause 3;
		
	 “Ordinary Shares”
	  	means the issued ordinary shares of 1.25 pence each in the capital of the Company;

  

 F-3 

			
	 “Participating Shareholders”
	  	means the Cypress Shareholders and Prudential, in their respective capacities as holders of Participating Shares;
		
	 “Participating Shares”
	  	means the 6.50% senior convertible participating shares of U.S.$1.00 each in the capital of the Company;
		
	 “Pro Rata Share”
	  	has the meaning ascribed thereto in Clause 4;
		
	 “Purchaser”
	  	has the meaning ascribed thereto in recital (A) above;
		
	 “Record Time”
	  	means the time at which the MVL commences;
		
	 “Relevant Securityholders”
	  	means: (i) holders of Ordinary Shares registered as such in the Register of Members of the Company as at the Record Time; and (ii) holders of ADSs registered as such in the books of the
Depositary as at the Record Time;
		
	 “Representatives”
	  	means, in relation to a party, the directors, employees, agents, partners, advisers, consultants of, and any individuals seconded to work for, such party (including persons who, at the relevant
time, occupied such position);
		
	 “Resolutions”
	  	means the resolutions to be considered and, if thought fit, approved at the EGM and to be set out in the Circular;
		
	 “Seller”
	  	has the meaning ascribed thereto in recital (A) above;
		
	 “SPA”
	  	has the meaning ascribed thereto in recital (A) above; and
		
	 “U.S.$” or “$”
	  	means United States dollars, the lawful currency of the United States of America.

  

	1.2	In this Deed and the recitals hereto, unless otherwise specified: 

  

	 	(a)	references to Clauses and Schedules are to clauses of and schedules to this Deed; 

  

	 	(b)	a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted;

  

	 	(c)	a reference to the singular includes the plural and vice versa; 

  

	 	(d)	a reference to any agreement, deed or document shall be construed as a reference to the same as it may have been, or may from time to time be, amended, supplemented or modified; and

  

	 	(e)	headings to Clauses are for convenience only and shall not affect the interpretation of this Deed. 

  

	2.	CONDITIONS 

 The obligations of each of the
Participating Shareholders under this Deed are conditional only upon: 
  

	 	(a)	The Resolutions having been duly approved by the requisite majorities at the EGM; and 

  

	 	(b)	Completion having occurred. 

  

	3.	UNDERTAKING 

 Each of the Participating Shareholders
hereby irrevocably undertakes to the Company, as trustee for the benefit of itself and of each Relevant Securityholder, that: 
  

	 	(a)	 promptly, and in any event by no later than the second Business Day following satisfaction of the last of the Conditions to be satisfied, it will execute and
deliver to the Liquidators at the address specified 

  

 F-4 

	 	 
in Clause 6 written notice in or substantially in the form set forth in the Schedule (the “Notice”) pursuant to which such Participating
Shareholder shall, notwithstanding the provisions of the Articles, irrevocably and unconditionally direct and instruct the Liquidators to pay to the Relevant Securityholders out of the proceeds of the MVL, prior to any distribution of the proceeds
of the MVL to the Participating Shareholders, an aggregate amount in cash equal to approximately U.S.$6.5 million (the “Distribution”), on the basis of a payment in cash of U.S.$0.025 per Ordinary Share and a payment in cash of
U.S.$0.10 per ADS, in each case to the registered holders thereof as at the Record Time, and any additional proceeds of the MVL shall then be paid to the Participating Shareholders in accordance with the Articles; 

  

	 	(b)	following the delivery of the Notice to the Liquidators, it will not, and it will procure that none of its Affiliates or Representatives will, take any actions or steps or do any
thing, or which would or might reasonably be expected to amend, modify, vary or revoke the Notice and/or the directions and instructions to the Liquidators set forth therein; and 

  

	 	(c)	in the event that it receives any amount in respect of a distribution of the proceeds of the MVL before such time as the Relevant Securityholders have received the full cash payment
provided for in Clause 3(a), it shall: 

  

	 	(i)	hold such amount in trust for the benefit of the Relevant Securityholders; and 

  

	 	(ii)	promptly repay such amount to the Liquidators subject to the direction to the Liquidators to pay such amount to the Relevant Securityholders in accordance with the provisions of
Clause 3(a), 

 provided that the maximum aggregate amount that a Participating Shareholder shall be obliged to hold in trust and to pay in
accordance with the provisions of this Clause 3(c) shall be limited to its Pro Rata Share. 
  

	4.	PRO RATA SHARE 

 For the purposes of this Deed, the
term “Pro Rata Share” shall mean, in respect of each Participating Shareholder, an amount in cash in U.S.$ being the product of the amount of the Distribution (less any amount thereof already paid to the Relevant Securityholders)
multiplied by a fraction, the numerator of which is the number of Participating Shares held by such Participating Shareholder as at the Record Time and the denominator of which is the total number of Participating Shares in issue as at the Record
Time. 
  

	5.	CIRCULAR 

 Prior to posting the Circular to its
shareholders the Company shall provide a copy of the Circular (including the Resolutions) in final or near final form to the Cypress Shareholders and shall not post the Circular until it has received the prior consent of the Cypress Shareholders
(such consent not to be unreasonably withheld, rendered subject to conditions or delayed). 
  

	6.	ADDRESS FOR NOTICES 

 The address of the Liquidators
to which the Notices to be delivered by Participating Shareholders in accordance with the requirements of this Deed are to be delivered is: 
 KPMG LLP

 8 Salisbury Square 
 London EC4Y 8BB 
 For the attention of: 
 Jeremy Spratt and Finbarr O’Connell 

(as Joint Liquidators of Danka Business Systems plc) 
  

 F-5 

	7.	PROVISIONS SEVERABLE 

 Every provision contained in
this Deed shall be severable and distinct from every other such provision and if at any time any one or more of such provisions is or becomes invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining such
provisions shall not in any way be affected thereby. 
  

	8.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 

 The
undertakings and obligations of the Participating Shareholders in this Deed are made and entered into for the benefit of the Relevant Securityholders and each Relevant Securityholder shall have the right to enforce the terms of this Deed under the
Contracts (Right of Third Parties) Act 1999 (the “Act”) as if such Relevant Securityholder was a party to this Deed. Save as provided for in the immediately preceding sentence of this Clause 8, no person who is not a party to this
Deed has any right to enforce any term hereof under the Act. Notwithstanding the foregoing, the Participating Shareholders and the Company may agree to amend, modify or vary any term of this Deed without having obtained the consent of any other
party if and to the extent that such amendment, modification or variation is not materially prejudicial to the interests of the Relevant Securityholders. 
  

	9.	GOVERNING LAW 

 This Deed is governed by and shall
be construed in accordance with English law. 
  

	10.	JURISDICTION 

 This Deed is subject to the exclusive
jurisdiction of the English Courts as regards any claim or matter arising out of or in relation to this Deed, and that accordingly any proceeding, suit or action arising out of or in connection with this Deed may be brought in such courts.

  

 F-6 

 IN WITNESS whereof this Deed has been executed and delivered the day and year first before
written. 
  

			
	EXECUTED and DELIVERED as a DEED by	 	        )
	CYPRESS MERCHANT BANKING PARTNERS II L.P.	 	)
	acting by: /s/ Chris Harned	 	)
	its duly authorised signatory	 	)
		
	EXECUTED and DELIVERED as a DEED by	 	)
	CYPRESS MERCHANT BANKING II C.V.	 	)
	acting by: /s/ Chris Harned	 	)
	its duly authorised signatory	 	)
		
	EXECUTED and DELIVERED as a DEED by	 	)
	55TH STREET PARTNERS II L.P.	 	)
	acting by: /s/ Chris Harned	 	)
	its duly authorised signatory	 	)
		
	EXECUTED as a DEED by AFFIXING	 	        )
	the COMMON SEAL of the	 	)
	THE PRUDENTIAL ASSURANCE COMPANY	 	)
	LIMITED in the presence of:	 	)
		
	 /s/ illegible
	 	
	Sealing Officer	 	
		
	EXECUTED and DELIVERED as a DEED by	 	        )
	DANKA BUSINESS SYSTEMS PLC	 	)
	acting by a director	 	)
	and the company secretary	 	)
		
	 /s/ A. D. Frazier
	 	
	Director	 	
		
	 /s/ Jean Dinovo Johnson
	 	
	Secretary	 	

  

 F-7 

 SCHEDULE 
 FORM OF NOTICE TO THE LIQUIDATORS 
 [On the letterhead of the relevant Participating
Shareholder] 
  

	To:	Jeremy Spratt and Finbarr O’Connell 

	    	(as Joint Liquidators of Danka Business Systems PLC) 

	    	c/o KPMG LLP 

	    	8 Salisbury Square 

	    	London EC4Y 8BB 

 [—]
2008 
 Dear Sirs 
 Members Voluntary Liquidation of Danka
Business Systems PLC 
 Reference is made to the deed of undertaking executed and delivered by each of Cypress Merchant Banking Partners
II L.P., Cypress Merchant Banking II C.V., 55th Street Partners II L.P., The Prudential Assurance Company Limited and Danka Business Systems PLC on or around 22 April 2008 (the “Deed”). A copy of the Deed is attached hereto.

 This letter is the Notice that we are required to deliver to you in accordance with the terms of the Deed. Capitalised terms used and not
otherwise defined in this Notice have the meanings ascribed thereto in the Deed. 
 In accordance with the requirements of the Deed,
notwithstanding the provisions of the Articles, we hereby irrevocably and unconditionally direct and instruct you to pay to the Relevant Securityholders out of the proceeds of the MVL, prior to any distribution of the proceeds of the MVL to us in
our capacity as a Participating Shareholder, an aggregate amount in cash equal to approximately U.S.$6.5 million, on the basis of a payment in cash of U.S.$0.025 per Ordinary Share and a payment in cash of U.S.$0.10 per ADS, in each case to the
registered holders thereof as at the Record Time, and any additional proceeds of the MVL shall then be paid to the Participating Shareholders in accordance with the Articles. 
 The terms of this notice shall be governed by and construed in accordance with English law. 
 Yours faithfully, 
  

	
	
	  

	By:
	For and on behalf of
	[Name of Participating Shareholder]

  

 F-8Purchase Agreement effective as of January 1, 2008

 Exhibit 10.1 
 Execution Copy 
 PURCHASE AGREEMENT 
 This Agreement is made effective as of the 1st day of January 2008 (the “Effective Date”), by and between Caterpillar Inc., a Delaware corporation with principal offices in Peoria, Illinois (“Buyer”) and Active
Power, Inc., a Delaware corporation with principal offices in Austin, Texas (“Seller”). This Agreement hereby supersedes and replaces that certain Phase II & Phase III Purchase Agreement entered into by and between
Buyer and Seller having an effective date as of January, 1 2000, and any subsequent Amendments. Buyer and Seller hereby agree as follows: 
  

	1.	Products Covered by Agreement. This Agreement concerns the purchase and sale of the parts or products listed in Exhibit A (“Products”).
Each Product will be manufactured by Seller to the specifications that are set forth in the relevant Caterpillar drawings for that Product (for each Product, the “Specifications”). Buyer and Seller may agree in writing to
modify the list of Products in Exhibit A or any of the Specifications for any Product from time to time, and the modified Specifications will apply to all of that Product that is ordered by Buyer after the modification; the
modification will only apply to previously ordered but unshipped Product if mutually agreed by the parties in writing. As set forth on Exhibit A, some Products are designated as “Production Products,” and others are
designated as “Spare Part Products.” 

  

	2.	Purchase and Sale of Product. 

  

	 	a.	Buyer’s Requirements. Subject to Section 10, Seller will supply and Buyer will purchase one hundred percent (100%) of its Electic Power Division’s
requirements for each Product. Seller will provide Buyer an approved PPAP (Production Part Approval Process) for every Product and every change to Product prior to shipment of Product. Seller understands that Buyer makes no guarantee as to the
quantity of Product it will require. 

  

	 	b.	Forecasts and Firm Orders. 

  

	 	i.	Buyer’s forecasted requirements will be made available to Seller on a quarterly basis. Any forecasts or estimates of such requirements provided to Seller by Buyer shall be
non-binding, and Seller acknowledges that it shall not be entitled to and shall not rely on such forecasts or estimates as binding commitments unless they are expressly stated as such by Buyer in writing. 

  

	 	ii.	Buyer will place orders with Seller by sending the order consist file (each, a “Firm Order”) specifying the Product, quantity, requested and/or restricted
shipping dates, and delivery location. 

  

	 	c.	Seller’s Acceptance or Rejection of Firm Orders. 

  

	 	i.	Each Firm Order shall be subject to acceptance by Seller. Seller’s acceptance shall be indicated in writing and confirm the ship date. If Seller has not rejected such Firm
Order within five (5) days from the date Buyer places Firm Order, such Firm Order shall be deemed accepted by Seller. Once a Firm Order has been accepted by Seller, it cannot be modified or canceled except by the parties’ mutual written
consent, or as set forth in Section 2(f) below. 

  

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 Execution Copy 
  

	 	d.	Lead Times. 

  

	 	i.	Seller has designated “Standard Lead Times” for each Product on Exhibit A. The term “Standard Lead Time” means the
minimum period of time between when Seller receives a Firm Order from Buyer for a particular Product, and when Seller makes that Product available for shipment at Seller’s dock. 

  

	 	ii.	If Buyer requests a ship date sooner than the Standard Lead Time after the Firm Order is placed (each, an “Expedited Ship Date”), and if Seller can provide
that Product on required ship date without incurring additional costs, Seller will do so at Buyer’s request for no fee; otherwise, Seller will quote Buyer the additional charges to meet such ship date that will be required, and the ship date
that Seller can offer for that Product, and Buyer can accept or reject those charges. If Buyer rejects those charges, then the ship date will be deemed to be the Standard Lead Time for that Product after the date that Firm Order was received by
Seller. 

  

	 	iii.	If a Firm Order does not specify a ship date, then the ship date will be deemed to be the Standard Lead Time for that Product after the date that Firm Order was received by Seller.

  

	 	iv.	Seller can modify the Standard Lead Times on Exhibit A from time to time on sixty (60) days written notice to Buyer, subject to Buyer’s consent which shall
not be unreasonably withheld. 

  

	 	v.	Seller agrees that the Standard Lead Times on Exhibit A for each Product will not be longer than the shortest average lead times provided by Seller for that Product to
any other customer of Seller that purchases the same Product at similar volume levels. 

  

	 	e.	Shipping. 

  

	 	i.	Each Firm Order shall specify Buyer’s dealers’ freight carrier and Buyer’s dealers’ account number with that carrier, or Buyer will provide a Bill of Lading to
Seller within seventy-two (72) hours of the scheduled ship date, so that all freight charges can be paid directly by Buyer’s dealers to the carrier. Seller will provide Buyer a signed Buyer Bill of Lading for Product within seventy-two
(72) hours of shipment of Product. Otherwise Seller will specify its own freight carrier and invoice delivery charges to Buyer. In that event, unless otherwise directed by Buyer in writing, Seller shall obtain insurance at Buyer’s expense
from the carrier for losses incurred during shipment. 

  

	 	ii.	All Products shall be shipped F.C.A. Seller’s facility (Incoterms 2000). Title to each Product shall pass to Buyer upon Seller’s tender of the Product to the freight
carrier at Seller’s loading dock. 

  

	 	iii.	If a Firm Order does not specify an Expedited Ship Date, and if the quantity of that Product to be shipped in that month as indicated by Buyer’s forecast does not exceed
one-hundred fifty percent (150%) of the expected quarterly quantity, for that Product and month, and if Seller tenders the Product to the freight carrier later than the specified ship date, then as Buyer’s exclusive remedy, Seller will be
responsible for any special freight charges that are reasonably incurred to try to hasten the delivery date for that Product in light of Seller’s late tender to the freight carrier. 

  

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	 	f.	Change Orders. 

  

	 	i.	Buyer can cancel or modify a Firm Order without liability to Seller by notifying Seller in writing before Seller has accepted that Firm Order. Seller or Buyer may not cancel
or modify a Firm Order after acceptance without the other party’s written consent. 

  

	 	ii.	After Seller has accepted a Firm Order, if Buyer notifies Seller in writing that Buyer wishes to cancel, modify the configuration of, increase or reduce the quantity of, or
delay the ship date for one or more Products ordered in a Firm Order (each, a “Change Order”), then in each case, Seller shall respond to the Change Order within forty-eight (48) hours. If Seller can accept the Change
Order without incurring additional costs, Seller will do so for no fee; otherwise, Seller will requote the new price and availability of Product to Buyer, and Buyer can accept or reject the Change Order. If Seller does not respond to the Change
Order within forty-eight (48) hours then it will be assumed that Seller can provide the Change Order without additional costs. If Buyer rejects the Change Order, the original terms of the accepted Firm Order will apply.

  

	 	iii.	No change orders will be accepted within two (2) weeks of the expected ship date, unless mutually agreed by both Seller and Buyer. 

  

	 	g.	Software. Seller agrees to allow Buyer the right to provide Seller’s monitoring and service software known as UPS View, to Buyer’s dealers through a password
protected website with no restriction on licensing and at no additional cost. Seller acknowledges Buyer will take no additional action to monitor usage or distribution of UPS View which is downloaded from the password protected website.

  

	3.	Price Containment. Both Seller and Buyer are committed to controlling and reducing costs, and both recognize that effective cost control as set forth in this Section 3
is of the essence to this Agreement. While this Agreement is in effect, Seller will maintain a cost control and reduction program with respect to Product, and will review costs on a regular basis for progress toward the objective of maintaining or
reducing Seller’s prices to Buyer. Interaction between Buyer’s and Seller’s engineering and purchasing personnel regarding costs will be encouraged. All cost savings generated by Buyer and Seller working together will be shared on a
50/50 basis by reducing the Prices set forth on Exhibit A, taking into consideration expenses of both Buyer and Seller to implement the cost reduction. All cost savings generated solely by Seller which still allow Seller to strictly
comply with all drawings and Specifications, and does not change form, fit or function of Product, will not change Prices. If Seller requests a Price increase, the Price Increase Process set forth in Exhibit B will be followed.

  

	4.	 Product Prices. Prices will be as shown in Exhibit A. Exhibit A may be modified from time to time by the signed written agreement
of both parties, or as provided in Section 3 above. The prices shown on Exhibit A do not include installation charges, freight and handling charges, applicable taxes, and Buyer shall be responsible for all such charges and 

  

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 Execution Copy 
  

	 	 
taxes. (Unless Buyer furnishes a proper exemption certificate, Buyer shall be charged for all sales taxes, however designated, levied or based on the sales
of Products specifically excluding any income taxes related to the sale of Products.) 

  

	5.	Payment Terms. Seller shall invoice Buyer for each Product after that Product ships from Seller’s facility. [ * ]. 

  

	6.	Term. The initial term of this Agreement shall be three (3) years, commencing on the Effective Date. This Agreement shall automatically be extended for additional terms
of one (1) year each unless either party gives written notice to terminate at least three (3) months prior to the end of the initial term or any additional term or unless otherwise terminated pursuant to the provisions hereof.

  

	7.	Warranty. 

  

	 	a.	Warranty as to Products. Seller warrants that each Product shall be free from defects and in full conformity with the Specifications for the warranty term. The term of
Seller’s warranty to Buyer is twelve (12) months from the date Product is placed in service with the end-user (provided that in no event shall this period exceed thirty-six (36) months after the date Seller shipped that Product). The
thirty-six (36) month warranty period set forth above, will not apply for a particular Product if Seller establishes and provides reasonable evidence to Buyer that Buyer or Buyer’s dealer has not complied with the Storage Guidelines in
Caterpillar document TIBU4855, which is attached hereto as Exhibit D, with respect to that Product, and such failure to comply was the primary cause for the Product failure. 

  

	 	b.	Modification of Storage Guidelines. The Storage Guidelines can be modified upon mutual agreement with Buyer and Seller, not to be unreasonably withheld.

  

	 	c.	Remedy With Respect to Parts. Buyer stocks some Spare Part Products through its Morton, Illinois distribution facility (“Stocked Spare Parts”). When a
Stocked Spare Part is required to repair a defective or non-conforming Product during the applicable warranty period (each, a “Required Replacement Part”), Buyer will use that Stocked Spare Part as the Required Replacement
Part, and will submit a reimbursement claim to Seller. When a warranty repair to a defective or non-conforming Product requires a Required Replacement Part that is not a Stocked Spare Part, Buyer will order that Required Replacement Part from Seller
in accordance with this Agreement, and then will submit a reimbursement claim to Seller. Subject to Section 7(c) and Section 7(f), Seller will reimburse Buyer the Price of that Required Replacement Part that was (i) necessary to
complete the repair of the Product that was under warranty and (ii) purchased by Buyer from Seller and paid for by Buyer in accordance with this Agreement. 

  

	 	i.	If a part on the Warranty Recall Parts List attached hereto as Exhibit E is reasonably believed by Buyer to be defective or non-conforming to Specification, and is
replaced with a Required Replacement Part, Buyer must return that defective or non-conforming part to Seller (or require its dealers to return it to Seller), along with the 

  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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 Execution Copy 
  

	 	 
warranty claim, within one-hundred eighty (180) days of the repair date. Seller shall reimburse all shipping costs for the return of the defective or
non-conforming part, provided the requirements as set forth in Exhibit F are followed. The Warranty Recall Parts List may only be modified by mutual agreement of both Buyer and Seller, such agreement not to be unreasonably withheld.

  

	 	ii.	Buyer shall be responsible for informing its dealers of the Warranty Recall Parts List, and requiring its dealers to return failed parts on this Warranty Recall Parts List to Seller
with the claim history documentation. 

  

	 	iii.	If a warranty reimbursement claim is paid by Seller and the Required Replacement Part was a Stocked Spare Part, then, in addition to reimbursing Buyer the Price of the Required
Replacement Part, Seller will pay Buyer an additional [ * ] of the Price of the Required Replacement Part to account for Buyer’s cost of logistics. This additional amount will not be paid if the Required Replacement Part is not a Stocked
Spare Part. 

  

	 	d.	Remedy With Respect to Labor. When a repair to a defective or non-conforming Product that is under warranty requires labor, then, in addition to any parts reimbursement
pursuant to Section 7(c) above, and subject to the limitations set forth in this Section 7(d) and in Section 7(f) Seller will reimburse Buyer for the labor charges that are actually incurred by Buyer and that are reasonably necessary
to complete the repair of the Product. Seller’s obligation is limited to the labor rates (in dollars per hour) not to exceed [ * ] per hour, and the labor hours set forth on Seller’s “Time Required Guide” or “TRG”
Schedule that is attached hereto as Exhibit G. If a warranty labor reimbursement claim is submitted by Buyer to Seller and it exceeds the labor hours in Seller’s TRG Schedule, then Seller shall adjust the claim and reimburse only
the adjusted amount. Seller’s TRG Schedule can only be modified if mutually agreed to by both Seller and Buyer and will be reviewed annually, such agreement not to be unreasonably withheld. 

  

	 	e.	Remedy With Respect to Travel Charges. If Buyer or Buyer’s dealer performs warranty labor that is reimbursable by Seller under Section 7(d) above at the site of an
end user of the Product, then Seller shall also reimburse Buyer for the documented, customary and reasonable travel expenses incurred by Buyer, for travel by automobile of up to four (4) hours of driving time (round trip), so long as
(i) the warranty labor is performed by Buyer’s dealers and the technician performing the warranty service is currently trained by the Buyer, as described below in Section 8, with respect to that particular Product, and (ii) the
travel expenses are not required to be paid by the end-user customer under Exhibit C or another agreement with that end-user customer. 

  

	 	f.	Conditions on Warranty. Seller may reject all or a portion of any warranty claim, including a claim under Section 7(c), all associated warranty labor claims under
Section 7(d), and all associated travel charge claims under Section 7(e), if the defective or non-conforming part is found on the Warranty Recall Part List and is not returned to Seller for that particular warranty reimbursement claim
within the one-hundred eighty (180) day 

  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

 5 

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period required by Section 7(c), or if the part is returned but is found not to be defective or non-conforming, or if warranty labor has been provided
on that Product by a technician who was not at that time certified by Seller with regard to that particular Product as provided below in Section 8. 

  

	 	g.	Monthly Statement. A monthly statement of Buyer warranty claims, including notice of specific Product failures, and summary information on the causes of such failure,
comments from the service technician, serial number, model number and installation date will be sent by Buyer to Seller. This statement, currently called the “Field Incident Report,” shall be used by Seller in its process of determining
the validity of the warranty claims submitted in that month. Seller shall respond to each warranty claim listed in the Field Incident Report with amount of warranty to be recovered by Buyer from Seller with justification as to the amount. This
response shall occur within fourteen (14) days from Seller’s receipt of Field Incident Report and/or receipt of the returned part if applicable, whichever comes last. 

  

	 	h.	Special Buyer Programs. Seller’s participation in Buyer’s “Product Improvement Programs” (PIP), “Product Support Programs” (PSP), “Extended
Warranty” terms, and other policy actions are to be negotiated on a case-by-case basis by both parties, documented in writing and signed by both parties. Participation in these programs will be based on an amount mutually agreed to by Seller
and Buyer. 

  

	 	i.	Disclaimer. EXCEPT FOR THE EXPRESS WARRANTY MADE IN THIS SECTION 7, SELLER DISCLAIMS ALL OTHER WARRANTIES ON ANY GOODS OR SERVICES PROVIDED BY SELLER, WHETHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, OF NON-INFRINGEMENT, OR OF FITNESS FOR A PARTICULAR PURPOSE. THE SOLE REMEDY FOR ANY BREACH OF SELLER’S EXPRESS LIMITED WARRANTY SHALL BE THE REMEDIES THAT ARE EXPRESSLY SET
FORTH IN THIS SECTION 7. 

  

	8.	Product Training. 

  

	 	a.	In order for Seller’s warranty to be valid with respect to a particular Product, all work performed on that Product by Buyer or Buyer’s dealers’ personnel must be
performed by personnel who have completed training on that Product as offered by Buyer. If Buyer permits any service personnel to work on a Product without having proper training from Buyer, then Seller’s warranty with regard to that Product
will be invalidated and Seller will not reimburse any labor or travel charges. 

  

	 	b.	 Buyer’s dealers’ service personnel must successfully complete Buyer’s training course. Seller will provide certified training for Buyer’s
trainers of Product at a mutually agreed upon price and time. Training courses are specific to particular Products. If any new Product is added to this Agreement, or if the Specification of a Product is modified to an extent that Seller reasonably
believes re-training is necessary, then previously certified training personnel will be given an updated course with regard to those new or modified Products to be certified on those new or modified Products, and subsequently, Buyer’s dealers
will be trained on these updates by Buyer’s trainers. In addition, certified trainers 

  

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will be given an update course at least once every three (3) years to remain certified, even if no new or modified Product has been released. Buyer will
keep records of all persons trained on Product and will make those records available to Seller at Seller’s reasonable request in connection with warranty claims, such request not to be unreasonably withheld. 

  

	 	c.	Seller may provide sales and marketing support to Buyer’s key dealers, only if requested by Buyer, and as agreed to by Seller. 

  

	9.	Indemnification. 

  

	 	a.	Seller agrees to indemnify, defend, and hold Buyer, its subsidiaries, affiliates, directors, officers, employees and agents harmless from and against all claims, demands,
liabilities, loss, damage, cost, and expense, of whatsoever nature, including attorneys’ fees, arising from or in any way connected with the injury or death of any person or loss or damage to property as a consequence of, or attributable to,
any defect of design, material, or workmanship of Product or failure of Product to conform with Seller’s and Buyer’s Specifications, drawings, and data. 

  

	 	b.	Buyer agrees to indemnify, defend, and hold Seller harmless against and from all claims, demands, liabilities, loss, damage, cost, and expense, of whatsoever nature paid to a third
party or incurred in the defense of a claim arising on account of Buyer’s (i) misrepresentation of the Product or providing unauthorized representations or warranties to its customers, (ii) modifications to the Product, or
(iii) negligence or other fault of products or services of Buyer. 

  

	10.	Termination. 

  

	 	a.	Notice. Either party may give the other party notice of default of this Agreement if (i) the other party materially breaches this Agreement; (ii) the other party
anticipatorily repudiates any material provision of this Agreement and fails to provide adequate assurance of future performance; or (3) the other party becomes insolvent, files a petition for relief under any bankruptcy, insolvency or similar
law, or makes an assignment for the benefit of its creditors. 

  

	 	b.	Notices of Default and Cure Period. Any notice of default shall be in writing in accordance with Section 11, reference this Section 10, and specify the default that
is the basis for the notice. The defaulting party shall have sixty (60) days in which to cure the default, and the Agreement shall not terminate if the defaulting party cures the default within the cure period. (However, if the default cannot
be cured within the cure period, no cure period will be available.) During any cure period, the parties shall continue to perform this Agreement except that Seller may stop delivering goods and services under this Agreement during the cure period if
the default is the Buyer’s failure to pay amounts that are due. 

  

	 	c.	In addition to the rights provided in Section 10a, Buyer may terminate this Agreement at any time, either totally or partially, in the event: 

  

	 	i.	Quality - Products consistently and materially fail to meet the Specifications as they exist today and are communicated to Seller from time to time, or Seller fails to maintain its
status as a Caterpillar certified supplier (including maintaining a current quality plan). 

  

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	 	ii.	Delivery - Seller is substantially and consistently failing to meet Buyer’s Firm Orders with respect to mutually agreed shipment dates. Buyer should not have to expedite normal
deliveries. It is the obligation of the Seller to maintain an up to schedule condition after a reasonable time period. That time period will be agreed upon by Seller and Buyer for each part number listed in Exhibit A.

  

	 	iii.	Competitiveness - Seller fails to be responsive to the market place or fails to remain competitive on a worldwide basis with other manufacturers of comparable parts or products in
terms of price. 

  

	 	iv.	Default Generally - Default by Seller in any obligation owed by Seller to Buyer. 

 Buyer’s decision on termination shall be final. Buyer will be reasonable in making the final decision. 
  

	11.	Notices. When written notice is required by this Agreement, it shall be sent by certified mail, by courier that provides confirmation of delivery, by email with an email
message being sent in return by the recipient confirming delivery, or by such other written or electronic method as will permit the sender and recipient to verify delivery, to the addresses set forth below: 

  

	
	 For Caterpillar:

	
	 560 Rehoboth Road

	 Griffin, Georgia 30252

	 Attn: Eric Musick, Global Purchasing Category Manager

	 Fax: (770) 233-5868

	 Email: musicem@cat.com

	
	 With copies to:

	
	 Caterpillar Inc.

	 100 N.E. Adams Street

	 Peoria, Illinois 61629-7310

	 Attn: General Counsel

	 Fax: (309) 675-6620

  

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 To Seller: 
 Active Power, Inc.

 2128 West Braker Lane, BK12 
 Austin, Texas 78758 
 Attn: John Penver, CFO 
 Fax: (512) 836-4511 
 Email: jpenver@activepower.com 
 Written notice may also be sent by facsimile to the numbers listed above, but such notice shall not be effective unless the sender receives a return
facsimile acknowledging receipt of the notice. Notice shall be deemed received when actually delivered to the recipient (as demonstrated by postal records, in the case of notice sent by mail. Facsimile and emailed notice shall be deemed received
upon receipt by the recipient, as reflected in the reply message received by the sender as described. Notice of delivery by courier shall be deemed received on the date of confirmation of delivery. The addresses and transmittal numbers set forth
above can be changed only by written notice that complies with the requirements of this Section. 
  

	12.	Use of Other Supply Sources. Nothing in this Agreement shall prevent Buyer from seeking other sources for alternatives to Product if Seller’s production capacity is
insufficient to meet Buyer’s needs. 

  

	13.	Change in Ownership and Control. During this Agreement, if there is a change in the ownership and control of either party, the other party shall have the option of
terminating this Agreement immediately by giving written notice thereof within sixty (60) days of being notified of the occurrence of such change of control; provided that if a party provides advance notice of a bona fide proposed change of
control (including the identity of the principal owners after such change of control occurs) the other party will within sixty (60) days provide written notification to the first party as to whether it will exercise such termination right if
the change of control occurs. For purposes of this Section 13, a change in the ownership and control of either Buyer or Seller or a parent company of either party, if appropriate shall be deemed to have occurred if and only if and when any one
or more persons (excluding existing owners) acting individually or jointly is or becomes a beneficial owner, directly or indirectly, of securities representing more than thirty-three percent (33%) of the combined voting power of the then
outstanding securities of Seller or Buyer or the parent company of either party. 

  

	14.	 Force Majeure. Neither Buyer nor Seller shall be liable to the other for any delay in or failure of performance of their respective obligations hereunder if
such performance is rendered impossible or impracticable by reason of fire, explosion, earthquake, drought, embargo, war, riot, act of God or of public enemy, an act of governmental authority, agency or entity, or any other similar contingency,
delay, failure or cause, beyond the reasonable control of the party whose performance is affected, irrespective of whether such contingency is specified herein or is presently occurring or anticipated by either party. In the event either party is
prevented from fulfilling its obligations under this Agreement because of such a force majeure as described herein, both the Seller and Buyer shall make every reasonable effort to continue to maintain as much as reasonably possible the
supplier-customer relationship 

  

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established under this Agreement. However, if Buyer or Seller is unable to meet its obligations hereunder because of the conditions described above and such
inability continues for a period of sixty (60) days, the other party shall have the right to terminate this Agreement upon thirty (30) days prior written notice (which will not be effective if the force majeure ceases prior to the
expiration of this 30-day period). 

  

	15.	Assignment; Applicable Law. This Agreement is not assignable by either party without the written consent of the other party. This Agreement and any matter related in any way
to this Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of laws provisions thereof. 

  

	16.	Entire Agreement. This Agreement and the terms and conditions referenced in any purchase order issued by Buyer in connection with this Agreement (to the extent not
inconsistent with this Agreement) constitutes the entire agreement and understanding between the parties with respect to the subject matters herein and therein, and supersedes and replaces any and all prior agreements, understandings,
representations, and promises, whether oral or written, between them with respect to such matters. Both parties agree that the terms and conditions of any Seller quotation, offer, acknowledgment or similar document, however designated, shall not
apply. 

  

	17.	Waiver. The provisions of this Agreement may be waived, altered, amended, or repealed in whole or in part only upon the written consent of Buyer and Seller. The waiver by
either party of any breach of this Agreement shall not be deemed or construed as a waiver of any other breach, whether prior, subsequent or contemporaneous, of this Agreement. 

  

	18.	Severability. Invalidation of any of the provisions contained herein, or the application of such invalidation thereof to any person, by legislation, judgment or court order
shall in no way affect any of the other provisions hereof or the application thereof to any other person, and the same shall remain in full force and effect, unless enforcement as so modified would be unreasonable or inequitable under all the
circumstances or would frustrate the purposes hereof. 

  

	19.	Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

  

	20.	Counterparts. Section headings contained herein are for ease of reference only and shall not be given substantive effect. This Agreement may be signed in one or more
counterparts, each to be effective as an original. 

  

	21.	Testing and Test Reports. Seller shall test each Production Product prior to shipment. Seller will maintain all test reports for Production Products for a period of
thirty-six (36) months after shipment, and will promptly provide them to Buyer upon Buyer’s request. Seller’s testing process and test report contents will be subject to Buyer’s approval, which will not be unreasonably withheld,
conditioned, or delayed. 

  

 10 

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	22.	Limitation of Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY, UNDER ANY EQUITY, COMMON LAW, TORT,
CONTRACT, ESTOPPEL, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, FOR ANY INCIDENTAL, SPECIAL, PUNITIVE, CONSEQUENTIAL OR INDIRECT DAMAGES, OR BUYER’S COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES. THIS LIMITATION OF LIABILITY SHALL NOT
APPLY, HOWEVER, TO (a) ANY AMOUNT THAT IS EXPRESSLY PAYABLE UNDER ANOTHER PROVISION OF THIS AGREEMENT; (b) ANY OBLIGATION UNDER THIS AGREEMENT, AT LAW, OR OTHERWISE, TO INDEMNIFY OR HOLD A PARTY OR OTHER PERSON HARMLESS AGAINST A THIRD
PARTY CLAIM; (c) ANY PARTY’S OR PERSON’S CLAIM OF INFRINGEMENT OR MISAPPROPRIATION OF ANY PARTY’S OR PERSON’S INTELLECTUAL PROPERTY RIGHTS; (d) ANY VIOLATION OF AN EXPRESS CONFIDENTIALITY COVENANT; OR (e) PERSONAL
INJURY OR PROPERTY DAMAGE. 

  

	23.	Compliance with Laws. Both parties will comply with the provisions of all applicable laws and regulations from which liability may accrue to the other party for any violation
thereof. 

  

	24.	Confidentiality of Agreement. When a party has disclosed this Agreement to potential investors and/or inquirers, that party will notify the other party of the identity of the
investor and/or inquirer to whom this Agreement has been disclosed. Except with respect to potential investors and/or acquirers that have agreed in writing to maintain the terms of this Agreement in confidence, the terms of this Agreement as well as
its existence shall be kept confidential and not disclosed by either party without the express written consent of the other party, or unless required by law or governmental or judicial order, in which case the party will give the other party prompt
notice of any such requirement or order (if permitted by law) and each party will cooperate in good faith with the other party’s efforts if any to obtain confidential treatment, a protective order, or other reasonable means to maintain the
confidentiality of this Agreement. 

  

	25.	Branding, Trademarks, and Copyright. Except as required under law, nothing in this Agreement authorizes Buyer to use any name, trademark, trade dress, or other designation or
mark that belongs to, or to a reasonable person in the relevant market for the Products would identify, Seller. Buyer is not licensed to use any marketing collateral or other works of authorship that belong to Seller, regardless whether related to
the Products. Unless otherwise agreed by Seller in writing, Buyer shall resell the Products under Buyer’s brand, product names, and marks, and shall generate and use its own marketing collateral, developed independently of Seller and
Seller’s materials. 

  

	26.	Licenses. 

  

	 	a.	 As between the parties, Seller shall own all rights, title and interest in and to the Products except as otherwise provided in the “Phase II Development
and Phase III Feasibility Study Agreement” dated January 22, 1999 and the “Phase III Product Development Agreement” dated September 1, 2001. If this Agreement is terminated by Buyer pursuant to Section 10 Seller hereby
grants to Buyer, effective as of such termination date, a non-exclusive, 

  

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worldwide, royalty-bearing license (including the right to sublicense only to Buyer’s wholly owned subsidiaries) to make, have made, use and/or sell the
Products. The license granted by the preceding sentence shall only be effective for eighteen (18) months beginning on the effective date of the termination, and Buyer shall pay a royalty to Seller of (A) [ * ] per delivered megajoule per
published rating by Seller for each Product designated by Seller as a “Phase II Product,” and (B) [ * ] per kVA for each Product designated by Seller as a “Phase III Product.” 

  

	 	b.	Each of Buyer and Seller grants to the other party an irrevocable, perpetual, non-exclusive, worldwide, royalty-free license (including the right to sublicense only to that
party’s wholly owned subsidiaries) to make, have made, use, sell and otherwise exploit, during and after the term of this Agreement, any modifications, improvements, inventions, know-how, ideas, or suggestions made with respect to the other
party’s Proprietary Information by that party’s employees or contractors who have had access to such Proprietary Information. If something ceases to be Proprietary Information pursuant to Section 25 above, any license granted with
respect thereto while such information was Proprietary Information will be unaffected. 

  

	27.	Parts Support. During this Agreement or following any termination hereof, other than termination by Seller due to a breach by Buyer, Seller shall provide, or at its option
shall cause to be provided, such quantities of Spare Part Products to Buyer as Buyer may request from time to time for a period of five (5) years after the last shipment made by Seller under this Agreement of a Production Product that uses the
requested Spare Part Product. Seller shall provide such Spare Part Products at a price not to exceed Seller’s then-current prices provided to other customer under similar terms and conditions, provided that such Spare Part Products are
reasonably and commercially available to Seller. If for any reason Seller is unable to provide Spare Part Products to Buyer pursuant to its obligation under Section 27, then Seller grants to Buyer a non-exclusive, perpetual, worldwide,
royalty-bearing license to make, have made, use, and sell those particular Spare Part Products using Seller’s proprietary designs. The foregoing license is subject to a royalty of [ * ] of the applicable price set forth in Seller’s most
current catalog or price list for those Spare Part Products. 

  

	28.	This Agreement hereby supersedes and replaces that certain Phase II and Phase III Purchase Agreement entered into by and between Buyer and Seller having an effective date as of
January 1, 2000, and any subsequent Amendments. 

  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized representatives as of the date first set forth above. 

 

									
	 CATERPILLAR INC.
 (“Buyer”)
	 		 	 ACTIVE POWER, INC.
 (“Seller”)

	 		 
					
	By:	 	 /s/ Dan Murphy
	 		 	By:	 	 /s/ Jim Clishem

	Name:	 	Dan Murphy	 		 	Name:	 	Jim Clishem
	Title:	 	Vice President Global Purchasing	 		 	Title:	 	President & Chief Executive Officer

  

 13 

 Execution Copy 
  
 EXHIBIT A 
 [ * ]

  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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 Execution Copy 
  
 EXHIBIT B: PRICE INCREASE PROCESS 
 This process
will be used whenever Seller requests a price increase for a Product listed in Exhibit A, including changes to these Products that do not require a new part number to be released. 
  

	 	1.	On the date Seller requests a price increase, Seller will submit to Buyer the proposed price increase, the Effective Date of the price increase, and data related to the material or
component cost drivers that are prompting Seller to propose the price increase (The price increase Effective Date shall not be less than 60 days from the date this data is received by Buyer). Seller is not obligated to share any data that it or a
third party may consider confidential, and may instead provide a non-confidential summary of that data; however, Buyer must be able to correlate the data using industry standard material cost indexes. This data may include, for example,

  

	 	 a.
	 3rd party supplier
invoices illustrating the increase in material costs, labor or service charges. 

  

	 	b.	Increased material content (bill of material) or labor requirements, and the costs of the added requirements. 

  

	 	c.	Commodity prices at the time of the previous quote, and the content within Product. 

  

	 	d.	Commodity prices at the current time, and the content within Product. 

  

	 	2.	Buyer will review and validate the information submitted by Seller. For component cost increases that can not be correlated to industry standard material cost indexes, both Buyer
and Seller will work together to try and offset the component increase by: 

  

	 	a.	Jointly meeting with the supplier(s) causing the component cost increase to investigate cost reduction/avoidance ideas 

  

	 	b.	Investigating other components with the Product for possible cost reduction ideas 

  

	 	3.	If an agreement is reached on the price increase, then Exhibit A will be amended in writing and such new prices will be implemented on the Effective Date, or as otherwise mutually
agreed to by Buyer and Seller. No retroactive price increases will be allowed. 

  

	 	4.	If no agreement is reached on the proposed price increase prior to the Effective Date, then, 

  

	 	a.	Seller will have the option for ten (10) days to notify Buyer in writing that Seller has withdrawn its proposal for a price increase; 

  

	 	b.	If Seller does not exercise its option to withdraw its price increase proposal, then the price increase as proposed by Seller will take effect on the Effective Date. If the price
increase takes effect without Buyer’s written consent, then Buyer will have the option during the period of ten (10) days after the Effective Date: (i) terminate this Agreement in its entirety by giving Seller ninety (90) days
written notice; or (ii) cancel the part numbers and all orders for Product affected by this price increase. 

  

 B-2 

 Execution Copy 
  
 EXHIBIT C: CATERPILLAR STANDARD LIMITED WARRANTY 
 

 
  

 C-1 

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 EXHIBIT C (continued) 
 

 
  

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 EXHIBIT D: UPS STORAGE GUIDELINES – TIBU4855-00 
 Introduction 
 The problem that is identified below does not have a known permanent solution. Until a permanent solution is known, use the
solution that is provided below. 
 Problem 
 The vacuum
pump has incurred an early hour failure due to one or more of the following results: 
  

	 	z	improper procedure for storage 

  

	 	z	improper setup procedure 

  

	 	z	improper troubleshooting procedure 

 Solution 
 The following procedures will provide enhanced information regarding the vacuum pump: 
  

	 	z	procedure for storage 

  

	 	z	setup procedure 

  

	 	z	troubleshooting procedure 

 Procedure for Storage

 Normal Operating Range 
 Minimum
temperature ... 0 °C (32 °F) 
 Maximum temperature ... 40 °C (104 °F) 
 Range of Humidity Minimum Humidity “Non-condensing”... 5% Maximum Humidity “Non-condensing” ... 95% 
 The vacuum pump has the following specifications for short term storage: 
 Short Term Temperature Range Minimum temperature ... –25 °C (–13 °F) Maximum temperature ... 70 °C (158 °F) 
 Short Term
Range of Humidity Minimum Humidity “Non-condensing” ... 65% Maximum Humidity “Non-condensing”... 95% 
 Short Term Storage - Short
Term defines the storage period of two months or less. 
 Short Term conditions cover the time when the equipment is in transit from the factory to the
dealer or from the dealer to the customer site. The system should be stored under short term conditions for only two months or less. 
 The vacuum pump has
the following specifications for long term storage: 
 Long Term Temperature Range Minimum temperature ... 0 °C (32 °F) Maximum temperature ... 40
°C (104 °F) 
 Long Term Range of Humidity Minimum Humidity “Non-condensing” ... 5% Maximum Humidity “Non-condensing” ... 95%

 Long Term Storage - Long Term defines the storage period of three to twelve months. 
 The system can be stored under long term conditions without any additional concerns. If the UPS is stored longer than one year, you will need to change the oil for the vacuum pump. Thereafter, change the oil in the
vacuum pump annually. After completing the oil change for the vacuum pump, you will need to energize the vacuum pump. Operate the vacuum pump for four hours. Operation of the pump will ensure proper lubrication of the seals for the vacuum pump.

 The vacuum pump is shipped from Service Parts without oil. Therefore, you are not required to change the oil for the vacuum pump for any inventory from
service parts. 
 Do not utilize a vacuum pump that has exceeded specifications for storage of the vacuum pump. Do not utilize a vacuum pump that has
exceeded the operational environmental specifications of the vacuum pump. The vacuum pump must be replaced. The replacement cost of the vacuum pump is not a warrantable repair. 
 Setup Procedure 
 The vacuum pump has a tamperproof label. This prohibits the service technician from utilizing
a 120 VAC source to begin the process for vacuum draw on the flywheel during the commissioning procedure. A tamperproof label that is corrupted will void any warranty claim that is associated with the vacuum pump. 
 To operate the vacuum pump prior to commissioning the system, temporarily disconnect the 240 VAC internal wiring to the receptacle on the right side of the pump. Connect
a 240 VAC line cord from an external source. Ensure that you have removed the external 240 VAC source prior to energizing the input terminals. 
 Refer to
the appropriate Operation and Maintenance Manual when you perform the following procedures: 
  

	z	commissioning of the UPS 

  

	 	z	replacement (field service) of the vacuum pump 

  

	 	z	installation of bearings for the flywheel 

 In addition, perform the
following operations: 
  

	 	z	When you change the bearing retainers in order to install bearings, complete the procedure in a timely manner. Installation of the bearings in place of the bearing retainers should
be completed prior to energizing the vacuum pump. Efficient installation will minimize any possible contamination of the chamber for the flywheel. Efficient installation should decrease the time that is required to create an acceptable vacuum level
within the chamber for the flywheel. 

  

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	 	z	Do not use a 120 VAC source to begin the vacuum draw on the flywheel. 

  

	 	z	Remove any externally connected 240 VAC source from the vacuum pump. 

  

	 	z	Perform a thorough inspection of the vacuum lines and connection points. Look for any possible discrepancies that could result in a vacuum leak. 

  

	 	z	Verify that the vacuum pump has clean, fresh oil. Verify that the oil for the vacuum pump is filled to the appropriate level. Use 190-8487 Vacuum Pump Oil for the vacuum
pump. The pump capacity is 0.7 liters. The capacity of the container for the oil (service parts) is 1.0 liter. 

  

	 	z	Do not overfill the reservoir for the vacuum pump. Overfilling the reservoir will cause the following results: misting oil from the vacuum pump, contamination of the interior of the
UPS and the appearance of a leaking vacuum pump. 

  

	 	z	The vacuum pump is equipped with two control switches. One switch controls the gas ballast. The other switch controls the operation mode of the vacuum pump. For normal operation of
the vacuum pump, turn the gas ballast switch to the Closed position (“O”). The switch for the mode selector is in the Full Clockwise position. 

  

	z	Remove the air bubbles from the vacuum system by turning the switch for the ballast from the 0 position to the II position. The switch for the ballast is located on the top middle
of the pump behind the exhaust port. Run the pump for 1 hour. Return the switch for the ballast to the 0 position and allow the pump to pull a vacuum. 

  

	z	For systems that have been in dealer storage with an age equal to or exceeding 12 months, lubricate the O-ring seal of the polymer elbow. The O-ring is located on the suction side
of the vacuum pump. Utilize 6V-2055 Grease for the O-ring. 

 NOTICE 
 Use rubber gloves when handling the o-ring. Do not use bare hands. 
 Troubleshooting Procedure 
 A properly sealed flywheel with a properly operating vacuum pump will yield a minimum reading for the
vacuum of 35 millitorr within three hours of operation. 
 If the results of your troubleshooting indicate that the fault actually resides with the vacuum
pump, perform a “Dead Head” test on the vacuum pump. To perform the “Dead Head” test, you will require the following service tool: 
  

	 	z	295-5408 Sensor Kit (“Dead Head”) 

  

	 	1.	Verify that the system is in bypass mode. Verify that the flywheel is disengaged. Refer to the appropriate Systems Operation, Testing and Adjusting. 

  

	 	2.	De-energize the vacuum pump. 

  

	 	3.	Disconnect the input vacuum hose and the 90 degree elbow assembly between the flywheel and the right side of the vacuum pump. 

  

	 	4.	Connect the 295-5409 Adapter Plate into the fitting for the vacuum pump. See Step 3. 

  

	 	5.	Connect the 200-8452 Vacuum Sensor to the 295-5409 Adapter Plate . 

  

	 	6.	Disconnect the wiring harness for the flywheel installed vacuum sending unit at the flywheel. 

  

	 	7.	Connect the wiring harness from Step 6 to the test 200-8452 Vacuum Sensor . 

  

	 	8.	For a single module unit, connect your laptop computer to the RS-232 connector that is located on the “I/O” board. For a multiple module unit, connect your laptop computer
to the RS-232 connector that is located on the “PCI” board. 

  

	 	9.	Start the UPSView program. Establish communications. 

  

	 	10.	Select the appropriate telemetry tile in order to view the “Vacuum Gauge”. 

  

	 	11.	Energize the vacuum pump. 

  

	 	12.	Monitor the reading of vacuum pressure via UPSView. 

  

	 	13.	An acceptable reading for the vacuum pump is 10 millitorr or less. If the vacuum pump produces a reading greater than 10 millitorr, replace the pump. 

  

	 	14.	Upon completion of the “Dead Head” test, return the system back to the original configuration. 

  

	 	15.	Return the system to on-line status. Refer to the appropriate Systems Operation, Testing and Adjusting. 

  

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 Execution Copy 
  
 EXHIBIT E 
 [ * ] 
  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

 E-1 

 Execution Copy 
  
 EXHIBIT F: SHIPPING REQUIREMENTS FOR WARRANTY RECALL PARTS 
  

					
	Packaging Rules:	  	Return parts must be properly packaged to prevent any shipment damage. The use of original shipping containers is preferred. All PWAs and semiconductor parts must be placed in an
ESDS bag when packaged for return shipment.
			
	Shipping Rules:	  	Domestic*	  	 Standard Ground Freight
 No Overnight
Shipments***
 No Collect Shipments

			
		  	International**	  	 Standard Air Freight
 No Overnight
Shipments***
 No Collect Shipments

		
	Notes:	  	
		
		  	* All domestic parts returns must be accompanied by a Parts Return Tag.
		
		  	** International parts returns must be accompanied by a copy of the warranty order. All international parts shipments must be claimed as a warranty replacement part to avoid
importation fees.
		
		  	*** Overnight shipping will not be accepted without prior written approval from Active Power’s Service Manager, Director of Service, or VP of Service.

  

 F-1 

 Execution Copy 
  
 EXHIBIT G 
 [ * ] 
  

	*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portion.

  

 G-1

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