Document:

Exhibit 10.16

 

	

    	
Smith Executive Employment Agreement
    

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as a deed and is entered into as of this 8th day of November, 2011 (the “Effective Date”), by and between Smith Electric Vehicles Europe Limited (the “Company”) and Robin Mackie, of ***** (“Employee”).

 

W I T N E S S E T H:

 

WHEREAS, Company is in the business of manufacturing and distributing electric delivery vehicles; and

 

WHEREAS, Company and Employee desire to enter into this Agreement to establish certain terms of Employee’s employment with Company.

 

NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein, and other good and valuable consideration, the receipt, and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Employment, Duties and Term.

 

(a)                                  Company hereby employs Employee as Chief Technology Officer and Senior Vice President, and Employee hereby accepts such employment with Company on the terms and conditions set forth in this Agreement.  In such capacity, Employee shall perform the duties appropriate to such office or position, and such other duties and responsibilities as are assigned to him from time to time by the Board of Directors of Company (the “Board”), the Managing Director of Company or the President and Chief Executive Officer (the “President”) of Smith Electric Vehicles US Corp (the “Parent”).  During the term of his employment with Company, Employee shall devote the whole of his time, attention and abilities to the business of Company, and, as directed by Company, to the business of Parent and any other Group Company, and shall use his best efforts to perform his duties under this Agreement for and on behalf of Company (and Parent or other Group Company, as applicable), and shall not work for anyone else without the express written consent of Company or engage in any activity in competition with or detrimental to Company or any other Group Company. Employee shall follow in all material respects all rules, policies and programmes adopted from time to time by Company (and Parent or other Group Company, as applicable) and applicable to Employee. “Group Company” means any company of which Company is a subsidiary (its holding company (including, without limitation, Parent)), any other subsidiary of its holding company and any company which is for the time being Company’s subsidiary in any jurisdiction in any part of the world, as such terms are defined in section 1159 of the Companies Act 2006, and “Group” shall mean all Group Companies jointly and severally.

 

(b)                                 This Agreement shall commence on the Effective Date and end when it is terminated in accordance with Paragraph 3 of this Agreement (the “Termination Date”).  The

 

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period from the Effective Date to the Termination Date shall be referred to in this Agreement as the “Term.”

 

(c)                                  Employee’s normal place of work is The Vigo Centre, Birtley Road, Washington, Tyne & Wear NE38 9DA or such other place which Company may reasonably require for the proper performance and exercise of his duties, which shall include, without limitation, facility locations. Employee agrees to travel on Company’s or other Group Company’s business (both within the United Kingdom and abroad) as may be required for the proper performance of his employment duties.  During this Agreement, Employee may be required to work outside the United Kingdom for continuous periods of more than two months.  Employee will be required to work at 12200 N.W. Ambassador Drive, Kansas City, Missouri, United States of America for extended periods of time.

 

(d)                                 Employee’s normal working hours shall be 08.00 to 16.15 on Mondays to Thursdays and 08.00 to 15.00 on Fridays, with 30 minutes for lunch, and such additional hours as are necessary for the proper performance of his duties. Employee acknowledges that he shall not receive further remuneration in respect of such additional hours.  Employee agrees that, by virtue of Employee’s position, Employee’s working time cannot be measured and, accordingly, his employment falls within the scope of regulation 20 of the Working Time Regulations 1998.

 

(e)                                  Employee is subject to Company’s disciplinary and grievance procedures, copies of which are available from the HR Manager. These procedures do not form part of Employee’s contract of employment. If Employee wishes to appeal against a disciplinary decision he may apply in writing to the HR Manager in accordance with Company’s disciplinary procedure. Company may at any time suspend Employee during any period in which Company is carrying out a disciplinary investigation into any alleged acts or defaults of Employee. During any period of suspension Employee shall continue to receive his salary and contractual benefits. If Employee wishes to raise a grievance, he may apply in writing to the HR Manager in accordance with Company’s grievance procedure.

 

(f)                                    Employee consents to any Group Company processing data relating to the Employee for legal, personnel, administrative and management purposes and in particular to the processing of any sensitive personal data (as defined in the Data Protection Act 1998) relating to Employee, including, as appropriate: (1) information about the Employee’s physical or mental health or condition in order to monitor sick leave and take decisions as to the Employee’s fitness for work; (2) Employee’s racial or ethnic origin or religious or similar information in order to monitor compliance with equal opportunities legislation;  (c) information relating to any criminal proceedings in which Employee has been involved for insurance purposes and in order to comply with legal requirements and obligations to third parties. Company may make such information available to any other Group Company, those who provide products or services to any Group Company (such as advisers and payroll administrators), regulatory authorities, potential or future employers, governmental or quasi-governmental organisations and potential purchasers of

 

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Company or any other Group Company or the business in which Employee works. Employee consents to the transfer of such information to any Group Company and any Group Company’s business contacts outside the European Economic Area in order to further their business interests even where the country or territory in question does not maintain adequate data protection standards.

 

(g)                                 There is no collective agreement which directly affects Employee’s employment.

 

2.                                       Compensation.

 

(a)                                  Base Compensation.  In consideration of the services rendered by Employee, and subject to the terms and conditions hereof, Company will pay Employee during the Term of this Agreement a base salary of $325,000.00 (USD) per year (the “Base Compensation”).  The Base Compensation shall accrue from day to day and be payable monthly in arrears on or about the 21st of each month directly into Employee’s bank or building society.  Company will withhold from all compensation payable to Employee all applicable deductions, including, without limitation, in respect of tax and National Insurance Contributions.  Company may deduct from Base Compensation, or any other sums owed to Employee, any money owed to Company by Employee.

 

(b)                                 Bonus.  Subject to the terms and conditions hereof and based on Employee’s performance during a fiscal year, during the Term, Employee shall be eligible to earn an annual performance bonus of up to an amount determined by the President, the Board and/or Parent’s Board of Directors (or a Board committee of either entity), as applicable (the “Performance Bonus”).  Eligibility for consideration for a Performance Bonus and the criteria applicable to Employee’s Performance Bonus opportunity for any given fiscal year (including the fiscal year in which the Effective Date occurs) shall be determined by the President, the Board and/or Parent’s Board of Directors (or a Board committee of either entity), as applicable, not later than the end of the first quarter of the relevant performance year (except to the extent Employee’s employment commences after the first quarter of such year).  Payment of any Performance Bonus shall be made based on the determination of the President, the Board and/or Parent’s Board of Directors (or a Board committee of either entity), as applicable, regarding Employee’s satisfaction of the criteria applicable to such Performance Bonus opportunity.  Any payment in respect of a Performance Bonus shall be subject to tax and other standard payroll withholdings and shall be paid within thirty (30) days following the final determination of the amount of the Performance Bonus to be paid.

 

(c)                                  Equity Interests.  Employee shall be eligible to participate in the equity incentive programs offered by Company or Parent as permitted by law and the applicable program documents.  In the event Employee is entitled to participate in such programs, Employee shall comply with the applicable program documents and all laws and regulations governing said programs, and agrees to execute any instruments or documents and take all other actions

 

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reasonably requested by Company or Parent, as applicable, in order to affect the issuance and, as applicable, repurchase or cancellation, of securities issued to Employee thereunder.

 

(d)                                 Vacation.  Employee will be entitled to 25 days’ vacation per year together with the usual public holidays in England and Wales; provided, however, except as otherwise provided by applicable law: (1) Company shall not pay Employee any additional compensation for any vacation time which is not used prior to the end of a calendar year or any earlier termination of employment, and (2) any vacation time which is not used prior to the end of a calendar year may not be used in any subsequent year.  If during the Term, Employee is employed by Company for only part of a calendar year, Employee shall be entitled to a pro rata number of vacation days during such partial calendar year. Company’s holiday year shall run from 1 January to 31 December.

 

(e)                                  Benefits.  During the Term, Employee shall be entitled to participate in any employee benefit plans (including retirement, insurance, fringe benefit and other executive benefit plans) generally provided by Company to full-time employees of Company, but only to the extent provided in such employee benefit plans and subject to eligibility requirements of such plans, and for so long as Company provides or offers such benefit plans.  Company reserves the right to modify, amend or terminate such benefit plans at any time without prior notice.  Company will pay for (or reimburse Employee the costs of) Employee’s memberships in social or business clubs, professional associations, and continuing education costs required to maintain professional certifications, to the extent deemed appropriate by the President.  Company will pay 100%, of the cost of employee family health insurance coverage, AD&D, executive level Short and Long Term Disability and term life insurance (up to one (1) times Base Compensation or up to a maximum of $1,000,00.00, whichever is greater); provided, however, that, if the Company determines that its payment of 100% of the cost of any such coverage might cause the applicable plan to provide an impermissibly discriminatory benefit, then, in lieu of paying 100% of the cost of such coverage, the Company will pay the maximum amount that it can pay for the coverage without causing the impermissible discrimination and pay the Executive a cash payment equal to the sum of (1) the difference between the amount that the Company pays for coverage and the actual cost of such coverage and (2) the amount of income and employment taxes that it reasonably anticipates the Executive will owe on the amount paid under this sentence. Employee will be responsible for all income taxes levied against Employee as a result of Company’s provision of any benefits to Employee.  A contracting-out certificate under the Pensions Schemes Act 1993 is not currently in force in respect of Employee’s employment. If the Employee joins the Company’s stakeholders pension scheme (Scheme), the Company shall contribute an amount equal to 12.0% of the Employee’s salary to the Scheme during each year of the Appointment. The Company’s contributions to the Scheme shall be payable in equal monthly instalments in arrears, and shall be subject to the rules of the Scheme and the tax reliefs and exemptions available from HM Revenue & Customs, as amended from time to time.The Employee will have the option to participate in the Scheme or for the Company to contribute in kind (at the 12% rate) to the Employee’s personal pension plan.

 

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During the Term, Employee will be entitled to a car allowance of £1,000 per month (subject to applicable deductions).

 

(f)                                    Expense Reimbursement.  During the Term, Employee shall be entitled to be reimbursed in accordance with Company policies, as adopted from time to time, for all reasonable, ordinary, and necessary expenses incurred by Employee in connection with the performance of Employee’s duties of employment hereunder, including, but not limited to travel, entertainment, professional dues, professional associations, professional education, and subscriptions.

 

3.                                       Termination.

 

(a)                                  Termination Events.  Subject to applicable law, this Agreement and Employee’s employment with Company may be terminated as follows:

 

(i)                                     by Company, immediately and without advance notice, for Cause;

 

(ii)                                  by Company, immediately and without advance notice, upon the death or Disability of Employee;

 

(iii)                               by Company, upon ninety (90) days’ prior written notice to Employee, without Cause;

 

(iv)                              by Employee, immediately and without advance notice, for Good Reason;

 

(v)                                 by Employee, upon thirty (30) days’ prior written notice to Company without Good Reason; or

 

(vi)                              by Employee, immediately and without advance notice, following a Change in Control.

 

(b)                                 Termination Benefits.

 

(i)                                     Subject to Paragraph 3(c) below, within sixty (60) days of termination of this Agreement, Company will pay to Employee a lump sum payment equal to the sum of:

 

(A)                              all accrued but unpaid benefits, reimbursements and Base Compensation owed to Employee as of the date of termination; and

 

(B)                                if this Agreement is terminated under clause (ii), (iii), (iv) or (vi) of Paragraph 3(a) above, (x) 100% of Employee’s then current annual Base

 

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Compensation, and (y) the amount of any Performance Bonus that has been earned in a prior year but remains unpaid as of the date of termination.

 

(ii)                                  If this Agreement is terminated under clause (ii), (iii), (iv) or (vi) of Paragraph 3(a), subject to Paragraph 3(c) below, Employee shall be entitled to a pro rated portion of the Performance Bonus, if any, Employee would have received for the fiscal year in which this Agreement is terminated had Employee remained employed with Company.  Such payment, if any, shall be paid as and when Performance Bonuses are paid by Company for such fiscal year.

 

(iii)                               If this Agreement is terminated for any reason, Company or Parent, as applicable, shall continue to provide D&O tail insurance coverage to Employee for the proscribed period provided in the D&O insurance policy in force as of the date of such Agreement termination.

 

(c)                                  Release.  All payments and benefits provided to Employee under Paragraph 3(b) (other than the payments and benefits provided under Paragraph 3(b)(i)(A)) above are conditioned on Employee executing and not revoking a release of claims against Company, Parent and all other Group Companies, in substantially the form set forth as Exhibit A hereto, which release must be executed, not be revoked and have become irrevocable within twenty-eight (28) days of Employee’s termination of employment.  All payments and benefits provided under Paragraph 3(b) (other than the payments and benefits provided under Paragraph 3(b)(i)(A)) above shall be forfeited if the Employee does not timely execute (or subsequently revokes) the release.

 

(d)                                 Certain Defined Terms.                      For purposes of this Agreement, the following capitalized terms shall have the meaning set forth below:

 

(i)                                     “Cause” means the good faith and reasonable determination of the Board that Employee has:

 

(A)                              without limitation, been grossly negligent or engaged in willful or gross misconduct, fraud, embezzlement, acts of dishonesty or a conflict of interest (to the extent such conflict of interest materially harms Company or any other Group Company), in each case, relating to the affairs of Company or any other Group Company; provided, that “Cause” shall not be deemed to exist under this clause (A) unless Employee has been given written notice specifying the act or omission constituting Cause and Employee has failed to cure such act or omission within thirty (30) days after receiving such notice; provided further, that such notice and cure right shall not be required to be given if the act or omission giving rise to the determination that Cause exists is not, in the reasonable determination of the Board, susceptible of cure;

 

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(B)                                been convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed) or any offence under any regulation or legislation relating to insider dealing; or

 

(C)                                engaged in a willful violation of any federal, state or other securities laws in any jurisdiction.

 

(ii)                                  “Change in Control” shall be deemed to have occurred upon any of the following events:

 

(A) individuals who, on the Effective Date, constitute the Board of Directors of Parent (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board; provided, however, that any person becoming a director after the Effective Date and whose appointment, election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors of Parent shall be an Incumbent Director; or

 

(B) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934)  or any successors thereto is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)  or any successor thereto, directly or indirectly, of securities of Parent representing 50% or more of the combined voting power of Parent’s then outstanding voting securities; or

 

(C) the consummation of a merger or consolidation of Parent with any other corporation, other than a merger or consolidation (A) which would result in all or a portion of the voting securities of Parent outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Parent or such surviving entity outstanding immediately after such merger or consolidation or (B) by which the corporate existence of Parent is not affected and following which Parent’s chief executive officer and directors retain their positions with Parent (and constitute at least a majority of the Board of Directors of Parent); or

 

(D) approval by the stockholders of Parent of a complete liquidation or dissolution of Parent.

 

(iii)                               “Disability” has the meaning set forth in Parent’s long-term disability plan as in effect as of the date on which a “Disability” is claimed hereunder.

 

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(iv)                              “Good Reason” means:

 

(A)                              a material diminution in Employee’s title or responsibilities not otherwise agreed to in writing by Employee;

 

(B)                                a material reduction in Employee’s Base Compensation not otherwise agreed to in writing by Employee;

 

(C)                                a move of Company’s corporate office of more than 100 miles from its location on the Effective Date, or a move of more than 100 miles of any Company facility at which the Employee is regularly required to provide substantial services;

 

(D)                               Company’s failure to satisfy any payment obligation under this Agreement; or

 

(E)                                 a material breach by Company of this Agreement (other than a failure to satisfy any payment obligation).

 

A termination for Good Reason hereunder shall not be effective until Employee has first given Company written notice specifying such act or omission giving rise to the alleged Good Reason event and Company has failed to cure such act or omission within thirty (30) days after receiving such notice. Employee shall provide Company with such written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances, otherwise, any claim of such circumstances as “Good Reason” shall be deemed irrevocably waived by Employee.

 

4.                                       Confidential Relationship and Confidential Information.

 

(a)                                  Confidential Information.  Employee acknowledges that, during the course of his employment, he will have access to information relating to Company’s and Parent’s businesses that provides Company and Parent with a competitive advantage, that is not generally known by persons not employed by or providing services for Company or Parent and that could not easily be determined or learned by someone outside Company or Parent (“Confidential Information”).  Such Confidential Information includes both written information and information not reduced to writing and includes, without limitation:  (i) the identity of Company’s and Parent’s customers, suppliers and other business partners and prospective customers, suppliers and other business

 

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partners, including names, addresses and phone numbers, the characteristics, preferences and investment strategies of those parties, the types of services provided to and ordered by those third parties; (ii) Company’s and Parent’s internal corporate policies related to those services, price lists, fee arrangements and terms of dealings with such third parties; (iii) the identity of Company’s and Parent’s sources in the field and off-site consultants and the terms and conditions on which Company and Parent transact business with those sources and consultants; (iv) financial and sales information, including Company’s and Parent’s financial condition and performance and the compensation paid to other employees of Company and Parent; (v) information relating to inventions, discoveries and formulas, records, research and development data, trade secrets, processes, other methods of doing business, forecasts and business and marketing plans of Company and Parent and (vi) all of Company’s and Parent’s Intellectual Property Rights (as hereinafter defined).  Employee acknowledges that Company and Parent have gathered such information at great cost and over time and that such information is not generally known and cannot easily be obtained from publicly available sources.

 

(b)                                 Notwithstanding the foregoing, the term “Confidential Information” shall not include, and Employee shall not have any obligations under this Paragraph 4 with respect to, any information which (i) is or becomes publicly known through no unlawful or other wrongful act or omission by Employee or any other person or entity; (ii) becomes known to Employee from a third party having the legal right to make an unrestricted disclosure without a breach of any obligation of confidentiality to Company or Parent by Employee or such third party; (iii) is voluntarily disclosed to the public or competitors of Company or Parent by Company or Parent (except where such public disclosure has been made by Employee or another without authorization); (iv) has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means; or (v) is a protected disclosure within the meaning of section 43A of the Employment Rights Act 1996.

 

(c)                                  Restriction on Use and Disclosure of Confidential Information.  Employee shall, both during and after his employment by Company, hold all Confidential Information in a fiduciary capacity.  Employee shall not directly or indirectly use or disclose such Confidential Information except as is (i) necessary for the good faith performance of his services for Company, or, as directed by the Company, for Parent, (ii) reasonably necessary, in the opinion of counsel to Company or Parent (or, in respect of claims by Company or Parent against Employee, counsel to Employee), to respond to or defend any claim(s) against Employee or Company or Parent or (iii) required to be disclosed by court order, governmental action, legal process or by applicable law; provided, however, that if disclosure is required under this clause (iii), Employee shall first give written notice thereof to Company and Parent and shall fully cooperate (at Company’s or Parent’s cost and expense) in Company’s or Parent’s attempt to obtain a protective order or other waiver or exclusion from the court or other applicable governmental or other authority.

 

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(d)                                 Ownership of Confidential Information.  Employee acknowledges that any documents received or created by him during the course of his employment with Company that contains or pertains to Confidential Information are and will remain the sole property of Company or Parent, as applicable.  Such documents include, without limitation, files, memoranda, correspondence, reports, client records, contact lists and compilations of information; however such information may be recorded and whether on hard copy or on a computer disk, magnetic disk, CD-ROM, flash drive, or other electronic storage device.  Employee shall return all such documents (including all copies) promptly upon the termination of his employment and shall not, during and after his employment, disclose those documents to anyone outside Company or use those documents for any purpose other than the advancement of Company’s or Parent’s interests, or as reasonably necessary, in the opinion of counsel to Company or Parent (or, in respect of claims by Company or Parent against Employee, counsel to Employee), to respond to or defend any claim(s) against Employee or Company or Parent.

 

5.                                       Restrictive Covenants.

 

(a)                                  Noncompetition; Non-solicitation.

 

(i)                                     Employee acknowledges that Company and Parent are engaged in a highly competitive business on a world-wide scale and that, by virtue of the position in which Employee is employed, his engaging in or working for or with any business which is directly competitive with Company or Parent or any other Group Company would cause Company or Parent or any such Group Company great and irreparable harm.  Employee also acknowledges that, by virtue of his employment, he has gained or will gain knowledge of the identity, characteristics, and preferences of Company’s or Parent’s customers, suppliers and other business partners, among other Confidential Information, and that Employee would inevitably have to draw on such Confidential Information if he were to solicit or service Company’s or Parent’s or any other Group Company’s customers, suppliers and other business partners on behalf of a competing business enterprise.

 

(ii)                                  Employee agrees that “Restricted Business” at any date means the goods, products, and/or services of the type provided, marketed, sold, produced and/or developed by Company or Parent or any other Group Company during the twelve (12) month period ending on that date for or concerning commercial all electric vehicles.  The “Territory” for the purposes of this Paragraph 5 shall be anywhere in (x) the World, (y) North America, (z) the United States and (a) the United Kingdom.  The parties acknowledge that the geographical limitations contained in (x), (y), (z) and (a) are separate  covenants and are reasonable based on the world-wide nature of Group’s business.

 

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(iii)          Accordingly, Employee agrees that during Employee’s employment with Company, whether or not under this Agreement, and thereafter for a period of twelve (12) months (the “Noncompetition Period”) he will not within the Territory:

 

(A)          directly or indirectly, engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing, or control of or be employed by, associated with or in any manner connected with any entity or organization engaged in Restricted Business in competition with Company, Parent or any other Group Company;

 

(B)          directly or indirectly approach, advise, solicit or deal with, in competition with Company, Parent or any other Group Company, any entity or organization engaged in Restricted Business;

 

(C)          directly or indirectly, for the purpose of competing with Company, Parent or any other Group Company:

 

(1)           induce or procure or attempt to induce or procure any person who is on, or was during the twelve (12) months preceding, the date of the termination of Employee’s employment with Company, an officer or management employee or key consultant of Company, Parent or any other Group Company with whom Employee had material dealings during the twelve (12) months preceding the date of the termination of Employee’s employment with the Company, to leave his/her employment or service with Company, Parent or any other Group Company (whether or not that person would commit any breach of his or her employment or appointment by reason of leaving the service of Company, Parent or any other Group Company);

 

(2)           accept into employment or otherwise engage or use the services of any person who is on, or was during the twelve (12) months preceding, the date of the termination of Employee’s employment with Company, an officer or management employee or key consultant of Company, Parent or any other Group Company with whom Employee had material dealings during the twelve (12) months preceding the date of the termination of Employee’s employment with the Company; or

 

(3)           induce or procure or attempt to induce or procure any person or entity who is on, or was during the twelve (12) months preceding, the date of the termination of Employee’s employment with Company, a customer of Company, Parent or any other Group Company (and with whom Employee had material dealings during the twelve (12)

 

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months preceding the date of the termination of Employee’s employment with Company) to purchase commercial all electric, hybrid, or alternative fuel trucks from a person or entity other than Company, Parent or any other Group Company;

 

(D)          provide technical, commercial or professional advice to any business or concern engaged in Restricted Business in competition with Company, Parent or any other Group Company;

 

(E)           interfere or seek to interfere with the supply of any components, materials, goods or services to Company, Parent or any other Group Company (or with the terms of any such supply) in relation to which the Employee had material dealings during the twelve (12) months preceding the date of the termination of Employee’s employment with Company; or

 

(F)           disparage Company, Parent or any other Group Company, or any of their respective directors, officers, employees, the Company, Parent or Group brand or its or their products and services.

 

(iv)          None of the restrictions in Paragraph 5(a) shall prevent Employee from:

 

(A)          holding an investment by way of shares or other securities of not more than 5% of the total issued share capital of any company, whether or not it is listed or dealt in on a recognised stock exchange;

 

(B)          being engaged or concerned in any business concern insofar as Employee’s duties or work shall relate solely to geographical areas where the business concern is not in competition with any Restricted Business; or

 

(C)          being engaged or concerned in any business concern, provided that Employee’s duties or work shall relate solely to services or activities of a kind with which Employee was not concerned to a material extent in the 12 months prior to the termination of his employment with Company.

 

(v)           Employee will, at the request and expense of Company, enter into a separate agreement with any Group Company in which he agrees to be bound by restrictions corresponding to those restrictions in this Paragraph 5(a) (or such of those restrictions as may be appropriate) in relation to that Group Company.

 

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(b)           Intellectual Property.

 

(i)            Employee acknowledges that all Employment IPRs, Employment Inventions and all materials embodying them shall automatically belong to Company to the fullest extent permitted by law. To the extent that they do not vest in Company automatically, Employee holds them on trust for Company.

 

(ii)           Employee acknowledges that, because of the nature of his duties and the particular responsibilities arising from the nature of his duties, he has, and shall have at all times while he is employed by Company, a special obligation to further the interests of Company.

 

(iii)          To the extent that legal title in any Employment IPRs or Employment Inventions does not vest in Company by virtue of Paragraph 5(b)(i), Employee agrees, immediately upon creation of such rights and Inventions, to offer to Company in writing a right of first refusal to acquire them on arm’s length terms to be agreed between the parties. Employee agrees that the provisions of this Paragraph 5(b) shall apply to all Employment IPRs and Employment Inventions offered to Company under this Paragraph 5(b) until such time as Company has agreed in writing that Employee may offer them for sale to a third party.

 

(iv)          Employee agrees:

 

(A)          to give Company full written details of all Employment Inventions which relate to or are capable of being used in the business of any Group Company promptly on their creation;

 

(B)          at Company’s request and in any event on the termination of his employment to give to Company all originals and copies of correspondence, documents, papers and records on all media which record or relate to any of the Employment IPRs;

 

(C)          not to attempt to register any Employment IPR nor patent any Employment Invention unless requested to do so by Company; and

 

(D)          to keep confidential each Employment Invention unless Company has consented in writing to its disclosure by Employee.

 

(v)                                       Employee waives all his present and future moral rights which arise under the Copyright Designs and Patents Act 1988, and all similar rights in other jurisdictions relating to any copyright which forms part of the Employment IPRs, and agrees not to support, maintain nor permit any claim for infringement of moral rights in such copyright works.

 

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(vi)                                      Employee acknowledges that, except as provided by law, no further remuneration or compensation other than that provided for in this agreement is or may become due to Employee in respect of his compliance with this Paragraph 5(b). This Paragraph 5(b) is without prejudice to Employee’s rights under the Patents Act 1977.

 

(vii)                                     Employee undertakes to use his best endeavours to execute all documents and do all acts both during and after his employment by Company as may, in the opinion of Company be necessary or desirable to vest the Employment IPRs in Company, to register them in the name of Company and to protect and maintain the Employment IPRs and the Employment Inventions. Such documents may, at Company’s request, include waivers of all and any statutory moral rights relating to any copyright works which form part of the Employment IPRs. Company agrees to reimburse Employee’s reasonable expenses of complying with this Paragraph 5(b).

 

(viii)                                    Employee agrees to give all necessary assistance to Company to enable it to enforce its Intellectual Property Rights against third parties, to defend claims for infringement of third party Intellectual Property Rights and to apply for registration of Intellectual Property Rights, where appropriate throughout the world, and for the full term of those rights.

 

(ix)                                      Employee hereby irrevocably appoints Company to be his attorney to execute and do any such instrument or thing and generally to use his name for the purpose of giving Company or its nominee the benefit of this Paragraph 5(b). Employee acknowledges in favour of a third party that a certificate in writing signed by any director or the secretary of Company that any instrument or act falls within the authority conferred by this Paragraph 5(b) shall be conclusive evidence that such is the case.

 

(x)           For purposes of this Agreement, the following capitalized terms shall have the meaning set forth below:

 

(A)          “Employment IPRs” means Intellectual Property Rights created by Employee in the course of his employment with Company (whether or not during working hours or using Company premises or resources).

 

(B)          “Employment Inventions” means any Invention which is made wholly or partially by Employee at any time in the course of his employment with Company (whether or not during working hours or using Company premises or resources, and whether or not recorded in material form).

 

(C)          “Intellectual Property Rights” or “IPR” means patents, rights to Inventions, copyright and related rights, trade marks, trade names and domain

 

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names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

 

(D)          “Invention” means any invention, idea, discovery, development, improvement or innovation, whether or not patentable or capable of registration, and whether or not recorded in any medium.

 

6.             Release.  Employee acknowledges that Company and Parent may use the image, likeness, voice, or other characteristics of Employee in the services, materials, computer programs, marketing and advertising and other deliverables created or used or distributed by or on behalf of Company and Parent in the course of their businesses.  Employee hereby consents to the use of such characteristics of Employee by Company and Parent and releases Company and Parent, and each of their respective directors, officers, employees, agents, contractors, licensees and assigns from any claims which Employee has or may have for invasion of privacy, right of publicity, defamation, copyright infringement, or any other causes of action arising out of the use, adaptation, reproduction, distribution, broadcast, or exhibition of such characteristics.

 

7.             Enforcement.  Employee acknowledges that the restrictions contained in Paragraphs 4 and 5 are fair, reasonable, and necessary for the protection of the legitimate business interests of Company and any Group Company and that Company and any such Group Company will suffer irreparable harm in the event of an actual or threatened breach of any such provision by Employee.  Employee therefore consents to the entry of a restraining order, preliminary injunction, or other court order to enforce such provisions and expressly waives any security that might otherwise be required in connection with such relief.  Employee also agrees that any request for such relief by Company or any Group Company shall be in addition and without prejudice to any claim for monetary damages which Company or any Group Company might elect to assert.  Employee agrees that the terms of Paragraphs 4 and 5 are in addition to, and not in limitation of, any other restrictive covenants agreed to by Employee with respect to Company and any Group Company.

 

8.             No Conflicting Obligations.  Employee represents and warrants to Company that he is not now under any obligation of a contractual or other nature to any person or entity which is inconsistent or in conflict with this Agreement, or which would prevent, limit or impair in any way the performance by him of his obligations hereunder. Employee warrants that he is entitled

 

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to work in the United Kingdom without any additional approvals and will notify Company immediately if he ceases to be so entitled during the Term.

 

9.             Governing Law and Jurisdiction.  This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement and no person other than Employee, Company and any Group Company shall have any rights under it.

 

10.          Severability.  If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by law.  If the final judgment of a court of competent jurisdiction declares that any provision of this Agreement, including, without limitation, any provision of Paragraph 4, 5 or 6 hereof, is invalid or unenforceable, the parties hereto agree that the court making the determination of invalidity or unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or area of the provision, to delete specific words or phrases and to replace any invalid or unenforceable provision with a provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable provision, and this Agreement shall be enforced as so modified.

 

11.          Survivability.  The provisions of this Agreement which by their terms call for performance subsequent to termination of Employee’s employment, or of this Agreement, shall so survive such termination.

 

12.          No Defense.  The existence of any claim, demand, action or cause of action of Employee against Company, whether or not based upon this Agreement, will not constitute a defense to the enforcement by Company (or any other applicable Group Company) of any covenant or agreement of Employee contained in Paragraphs 4 and 5 herein.

 

13.          No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation, or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

 

16

 

14.          Source of Payments.  All payments provided under this Agreement shall be paid in cash from the general funds of Company, and no special or separate fund shall be established and no other segregation of assets shall be made to assure payment.

 

15.          Tax Withholding.  Company may withhold from any benefits payable under this Agreement (including with respect to the Performance Bonus whether in cash or in stock shares) all federal, state, city or other taxes or social security deductions as Company shall reasonably determine are required pursuant to any law or governmental regulation or ruling.

 

16.          Notices.  Any notices, demands and communications under this Agreement shall be in writing and shall be deemed to have been duly given and received (a) if delivered personally or actually received, (b) three (3) business days after being mailed, certified mail, return receipt requested, (c) one (1) business day after being sent by a nationally recognized overnight delivery service, or (d) if sent via facsimile or similar electronic transmission during normal business hours, as evidenced by mechanical confirmation of such fax or other electronic transmission, to the parties as set forth below or at such other address as may have been furnished by a party to the other party in accordance with the foregoing:

 

	
 
    	
If to Company, to:
    	
Smith Electric Vehicles Europe Limited
    
	
 
    	
 
    	
Managing Director
    
	
 
    	
 
    	
Vigo Centre
    
	
 
    	
 
    	
Birtley   Road
    
	
 
    	
 
    	
Washington
    
	
 
    	
 
    	
Tyne &   Wear
    
	
 
    	
 
    	
NE38   9DA
    
	
 
    	
 
    	
 
    
	
 
    	
With a copy (which shall not constitute   notice) to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Smith   Electric Vehicles US Corp
    
	
 
    	
 
    	
12200   N.W. Ambassador Drive, Suite 326
    
	
 
    	
 
    	
Kansas   City, Missouri 64163 USA
    
	
 
    	
 
    	
Attention:   General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
If to Employee, to:
    	
Robin Mackie
    
	
 
    	
 
    	
*****
    
	
 
    	
 
    	
*****
    

 

17.          Assignment.  This Agreement is a personal contract requiring the provision of unique services by Employee, and Employee’s rights and obligations hereunder may not be sold, transferred, assigned, pledged, or hypothecated by Employee.  In the event of any attempted assignment or transfer of rights hereunder by Employee contrary to the provisions hereof (other than as may be required by law), Company will have no further liability for payments hereunder.

 

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The rights and obligations of Company hereunder will be binding upon and run in favor of the successors and assigns of Company.

 

18.          Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.  Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

 

19.          Complete Understanding; Amendments; Waiver.  This Agreement  and the documents referenced herein constitute the complete understanding between the parties with respect to the employment of Employee and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, and no statement, representation, warranty or covenant has been made by any party with respect thereto except as expressly set forth herein, and all prior employment agreements or arrangements, whether oral or written, between Company and/or Parent and Employee with respect to the performance of any services by Employee are hereby terminated.  This Agreement shall not be altered, modified or amended (except as provided in Paragraph 10 hereof) or terminated except by a written instrument signed by each of the parties hereto.  No waiver of any term or provision hereof, or of the application of any such term or provision to any circumstances, shall be effective or binding on any party unless it is in writing signed by the party charged with giving such waiver.  A waiver by either party hereto of any breach hereunder by the other party shall not operate as a waiver of any other breach, whether similar to or different from the breach waived, and no waiver by any party hereto of a breach hereunder by the other party on any occasion shall constitute a waiver of the same breach on any subsequent occasion.  Except as expressly provided herein, no delay on the part of Company, Parent or any other Group Company or Employee in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, no single or partial exercise by Company, Parent or any other Group Company or Employee of any such right or remedy shall preclude other or further exercise thereof and all remedies hereunder or by operation of law or equity shall be cumulative and not exclusive.

 

20.          Titles and Captions; Construction.  All paragraph titles or captions in this Agreement are for convenience only and in no way define, limit, extend or describe the scope, meaning or intent of any provision hereof.  When used in this Agreement, (a) words denoting the singular include the plural and vice versa, (b) his/her, her or its shall include all genders, (c) when calculating the period of time within or following which any act is to be done or notice given or other steps taken, the date which is the reference day in calculating such period shall be excluded and if the last day of such period is not a “business day” in the United Kingdom, then the period shall end on the next day which is a business day in United Kingdom, and (d) any reference to

 

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“herein,” “hereof,” “hereby,” “hereunder” or words of similar import shall mean and refer to this Agreement as a whole and not to any particular part hereof. A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

21.          Notification of New Employer.  In the event that Employee is no longer an employee of Company, Employee consents to notification by Company to Employee’s new employer or its agents regarding Employee’s rights and obligations under this Agreement.

 

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This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.

 

 

	
Executed   as a deed by Smith Electric
    	
 
    	
/s/   Bryan Hansel
    
	
Vehicles   Europe Limited acting by
    	
 
    	
Bryan   Hansel, Director
    
	
Bryan   Hansel, a director
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed   as a deed by Robin Mackie,
    	
 
    	
/s/   Robin Mackie
    
	
in   the presence of:
    	
 
    	
Robin   Mackie
    
	
 
    	
 
    	
 
    
	
/s/   B. Kevin Neal
    	
 
    	
 
    
	
Signature   of witness
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
B.   Kevin Neal
    	
 
    	
 
    
	
Print   name of witness
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
12200   N.W. Ambassador Dr.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Kansas   City, MO 64163
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address   of witness
    	
 
    	
 
    

 

20

 

EXHIBIT A

 

 

DATED                 20[   ]

 

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT

 

 

(1)           SMITH ELECTRIC VEHICLES EUROPE LIMITED

 

(2)           SMITH ELECTRIC VEHICLES CORP.

 

(3)           ROBIN MACKIE

 

 

 

COMPROMISE AGREEMENT

 

 

 

THIS AGREEMENT is made on                                                        20[    ]

 

BETWEEN:

 

1.             SMITH ELECTRIC VEHICLES EUROPE LIMITED (Company No. 07472318) whose registered office is at the Vigo Centre, Birtley Road, Washington, Tyne & Wear NE38 9DA (the “Company”);

 

2.             SMITH ELECTRIC VEHICLES CORP. whose principal place of business is at 12200 N.W. Ambassador Drive, Suite 326, Kansas City, Missouri 64143 (the “Parent”) (together with the Company, the “Companies”);

 

3.             ROBIN MACKIE of [Address] (the “Employee”).

 

1.             BACKGROUND

 

1.1           The Employee’s employment with the Company [terminated on] OR [will terminate on] [DATE] (the “Termination Date”) [by reason of redundancy] OR [by reason of the Company terminating the Employee’s employment] OR [by reason of the Employee’s resignation] OR [by mutual agreement].

 

1.2           The Companies and the Employee have entered into this agreement (the “Agreement”) to record and implement the terms on which they have agreed to settle any claims which the Employee has or may have in connection with the Employee’s employment or termination or otherwise against the Companies or any of their directors, officers or employees whether or not those claims are, or could be, in the contemplation of the parties at the time of signing this Agreement.

 

1.3           The parties intend this Agreement to be an effective waiver of all and any such claims and to satisfy the conditions relating to compromise agreements in the relevant legislation.

 

2.             SALARY AND BENEFITS TO TERMINATION DATE

 

2.1           The Employee [was] OR [will be, within 60 days of the Termination Date,] paid all outstanding salary and contractual benefits up to and including the Termination Date (subject to deduction of income tax and employee National Insurance contributions).

 

2.2           The Employee [has no outstanding accrued holiday entitlement] OR [will be paid, within 60 days of the Termination Date, £[·] (subject to deduction of income tax and employee National Insurance contributions) for [NUMBER] days accrued but unused holiday entitlement at the Termination Date] OR [must take any outstanding holiday entitlement before the Termination Date].

 

2.3           The Company confirms that it shall reimburse the Employee in the usual way for any such expenses properly incurred and submitted in accordance with its expenses policies and procedures within [seven] days of the Termination Date.

 

2.4           All contractual relations between the Employee and the Companies [ceased] OR [will cease] on the Termination Date except for those obligations expressly created, preserved and amended by this Agreement or for those that survive the Termination

 

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Date in accordance with the Employment Agreement, dated as of 8 November 2011 (the “Employment Contract”), between the Company and Employee.

 

3.             TERMINATION PAYMENT

 

3.1           Subject to and conditional upon the terms of this Agreement (including, without limitation, the conditions in this Clause 3.1), and within 60 days of the latest condition to occur of:

 

3.1.1        the Termination Date;

 

3.1.2        the return by the Employee of all Company or Group property in accordance with Clause 6 below; and

 

3.1.3        receipt by the Company of the Employee’s acceptance of the terms of this Agreement and a certificate from the Employee’s adviser (the “Adviser”) (in the attached form set out in Schedule 1 to this Agreement),

 

and provided the conditions at Clauses 3.1.2, 3.1.3 and 15.3 are met, the Company will pay the Employee:

 

3.1.4        [the sum of £[ONE YEAR’S BASE SALARY] as compensation for termination of employment, in accordance with Paragraph 3(b)(B) of the Employment Contract;]

 

3.1.5        [the sum of £[NUMBER] as payment of [a pro rated portion of] the Employee’s Performance Bonus (as defined in the Employment Contract), in accordance with Paragraph 3(b) of the Employment Contract [(the payments at 3.1.4 and 3.1.5 being][(]the “Termination Payment”);] and

 

3.1.6        the sum of £[100] in consideration of the Employee entering into the ongoing obligations set out in Clause 13 (subject to deduction of income tax and employee National Insurance Contributions).

 

4.             BENEFITS

 

4.1           Except for those benefits expressly created, preserved and amended by this Agreement, the Employee’s entitlement to all Company, Parent or Group benefits [ceased] OR [will cease] on the Termination Date, except that the Companies shall continue to provide D&O tail insurance coverage to Employee for the proscribed period provided in the D&O insurance policy in force as of the Termination Date in accordance with Section 3(b)(iii) of the Employment Contract.

 

4.2           The Company or its advisers shall contact the Employee separately regarding any accrued benefits due under any Company or Group pension scheme (the “Pension Scheme(s)”) following the Termination Date, and the options open to the Employee in relation to the Pension Scheme(s).

 

4.3           The Employee’s entitlements (if any) under Company or Group Company share incentive, bonus and share purchase plans (the “Plans”) are prescribed by the rules of the Plans.

 

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5.             TAXATION

 

5.1           The sums payable or the value of any benefits provided to the Employee under the terms of this Agreement will be subject to appropriate deductions for tax and employee National Insurance Contributions. The Company will make appropriate deductions via PAYE.

 

5.2           The Employee will be responsible for the payment of any further tax and employee National Insurance Contributions that arise in respect of the payments made, or value of the benefits provided to, the Employee pursuant to this Agreement.  The Employee shall indemnify the Companies on a continuing basis in respect of any further income tax or employee National Insurance Contributions in respect of the payments and benefits due in accordance with this Agreement and not otherwise deducted by the Company under PAYE from the payments made in accordance with this Agreement (and any related interest, penalties, costs and expenses save for such that may have been incurred by reason of any default of the Company or any Group Company).

 

5.3           The Company shall give the Employee reasonable notice of any demand for tax which may lead to liabilities for the Employee under this indemnity and shall provide the Employee with reasonable access to any documentation the Employee may reasonably require to dispute such a claim (provided that nothing in this Clause shall prevent the Company from complying with its legal obligations with regard to HM Revenue and Customs or other competent body).

 

6.             RETURN OF COMPANY PROPERTY

 

6.1           The Employee confirms that all credit cards, keys, security passes, computer disks, personal organisers, laptop computers, and all documents and copies, together with all other property belonging to the Company or any other Group Company or relating to its or their business, in the Employee’s possession or control will be returned to the Company on or before the Termination Date.  The Employee will not keep or make a copy of anything referred to in this Clause 6.1.

 

6.2           The Employee shall, prior to the Termination Date, delete irretrievably any information relating to the business of the Company or any other Group Company that the Employee has stored on any magnetic or optical disk or memory device and all matter derived from such sources which is in the Employee’s possession or control outside the premises of the Company.

 

6.3           The Employee shall, if requested to do so by the Company, provide a signed statement that the Employee has complied fully with the Employee’s obligations under this Clause 6 and shall provide it with such reasonable evidence of compliance as may be requested.

 

7.             LEGAL FEES

 

7.1           The Company agrees to pay to the Adviser a fee of up to £500 plus VAT as a contribution towards the Employee’s legal fees incurred exclusively in connection with the termination of the Employee’s employment and the preparation of this Agreement.  This contribution will be paid directly to the Adviser following receipt

 

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by [NAME/POSITION] of a VAT invoice from the Adviser addressed to the Employee but expressed to be payable by the Company.

 

8.             RESIGNATION FROM OFFICE

 

8.1           By signing the enclosed copy of this Agreement, the Employee agrees to resign as a director of the Company and each Group Company of which the Employee is a director with immediate effect.  The Employee undertakes to deliver immediately to the Company or the relevant Group Company signed copies of the resignation letter(s) in the form attached at Schedule 2. The Employee will do such further things as may be necessary to give effect to the resignation(s).

 

9.             REFERENCE

 

9.1           Written reference requests should be addressed to [NAME/POSITION].  [If [NAME/POSITION] receives such a written request for a reference in respect of the Employee, the Company will provide the draft attached at Schedule 3 to this Agreement.  If new facts come to the Company’s attention after the signing of this Agreement which make the agreed reference substantially and materially incorrect, the Company will not be obliged to provide the agreed reference.  The Company will not respond to any oral enquiries.

 

10.          ANNOUNCEMENTS

 

10.1         The Company will make the agreed [internal and external] announcement[s] set out in Schedule 4 to this Agreement and will not make or authorise any further comment regarding the termination of the Employee’s employment with the Company which is inconsistent with such announcement[s].

 

11.          RESTRICTIVE COVENANTS

 

11.1         The Employee affirms and agrees to abide by the restrictive covenants in the Employment Contract including, without limitation, the restrictions in Paragraph 5 of that contract, which will continue in full force and effect.

 

12.          WARRANTIES AND REPRESENTATIONS

 

12.1         The Employee warrants and represents to the Companies that the Employee:

 

12.1.1      is not aware of any circumstances which might give rise to any personal injury claim against the Companies;

 

12.1.2      has not done or failed to do anything of which the Companies are unaware amounting to a repudiatory breach of the express or implied terms of the Employee’s employment with the Company or which, if it had been done or omitted after the execution of this Agreement, would have been in breach of any of the terms of this Agreement;

 

12.1.3      is not aware of any matters relating to any acts or omissions by the Employee or any director, officer, employee or agent of the Company or any other Group Company which if not already disclosed to the Companies would or might affect their decisions to enter into this Agreement, to the terms of this

 

4

 

Agreement or make any of the payments or provide any of the benefits referred to in this Agreement; and

 

12.1.4      has not presented an originating application or claim form to any office of the Employment Tribunals or issued a claim form in the High Court or County Court in connection with this employment or its termination or issued any equivalent or similar proceedings against the Company or any other Group Company in any other jurisdiction, nor has anyone acting on the Employee’s behalf presented nor will they present any such complaint or present or issue an originating application or claim form or issue any equivalent or similar proceedings.

 

13.          CONFIDENTIALITY AND CONDUCT

 

13.1         The Employee accepts and agrees that the Employee’s  express and implied duties relating to Confidential Information, including but not limited to any express terms of the Employment Contract (including any amendments), continue after the Termination Date.  For the avoidance of doubt, the Employee agrees that the Employee shall not at any time disclose to any person or use for the Employee’s own purposes or through lack of diligence cause the unauthorised disclosure of any Confidential Information, although this restriction shall not apply to any Confidential Information coming into the public domain which: (i) is or becomes publicly known through no unlawful or other wrongful act or omission by the Employee or any other person or entity; (ii) becomes known to the Employee from a third party having the legal right to make an unrestricted disclosure without a breach of any obligation of confidentiality to the Company or the Parent by the Employee or such third party; (iii) is voluntarily disclosed to the public or competitors of the Company or the Parent by the Company or the Parent (except where such public disclosure has been made by the Employee or another without authorisation); (iv) has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means; or (v) is a protected disclosure within the meaning of section 43A of the Employment Rights Act 1996.

 

13.2         For the purpose of this Clause 13 “Confidential Information” means information relating to the Company’s and the Parent’s businesses that provides the Company and the Parent with a competitive advantage, that is not generally known by persons not employed by or providing services for the Company or the Parent and that could not easily be determined or learned by someone outside the Company or the Parent.  Such Confidential Information includes both written information and information not reduced to writing and includes, without limitation:  (i) the identity of the Company’s and the Parent’s customers, suppliers and other business partners and prospective customers, suppliers and other business partners, including names, addresses and phone numbers, the characteristics, preferences and investment strategies of those parties, the types of services provided to and ordered by those third parties; (ii) the Company’s and the Parent’s internal corporate policies related to those services, price lists, fee arrangements and terms of dealings with such third parties; (iii) the identity of the Company’s and the Parent’s sources in the field and off-site consultants and the terms and conditions on which the Company and the Parent transact business with those sources and consultants; (iv) financial and sales information, including the Company’s and the Parent’s financial condition and performance and the compensation paid to other employees of the Company and the Parent; (v)

 

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information relating to inventions, discoveries and formulas, records, research and development data, trade secrets, processes, other methods of doing business, forecasts and business and marketing plans of the Company and the Parent; and (vi) all of the Company’s and the Parent’s Intellectual Property Rights (as defined in the Employment Contract). The Employee acknowledges that the Company and the Parent have gathered such information at great cost and over time and that such information is not generally known and cannot easily be obtained from publicly available sources.

 

13.3         The Employee will keep confidential and not disclose (other than in confidence to professional advisers, immediate family or as required by law) the existence or terms of this Agreement and the circumstances leading up to the termination of the Employee’s employment.  The Employee also warrants that if the provisions of this Clause had been in effect during the 12 months before the Termination Date, the Employee would not be in breach.

 

13.4         The Employee agrees and undertakes that the Employee will not:

 

13.4.1      make or publish any statement to any third party (including but not limited to any customers, clients or suppliers of the Company or any other Group Company) concerning the terms of this Agreement; or

 

13.4.2      make or publish any derogatory or disparaging statement concerning the Company, any Group Company or any of its or their directors, officers, employees, agents, products, services, customers, clients or suppliers,

 

provided that the Employee will not be prevented from making such statements/disclosures:

 

(i)            for the purposes of seeking legal or other professional advice from the Adviser in relation to this Agreement provided the Adviser is bound by the same duty of confidence;

 

(ii)           to the proper authorities as required by law; or

 

(iii)          to the Employee’s immediate family provided any such person agrees to maintain confidentiality.

 

13.5         The Employee agrees to be available to, and to cooperate with, the Company, any Group Company or its or their advisers in any internal investigation or administrative, regulatory, judicial or quasi-judicial proceedings.  The Employee acknowledges that this could involve, but is not limited to, responding to or defending any regulatory or legal process, providing information in relation to any such process, preparing witness statements and giving evidence in person on behalf of the Company or any Group Company. The Company (or the relevant Group Company) shall reimburse any reasonable expenses incurred by the Employee as a consequence of complying with the obligations under this Clause, provided that such expenses are approved in advance by the Company (or the relevant Group Company).

 

13.6         The Employee warrants that the Employee has not done or failed to do anything, including, without limitation, published any statement or authorised or permitted

 

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anyone else to do so prior to the date of this Agreement, which would constitute a breach of Clauses 13.1 to 13.4 if it had occurred after the date of this Agreement.

 

14.          FULL AND FINAL SETTLEMENT

 

14.1         The terms under this Agreement are offered without any admission of liability on the part of: (i) the Company; (ii)        the Parent; (iii) any other Group Company; (iv) its or their respective current or former stockholders, members, partners, directors, officers, employees or agents; and (v) the respective successors and assigns of each party described in the preceding clauses (i) through (iv) ((i) — (v) together the “Protected Persons”), and are in full and final settlement of all claims, causes of action, liabilities, debts and demands, of any and every kind in all jurisdictions whether known or not under contract, tort, statute or otherwise which the Employee has at the date of this Agreement or which may arise in future against the Protected Persons arising out of or in connection with or as a consequence of the Employee’s employment and/or its termination (collectively, “Claims”) including, without limitation, any Claim:

 

14.1.1      for unfair dismissal under the Employment Rights Act 1996;

 

14.1.2      for wrongful dismissal or breach of actual or implied contract, including, without limitation, in relation to any alleged or actual bonus, commission, carried interest, profit sharing or incentive payments or other variable forms of remuneration;

 

14.1.3      in relation to any alleged or actual entitlement to shares, stocks or membership in any entity, howsoever granted;

 

14.1.4      for a statutory redundancy payment, under the Employment Rights Act 1996, or any other type of redundancy payment;

 

14.1.5      in relation to unauthorised deductions from wages under the Employment Rights Act 1996;

 

14.1.6      for unlawful detriment under the Employment Rights Act 1996;

 

14.1.7      for working time or holiday pay under the Working Time Regulations 1998 or contractually;

 

14.1.8      for equal pay, equality of terms, less favourable treatment or detriment, direct or indirect discrimination, harassment or victimisation on any unlawful ground, including, but not limited to, sex, pregnancy or maternity status, marital or civil partnership status, race, colour, nationality, ethnic or national origin, disability (including discrimination arising from disability and failure to make reasonable adjustments), part-time or fixed-term status, sexual orientation, transsexualism, age, and religion, religious or philosophical belief or non-belief, under the applicable Act or Regulations set out in Clause 15.1 of this Agreement;

 

14.1.9      in relation to protected disclosures (whistleblowing) under the Employment Rights Act 1996 and under the Public Interest Disclosure Act 1998;

 

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14.1.10     in respect of the infringement of the statutory employment rights set out in the Trade Union and Labour Relations (Consolidation) Act 1992;

 

14.1.11     for failure to comply with obligations under the Human Rights Act 1998;

 

14.1.12     for failure to comply with obligations under the Data Protection Act 1998;

 

14.1.13     in relation to personal injuries of which the Employee is currently aware;

 

14.1.14     in relation to written reasons for dismissal, written particulars or itemised payslips, under the Employment Rights Act 1996;

 

14.1.15     in relation to the national minimum wage, under the National Minimum Wage Act 1998;

 

14.1.16     in relation to the right to be accompanied at disciplinary and grievance meetings, under the Employment Rights Act 1999; and

 

14.1.17     under any of the U.S. Age Discrimination in Employment Act, the U.S. Older Workers Benefit Protection Act, Title VII of the U.S. Civil Rights Act of 1964, the Americans with Disabilities Act, and the U.S. Family and Medical Leave Act; and under any and all laws related to tort claims (including, but not limited to, whistleblower rights, wrongful discharge, and alleged retaliation for asserting any statutory rights),

 

but excluding any claim the Employee may have:

 

(i)            in respect of accrued pension rights under any Pension Scheme;

 

(ii)           for any personal injury of which the Employee is currently unaware; and

 

(iii)          for the sums and benefits due to the Employee pursuant to this Agreement or to enforce any other term of this Agreement.

 

14.2         The Employee hereby covenants and agrees not to threaten, file, institute or join in any action or proceeding to assert any Claim against any Protected Person.  The Employee confirms that the Employee is aware of no other claim or grounds to make a claim against the Protected Persons in relation to any other matters howsoever arising.  The Employee represents and warrants that:

 

14.2.1      the Employee has instructed the Adviser to advise as to whether the Employee has or may have any claims, including statutory claims, against the Protected Persons arising out of or in connection with the Employee’s employment or its termination;

 

14.2.2      the Employee has provided the Adviser with all available information which the Adviser requires or may require in order to advise whether the Employee has any such claims;

 

14.2.3      the Adviser has advised the Employee that on the basis of the information available to the Adviser the Employee’s only claims or particular complaints

 

8

 

against the Protected Persons, whether statutory or otherwise, are those listed in this Clause 14 and that the Employee has no other claim against the Protected Persons, whether statutory or otherwise;

 

14.2.4     the only claims or particular complaints against the Protected Persons, whether statutory or otherwise, are those set in this Clause 14; and

 

14.2.5     the Employee has no other claims against the Protected Persons.

 

14.3        The Employee acknowledges that the Companies are entering into this Agreement in specific reliance on the warranties, representations and waivers in Clauses 12, 13 and 14.

 

14.4        If despite the terms of this Agreement the Employee institutes proceedings against the Company, the Parent, any Group Company or any other Protected Person in connection with the Employee’s employment, its termination or otherwise (which would be in breach of this Agreement) the Employee acknowledges and agrees that at the discretion of the Company the Employee will either repay all of the Termination Payment by way of liquidated damages or that the Termination Payment will be offset against any award of damages or compensation awarded to the Employee.  If the Employee commits any other breach of this Agreement the Companies reserve their rights to bring appropriate legal proceedings against the Employee.

 

15.          COMPLIANCE WITH STATUTORY PROVISIONS

 

15.1        This Agreement satisfies the conditions regulating compromise agreements under the Employment Rights Act 1996, the Disability Discrimination Act 1995, the Sex Discrimination Act 1975, the Race Relations Act 1976, the Trade Union and Labour Relations (Consolidation) Act 1992, the Working Time Regulations 1998, the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, the Employment Equality (Sexual Orientation) Regulations 2003, the Employment Equality (Religion or Belief) Regulations 2003, the Employment Equality (Age) Regulations 2006 and the Equality Act 2010.

 

15.2        The Employee confirms that the Employee:

 

15.2.1     has received advice from the Adviser as to the terms and effect of this Agreement and in particular its effect on the Employee’s ability to pursue rights before an Employment Tribunal; and

 

15.2.2     will procure that the Adviser signs the Certificate in Schedule 1.

 

15.3        In order for the Employee to receive the payments set forth in Clauses 3.1.4 through 3.1.6, the Employee must return a signed counterpart of this Agreement to the Company on or prior to [time] on [date that is at least 21 calendar days (where there is not a group termination) or 45 calendar days (where the Employee’s termination is part of a group termination) after the date the Employee received this original version of this Agreement].  With respect to the waiver of the Claims specified in Clause 14.1.17 of this Agreement, the Employee shall have the right to revoke and withdraw his acceptance of this Agreement at any time within seven (7) calendar days after the

 

9

 

date on which the Employee signs this Agreement; provided, that any such revocation or withdrawal (a) must be delivered in writing to the Company prior to 5:00 p.m. GMT on such seventh calendar day and (b) applies only with respect to the Claims specified in Clause 14.1.17 of this Agreement.  The waiver of the Claims specified in such Clause 14.1.17 shall become effective at the expiration of such seven-calendar day period, provided that the Employee has not previously revoked or withdrawn his acceptance of this Agreement.  Notwithstanding any other provision of this Agreement, in the event that the Employee does revoke or withdraw his acceptance of this Agreement in accordance with this Clause 15.3, the Employee shall not be entitled to receive any of the payments set forth in Clauses 3.1.4 through 3.1.6 hereof.

 

16.          THIRD PARTY RIGHTS

 

16.1        Each Protected Person shall have the right under the Contracts (Rights of Third Parties) Act 1999 to enforce the rights referred to in this Agreement.  Except as set out in this Clause 16, a person who is not a party to this Agreement may not enforce any of its provisions under the Contracts (Rights of Third Parties) Act 1999.

 

17.          GENERAL

 

17.1        In this Agreement, “Group Company”  means any one of the Company, its subsidiaries, its holding company (including, without limitation, the Parent) or any subsidiary of its holding company (in each case as defined by section 1159 of the Companies Act 2006) and the “Group” has the corresponding meaning.

 

17.2        In this Agreement, references to statutory provisions shall be construed as references to those provisions as respectively replaced or amended or re-enacted from time to time.

 

17.3        This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales, except that Clauses 14.1.7 and 15.3 shall be governed by and construed in accordance with the internal laws of the State of Missouri (and U.S. Federal law, as applicable).  The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

 

17.4        This Agreement may be executed in one or more counterparts which, when taken together, shall be deemed to constitute the entire agreement between the parties.

 

17.5        This Agreement constitutes the entire and only agreement between the parties in relation to the termination of the Employee’s employment and other matters referred to in this Agreement and may not be modified except by an instrument in writing signed by the duly authorised representatives of the parties.  This Agreement supersedes all and any previous agreement, understanding or representation (whether written or oral) between the parties in relation to such matters.  By signing this Agreement, the Employee confirms that the Employee is not entering into it in reliance upon any oral or written representation made to the Employee by or on behalf

 

10

 

of the Companies.  Nothing in this Agreement shall exclude or limit liability for fraud or fraudulent misrepresentation.

 

17.6        Notwithstanding that this Agreement is marked “Without prejudice and subject to contract” it will become an open and binding agreement between the parties when: (a) it is dated and signed by all parties named below and accompanied by the Certificate in Schedule 1 signed by the Adviser; and (b) the seven day revocation period under Clause 15.3 has passed and the Employee has not revoked, or withdrawn his acceptance of, this Agreement in accordance with that Clause.

 

11

 

Schedule 1

 

Adviser’s Certificate

 

I confirm that:

 

I am a relevant independent adviser as defined in the Acts and Regulations (as set out in Clause 15.1 of the Agreement between Robin Mackie (the “Employee”), Smith Electric Vehicles Europe Limited and Smith Electric Vehicles Corp. to which this Certificate is annexed) and an independent adviser for the purposes of section 147 of the Equality Act 2010.

 

I have advised the Employee of the terms and the effect of the Agreement and in particular its effect on the Employee’s ability to pursue a claim before an Employment Tribunal.

 

There is in force a contract of insurance covering the risk of a claim by the Employee in respect of loss arising in consequence of my advice.

 

 

	
Adviser’s   signature
    	
 
    
	
 
    	
 
    
	
Adviser’s   name
    	
[Name]
    
	
 
    	
 
    
	
Title
    	
Solicitor
    
	
 
    	
 
    
	
Adviser’s   business address
    	
[Address]
    
	
 
    	
 
    
	
Date
    	
 
    

 

12

 

Schedule 2

 

Resignation From Office

 

[Employee’s address]

 

 

The Company Secretary

 

[Company name and address]

 

 

[DATE]

 

 

Dear/Sir Madam

 

I hereby give formal notice of my resignation as a director of [COMPANY NAME(S)] with immediate effect and confirm I have no claims or rights of action against any such company.  To the extent that any such claim exists or may exist, I irrevocably waive such claim and release the Company, all other Group Companies, and their officers and employees from any such liability.

 

Yours faithfully,

 

 

[Employee Name]

 

13

 

Schedule 3

 

Agreed Reference

 

[DATE]

 

 

Dear [                     ]

 

 

Re:  Robin Mackie

 

Robin Mackie was employed by Smith Electric Vehicles Europe Limited as [Title] from [Date] to [Date], when his employment ended [by reason of redundancy].

 

It is our policy only to provide references containing information as to employees’ roles and dates of employment.  This reference is given to the addressee in confidence and only for the purposes for which it was requested.  It is given in good faith, but neither the writer nor Smith Electric Vehicles Europe Limited accepts any responsibility or liability for any loss or damage caused to the addressee or any third party as a result of any reliance being placed on it.

 

Yours sincerely,

 

 

[Name]

 

[Title]

 

14

 

Schedule 4

 

Agreed Announcements

 

[                           ]

 

15

 

IN WITNESS whereof this Agreement has been signed on behalf of the Companies and by the Employee the day and year first above written.

 

 

	
SIGNED   by [                    ]
    	
)
    	
 
    
	
Duly   authorised for and on behalf of
    	
)
    	
 
    
	
SMITH   ELECTRIC VEHICLES
    	
)
    	
 
    
	
EUROPE   LIMITED
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED   by [                    ]
    	
)
    	
 
    
	
Duly   authorised for and on behalf of
    	
)
    	
 
    
	
SMITH   ELECTRIC VEHICLES
    	
)
    	
 
    
	
CORP.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED   by ROBIN MACKIE
    	
)
    	
 
    

 

16Exhibit 10.17

 

PRODUCTION SPACE LEASE

(Building #2 at KCI)

 

THIS PRODUCTION SPACE LEASE (the “Lease”), is made and entered into this 12th day of March, 2009, between KANSAS CITY, MISSOURI, a municipal corporation of the State of Missouri, (“Landlord”) and SMITH ELECTRIC VEHICLES US CORP., a Delaware corporation (“Tenant”).

 

BASIC TERMS

 

	
1.
    	
 
    	
Premises: 
    	
 
    	
See Exhibit “A” attached   hereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Building:
    	
 
    	
9200 NW 112th Street, Kansas City, MO 64153 (Building #2)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Commencement Date:
    	
 
    	
The date which is thirty (30) days after completion of the Tenant   Improvement Program (as defined below); provided (i) Landlord shall use   best efforts to cause the, completion of the Tenant Improvement Program by   May 1, 2009 and (ii) Tenant shall have early access to the Premises upon   execution of this Lease as provided in Section 3(D) below.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Expiration Date:
    	
 
    	
Twenty-four (24) months after the Commencement Date.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Term:
    	
 
    	
(i) 12 months (“Initial Term”)
    
	
 
    	
 
    	
 
    	
 
    	
(ii) 12 months (“First Renewal Term”)
    
	
 
    	
 
    	
 
    	
 
    	
(iii) 12 months (“Second Renewal Term”)
    
	
 
    	
 
    	
 
    	
 
    	
(iv) 12 months (“Third Renewal Term”)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Rent:
    	
 
    	
Base Rent + Tenant   Improvements = Rent
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Base Rent  (+)  Tenant Improvements
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Year 1: $25,000.00/mo (+) $6,346.33/mo*
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
First Renewal Term: $25,000.00/mo (subject to Section 5 Rent   Adjustment) (+) $6,346.33/mo*
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Year 1: Rent payments: $31,346.33/mo*
    

 

	
 
    	
 
    	
 
    	
 
    	
*NOTE: The Tenant Improvement Rent may be adjusted if Tenant, at its   option, elects to use all or any portion of the Additional Allowance (as   defined in Exhibit “C” attached   hereto).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Address of Landlord for Notices:
    	
 
    	
Kansas City Aviation Department
    
	
 
    	
 
    	
 
    	
 
    	
Properties & Commercial Development
    
	
 
    	
 
    	
 
    	
 
    	
ATTN: Deputy Director
    
	
 
    	
 
    	
 
    	
 
    	
601 Brasilia Avenue
    
	
 
    	
 
    	
 
    	
 
    	
Kansas City, MO 64153
    

 

 

	
8.
    	
 
    	
Address of Tenant for Notices:
    	
 
    	
Smith Electric Vehicles US Corp.
   12200 NW Ambassador Drive, Suite 326
   Kansas City, Missouri 64163
   ATTN: Mr. Bryan Hansel
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Broker(s):
    	
 
    	
CB Richard Ellis, Inc. (Tenant’s broker)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Security Deposit:
    	
 
    	
None
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Tenant Improvement Allowance:
    	
 
    	
$40,000.00 (to be applied toward the Tenant improvement Project set   forth on Exhibit “C”)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Exhibits:
    	
 
    	
Exhibit “A” — Premises
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “A-1” — Right of   First Refusal Space
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “B” — Rules and   Regulations
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “C” — Tenant Improvement   Program
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “D” — Parking Lot Depiction
    

 

2

 

WITNESSETH:

 

For and in consideration of the rents, covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

 

1.                                       PREMISES AND COMMON AREA:

 

A.                                   Landlord, for and in consideration for the rents, covenants and agreements hereinafter specified to be paid, kept and performed by Tenant, leases to Tenant, and Tenant hereby accepts, the Premises (as defined in the Basic Terms and Exhibit “A”) on an AS IS, WHERE IS basis, but subject to Landlord’s obligation to complete the Tenant Improvement Program (as provided below). In addition to the Premises, Landlord shall also lease to Tenant, at no additional cost, the parking lot identified on Exhibit “D” for storage of Tenant’s vehicles, as more fully set forth in Section 34 below. Landlord acknowledges and agrees that Landlord, and not Tenant, shall be responsible to cause the Premises to comply with all applicable laws.

 

B.                                     Landlord grants Tenant the non-exclusive right, together with all other occupants of the Building and their agents, employees and invitees, to use the Common Area during the Term. For purposes of this Lease, “Common Area” means the parking area, driveways, lobby areas, multitenant corridors and landscaped areas, as well as other areas of the Building and Land which Landlord may designate from time to time as common area available to all tenants. Landlord, at Landlord’s reasonable discretion, may make changes to the Common Area so long as it does not unreasonably interfere with Tenant’s ability to conduct business or adversely affect the Tenant’s access and the quality of the Building. Landlord’s rights regarding the Common Area include, but are not limited to, the right to (a) restrain unauthorized persons from using the Common Area; (b) place permanent or temporary kiosks, displays, carts or stands in the Common Area and lease the same to tenants; (c) temporarily close any portion of the Common Area (i) for repairs, improvements or alterations, (ii) to discourage unauthorized use, (iii) to prevent dedication of prescriptive rights, or (iv) for any other reason Landlord deems sufficient in Landlord’s reasonable judgment; (d) change the shape and size of the Common Area; (e) add, eliminate or change the location of any improvements located in the Common Area and construct buildings or other structures in the Common Area; and (f) impose and revise reasonable Rules and Regulations concerning use of the Common Area, including, but not limited to, any parking facilities comprising a portion of the Common Area (which must be applied in a non-discriminatory manner).

 

Tenant shall also have access, at no additional charge to Tenant, to the following areas within the Building, as shown on Exhibit “A” attached hereto: (i) pedestrian ingress and egress to and from the North parking lot and Premises as shown on Exhibit “A”, (ii) pedestrian ingress and egress to and from the West parking lot and Premises as shown on Exhibit “A”, (iii) the loading dock as shown on Exhibit “A”, and (iv) production vehicle ingress and egress from the West parking lot and Premises as shown on ‘Exhibit “A”.

 

C.                                     Right of First Refusal. If, during the Lease Term, Landlord receives a bona fide offer to lease all or any portion of the Building, described in Exhibit “A-1” as “Right of First Refusal Site,” Landlord shall give Tenant written notice of such offer which will state:

 

i.                                          Landlord’s desire and intention to lease the property;

 

ii.                                       Description of the property to be leased; and

 

iii.                                    Details of bona fide offer.

 

3

 

For ten (10) days after the written notice, Tenant may lease the Right of First Refusal Site according to the terms and conditions of this Lease (“Refusal Right”); provided, however, that Tenant shall pay Landlord the then current Base Rent, as defined in Section 4.A., which shall take effect on the date Tenant occupies of such Right of First Refusal Site. If Tenant does not lease the Right of First Refusal Site within the ten (10) day period then the Refusal Right shall automatically cease and expire. If Landlord fails to consummate the lease which is the subject of the bona fide offer, then the Right of First Refusal shall be re-instituted for the balance of the term.

 

2.                                       ACCEPTANCE OF PREMISES: Tenant’s occupancy of the Premises establishes Tenant’s acceptance of the Premises, the Building and the Land in an “AS IS — WHERE IS” condition. Except as otherwise provided herein, all warranties express or implied, are hereby waived and disclaimed by Tenant.

 

3.                                       TERM.

 

A.                                   The Lease (“Initial Term”) shall commence on the Commencement Date (as stated in the Basic Terms). The Lease term shall be for the Term (as stated in the Basic Terms) and shall end at midnight on the last day of said period (the “Expiration Date”), but subject to Tenant’s right to renew as provided in subsection 3(B) below. Tenant shall have the option to terminate this Lease as set forth in Section 3(C) below.

 

B.                                     Renewals.

 

(i)                                     First Renewal Term. The Tenant shall have the option to renew this Lease for a one (1) year term thereafter (“First Renewal Term”). If Tenant desires to exercise its option to renew, then the Tenant shall exercise such option by giving written notice of its intent to renew to Landlord not more than 60 days prior to the end of the Initial Term. The Base Rent for the First Renewal Term shall be set forth in Section 5 below. Notwithstanding anything to the contrary contained herein, in the event Tenant fails to exercise the First Renewal Term, then Tenant shall reimburse Landlord an amount equal to $76,156.00, which amount equals the unamortized cost of the Tenant Improvement Program (plus one-half (1/2) of the Additional Allowance, if used by Tenant). If Tenant exercises the First Renewal Term, then Tenant’s broker will be paid a commission of 3% of Base Rent for such one (1) year First Renewal Term.

 

(ii)                                  Second Renewal Term. The Tenant shall have the option to renew this Lease for a one (1) year term thereafter (“Second Renewal Term”). If Tenant desires to exercise its option to renew, then the Tenant shall exercise such option by giving written notice of its intent to renew to Landlord not more than 60 days prior to the end of the First Renewal Term. The Base Rent for the Second Renewal Term shall be set forth in Section 5 below.

 

(iii)                               Third Renewal Term. The Tenant shall have the option to renew this Lease for a one (1) year term thereafter (“Third Renewal Term”). If Tenant desires to exercise its option to renew, then the Tenant shall exercise such option by giving written notice of its intent to renew to Landlord not more than 60 days prior to the end of the Second Renewal Term. The Base Rent for the Third Renewal Term shall be set forth in Section 5 below.

 

C.                                     Early Termination. Tenant shall have the right to terminate this Lease prior to the Expiration Date with ninety (90) days advance written notice to the Landlord only if Tenant relocates its operation to the KCI Intermodal BusinessCentre. Such Early Termination notice shall expressly set forth the date on which the tenancy will terminate. If the date of Early Termination occurs during

 

4

 

the initial term or any renewal term, Tenant will make a payment to Landlord equal to (i) the applicable unamortized portion of the leasing commissions paid by Landlord and (ii) the applicable unamortized principal cost of the Tenant Improvement Program (as described in Exhibit “C”) as of the date of Early Termination (“Tenant Improvement Fee”). In the event that Tenant fails to submit to Landlord such fees with the above described notice, Landlord shall provide written notice to Tenant and Tenant shall have ten (10) business days after the date of mailing to pay the required fees in full. If such payment is not then made, Tenant’s notice of Early Termination is ineffective and Tenant shall have no further right to any Early Termination pursuant to this section. In the event Tenant shall fail to quit and vacate the Premises upon the expiration or the termination of this Lease, as set forth in the early termination notice, then this Lease will not terminate and Tenant shall immediately be in default of the terms and conditions of this Lease, and Landlord shall be able to pursue any rights or remedies it may have available to it under the terms of this Lease, including but not limited to the terms and provisions set forth in Section 28 below.

 

D.                                    Early Access. Upon full execution of this Lease and continuing until the Commencement Date, Tenant may enter the Premises prior to the Commencement Date for purposes of installing Tenant’s trade fixtures and other purposes If Tenant enters the Premises prior to the Commencement Date, all of the agreements and covenants of Tenant in this Lease, except the payment of Rent, shall apply and be in force, including, without limitation, the insurance requirements (and the insurance certificate required hereunder shall be provided to Landlord prior to such early entry). During any such entry into the Premises before the Commencement Date, Tenant shall not interfere in any way with any construction work or other activity by Landlord in the Premises and Tenant shall cooperate in all responsible ways with Landlord while Landlord is carrying on any activity within the Premises.

 

4.                                       RENT:

 

A.                                   Base Rent. “Base Rent” shall mean the per square foot rental rate for the Premises and Common Area (as defined in the Basic Terms and subject to adjustment to Base Rent as set forth in Section 5).

 

B.                                     Tenant Improvement Rent. “Tenant Improvement Rent” shall mean the amount payable in equal monthly payments over the Initial Term of this Lease equal to the certified cost of the Tenant Improvement Program (defined in Exhibit “C”), amortized on a straight-line basis, without interest, over the Initial Term. Upon completion of the Tenant Improvement Program, Tenant, at its sole discretion, may elect to pay to Landlord all or a portion of the certified cost of the Tenant Improvement Program. If Tenant desires to pay in advance, Landlord must receive such payment within twenty (20) days upon completion of the Tenant Improvement Program. Any balance remaining after such twenty (20) day period will be subject to Tenant Improvement Rent payments.

 

C.                                     Rent. “Rent” shall mean the sum of Base Rent and Tenant Improvement Rent, if any. This Lease is a full service or “gross” lease and all operating expenses, utilities, maintenance and similar costs are included in the term “Rent”, except as otherwise specifically set forth herein.

 

D.                                    Additional Rent. In addition to the Rent, Tenant shall pay during the Lease term as additional rent (“Additional Rent”) all other sums or amounts provided for in this Lease which are to be paid by Tenant.

 

E.                                      Late Fees. A service charge of one and one-half percent (1 1/2%) per month shall automatically accrue to all payments received five (5) days after the due date thereof.

 

5

 

F.                                      Tenant agrees to pay Landlord at such place as Landlord shall designate from time to time, Rent as follows: Tenant will pay Rent in monthly installments to Landlord, in advance, without offset or deduction, without notice or demand by Landlord commencing on the Commencement Date and continuing on the first day of each and every calendar month after the Commencement Date during the Term through and including the Expiration Date, except that Tenant shall pay the first month’s Base Rent within ten (10) days after full execution of this Lease. Rent shall be payable in equal monthly installments subject to Section 7.

 

5.                                       BASE RENT ADJUSTMENT:

 

A.                                   Base Rent will be adjusted beginning one year following the Commencement Date (as stated in the Basic Terms) each year thereafter, including any renewal periods, based on the annual percentage change in the Consumer Price Index for All Urban Consumers (“CPI-U”). In no event will the annual adjustment result in Base Rent being less than the amount charged during the prior year or more than 3% above the amount charged during the prior year. The most recent available CPI-U as of first anniversary of the Commencement Date and on an annual basis thereafter for each year of the Term and any renewal terms, calculated over the preceding twelve months, shall be used to adjust the Rent for the next year. The Tenant Improvement Rent shall not be increased by the CPI-U (only the Base Rent).

 

B.                                     CPI-U means the Consumer Price Index for All Urban Consumers for the U.S. City Average for All Items, 1982-84 = 100, or the successor of that index calculated on a calendar year basis and as published by the Bureau of Labor Statistics, U.S. Department of Labor.

 

6.                                       SECURITY DEPOSIT. Intentionally Left Blank.

 

7.                                       PRORATION OF FIRST AND LAST MONTH’S RENT: Tenant’s obligation to pay Rent under this Lease will commence upon the Commencement Date. If the Commencement Date occurs on any day other than the first day of a calendar month, then all Rent provided shall be prorated for that month, and the Lease Term shall be adjusted accordingly. If Tenant’s lease shall end on any other day other than the last day of a calendar month, then all Rent shall be prorated for that month.

 

8.                                       USE: Tenant agrees that it shall occupy and use the Premises for any lawful purposes (including, without limitation, assemblage, production, manufacturing and storage of electric vehicles), and that it will conduct its business in such a manner as will not interfere with or infringe upon the rights of any other tenants or occupants of the Building, or disturb their quiet enjoyment, or interfere with any services to be provided to any Common Areas or to any other tenant within the Building, or which may invalidate or increase the premium cost of any insurance carried on the Building. Tenant further agrees that it will observe and comply with all present and future laws, ordinances, requirements, orders, directions, rules and regulations of all governmental authorities affecting the Premises, and that it will not use or permit the use of the Premises for any unlawful, disreputable or hazardous use. Tenant shall not use or occupy the Premises in violation of the certificate of occupancy. Tenant shall obtain all licenses, permits or other authorizations from any governmental or quasigovernmental agencies needed for the operation of Tenant’s business on the Premises.

 

9.                                       SERVICES:

 

A.                                   Landlord agrees to furnish Tenant during the Lease Term, the following service:

 

(i)                                     Heating: Landlord agrees to supply heating when necessary for normal comfort in the Premises from Monday through Friday, during the period from 7:00 a.m. to

 

6

 

6:00 p.m., and on Saturday from 8:00 a.m. to 1:00 p.m., exclusive of holidays (“Normal Business Hours”). Landlord further agrees that heating services for the Premises at times other than Normal Business Hours shall be provided on the condition that Tenant shall pay as Additional Rent the pro-rata share of the cost of such additional services based upon prevailing rates (on an hourly basis). Landlord reserves the right to set reasonable requirements for prior notice of the need for off-hours services.

 

(ii)                                  Electricity: Landlord agrees to supply electrical wiring and facilities for standard building lighting fixtures provided by the Landlord and for Tenant’s normal office uses during Normal Business Hours, but not including electrical services required for any item of equipment which requires voltage other than 220 volts. Landlord shall not be responsible for providing electricity required for any electrical equipment requiring voltage other than 220 volts single phase, and Tenant’s equipment and the Premises lighting may not exceed an average of five (5) watt per square foot of Premises. No electrical circuit for the supply of Tenant’s incidental uses will have a current capacity exceeding 15 amperes; and electricity to be used by Tenant shall be only for equipment and accessories normal to office usage. Landlord reserves the right to require Tenant to install (or, at Landlord’s option, to require Tenant to reimburse Landlord for its installation of) conduit wiring and other equipment necessary to supply electricity for Tenant’s use requirements in excess of those set forward in this subsection at Tenant’s expense by arrangement with the approved electrical utility, if applicable (as determined by Landlord on a commercially reasonable basis). If Tenant’s electrical usage as determined either by metering, submetering or an electrical usage survey exceeds normal electrical usage to be provided by Landlord hereunder, Tenant further agrees to pay monthly as Additional Rent the entire costs of providing such excess electricity.

 

(iii)                               Water: Landlord agrees to supply water to the Common Areas of the Building from regular Building outlets for drinking, lavatory and toilet purposes.

 

(iv)                              Maintenance: Routine maintenance and electric lighting service (including lamp replacement) will be provided by Landlord for all Common Areas and service areas of the Building in the manner Landlord deems appropriate.

 

(v)                                 Compressed Air. Landlord agrees to provide compressed air at the Premises for use by Tenant in the operation of Tenant’s business.

 

(vi)                              Security. So long as Tenant is the only tenant in the Building, then Landlord shall not be required to provide security at the Building. However, if there is more than one tenant at the Building, then Landlord, at Landlord’s cost, shall address security concerns at the Building. Notwithstanding the above, Landlord shall have no liability to the Tenant, Tenant’s agents, servants, employees, customers, invitees, licenses or any person entering the Premises or the Building under the invitation of Tenant or any assignee or subtenant of the Tenant (all of whom, exclusive of Tenant only, are hereinafter jointly and severally referred to as “Invitees”) for any losses resulting from theft, burglary or damage to persons on the Premises, and Landlord shall not be required to insure against such losses. Tenant shall have access to the Premises 24 hours per day, seven (7) days per week.

 

B.                                     If Tenant requests additional work or services from Landlord, Landlord may furnish such additional work to Tenant at Landlord’s option. If Landlord performs such work or service for Tenant, then Tenant agrees to pay Landlord any additional costs associated with this work, including a reasonable administrative or overhead charge, which costs and scope must be agreed to by Landlord and Tenant before the work commences.

 

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C.                                     Services and utilities provided to the Building or the Premises by Landlord are not warranted by Landlord to be free from interruption. Landlord is not responsible or liable for any injury, damage, loss or inconvenience resulting from failure to furnish any of the services or utilities which Landlord agrees to provide. Failure to provide any such service will not constitute a default under this Lease, is not an eviction, and does not entitle Tenant to any reduction, offset or abatement in the payment of Rent or Additional Rent under this Lease; provided however, that if the interruption or cessation of utilities resulted from a cause within Landlord’s exclusive control and the Premises are not usable by Tenant for the conduct of Tenant’s business as a result thereof, Base Rent shall be abated for the period which commences five (5) business days after the date Tenant gives to Landlord written notice of such interruption until such time as the utilities required for the conduct of Tenant’s business are restored. Tenant shall not be entitled to such abatement if Tenant is in fact conducting business in the Premises during such interruption of utilities.

 

D.                                    Tenant shall be solely responsible for the installation, use and maintenance of telephone and other communication services to the Premises. Landlord shall have the right to direct and approve the location and method of installation of all wires and other equipment to be installed in the Premises and the Building, as well as the contractor performing any such work in the Building (provided Tenant shall not be required to remove such wires, cabling and similar equipment at the expiration or earlier termination of the Lease). In no event shall Landlord be responsible for payment for such installation, use or maintenance of the telephone or other communication services. Tenant shall not have the right to install wiring or other equipment outside of the Premises without the advance written consent of Landlord, and agrees to coordinate such efforts with Landlord. All expenses incurred by Landlord in connection with such telephone or communication services shall be payable by Tenant as Additional Rent.

 

10.                                 REPAIRS AND MAINTENANCE:

 

A.                                   Landlord agrees to maintain the structure, roof, exterior walls, exterior doors, exterior windows, public restrooms, public elevators, all plumbing, heating, air conditioning and similar equipment and the corridors of the Building of which the Premises is a part, and the grounds (including landscaping and mowing) and parking areas (including snow removal) serving the Building, in good repair. Such maintenance and repair costs incurred by Landlord shall be at Landlord’s sole cost and expense; provided, however, that if any repairs to any part of the Building or any such equipment installed in or used in connection with the Building or any of the grounds or parking areas serving the Building are necessitated by the gross negligence or willful misconduct of Tenant or its Invitees, Tenant shall reimburse Landlord for the cost thereof within twenty (20) days after written demand, as Additional Rent. Tenant shall not pay any additional operating expenses for the term of this Lease.

 

B.                                     Tenant shall be responsible for the Premises and at Tenant’s cost, shall keep it in a safe, neat and attractive condition. Tenant shall pay for all redecoration, remodeling, alteration and painting of the Premises desired by Tenant, which must be approved by Landlord, which approval shall not be unreasonably withheld. Tenant shall also pay for the repair and maintenance during the Lease Term of all special equipment or improvements installed by Tenant in the Premises, including, but not limited to, supplemental air handling units, dishwashers, icemakers, disposals, showers, sinks, commodes, glass walls and other similar equipment or improvements. All improvements by Tenant shall be subject to 12.B below.

 

11.                                 ASSIGNMENT AND SUBLETTING: Tenant shall not assign or mortgage this Lease or sublet all or any portion of the Premises without Landlord’s prior written consent, in each instance, which such consent will be granted in Landlord’s reasonable discretion, Any request for Landlord’s written consent shall be accompanied by a copy of the proposed assignment or sublease, which must be in a form acceptable to Landlord. No assignment, mortgaging, or subletting, if consented to by Landlord, shall relieve Tenant of its liability under this Lease. Tenant shall pay to Landlord, in

 

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consideration of Landlord’s written consent to the assignment or sublease, all rent and other consideration received by Tenant from any such assignee or subtenant which is in excess of the rental obligation required under the terms of this Lease for the Premises or portion thereof for which the consent of Landlord is requested. Consent by Landlord to an assignment or sublease shall not operate as a waiver of the necessity of Tenant to obtain the prior written consent of Landlord to any subsequent assignment, mortgaging or subletting and the terms of any such consent shall be binding upon the assignee, mortgagee or subtenant. Notwithstanding the above, Tenant, without Landlord’s consent (provided that Tenant is not in default in the performance of its obligation under this Lease after any applicable notice and cure periods), may cause an assignment or subletting (each, a “Transfer”) to an Affiliate of Tenant if Tenant (a) notifies Landlord at lease thirty (30) days prior to such Transfer; (b) delivers to Landlord, at the time of Tenant’s notice, current financial statements of Tenant and the Affiliate that are reasonably acceptable to Landlord; and (c) the Affiliate assumes and agrees in a writing delivered to and reasonably acceptable to Landlord to perform Tenant’s obligations under this Lease arising after such Transfer and to observe all terms and conditions of this Lease. For purposes of this Section 11, the term “Affiliate” means any persons or entity that, directly or indirectly, controls, is controlled by or is under common control with Tenant. For purposes of this definition, “control” means possessing the power to direct or cause the direction of the management and policies of the entity by the ownership of a majority of the voting interests of the entity. A sale or transfer of stock shall not constitute an assignment, subletting or transfer as provided herein.

 

12.                                 IMPROVEMENTS; ALTERATIONS:

 

A.                                   Tenant shall make no alterations, improvements or changes to the Premises or the Building without Landlord’s prior written consent, which consent shall not he unreasonably withheld. Unless Landlord shall otherwise agree, any alterations, improvements or changes to which Landlord may consent shall be done at the sole cost of Tenant and pursuant only to such plans, specifications and agreements approved in writing by Landlord (not to be unreasonably withheld). By consenting to or approving any plans, specifications and agreements for any alterations, improvements or changes which Tenant desires to make to the Premises, Landlord does not warrant and shall assume no responsibility for the completeness, design sufficiency, or compliance of such plans with all applicable laws, rules and regulations of governmental agencies or authorities. If Landlord performs such work for Tenant, then Tenant agrees to pay Landlord any additional costs associated with the work, including a reasonable administrative or overhead fee. Notwithstanding the foregoing, Tenant shall be entitled to make non-structural alterations to the Premises without Landlord’s consent to the extent such alterations do not exceed $15,000 per lease year.

 

B.                                     Tenant will keep the Premises, Building and Common Area free from any mechanics’, materialmen’s, designers’ or other liens arising out of any work performed, materials furnished or obligations incurred by or for Tenant or any person or entity claiming by, through or under Tenant.

 

13.                                 SIGNAGE: Except as provided below, Tenant shall not display, inscribe, paint or affix any sign, picture, advertisement or notice visible from anywhere outside the Premises without Landlord’s prior written consent. Such consent may be granted in Landlord’s reasonable discretion. If consented to by Landlord, any such sign will meet all requirements set by Landlord. Such signage will be maintained at Tenant’s expense and removed at the termination of this Lease at Tenants expense. Tenant will immediately repair any damage to the building or Premises caused by such removal. Notwithstanding the above, upon Tenant’s request, Landlord shall work in good faith to approve exterior building signage and/or monument signage for Tenant’s use of the Premises (provided the cost of which shall either be at Tenant’s cost or paid through the Additional Allowance).

 

14.                                 RISK OF LOSS — INDEMNITY: Landlord shall not be responsible or liable to Tenant for any injury, loss or damage to persons or property occurring in or on the Premises regardless of cause

 

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(except to the extent caused by the gross negligence or willful misconduct of Landlord or its agents, contractors or employees), it being understood and agreed that all risk or loss be borne by Tenant.

 

A.                                   General Indemnification. For purposes of this Section only, the following terms shall have the meanings listed:

 

(i)                                     Claims means all claims, damages, liability, losses, costs and expenses, court costs and reasonable attorneys’ fees, including attorneys’ fees incurred by the Landlord in the enforcement of this indemnity obligation.

 

(ii)                                  Tenant’s Agents means Tenant’s officers, employees, subtenants, successors, assigns, invitees, and other agents.

 

(iii)                               Landlord means Landlord and its agents, officials, officers and employees.

 

B.                                     Tenant’s obligations under this Section with respect to indemnification for acts or omissions, including negligence of Landlord, shall be limited to the coverage and limits of insurance that Tenant is required to procure and maintain under this Lease.

 

C.                                     Tenant shall defend, indemnify and hold harmless Landlord from and against all claims arising out of or resulting from all acts or omissions in connection with this Lease in the Premises caused in whole or in part by Tenant or Tenant’s Agents, regardless of whether or not caused in part by any act or omission, including negligence, of Landlord. Tenant is not obligated under this Section to indemnify Landlord for the sole negligence of Landlord.

 

D.                                    Subject to the statutory limitations under Missouri law, Landlord shall defend, indemnify and hold harmless Tenant from and against all claims arising out of or resulting from all acts or omissions in connection with this Lease in the Common Area or other areas of the Building (other than the Premises) caused in whole or in part by Landlord or Landlord’s employees, agents and contractors, regardless of whether or not caused in part by any act or omission, including negligence, of Tenant. Landlord is not obligated under this Section to indemnify tenant for the sole negligence of Tenant.

 

15.                                 OBLIGATION TO INSURE PREMISES:

 

A.                                   Landlord, at its expense, shall insure and bear all risk of loss, damage and destruction to the Building or Premises leased to Tenant, including the Tenant Improvement Program (as described in Exhibit “C”); provided, however that Tenant shall insure and bear all risk of loss or damage or destruction to any improvements, fixtures, equipment or other property of Tenant. It shall be the obligation of the Tenant to insure any improvements that Tenant makes to the Premises, as well as any fixtures, equipment or other property that Tenant maintains on or within the Premises (except for the Tenant Improvement Program performed by Landlord). In the event of loss or damage or destruction to the Premises leased to Tenant, Landlord shall have no obligation whatsoever to reimburse Tenant for loss or damage or destruction to any improvements, fixtures, equipment or other property of Tenant.

 

B.                                     In case of any material damage to or destruction of the Building leased to Tenant, or any part thereof, Landlord, in its sole discretion, shall have the option to promptly commence and complete with due diligence the restoration of the Building including the Tenant Improvement Program, if applicable, exclusive of any improvements, fixtures, equipment or other property of Tenant, as nearly as reasonably practicable to the value and condition thereof immediately prior to such damage or destruction.

 

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C.                                     In the event of damage to or destruction or loss of such Building by an insured risk, Landlord shall have the election, indicated by written notice given to Tenant within 30 days after the occurrence of such event, not to repair, restore, rebuild or replace the improvements, such election to be effective as of the date of such damage, destruction or loss and, upon such election, Tenant shall be relieved of all further liability and obligations hereunder.

 

D.                                    Notwithstanding the above, if fire or other casualty renders the whole or any material part of the Premises untenantable and Landlord’s engineer determines (in its reasonable discretion) that it cannot make the Premises tenantable within 90 days after the date of the casualty, then Landlord will so notify Tenant within thirty (30) days after the date of the casualty and may, in such notice, terminate this Lease effective on the date of Landlord’s notice. If Landlord does not terminate this Lease as provided in this section, Tenant may terminate this Lease by notifying Landlord within thirty (30) days after the date of Landlord’s notice, which termination will be effective thirty (30) days after the date of Tenant’s notice.

 

16.                                 INSURANCE: Beginning to the date that Tenant wishes to install furniture and other ancillary equipment, Tenant shall procure and maintain in effect throughout the duration of this Lease insurance coverage not less than the types and amounts specified in this section. In the event that additional insurance, not specified herein, is required during the term of this Lease, Tenant shall supply such insurance. Policies containing a Self-Insured Retention are unacceptable to Landlord.

 

A.                                   Commercial General Liability Insurance with limits of $2,000,000.00 per occurrence and $2,000,000.00 aggregate, written on an “occurrence” basis. The policy shall contain a waiver of any rights or subrogation in favor of Landlord and be written or endorsed to include the following provisions:

 

(i)                                     Severability of Interests Coverage applying to Additional Insureds

 

(ii)                                  Contractual Liability,

 

(iii)                               Per Project Aggregate Liability Limit or, where not available, the aggregate limit shall be $2,000,000.00.

 

(iv)                              No Contractual Liability Limitation Endorsement.

 

(v)                                 Additional Insured Endorsement, ISO form CG20 10, current edition or its equivalent.

 

B.                                     Tenant shall maintain Full Replacement Cost Insurance on all of the fixtures, equipment or other property of Tenant, including Tenant’s leasehold improvements (other than the Tenant Improvement Program) paid for by Tenant on the Premises (now or hereafter existing) or used in connection therewith (collectively, the “Tenant’s Personalty”) against any loss or damage by fire, and other or any casualties or peril, and all other perils as are included within what is commonly known as “all risk coverage” for such Tenant’s Personalty with full replacement cost insurance, in amounts sufficient to prevent Tenant from being or becoming a co-insurer within the terms of the policy or policies in question and in no event less than the full replacement cost value thereof, exclusive of the cost of foundations, excavations, and footings below the lowest basement floor, and without any deduction being made for depreciation. The replacement cost value of Tenant’s Personalty shall be determined from time to time, but not more frequently than once in any twelve (12) consecutive calendar months at the request of Landlord, by an appraiser, architect and/or contractor.

 

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C.                                     Landlord shall cause any insurance policy carried by Landlord on or relating to the Premises and Tenant shall cause any insurance policy carried by Tenant on or relating to the Premises to be written in such a manner so as to provide that the insurance company waives all right of recovery by way of subrogation against Landlord or Tenant, as the case may be, in connection with any loss or damages covered by such policies.

 

D.                                    No policy may be canceled until after 30 days written notice of cancellation to Landlord, ten days in the event of nonpayment of premium. The Commercial General and specified above shall provide that the Landlord and its agencies, officials, officers and employees, while acting within the scope of their authority, will be named as additional insureds for the services performed under this Lease. Tenant shall provide to Landlord at execution of this Lease a certificate of insurance showing all required endorsements and additional insureds.

 

E.                                      All insurance coverage must be written by companies that have an A.M. Best’s rating of “B+V” or better, and are licensed or approved by the State of Missouri to do business in Missouri.

 

F.                                      Regardless of any approval by the Landlord, it is the responsibility of Tenant to maintain the required insurance coverage in force at all times; its failure to do so will not relieve it of any contractual obligation or responsibility. In the event of Tenant’s failure to maintain the required insurance in effect, Landlord may obtain such insurance and any premiums paid by the Landlord shall be payable by Tenant to the Landlord with the next installment of rent due under the Lease with interest thereon of one and one-half percent (1.5% per month or may pursue its remedies for breach of this Lease as provided for herein and by law. Tenant understands and agrees that insurance coverages may be reasonably increased or added to in order to protect the Landlord and its property.

 

G.                                     Tenant shall provide for the handling, in a commercially reasonable manner, of all claims for bodily injury, property damage or theft arising out of the activities of Tenant under this Lease.

 

H.                                    Landlord shall maintain commercial general liability insurance at all times during the Term of this Lease.

 

17.                                 LANDLORD’S USE: Landlord reserves the right at all reasonable times and upon reasonable advance notice (except in the case of emergencies) to enter and be upon the Premises for the purpose of examining same, to show the same to prospective purchasers and mortgagees, and for such repairs, alterations, additions, installations and removals as Landlord may deem proper and useful for servicing the Premises or the Building. At all times during the Term of this Lease, Landlord shall have the right to enter upon the Premises at all reasonable times and upon reasonable notice (except in the case of emergencies) and exhibit the same to prospective tenants or purchasers.

 

18.                                 CONDEMNATION:

 

A.                                   If the whole of the Premises shall be taken for any public or quasi public use under any statute or by right of eminent domain, or by private purchase in lieu thereof, this Lease shall automatically terminate as of the date that possession shall be taken.

 

B.                                     If only a portion of the Premises shall be so taken, but in the reasonable determination of Landlord the remaining Premises can not be restored to a functional building for use by Tenant as herein contemplated, then either Landlord or Tenant shall have the right to terminate this Lease as of the date that possession shall be taken upon giving written notice to the other party within sixty (60) days after such taking. If no such election is made to terminate this Lease, Landlord shall restore the Premises to an architectural unit as nearly like its condition prior to such taking as shall be practicable, but such work shall not exceed the scope of the work required to be done by Landlord in originally constructing the Premises or the amount of any available condemnation proceeds. If this

 

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Lease is not terminated, as hereinbefore provided, all of its items shall continue in effect, but a proportionate percentage of rent, in accordance with the nature and extent of the damage to the Premises, shall be suspended or abated.

 

C.                                     All compensation awarded or paid upon a total or partial taking of the Premises shall belong to and be the property of Landlord without any participation by Tenant; provided, however, that nothing contained herein shall be construed to preclude Tenant from prosecuting any claim directly against the condemning authority for loss of business, depreciation to, damage to, cost of removal of, or for the value of moving expenses and personal property take, so long as such claim shall not diminish or otherwise adversely affect Landlord’s award.

 

19.                                 DEFAULT:

 

A.                                   If (1) Tenant shall fail to pay any rent or any other sum of money due hereunder when due and such failure shall continue for a period of five (5) days after written notice from Landlord, (2) Tenant shall fail to perform or comply with any other covenant or agreement herein contained and such failure shall continue for a period of twenty (20) days after written notice thereof is given Tenant (or such additional period as may be reasonably required to cure such default, if the default is of such a nature that it cannot be cured within such 20-day period, provided Tenant commences cure within said twenty (20) days, and thereafter diligently prosecutes cure to completion), (3) any guarantor under this Lease dies, or (4) Tenant or any guarantor under this Lease (if any entity) dissolves or liquidates, then Tenant shall be in default under this Lease, and at any time thereafter Landlord may, at its option:

 

(i)                                     terminate this Lease; or

 

(ii)                                  effect or pay or perform that obligation as to which the Tenant is in default, and the Tenant shall thereupon be indebted to the Landlord for all amount so paid or advanced and all costs and expenses incurred in connection therewith, such indebtedness to be payable on demand; or

 

(iii)                               reenter, take possession of the Premises and remove all persons and property therefrom (any property so removed may be stored in a public warehouse or elsewhere at the cost of, and for the account of Tenant), and without being deemed guilty of trespass, or liable for any loss or damage occasioned thereby.

 

If Tenant shall, after default, voluntarily give upon possession of the Premises to Landlord, or deliver the keys to the Premises to Landlord, or both, such actions shall be deemed to be in compliance with Landlord’s rights and the acceptance thereof by Landlord shall not be deemed to constitute a surrender of the Premises. Should Landlord elect to reenter, or should it take possession pursuant to legal proceedings or pursuant to any notice provided by law, it may either terminate this Lease or, without terminating this Lease, may relet the Premises (or any part thereof) for such term or terms (including a term extending beyond the Lease term), at such rental or rentals and upon such other terms and conditions as Landlord in its reasonable discretion may deem advisable. Upon each such reletting all rentals shall be applied first to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second to the payment of any costs and expenses of such reletting, including brokerage fees, attorney’s fees and cost of any alterations and repairs which Landlord, in its reasonable judgment, deemed necessary in connection with such reletting; third to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent or damage as the same may become due and payable hereunder. If such rentals received from such reletting during any month shall be less than that to be paid during said month by Tenant hereunder, Tenant shall pay any such deficiency to landlord monthly. No such reentry or retaking of possession by Landlord shall be construed as an election by Landlord to terminate this Lease unless a written notice of such election is given to Tenant or unless the termination thereof is decreed by a

 

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court of competent jurisdiction. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach.

 

B.                                     Should this Lease be terminated at any time due to Tenant’s default, Landlord, in addition to any other remedies it may have, may recover from Tenant all damages it may incur by reason of such breach, including the cost of recovering the Premises, reasonable attorney’s fees, and the worth at the time of such termination of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated term, all of which amounts shall be immediately due and payable from Tenant to Landlord. In determining the rent which would be payable by Tenant hereunder subsequent to default, the rent for each year of the unexpired term shall be equal to the average of the total annual monthly Rent, Additional Rent and other charges paid by Tenant from the Commencement Date to the time of default. Notwithstanding the above, in the event of a default of this Lease by Tenant, the Landlord shall use best efforts to mitigate its damages.

 

C.                                     The acceptance of any sums of money from Tenant after the expiration of any five (5) day or twenty (20) day notice as above provided may, at Landlord’s option, be taken to be a payment on account by Tenant and shall not constitute a waiver by landlord of any of its rights hereunder or at law, nor shall it reinstate this Lease or cure a default on the part of Tenant.

 

D.                                    Tenant Remedies/Limitiation of Liability:: Landlord shall not be in default hereunder unless Landlord fails to perform any of its obligations hereunder within twenty (20) days after written notice from Tenant specifying such failure (unless such performance will, due to the nature of the obligation, require a period of time in excess of twenty (20) days, then after such period of time as is reasonably necessary). In the event of such default by Landlord (after the applicable notice and cure period), Tenant shall be entitled to exercise all rights and remedies at law and equity.

 

If in an emergency situation, a repair to the Premises and/or the Building (of which Landlord is obligated to perform pursuant to the express terms and conditions of the Lease) is required, Tenant shall make all reasonable and good faith efforts to contact Landlord or Landlord’s managing agent by telephone, by e-mail and facsimile to advise Landlord of the need for such repair. If after making reasonable and good faith efforts to contact Landlord, either (i) Tenant does not receive a response from Landlord or Landlord’s managing agent within one (1) business day, or (ii) Tenant succeeds in contacting Landlord and/or Landlord’s managing agent and Landlord fails to undertake action to correct the emergency situation within one (1) business day, Tenant may perform the repair, in such manner as Tenant deems reasonably necessary (which must be in a commercially reasonable manner and upon competitive rates), on account of Landlord. Upon completion of the emergency repair, Landlord shall be required to reimburse Tenant for the reasonable and actual cost of the repair. Landlord’s payment shall be due within thirty (30) days after receipt of Tenant’s bill accompanied by reasonable evidence that Tenant has paid for the repair. For the purpose of this Article, an emergency situation means a condition or state of facts which if not corrected would result in further damage to the Premises, the Building or its contents or which would materially impair Tenant from conducting its business at the Premises in a reasonable manner.

 

20.                                 ABANDONMENT: Notwithstanding anything herein to the contrary, nothing herein shall be construed as an obligation for Tenant to open or operate an office in the Premises. Tenant shall have the right to remove Tenant’s personal property from the Premises and cease operations in the Premises at any time and at Tenant’s sole discretion. However, the right to cease to operate a business in the Premises shall not affect Tenant’s obligation to pay all amounts due hereunder and to perform all covenants and obligations hereunder and to perform all covenants and obligations hereunder. Nothing contained herein shall affect Landlord’s rights under Section 19 above.

 

21.                                 RIGHTS AND REMEDIES: The rights and remedies hereunder and any others provided by law shall be construed as cumulative and no one of them is exclusive of any other right or remedy.

 

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Such rights and remedies shall further be continuing rights, none of which shall be exhausted by being exercised on one or more occasions. A party shall be entitled to an injunction in proper cases to enforce any part or parts of this Lease or to prevent or stop any violation or default on the part of the other party. A waiver of any default, breach or failure shall not be construed as a continuing waiver or as a waiver of any subsequent default, breach or failure. Whenever in this Lease Landlord reserves or is given the right and power to give or withhold its consent to any action on the part of Tenant, such right and power shall not be exhausted by its exercise on one or more occasions, but shall be a continuing right and power for the full Lease term.

 

22.                                 ATTORNEY’S FEES AND COSTS: If either Landlord or Tenant commences any litigation or judicial action to determine or enforce any of the provisions of this Lease, the prevailing party in any such litigation or judicial action is entitled to recover all of its costs and expenses (including, but not limited to, reasonable attorneys’ fees, costs and expenditures) from the non-prevailing party.

 

23.                                 RELOCATION OF TENANT: Intentionally deleted.

 

24.                                 SUBORDINATION — ASSIGNMENT OF LEASE BY LANDLORD — ESTOPPEL CERTIFICATES:

 

A.                                   This Lease shall be subject and subordinate to any existing or future mortgages or deeds of trust placed by Landlord on the Building or the Common Areas; provided, however, that landlord may, at its option, by written document duly recorded in the applicable Office of the Register of Deeds, cause this Lease to become superior to any mortgage or deed of trust on the Building, the Common Areas or any portion thereof. Tenant shall execute a written document evidencing such subordination to any mortgage affecting the Building or the Common Areas in form and substance reasonably acceptable to Landlord and Tenant. Further, at Landlord’s option, this Lease may be assigned by Landlord to any mortgagee or cestui que trust as additional security for any loan to Landlord, and Tenant upon request shall acknowledge receipt of notice of each such assignment. Such assignment may be recorded and Tenant shall, upon notice of such assignment, recognize such assignee as the Landlord according to the terms and conditions of the Lease. At the option of the holder or beneficiary of any encumbrance upon the Building or the Common Area, Tenant agrees that no foreclosure of such encumbrance, nor the institution of any suit, action, or proceedings against Landlord, shall by operation of law or otherwise result in cancellation or termination of this Lease or the obligations of the Tenant or Landlord. Upon request, tenant agrees to execute such instruments satisfactory to the holder, beneficiary, or purchaser at a foreclosure proceeding whereby Tenant attorns to such successor in interest. In the event of such transfer, this Lease and Tenant’s rights hereunder shall continue undisturbed so long as Tenant is not in default hereunder beyond any applicable notice and cure periods hereunder.

 

B.                                     Within ten (10) days after Landlord’s request thereof, Tenant shall execute a written instrument to Landlord or any other person, firm or corporation specified by Landlord, certifying: (a) that Tenant has accepted the Premises, is in occupancy, and is paying rent on a current basis with no off-sets or claims, or if it is not paying rent on a current basis or does have off-sets or claims, tenant shall specify the status of its rental payments and the basis and amount claimed due as off-sets or claims; (b) that this Lease is unmodified and in full force and effect, or if there has been any modifications, that the same is in full force and effect as so modified, and identifying any such modifications; (c) whether or not there are any off-sets or defenses then existing in favor of Tenant against the enforcement of any of the terms, covenants and conditions of this Lease, and if so, specifying the same, and also whether or not Landlord has observed and performed all of the terms, covenants and conditions on the part of Landlord to be observed and performed, and if not, specifying the same; and (d) the dates to which monthly Rent, additional rent and all other charges equivalent to rent hereunder have been paid. Such request may be made by Landlord at any time and from time to time during the Lease term.

 

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C.                                    Landlord and any party succeeding to Landlord’s interest herein may transfer, assign convey or otherwise dispose of this Lease and in such event be free from and relieved of all covenants and obligations of the landlord herein and from any liability from any act or omission or event occurring after such conveyance or other disposition. Any party succeeding to Landlord’s interest herein shall be deemed to have agreed to assume and carry out any and all of the covenants of Landlord under this Lease, so long as it shall hold such interest, all without further agreement between the parties hereto or their successors in interest.

 

25.                               BANKRUPTCY: The filing of any petition in bankruptcy or insolvency or for reorganization under any bankruptcy act by or against Tenant, or Tenant’s making of a voluntary assignment for the benefit of its general creditors, or the filing of any petition for an arrangement of composition under any bankruptcy act, or the appointment of a receiver or trustee after notice and hearing to take charge of its business, or the filing of any other petition or application seeking relief under nay other federal or state laws now or hereafter providing for the relief of debtors, shall automatically constitute a default in this Lease by tenant for which Landlord may, at any time or times thereafter, at its option, exercise any of the remedies and options provided to Landlord in Sections 11 and 19 of this Lease; provided, however, if such petition is filed by a third party against Tenant and Tenant desires in good faith to defend the same, if Tenant is not in default of any obligation hereunder at the time of the filing of such petition and within ninety (90) days thereafter procures a final adjudication that it is solvent and a judgment dismissing such petition, this Lease shall be fully reinstated as though such petition had never been filed.

 

26.                               RULES AND REGULATIONS: Tenant agrees to abide by all rules and regulations now or hereinafter in effect and applicable to the Premises, and all covenants and agreements therein contained. The rules and regulations in effect as of the date hereto are attached hereto as Exhibit “B.”

 

27.                               SURRENDER OF PREMISES; REMOVAL OF PROPERTY: Upon termination of this Lease, whether by expiration of its stated Term or otherwise, Tenant shall peaceably quit and surrender to Landlord the Premises in good condition and repair, ordinary wear and tear and damage by fire or other casualty excepted. All furniture, movable trade fixtures, and equipment installed by Tenant, will be removed by Tenant at termination of the Lease. All such removals shall be accomplished in a workmanlike manner so as not to damage the Premises or the Building, including the structure or structural qualities of the Building or the plumbing, electrical lines, or other utilities. Except for movable office furnishings, all improvements, alterations or additions made by either Landlord or Tenant within the Premises shall become the property of Landlord when the Premises is vacated by Tenant and shall remain upon and be surrendered with the Premises without compensation to Tenant; provided, however, that Landlord may solely at its option, require Tenant to remove at the end of the Lease Term, any and all leasehold improvements designated by Landlord (excluding the initial Tenant Improvement Program) and all fixtures, equipment and other property installed on or in the Premises by Tenant (provided Landlord must require such removal at the time of approving such leasehold improvements) and to thereafter restore the Premises. Notwithstanding the above, Tenant shall not be required to remove any wiring, cabling or the like at the expiration or earlier termination of the Lease. Except for damage by fire or casualty, the maintenance and care of such improvements during the term of this Lease shall be the responsibility of Tenant. If Tenant fails to remove any leasehold improvements (to the extent set forth above), fixtures, equipment or property designated by Landlord for removal, Landlord may remove all or any portion of such improvements or property at Tenant’s cost, with no obligation on the part of Landlord to preserve or store any such removed improvements, fixtures, equipment or property. Any such furniture, movable trade fixtures, and equipment not promptly removed by Tenant shall be deemed conclusively to have been abandoned by Tenant and may be appropriated, sold, destroyed, or otherwise disposed of by Landlord without notice to Tenant or obligation to compensate Tenant or to account therefore. Tenant shall pay Landlord, on demand, all costs incurred by Landlord in connection with such abandonment. Tenant’s obligation to

 

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observe or perform the provisions of this section shall survive the expiration or other termination of this Lease.

 

28.                               HOLDING OVER: In the event Tenant or any of its successors in interest shall fail to quit and vacate the Premises upon expiration or termination of this Lease, The tenant shall immediately be in default of the terms and conditions of this Lease, and such holding over shall constitute and be construed at landlord’s option as a tenancy at will, from month to month, and in such event Tenant shall pay 125% Rent for all the time Tenant retains possession of the Premises, or any part thereof, after the termination of this Lease, whether by lapse or time or by election of either party, pursuant to Section 3 of this Lease, unless Landlord consents in writing to a specified allowable holdover period, and in addition Tenant shall pay all provable consequential damages, including attorney’s fees, suffered by Landlord because of such holding over (but such consequential damages shall only apply if Tenant holds over more than sixty (60) days). Should Tenant hold over in any manner after expiration or termination of this Lease, such holding over by Tenant shall be subject to all terms, covenants and conditions of this Lease which are not inconsistent with such holding over, and no such holding over by Tenant shall ever be construed as an extension of the Lease Term without Landlord’s written consent.

 

29.                               DELAYS BEYOND PARTY’S CONTROL: If performance of any obligation hereunder by Landlord is delayed due to fire, strikes or labor trouble, riots, acts of God, inability or difficulty in obtaining labor or materials, civil commotions, war, governmental laws, regulations, restrictions, or any other causes that are beyond such party’s reasonable control, financial inability excepted, the period of delay shall be added to Landlord’s time from performing such obligations and Landlord shall have no liability because of such delay.

 

30.                               QUIET ENJOYMENT: Landlord agrees that subject to the terms, covenants, and provisions of this Lease, Tenant may upon observing and complying with all terms, covenants, and provisions of this Lease, peaceably and quietly occupy the Premises.

 

31.                               BROKERAGE:

 

A.                                    Tenant represents that it is not had negotiations with or dealt with any broker in connection with the negotiation and execution of this Lease other than CB Richard Ellis, Inc. Landlord hereby agrees to pay CB Richard Ellis, Inc a commission in the amount of 3% of the Base Rent payable for the initial one (1) year Term within 30 days following the full execution of this Lease.

 

B.                                    In the event that Tenant exercises its option to renew the term of this lease, Landlord hereby agrees to pay CB Richard Ellis, Inc a commission in the amount of 3% of the Base Rent payable for such exercised renewal term within 30 days following the full execution of the applicable renewal term.

 

32.                               RELATIONSHIP OF PARTIES: Nothing contained herein shall be deemed or construed to create any principal-agent, partnership or other relationship between Landlord and Tenant, except that of landlord and tenant.

 

33.                               NOTICE: Every notice required or permitted hereunder shall be in writing and shall be deemed duly served for all purposes if: (a) upon Landlord, by depositing a copy thereof in the United States mail, postage prepaid and certified, and addressed to Landlord at the address set forth in the Basic Terms, or at such other place or places as Landlord from time to time may designate in writing as the place for the payment of rent hereunder; or if (b) upon Tenant, by depositing a copy thereof in the United States mail, postage prepaid and certified, and addressed to Tenant at the address of the Premises, or by delivering the same in person to an officer of such party with written acknowledgement receipt, or by overnight delivery, when appropriate, addressed to the party to be

 

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notified at the address of the Premises. Any such notice shall be effective as of the earlier of the date it is so delivered, mailed, or sent to overnight delivery.

 

34.                               PARKING: One hundred (100) parking spaces will be provided on-site on a non-reserved, rent-free basis, as shown on Exhibit “D” attached hereto. The use of Tenant’s share of all parking spaces provided by Landlord for the Building shall be subject always to all applicable rules and regulations. Tenant shall have access to the parking lot twenty-four (24) hours per day, seven (7) days per week.

 

In addition to Tenant’s use of the on-site parking lot, Tenant shall be entitled to store vehicles, at no additional cost, within the parking lot identified on Exhibit “D” attached hereto (the “Storage Lot”), which Storage Lot will park at least 300 vehicles. Tenant shall access to such Storage Lot through a secured gate (subject to the $10,000 allowance set forth on Exhibit “C”), which Tenant shall have access to twenty-four (24) hours per day, seven (7) days per week.

 

35.                               LIMITED LIABILITY OF LANDLORD: Tenant understands and agrees that none of the Landlord’s covenants, undertakings or agreements are made or intended as personal covenants, and that any liability for damage, breach or non-performance by Landlord will be collected only out of Landlord’s interest in the Building. No personal liability is assumed by the Landlord, nor may any such personal liability be at any time asserted against the Landlord. If Landlord shall for any reason terminate its ownership of the Building, Tenant understands and agrees that any claim which Tenant may have against Landlord as of such date will be deemed to have been waived or terminated, it being understood that Tenant’s recourse in the event of any such claim shall be any successor’s respective ownership of the Building.

 

36.                               HEIRS, SUCCESSORS AND ASSIGNS: The term “Tenant” as used in this Lease means and applies to whomever executes this Lease as a Tenant regardless of number, gender or nature or entity. If more than one Tenant executes this Lease, such Tenants shall be jointly and severally liable hereunder. Subject to the provisions of Sections 11 and 24 of this Lease, all covenants, conditions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and their respective heir, legal representatives, successors and permitted assigns.

 

37.                               ENTIRE AGREEMENT: Tenant acknowledges that, except as expressly set forth herein, Landlord, its agents and employees have made no representations or warranties respecting the Premises, the Building or Common Areas. If any provision of this Lease shall be declared invalid or unenforceable, the remainder of this Lease shall continue in full force and effect. This Lease contains the entire agreement between the parties. This Lease may be modified only by a writing signed by both parties. This Lease shall be governed by the laws of the State of Missouri.

 

38.                               HAZARDOUS MATERIALS:

 

A.                                    Compliance with Hazardous Materials Laws: Tenant will not cause any Hazardous Material to be brought upon, kept or used on the Building or Common Areas in a manner or for a purpose prohibited by or that could result in liability under any Hazardous Materials Law. Tenant, at its sole cost and expense, will comply with all Hazardous Materials Laws and prudent industry practice relating to the presence, treatment, storage, transportation, disposal, release or management of Hazardous Materials on, on, under or about the Building or Common Areas that Tenant brings upon, keeps or uses on the Building or Common Areas and will notify Landlord of any and all Hazardous Materials Tenant brings upon, keeps or uses on the Building or Land(other than small quantities of office cleaning or other office supplies as are customarily used be a tenant in the ordinary course in a general office and production facility and except as provided below). On or before the Expiration Date or earlier termination of this Lease, Tenant, at its sole cost and expense, will completely remove from the Building and Common Areas (regardless whether any Hazardous Materials Law requires removal), in compliance with all Hazardous Materials Laws, all Hazardous Materials Tenant causes to

 

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be present in, on, under or about the Building or Common Areas. Notwithstanding anything to the contrary contained herein, Tenant shall not be in violation of this Section 38 and Tenant is hereby permitted to bring onto the Premises such batteries, solvents and other items which may constitute “Hazardous Materials” as defined below so long as such items are used in the ordinary course of Tenant’s business and such items are held, used, stored and disposed of in accordance with all applicable Hazardous Materials Laws.

 

B.                                    Definitions: For purposes of this Lease, “Hazardous Materials” means any of the following, in any amount: (a) any petroleum or petroleum product, asbestos in any form, urea formaldehyde and polychlorinated biphenyls; (b) and radioactive substance; (c) any toxic, infectious, reactive, corrosive, ignitable or flammable chemical or chemical compound; and (d) any chemicals, materials or substances, whether solid, liquid, or gas, defined as or included in the definitions of “hazardous substances,” “hazardous wastes,” “ hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “solid waste,” or words of similar import in any federal, state, local statute, law, ordinance or regulation now existing or existing on or after the Commencement Date as the same may be interpreted by government offices and agencies. “Hazardous Materials Laws” means any federal, state or local states, laws, ordinances or regulations now existing or existing after the Commencement Date that control, classify, regulate, list or define Hazardous Materials or require remediation of Hazardous Materials contamination.

 

C.                                    Notice of Actions: Tenant will notify Landlord of any of the following actions affecting Landlord, Tenant, the Building or the Common Areas that result from or in any way relate to tenant’s use of the Building or Common Areas immediately after receiving notice of the same: (a) any enforcement, clean-up, removal or other governmental or regulatory action instituted, completed or threatened under any Hazardous Materials Law; (b) any claim made or threatened by any person relating to .damage, contribution, liability, cost recovery, compensation, loss or injury resulting from or claimed to result from any hazardous Material; and (c) any reports made by any person, including Tenant, to any environmental agency relating to any Hazardous Material, including any complaints, notices, warnings or asserted violations. Tenant will also deliver to Landlord, as promptly as possible, copies or all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Premises or Tenant’s use of the Premises. Upon Landlord’s written request, Tenant will promptly deliver to Landlord documentation acceptable to Landlord reflecting the legal and proper disposal of all Hazardous Materials removed or to be removed from the Premises. All such documentation will list Tenant or its agent as a responsible party and will not attribute responsibility for any such Hazardous Materials to Landlord.

 

D.                                    Disclosure and Warning Obligations: Tenant acknowledges and agrees that all reporting and warning obligations required under Hazardous Materials Laws resulting from or in any way relating to Tenant’s use of the Premises, the Building or the Common Area are Tenant’s sole responsibility, regardless whether the Hazardous Materials Laws permit or require Landlord to report or warn.

 

E.                                     Indemnification: Tenant releases and will indemnify, defend (with counsel reasonably acceptable to Landlord), protect and hold harmless the Landlord from and against any and all claims whatsoever arising or resulting, in whole or in part, directly or indirectly, from the presence, treatment, storage, transportation, disposal, release or management of Hazardous Materials in, on, upon or from the Building and Common Areas (including water tables and atmosphere) that Tenant brings upon, keeps or uses on the Premises, the Building or Common Areas. Tenant’s obligations under this section survive the expiration or earlier termination of this Lease.

 

F.                                      Landlord’s Environmental Representation and Warranty; Indemnification. Landlord has ordered an appropriate environmental report to create a baseline of Landlord’s environmental liability with respect to the Premises (the “Environmental Report”). Such Environmental Reports will

 

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not be completed as of the execution date of this Lease. Landlord will provide a copy of such Environmental Reports upon receipt of the same. The Environmental Report will create a baseline of the environmental condition of the Premises (the “Environmental Baseline”). Subject to the statutory limitations under Missouri law, Landlord shall indemnify, defend and hold Tenant harmless from and against any and all claims, demands, liabilities, losses and expenses, including consultant fees, court costs and reasonable attorneys’ fees, arising out of the presence prior to the Commencement Date of any Hazardous Materials or any other toxic material on, in or under the land on which the Building is situated, the Building or any of the other improvements constructed on the land on which the Building is situated. Tenant shall be responsible for environmental conditions affecting the Premises as provided in Sections 38(A)-(E) above such Environmental Baseline. Notwithstanding anything to the contrary set forth herein, the terms of this Section 38(F) shall survive the expiration or earlier termination of this Lease.

 

39.                               Earnings Tax/Occupational License Clearance. Prior to the Commencement Date, Tenant shall furnish the Landlord sufficient proof from City of Kansas City, Missouri’s Commissioner of Revenue, dated not more than sixty (60) days before the date furnished to the Landlord, that it is not delinquent for any City of Kansas City, Missouri earnings or occupational license taxes, including withholdings from its respective employees.

 

40.                               Affirmative Action. To the extent required by law, Tenant shall establish and maintain for the term of this Lease an Affirmative Action Program in accordance with the provisions of Chapter 38 of the Code, the rules and regulations relating thereto and any additions or amendments. Tenant shall not discriminate against any employee or applicant for employment because of race, color, creed or religion, ancestry or national origin, sec, handicap or disability, age, familial status, marital status or sexual orientation, in a manner prohibited by Chapter 38 of the Code. If Tenant fails, refuses or neglects to comply with Chapter 30 of the Code, then the failure shall be deemed a total breach of this lease and this Lease may be terminated, canceled or suspended, in whole or in part, and Lessee may be declared ineligible for any further contracts funded by the City of Kansas City, Missouri for a period of one (1) year. This is a material term of this Lease.

 

41.                               Amendments; Landlord Representations and Warranties. This Lease may be amended from time to time by written Amendment, duly authorized and executed by representatives of both parties hereto, without further City of Kansas City, Missouri City Council action. Landlord represents and warrants that, to the best of its knowledge, (i) it is the fee simple title owner and record title holder of the Land and the Building, (ii) the Landlord has not received any notice and does not have any knowledge of any eminent domain or similar proceeding which would affect all or any portion of the Building, the Land or the Premises, (iii) Landlord has the full right, power and authority to make this Lease and (iv) no restrictive covenant or similar agreement restricts, prohibits, or otherwise unreasonably affects Tenant’s ability to operate its business at the Premises.

 

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IN WITNESS WHEREOF, the parties hereto for themselves, their successors and assigns, have executed this Lease the day and year first above written.

 

 

	
 
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SMITH ELECTRIC VEHICLES US   CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Bryan Hansel
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
KANSAS CITY, MISSOURI
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Mark VanLoh
    
	
 
    	
 
    	
 
    	
Mark VanLoh, AAE
    
	
 
    	
 
    	
 
    	
Director of Aviation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Approved as to form:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Dorothy Campbell
    	
 
    	
 
    	
 
    
	
Dorothy Campbell
    	
 
    	
 
    	
 
    
	
Assistant City Attorney
    	
 
    	
 
    	
 
    

 

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EXHIBIT “A”

 

PREMISES

 

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EXHIBIT “A-I”

 

RIGHT OF FIRST REFUSAL SITE

 

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EXHIBIT “B”

 

RULES AND REGULATIONS

 

1.                                       Tenant, its agents employees, customers, guests, licensees and invitees shall not loiter in entrances, nor in any way obstruct any sidewalks or parking areas. Canvassing, soliciting and peddling in the Building is prohibited.

 

2.                                       Tenant shall not mark, drive nails, screw or drill into, paint or in any way deface the walls, ceilings, partitions, floors, wood, stone or iron work of the Building, except as necessary to hang paintings, certificates and similar decorations for reasonable office decoration.

 

3.                                       No awnings or other projections shall be attached to the outside walls of the Building, and no window shades, blinds, drapes or other window coverings shall be hung in the Premises, without the prior written consent of Landlord.

 

4.                                       The toilets and urinals shall not be used for any purposes other than those for which they were constructed, and no substance of any kind shall be thrown therein. Waste and excessive unusual use of water shall not be allowed.

 

5.                                       Tenant shall not use any apparatus, machinery or device in or about the Premises that will make any objectionable noise or vibration, and Tenant shall not connect any apparatus, machinery or device with electric wires to water pipes or air conditioning ducts without the prior written consent of Landlord.

 

6.                                       Electrical wiring of every kind shall be introduced and connected only as directed by Landlord and no boring or cutting for wires shall be allowed except with prior consent of Landlord. All telephones, telephone call boxes, telephone cables and other related equipment shall be installed and located in such manner as is directed by Landlord.

 

7.                                       Landlord’s reasonable approval of the weight, size and location of all heavy equipment to be brought into the Building must be obtained prior to the same being brought into the Building (which approval shall not be unreasonably withheld, conditioned or delayed), and all such property shall be moved into or out of the Building only during such time or times and at such entrances as may be reasonably designated by Landlord or Landlord’s Agent. Further, all such moving must be done by professional bonded movers under the supervision of Landlord. Landlord shall not be responsible for any loss or damage to any such property from any cause, but all damage caused to such Building in the moving or maintaining of any such property shall be at the expense of Tenant.

 

8.                                       No tenant shall cause or permit any unusual or objectionable odors to escape from the Premises. The Premises shall not be used for lodging or sleeping or for any immoral or illegal purposes. No tenant shall make, or permit to be made, any unseemly or disturbing noises, sounds or vibrations, or otherwise disturb or interfere with occupants of the building or those having business with them. No tenant shall throw anything out of doors or in the corridors, stairways or in other common areas.

 

9.                                       No additional lock or locks shall be placed on any doors in the Building of which the Premises is a part without Landlord’s prior written consent. Two keys to the Premises shall be furnished by Tenant to Landlord and all such keys shall at all times remain the property of Landlord.

 

10.                                 All removals or deliveries of freight must take place during normal business hours and in the locations designated by Landlord form time to time.

 

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11.                                 All vehicles must be parked in striped, designated, parking areas. In order to keep all required fire lanes open, to protect persons and property form injury or damage due to fire or other casualty, to avoid unreasonably interfering with the rights of Landlord and other tenants within the Building, and such other tenant’s Invitee’s, to keep all driveways, aisles, entry ramps, roadways, sidewalks and parking areas available for their intended uses, top provide suitable parking for visitors and the disabled, and to not unreasonably interfere with anyone’s ingress and egress to the Building, Tenant agrees to restrict the parking of its motor vehicles and the motor vehicles of all of its Invitees to only those striped, designated parking areas provided for the Building, so that all roadways, driveways, aisles, entry ramps, sidewalks and pedestrian passageways shall remain open and unobstructed at all times for their intended uses, and that those for whom they are intended. Tenant shall not park any vehicles in any parking lot overnight, unless the owner of such car is then within the Building, without Landlord’s prior consent. Should a motor vehicle be parked by Tenant or by any of its Invitees other than in such designated parking areas, or overnight without Landlord’s consent, or otherwise fail to be in compliance with all applicable rules and regulations, Landlord shall remove or cause the removal of such vehicle from the Property at the cost of the owner thereof, and Landlord shall not be liable to Tenant or any of its Invitees or any other person for any loss or damage which may result therefrom.

 

12.                                 Sidewalks and pedestrian plazas are provided for ingress to and egress from parking areas and building(s). Tenant and Tenant’s agents, employees, customers, guests, licensees and Invitees are required to use them at all times and shall not walk on the grass or over plant beds.

 

13.                                 No explosives, firearms, flammables or hazardous substances of any kind shall be brought into the Building and the Common Areas.

 

14.                                 No refuse or garbage will be stored anywhere except inside the Premises or in areas designated by Landlord.

 

15.                                 Tenant shall comply with all covenants, conditions, restrictions, declarations and similar encumbrances which affect the Building and the Common Areas.

 

Landlord reserves the right to establish and enforce additional rules and regulations and to modify existing rules and regulations for the safety, maintenance, repair and cleanliness of the Building and the Common Areas, and for the preservation of good order therein, and Tenant agrees to comply with and abide by all such further rules and regulations. Landlord further reserves the right to establish, modify and enforce the rules and regulations as to the parking areas and other Common Areas and Tenant agrees to comply with and abide by the same.

 

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EXHIBIT “C”

 

TENANT IMPROVEMENT PROGRAM

 

A.                                   Landlord, at its sole expense, agrees to furnish or perform those items of construction and those improvements (the “Tenant Improvement Program”) listed below on a turn-key basis:

 

·                       Paint Ceilings. Clean and paint 50,000 square feet of ceilings, bar joists, piping and ducts ($50,412.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Break Room. Re-tile floor, re-lamp light fixtures, build temporary walls, clean diffusers and supply a fire extinguisher have all HVAC serviced and in good operating order prior to occupancy ($11,8.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Office Space. Re-carpet, replace ceiling tile, demo wall, re-lamp lights, clean diffusers and supply a fire extinguisher have all HVAC serviced and in good operating order prior to occupancy ($21,100.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Paint Walls. Interior and exterior office and break room walls, stairwells, warehouse ($21,800.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Bathroom Repairs. Paint walls, build temporary wall, repair plumbing fixtures ($14,500.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Hang Banner Material. Suspend banner material around warehouse spade ($8,500.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Warehouse Floor. Remove yellow striping, dirt and oil and apply clear sealer on floor ($36,600.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Return Bay. Hang banner material, general clean up ($4,900.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Return Bay Concrete Floor Repair. Tear out and replace approximately 4000 square feet of concrete floor (no cost to Tenant).

 

·                       Demo Coiling Overhead Door. Remove interior overhead door between production line and return bay ($2,700.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                       Fencing Gate Allowance. Fencing gates to Vechicle storage area and modifications if need to the gate to dock high loading area ($10,000 allowance provided to Tenant and included as part of the Tenant Improvement Rent).

 

·                       Duct Cleaning Allowance. Duct cleaning please confirm the scope and bid on this item for final review and approval ($10,000 allowance provided to Tenant and included as part of the Tenant Improvement Rent).

 

Total cost is $192,312.00 based upon such items. Landlord shall provide a Tenant Improvement Allowance in the amount of $40,000.00. Accordingly, Tenant shall be responsible for $152,312.00 as to the Tenant Improvement Rent (which equals $6,346.33 per month over a 24-month period at 0% interest).

 

26

 

In addition to such items set forth above, at Tenant’s option, Landlord hereby agrees to provide to Tenant an additional amount of $25,000 (the “Additional Allowance”) to be used by Tenant in connection with improvements to the Premises. If Tenant elects to use all or any portion of the Additional Allowance, then the Tenant Improvement Rent will be adjusted accordingly (and spread over a 24-month period at 0% interest).

 

B.                                     If Tenant shall desire any changes to the Tenant Improvement Program, Tenant shall so advise Landlord in writing and Landlord shall determine whether such changes can be made in a reasonable and feasible manner. Any and all costs of making any changes to the Tenant Improvement Program which Tenant may request and which Landlord may agree to shall be at Tenant’s sole cost and expense and shall be paid to Landlord within thirty (30) days after written demand by Landlord. In addition to the Tenant Improvement Program, Tenant may make other alterations and improvements to the Premises in accordance with the terms of the Lease, but at Tenant’s sole cost and expense.

 

C.                                     Upon execution of the Lease, Landlord shall immediately proceed with and complete the construction of Tenant Improvement Program.

 

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EXHIBIT “D”

 

PARKING LOT DEPICTION

 

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