Document:

Exhibit 10.18

 

OFFICE LEASE

(Ambassador Building at KCI)

 

THIS OFFICE 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:
    	
 
    	
Suite 326,   consisting of 8,682 rentable square feet and located on the 3rd floor of the Building. See Exhibit “A” attached hereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Building:
    	
 
    	
12200   NW Ambassador Drive, Kansas City, Missouri.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
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 April 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:
    	
 
    	
24   months (“Initial Term”)
    
	
 
    	
 
    	
 
    	
 
    	
12   months (“First Renewal Term”)
    
	
 
    	
 
    	
 
    	
 
    	
12   months (“Second Renewal Term”)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Rent:
    	
 
    	
Base Rent + Tenant Improvements = Rent
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Base   Rent  (+)  Tenant Improvements
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Year   1: $10,852.50/mo (+) $925/mo*
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Year   2: $10,852.50/mo (subject to Section 5 Rent Adjustment) (+) $925/mo*
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Year   1: Rent payments: $11,777.50/mo*
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
*NOTE:   The Tenant Improvement Rent to be adjusted based upon the number of locations   of voice power and data for entire office and for each cubicle (to be   determined on final plans as provided 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:
    	
 
    	
$10,000.00   (to be applied toward the Tenant Improvement Project set forth on Exhibit “C”)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Exhibits:
    	
 
    	
Exhibit “A”   — Premises
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “A-1” — Parking
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “A-2” — Right of   First Refusal Space
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “B” —   Rules and Regulations
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “C” — Tenant   Improvement Program
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “D” — Janitorial   Specifications
    
	
 
    	
 
    	
 
    	
 
    	
Exhibit “E” — Meeting   Space Rate Schedule
    

 

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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.                                   Premises. 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) and further subject to latent defects. Landlord represents and warrants that, as of the Commencement Date, the Premises shall comply with all applicable laws.

 

B.                                     Re-measurement of Premises. The amount of rentable square feet comprising the Premises shall be calculated in accordance with Building Owners and Managers Association International (ANSI/BOMA Z65.1-1996 “Standards of Method for Measuring Floor Area for Office Buildings”, as amended) standards upon completion of the construction of the Premises and may be verified by Tenant. Upon re-measurement, the monthly installments of Basic Rent hereunder shall be adjusted to reflect the product of the actual rentable square feet of the Premises multiplied by the Rent amounts set forth below divided by twelve (12).

 

C.                                     Common Area. 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). Notwithstanding the above, Tenant shall have the right to use the conference facility on the first floor and/or the third floor of the Building the “Conference Facility”) at no charge one (1) time per year and may use such Conference Facility on additional occasions at Tenant’s option at a rate per use as defined in Exhibit “E” - Meeting Space Rate Schedule (which rate must be uniformly charged to all tenants of the Building) based upon availability of such Conference Facility.

 

D.                                    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-2” 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;

 

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ii.                                       Description of the property to be leased; and

 

iii.                                    Details of bona fide offer.

 

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, subject to latent defects. 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.

 

(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.

 

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 the initial two (2) year term of this Lease or any renewal term, Tenant will make a payment to Landlord equal to (i) the applicable unamortized portion of the leasing commissions paid 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

 

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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.

 

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.

 

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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 general office use, and for other lawful purposes, 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 and Air Conditioning: Landlord agrees to supply heating and air conditioning when necessary for normal comfort in the Premises from Monday through Friday, during the period from 7:00 a.m. to 6:00 p.m., and on Saturday from 8:00 a.m. to 1:00 p.m., exclusive of holidays (“Normal Business Hours”). When machines or equipment are used in the Premises that generate heat or in any way affect the temperature otherwise maintained by the air conditioning system, or when occupancy of the Premises or electrical loads exceed standards set from time to time by building management (as determined by a Landlord on a commercially reasonable basis), Landlord reserves the right to require Tenant to install (or, at Landlord’s option, to require Tenant to reimburse Landlord for its installation of) supplementary air conditioning and/or ventilation units in the Premises, in such manner. Landlord further agrees that heating or air conditioning 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 entire cost of such additional services based upon prevailing rates (on an

 

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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 120 volts. Landlord shall not be responsible for providing electricity required for any electrical equipment requiring voltage other than 120 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. Notwithstanding the above, two (2) parking spaces (Exhibit “A-1”) shall have 220-volt charging locations, as provided in Section 34 below.

 

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

 

(iv)                              Janitorial: Landlord agrees to furnish to the Common Areas and to the Premises-daily janitorial services and normal trash removal customarily furnished by similar office buildings in the suburban Platte County area, as more fully set forth in the janitorial specifications set forth on Exhibit “D”.

 

(v)                                 Elevator: Landlord shall supply appropriate elevator services for the Building during Normal Business Hours and at all other times shall provide what Landlord deems to be sufficient elevator service, subject always to reasonable security requirements, to permit Tenant reasonable access to the Premises.

 

(vi)                              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.

 

(vii)                           Lobby Desk and Security: Landlord shall provide a person to work at the lobby desk of the Building during normal business hours. Landlord shall further provide a card key access system for after hours use of the Premises by the Tenant. 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. Notwithstanding the above, 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

 

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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.

 

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.

 

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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 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 be 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: 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, Landlord

 

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shall provide kiosk signage in the lobby of the Building and at the entry of the Premises, at Landlord’s cost and expense.

 

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 (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.                                 OBILIGATION 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

 

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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.

 

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, flood, earthquake 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

 

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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.

 

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

 

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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 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

 

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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 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/Limitation 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.

 

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. 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

 

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(including, but not limited to, reasonable attorneys’ fees, costs and expenditures) from the non-prevailing party.

 

23.                               RELOCATION OF TENANT: Upon not less than forty-five (45) days prior written notice to Tenant, Landlord may relocate Tenant to other space of comparable size and quality within the Building, so long as the relocated space is contiguous and such space has similar configuration and amenities as is provided in the Premises. Landlord will move or pay for physically moving Tenant’s personal property and equipment to the new space and will reimburse Tenant for reasonable, documented out-of-pocket costs Tenant incurs in connection with the relocation. Prior to or concurrently with the relocation, Landlord will prepare, and the parties will execute, an amendment to this Lease to evidence the relocation and make any necessary changes to the Basic Terms resulting from the relocation.

 

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.

 

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

 

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

 

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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 two (2) 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 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.

 

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34.                               PARKING: Parking at a ratio of 5 cars per 1,000 square feet will be provided on-site on a non-reserved, rent-free basis, as shown on Exhibit “A-I” attached hereto. Two (2) of those parking spaces shall be equipped by Landlord with 220-volt charging locations and shall be designated and signed for the exclusive use of Tenant. 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.

 

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 facility). 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 be present in, on, under or about the Building or Common Areas.

 

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,”

 

18

 

“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 Areas 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 represents and warrants to Tenant that as of the Effective Date, to the best of Landlord’s knowledge (i) no Hazardous Materials are present on or in the Building or any of the other improvements constructed at the Project, and (ii) no Hazardous Materials are present on, in or under the land on which the Building has been built and is situated. 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. 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

 

19

 

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.

 

20

 

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, AAE
    
	
 
    	
 
    	
 
    	
Mark   VanLoh, AAE
    
	
 
    	
 
    	
 
    	
Director   of Aviation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Approved   as to form:
    	
 
    	
 
    	
 
    
	
/s/   Dorothy Campbell
    	
 
    	
 
    	
 
    
	
Dorothy   Campbell
    	
 
    	
 
    	
 
    
	
Assistant   City Attorney
    	
 
    	
 
    	
 
    

 

21

 

EXHIBIT “A”

 

PREMISES

 

22

 

	

    

 

 

EXHIBIT “A-1”

 

PARKING

 

23

 

	

    

 

 

EXHIBIT “A-2”

 

RIGHT OF FIRST REFUSAL SPACE

 

24

 

	

    

 

 

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 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, 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 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.

 

25

 

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.

 

26

 

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:

 

·                  Conference Room. Metal studs, drywall, door and hardware, relocation of lighting, new indirect strip light fixture, relocation of projector screen ($11,900.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                  Reception Area. Relocation of glass wall, patch ceiling, relocate light switch, patch carpet ($10,200.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                  Wall and Door at end of Hallway. Demising wall and door separating executive area from boardroom glass door, card reader on door and light switches ($3,200.00 charged to Tenant as part of the Tenant Improvement Rent).

 

·                  Parking lot power. Supply power to parking lot for charging vehicles two 220 volt chargers ($6,900.00 charged to Tenant as part of the Tenant Improvement Rent).

 

Total cost is $32,200.00 based upon such items. Landlord shall provide a Tenant Improvement Allowance in the amount of $10,000.00. Accordingly, Tenant shall be responsible for $22,200.00 as to the Tenant Improvement Rent (which equals $925 per month over a 24-month period at 0% interest).

 

In addition to such items, Landlord agrees to furnish or perform those items of construction set forth below (on a turn-key basis, with an established charge to be added to the Tenant Improvement portion of Rent):

 

·                  Office Voice Data and Power. Provide voice data and power to each office desk location subject to final floor plan and bid ($1,150.00 per location charged to Tenant as part of the Tenant Improvement Rent - the number of locations will be determined by Tenant in the final plans).

 

·                  Voice Data and Power to Cubicles. Provide one voice, one data and power to each location subject to final floor plan and bid ($850.00.00 per cubicle charged to Tenant as part of the Tenant Improvement Rent - the number of locations will be determined by Tenant in the final plan).

 

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.

 

27

 

EXHIBIT “D”

 

JANITORIAL SPECIFICATIONS

 

28

 

JANITORIAL SCOPE OF SERVICES

 

DAYTIME SERVICE

 

Maintenance company will provide full-time day porter, Monday through Friday, for a total of eight (8) hours per day. They will be responsible for performing services which will be detailed in a provided schedule, as well as taking care of any emergency situations. The day personnel will be employed by the maintenance company, however, will be subject to supervision and direction by building management or their designee. Under no circumstances, unless approved in advance, should the day personnel perform any of the duties specified for the nighttime personnel.

 

Basically, the day personnel will cover duties in the interior common areas of the building (i.e. lobbies, corridors, break rooms, elevators, service/delivery and mail center, etc.) as well as maintain the building’s exterior areas. In some instances cleaning of specified tenant’s leased space may be required during the day personnel’s shift. A brief explanation of specific interior common area and nightly office area duties may be found at the end of this Scope of Services section; however, these are only designed to demonstrate the type of work to be performed and are not intended to be a full description of all facets of the either the day or night personnel’s jobs and/or duties.

 

EXTERIOR COMMON AREA SERVICE (Daytime Personnel Only)

 

The day personnel shall perform the daily cleaning and policing of the outside of the building entrances, including sidewalks and walkways. Also included will be all building stairwells. Day personnel will hose the building entrances daily, weather permitting.

 

RECYCLING PROGRAM (Daytime and Nighttime Personnel)

 

The day personnel will be responsible for handling of all paper and transferring this material to storage bins in the dock area.

 

SNOW REMOVAL SERVICE (Daytime Personnel Only)

 

The day personnel will be responsible for assisting in the removal of snow from the building entrances.

 

NIGHTTIME SERVICE

 

Maintenance company will provide nighttime janitorial service, Monday through Friday. They will be responsible for performing services which will be detailed in a provided schedule, as well as taking care of any emergency situations. The nighttime personnel will be employed by the maintenance company; however, will be subject to supervision and direction by building management or their designee. Under no circumstances, unless approved in advance, should the nighttime personnel perform any of the duties specified for the daytime personnel.

 

Basically, the night personnel will cover duties in the interior of the building associated with specified tenant leased space. A brief explanation of specific interior common area and nightly office area duties may be found at the end of this Scope of Services section; however, these are only designed to demonstrate the type of work to be performed and are not intended to be a full description of all facets of either the daytime or nighttime personnel’s jobs and/or duties.

 

 

EXPLANATION OF DUTIES

 

DAILY INTERIOR COMMON AREA / NIGHTLY OFFICE AREA SERVICES

 

Feather dust and wipe clean all furniture, desk tops, and file cabinets.

Clean all glass entry doors.

Spot clean all bright work and visible hardware to remove dust, dirt, smudges.

Thoroughly clean all door saddles of dirt and debris.

Empty all waste paper baskets and trash containers.

Remove all trash from floors to the designated trash area.

Clean, disinfect, and polish all drinking fountains.

Vacuum all carpets and perform minor spot cleaning.

Sweep all hard floor surfaces.

Damp mop all hard floor surfaces.

Nightly trash to be placed on plastic tarp in front of service elevator.

Paper folders on desks are not to be moved.

Return chairs and waste baskets to proper positions.

Check for burned out lights and report them to supervisor.

Secure all lights as soon as possible each night.

 

WEEKLY SERVICES

 

Dust all window sills, picture frames, ledges, exit signs, and other exposed flat surfaces.

Complete “hi-lo” dusting of all chair rungs, legs, and sides of desks, and other surfaces.

Damp wipe and sanitize telephones.

 

MONTHLY SERVICES

 

Fingerprints will be removed from walls.

Wipe down cove base and kick plates.

Dust and vacuum overhead vents, within reach.

Vacuum all carpet corners and edges.

 

SEMI-ANNUAL SERVICES

 

Vacuum all upholstered or fabric covered furniture and draperies.

Machine strip all hard floor surfaces and refinish.

 

REST ROOMS

 

DAILY/NIGHTLY REST ROOM SERVICES

 

Restock all restrooms with supplies from stock – including paper towels, toilet tissue, and soap.

Restock all sanitary napkin and tampon dispensers.

Wash and polish all mirrors, dispensers, faucets and bright work with a disinfectant cleaner.

Wash and sanitize all toilets, toilet seats, urinals & sinks with a disinfectant cleaner.

Wipe all sinks dry.

Empty and sanitize all waste, sanitary napkin, and tampon receptacles.

Spot clean finger prints, marks, and graffiti from walls, partitions, and light switches.

 

 

EXPLANATION OF DUTIES (Cont.)

 

REST ROOMS

 

Remove all rest room trash from building to building supplied dumpsters.

Sweep and damp mop floor surfaces using disinfectant cleaner.

Report all fixtures not working properly in the log book.

 

MONTHLY REST ROOM SERVICES

 

Clean rest room vents.

Remove fingerprints from walls.

Wipe down all tile walls and metal partitions.

Clean all ventilation grills.

Dust all doors and door jambs.

 

QUARTERLY REST ROOM SERVICES

 

Wipe interior (rest room side) of all doors.

Machine scrub all tile floors.

 

PASSENGER ELEVATORS (Daytime Only)

 

DAILY PASSENGER ELEVATOR SERVICES

 

Spot clean interior metal, tile, wood, cab walls and doors.

Spot clean outside surfaces of all elevator doors and frames.

Vacuum/mop all cab floors thoroughly.

Vacuum all elevator thresholds.

 

WEEKLY PASSENGER ELEVATOR SERVICES

 

Thoroughly clean all interior metal and stone surfaces of all doors, frames, and panels.

Clean and polish all thresholds with steel wool.

 

BREAK ROOMS, CORRIDORS, SERVICE AREAS

 

DAILY SERVICE AREAS

 

Keep areas clean and organized.

Keep sinks clean and free of visible debris.

 

WEEKLY SERVICE AREAS

 

Sweep and wet-mop hard floors.

 

SEMI-ANNUAL SERVICE AREAS

 

Machine scrub all hard floors.

 

 

EXHIBIT ‘E’

 

MEETING SPACE RATE SCHEDULE

 

29

 

THE AMBASSADOR BUILDING AT KCI

MEETING SPACE RATE SCHEDULE

Effective July 1, 2008

 

Executive Board & Hospitality Rooms

 

	
Tenant Rate
    	
 
    	
Non-Tenant Rate
    	
 
    
	
Partial Day
    	
 
    	
Full Day
    	
 
    	
Partial Day
    	
 
    	
Full Day
    	
 
    
	
 
    	
 
    	
$
    	
200.00
    	
 
    	
 
    	
 
    	
$
    	
250.00
    	
 
    
	
Six Hours - $175.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
Four Hours - $150.00
    	
 
    	
 
    	
 
    	
$150.00
    	
 
    	
 
    	
 
    
	
Two Hours - $100.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
										

 

Executive Hospitality Room (1)

 

	
Partial Day
    	
 
    	
Full Day
    	
 
    	
Partial Day
    	
 
    	
Full Day
    	
 
    
	
 
    	
 
    	
$
    	
150.00
    	
 
    	
 
    	
 
    	
$
    	
200.00
    	
 
    
	
Six Hours - $ 125.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
Four Hours - $100.00
    	
 
    	
 
    	
 
    	
$100.00
    	
 
    	
 
    	
 
    
	
Two Hours - $ 75.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
										

 

(1) Executive Hospitality Room may be reserved separate from Executive Board Room or other Meeting Spaces per the above rates.

 

 

THE AMBASSADOR BUILDING AT KCI
 MEETING SPACE RATE SCHEDULE

Effective July 1, 2008

 

CONFERENCE CENTER AUDITORIUM
 *** FULL FACILITY ***

 

	
Tenant Rate
    	
 
    	
Non-Tenant Rate
    	
 
    
	
Partial Day
    	
 
    	
Full Day
    	
 
    	
Partial Day
    	
 
    	
Full Day
    	
 
    
	
 
    	
 
    	
$
    	
250.00
    	
 
    	
 
    	
 
    	
$
    	
500.00
    	
 
    
	
Six Hours - $200.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
Four Hours - $150.00
    	
 
    	
 
    	
 
    	
$300.00
    	
 
    	
 
    	
 
    
	
Two Hours - $100.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
										

 

CONFERENCE CENTER AUDITORIUM (2)
  *** HALF FACILITY***

 

	
Partial Day
    	
 
    	
Full Day
    	
 
    	
Partial Day
    	
 
    	
Full Day
    	
 
    
	
 
    	
 
    	
$
    	
150.00
    	
 
    	
 
    	
 
    	
$
    	
300.00
    	
 
    
	
Six Hours - $ 125.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
Four Hours - $100.00
    	
 
    	
 
    	
 
    	
$200.00
    	
 
    	
 
    	
 
    
	
Two Hours - $ 75.00
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
										

 

(2) Conference Center Reception/Pro-Function Area is available at same rates as Conference Center Auditorium – Half Facility.Exhibit 10.20

 

***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

Smith – AVIA Ashok Supply Agreement

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT (“Agreement”) is dated this 7th day of October, 2010 (the “Effective Date”), by and between Smith Electric Vehicles US Corp., of 12200 N.W. Ambassador Drive, Suite 326, Kansas City, Missouri, USA, its subsidiaries and Affiliates (“Smith”), and AVIA Ashok Leyland Motors s.r.o. of Beranovych 140, CZ 19903 Praha 9. Letnany, Czeeh Republic, its subsidiaries and Affiliates (collectively, “AVIA Ashok”) (collectively the “Parties,” and each individually a “Party”), based upon the following recitals.

 

A.            AVIA Ashok desires to sell and Smith desnes to purchase the Products on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, the Parties agree as follows:

 

ARTICLE 1. DEFINITIONS

 

As used in this Agreement, the following words, when capitalized, have the meanings set forth below:

 

1.1          “Affiliate” means any business or other entity which is directly or indirectly controlling, controlled by or under common control with the specified entity, and control means direct or indirect ownership or actual control of at least fifty percent (50%) of the voting shares or other equity interest having power to elect directors or persons performing a similar function.

 

1.2          “Background Intellectual Property” of a Party means (a) the intellectual Property of a Party that is owned or controlled by that Party before the Effective Date of this Agreement, or (b) created by a Party outside the scope of this Agreement.

 

1.3          “Confidential Information” means any and all information which that Party treats as confidential, whether the information is in oral, written, graphic or electronic form: provided that (a) if the information is in writing or other tangible form, it is clearly marked as “proprietary” or “confidential” when disclosed to the receiving Party or (b) if the information is not in tangible form, it (i) is identified as “proprietary” or “confidential” when disclosed and (ii) is identified in reasonable detail in a writing which is marked “proprietary” or “confidential” and is so delivered to the receiving Party within ten (10) days after disclosure by the disclosing Party. Confidential Information excludes any information, date or material which (a) the disclosing. Party expressly agrees in writing is free or any non-disclosure obligations: (b) is independently developed by the receiving Party or its Affiliates without reference to the Confidential Information of the disclosing Party (as evidenced by documentation in the receiving Party’s possession): (c) is lawfully received by the receiving Party or its Affiliates, free of any non-disclosure obligations, from a third Party having the right to so furnish the applicable Confidential Information: or (d) is or becomes generally available to the public without any breach of this Agreement or unauthorized disclosure of Confidential Information by the receiving Party or any of its Affiliates.

 

1

 

***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

Smith – AVIA Ashok Supply Agreement

 

1.4          “Direct Competitor” means any entity which (i) manufactures electrical vehicle products in direct competition with Smith or (ii) sells electrical vehicle products in direct competition with Smith in the Territory.

 

1.5          “Ex Works” has the meaning as defined in Incoterms 2000.

 

1.6          “Field of Use” means electric vehicle market, including range extender technology and equipment.

 

1.7          “Independently Developed Intellectual Property” means Intellectual Property resulting directly from and authored, conceived, developed, reduced to practice or otherwise created during and following the term of this Agreement.

 

1.8          “Intellectual Property” means all rights in ideas, inventions, works of authorship, know-how, technical information, trade secrets, pending patent applications, patents, copyrights and Confidential Information.

 

1.9          “Products” means (i) those Products and accessories sold hereunder by AVIA Ashok, which are identified in Attachment A and D and (ii) Service Parts (as defined in Section 12.1) under this Agreement pursuant to an amendment or supplement executed by AVIA Ashok and Smith, along with any updates on cab- and/or frame components.

 

1.10        “Territory” means the United States of America, Canada, and Mexico.

 

ARTICLE 2. INTELLECTUAL PROPERTY RIGHTS

 

2.1          Intellectual Property Rights.

 

(a)                                 Independent Ownership. Each Party is and remains the owner of its Background Intellectual Property and its Independently Developed Intellectual Property, and the Parties understand and agree that, except as specifically set forth in this Agreement, no license or other rights, either express or implied, are granted by either Party to the other under this Agreement with respect to any Background Intellectual Property or Independently Developed Intellectual Property. Each Party shall decide in its sole discretion whether it protects, and shall bear all costs of protecting, its Background Intellectual Property and Independently Developed Foreground Intellectual Property.

 

(b)                                 Infringement Claims. This Agreement contemplates the sale of Products based on specifications developed by Smith and listed in Attachment B and technological solutions developed by AVIA Ashok to fulfill those specifications. If any third party alleges that the manufacture, sale or use of Products or any individual component of any Products infringes upon a patent, copyright or other Intellectual Property right belonging to that third party, then each Party supplying the alleged infringed Product shall defend, indemnify and hold harmless the other Party and its Affiliates from such claims and any resulting damages and expenses (including reasonable attorneys’, other professionals’, and court fees). AVIA shall not be

 

2

 

***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

Smith – AVIA Ashok Supply Agreement

 

liable for any infringement claims stemming from or arising out of (i) specifications requested by Smith or (ii) components added to the AVIA Products by Smith.

 

(c)           Right to Use; Re-Design.  If the Party which is responsible for indemnification under Section 2.1(b), or any final, non-appealable judgment of a court of competent jurisdiction, determines that any Product or individual component of any Product (each an “Infringing Unit”) infringes on any patents, trademarks, copyrights, industrial design rights, or other proprietary rights, or by misuse or misappropriation of trade secrets, then in addition to the obligations set forth in Section 2.1(d), the indemnifying Party shall, at its expense, use commercially reasonable efforts to either: (i) secure the rights to manufacture, sell and use the allegedly Infringing Unit: (ii) replace or modify the Infringing Unit with a non-infringing product without material degradation in performance, features, functions or quality, or with a mutually agreeable amount of degradation in performance, features, functions or quality, or (iii) if, in the sole judgment and discretion of the indemnifying Party, none of the foregoing alternatives is reasonably available, the indemnifying Party shall notify the indemnified Party to discontinue using the Infringing Unit, but only to the extent necessary to avoid the infringement, and in the case of this clause (iii) the indemnifying Party shall not be liable for any indemnification beyond the indemnified Party’s inventory of Infringing Units on hand at the time of such notification, and the indemnified Party may pursue its remedies available under this Agreement (subject to the limitations contained in Article 11 and elsewhere in this Agreement).

 

(d)           Indemnification Procedures.  Promptly after either Party receives information regarding the commencement or threatened commencement of any third party infringement claim, the Party receiving the information shall promptly notify the other Party in writing. The obligations of Section 2.1(b) above are contingent on: (i) the indemnified Party not entering into any settlement or concession with regard to the applicable indemnified claim without prior approval of the indemnifying Party; (ii) the indemnifying Party having full control of the defense of the indemnified claim, with the reasonable cooperation of the indemnified Party; and (iii) the cooperation of the indemnified party in implementing and distributing revised Products to avoid any continuing or future infringement, or otherwise assisting in mitigating potential infringement damages.

 

(e)           Party’s Failure to Act.  If the indemnifying Party does not confirm that it will assume control of the defense of any infringement claim (and provide reasonable assurance regarding its fulfillment of this obligation), the indemnified Party shall have the right to take appropriate legal action and the indemnifying Party shall promptly reimburse the indemnified Party for all reasonable costs and expenses upon presentation of reasonable supporting documentation.

 

(f)            Branding.  Smith shall have the right to brand Products, identified in Attachment A, with the Smith brand under the terms of this agreement for

 

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Smith – AVIA Ashok Supply Agreement

 

deliveries within the Territory for the term of this Agreement for use in the Field Of Use.

 

ARTICLE 3. ORDER OF PRODUCTS

 

3.1          Purchase and Supply of Products. Smith agrees to purchase, and AVIA Ashok agrees to supply, Products and Service Parts, in accordance with the terms of this Agreement, at the prices listed in Attachment A, provided that AVIA Ashok’s obligation to supply Products shall be conditioned upon AVIA Ashok’s acceptance of any changes to the specifications set forth on Attachment B.

 

3.2                               Forecasts; Purchase Orders.

 

(a)           Rolling 6-Month Forecast.   At least thirty (30) days before the Start of Production, and on approximately the first day of each month after the Start of Production, Smith shall deliver to AVIA a good faith rolling six (6) month estimate of Product purchases on a monthly basis (a “Rolling Forecast”).

 

(b)           Submittal of Purchase Orders.  Smith shall submit purchase orders to AVIA Ashok for the Product on a quarterly basis, and AVIA Ashok shall accept purchase orders submitted in accordance with this Agreement. Purchase orders may be issued by mail, facsimile or (upon mutual agreement of the Parties), electronic data interchange. All purchase orders issued under this Agreement shall be deemed to incorporate and be governed by the terms and conditions of this Agreement.

 

(c)           After transmission and confirmation of the order by AVIA, the quantity and specification of the order cannot be changed for the coming[***]weeks. The maximum change in volume for weeks [**] to [***] after order confirmation shall not exceed [***]% of the original order volume. The maximum change in volume for weeks[***]to [***]after order confirmation shall not exceed [***] of the original order volume. Volumes and specifications of weeks[***] or later can be changed vs. the volumes of the 6-months-forcast as per 3.2 (a). Additional quantities shall be subject to there being no other constraints such as in production or sourcing of raw materials etc.

 

3.3          Non-standard Orders.  AVIA Ashok shall use commercially reasonable efforts to (i) fill any purchase orders in excess of estimated purchase volumes provided that AVIA Ashok shall not have any liability for failure to timely deliver Products subject to purchase orders and (ii) fill any purchase orders on an expedited basis provided that AVIA Ashok shall have no liability for failure to deliver Products based upon non-standard lead times. Notwithstanding the foregoing, if AVIA Ashok incurs additional costs to fill purchase orders in accordance with this Section 3.3, it shall provide a written estimate of the additional costs to the Smith, and the AVIA Ashok shall have no obligation to fulfill the applicable purchase order unless AVIA Ashok mutually agree upon the amount of the additional costs which shall be paid.

 

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Smith – AVIA Ashok Supply Agreement

 

3.4          Conflicting Terms Void; Modifications.   Any terms contained in any purchase order, confirmation or invoice which are different from, or in addition to, the terms of this Agreement shall be deemed void and of no effect, unless otherwise agreed in a writing signed by both of the Parties.

 

ARTICLE 4. PRICES AND PAYMENTS

 

4.1          Products Pricing.

 

(a)           Sale Terms.  AVIA Ashok shall sell the Products to Smith at the prices set forth in Attachment A to this Agreement. The prices for the Products listed on Attachment A as of the Effective Date are based on the specifications as of the Effective Date of this Agreement changes in the Product specifications may result in mutually-agreeable changes to Product prices. Neither Party shall have any obligation to implement any changes to the Products until the Parties agree upon changes to the Product prices.

 

(b)           Except as set forth in section 4.1(c). Pricing shall remain firm for each full calendar year as agreed by the Parties and shall be revised from year to year.

 

(c)           Cost reduction.   The parties agree to work together continuously in order to reduce the manufacturing costs of the product. To achieve that long term and on an on-going basis, the engineering and procurement departments of the Parties shall work closely together. The two parties agree to reduce the price of Products based on specific cost-reduction projects mutually identified and agreed upon. Attachment E sets forth the agreed to cost reduction projects (“Cost Reduction Projects”). The Parties agree to continue to develop cost reduction projects on a forward looking basis.

 

ARTICLE 5. EXCLUSIVITY

 

5.1          Smith shall have exclusive rights to sell, service, and market the Products and Service Parts within the Field of Use under this Agreement in the Territory for the term of this Agreement. In the event Smith fails to purchase the minimum annual purchase requirements as set forth in Attachment C, Smith’s rights under this Agreement shall become non-exclusive rights.

 

During the term of this Agreement, Smith shall exclusively procure AVIA Cab-Kitsfor the Smith Newton truck.

 

During the term of this Agreement, Smith agrees to exclusively procure AVIA Frame-Kits from AVIA for the Smith Newton truck. The Parties are jointly committed to reduce the manufacturing costs of and the Price of the AVIA Frame-Kits. AVIA agrees to use good faith commercial efforts and diligence to provide the AVIA Frame-Kits to Smith at net costs (inclusive of transfer price, shipping costs, tariffs, duties, and taxes, etc.,) that are US market competitive. AVIA recognizes than in addition to US market competitive costs for the AVIA Frame-Kits, production of said Frame-Kits in the US greatly enhances the 

 

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Smith – AVIA Ashok Supply Agreement

 

salability of the Smith Newton in the US, Canada, and Mexico in regards to NAFTA, Buy American, and Buy America treaties and laws (Regulations).

 

5.2           As modified in section 5.1. above, for the duration of this Agreement. Smith shall procure and assemble for their product, the Smith Newtontruck, the AVIA Cab-kit and AVIA Frame-Kits regardless of the location of assembly of the frame.

 

5.3           The Parties do agree, in each Parties sole discretion, to co-promote each other and each other’s products. Unless agreed upon by both parties in writing, during the term of this Agreement and for a period of one (1) year following termination for any reason, both Parties agree not to vilify, criticize, or otherwise slander or defame the business or business practices of AVIA Ashok or Smith, or its officers, directors, or employees.

 

5.4           AVIA Ashok, its subsidiaries and affiliates, shall not compete with Smith in the Territory and Smith shall have exclusive rights to sell, service, and market the Product and Service Parts under this Agreement in the Field of Use. Reciprocally Smith shall exclusively procure for the electric vehicle NEWTON truck, the AVIA Cab-kit and AVIA Frame-kit parts in the territory in the field of use.

 

5.5           In the event AVIA Ashok sells, manufactures, or assembles its vehicles or products in the Territory or grants any rights to any person or entity to do the same, it agrees to: (i) not compete with Smith or to permit any other person or entity to so compete, as set forth in Section 5.1 and 5.3. above, and (ii) modify the appearance of the cab so as to make the Smith cab readily distinct and avoid consumer confusion. For purposes of clarification, the cab supplied to Smith under this Agreement is represented in the photographs set forth in Attachment D.

 

5.6           New territories.  In the event Smith acquires or otherwise gains a controlling interest in Smith Electric UK, the parties agree to negotiate in good faith the inclusion of such additional territories under this Agreement.

 

ARTICLE 6. PAYMENT

 

6.1           Wire Transfer.  Payment of the amount of any accepted purchase order shall be made by means of a bank wire transfer of immediately available funds in U.S. Dollars, to the account number provided.

 

6.2           Payment Terms.  For orders and deliveries from August to December 2010, the parties agree to the terms 10% down-payment, payable against invoice provided by AVIA upon receipt of a purchase order from Smith: 90% payable within 90 days after the date of invoice, subject to annual mutual reviews.

 

6.3           Late Payment.  All amounts not paid when due shall bear interest from the due date at the rate of one and one-half percent (1.5%) per month.

 

6.4           Tax Liability.  AVIA Ashok shall not be liable for Non-Income Taxes (as defined below) applicable to goods and services sold to the other Party under this Agreement.

 

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Smith – AVIA Ashok Supply Agreement

 

“Non-Income Taxes” means any U.S. federal, state and local sales, use, excise, utility, consumption, value added and other similar types of transaction based taxes assessed on the provision of goods and services. For all sales of Product upon which tax reimbursement to AVIA Ashok is applicable. AVIA Ashok shall separately itemize all applicable taxes on invoice submitted to Smith.

 

ARTICLE 7. DELIVERY

 

7.1           Delivery Terms.  All Products shall be sold Ex Works (AVIA Ashok facility) to ship to locations as provide to AVIA Ashok by Smith, unless agreed otherwise in writing by the Parties. Title shall pass to the receiving Party simultaneously with passage of risk of loss to the receiving Party as specified in Incoterms 2000.

 

7.2           Packaging.  All Product supplied by AVIA Ashok shall be packed and marked in accordance with all applicable laws.

 

7.3           Lead Times: Expedited Delivery.  In the case of an emergency order (which shall be more than 20% in excess of any Rolling Forecast), the Party receiving the order shall determine whether, and if so when the amount in excess of 20% of the Rolling Forecast can be filled and advise the ordering Party as to the earliest practicable delivery date All costs, if any, of fulfilling emergency orders beyond the standardize pricing shall be paid by the ordering Party within thirty (30) days after Smith receives an invoice for those costs. There shall be no liability to either Party for any failure or delay in satisfying such emergency orders.

 

7.4           Testing and Inspection. AVIA Ashok shall use commercially reasonable efforts to inspect and test Products prior to delivery. AVIA Ashok shall maintain as part of its quality records inspection reports that confirm the delivered Products have been manufactured, tested, and packaged in accordance with the requirements set forth in this Agreement and by applicable laws.

 

ARTICLE 8. INCORRECT QUANTITIES OR TYPE

 

8.1           Discrepancy.  If, after delivery. Smith discovers any discrepancy between (i) the quantity or type of Products ordered and that received or (ii) the quantity or type of Products invoiced and that received, Smith shall use best efforts to timely give notification to AVIA Ashok of the discrepancy. Appropriate adjustments shall be made in the ordinary course.

 

8.2           Non-Conformity.  If the Products delivered are non-conforming products to the specifications and requirements, AVIA Ashok shall use commercially reasonable efforts in supply conforming Products to Smith as soon as reasonably possible and shall advise Smith of the earliest practicable delivery date. However, if AVIA Ashok fails to provides conforming Products within 60 days following the written notification (in paper or by mail) about non-conformance from Smith to AVIA Ashok, AVIA Ashok shall be subject, at Smith’s discretion, to a penalty of        [***]       of the total price of the non-conforming Product, per week, subject to a maximum of    [***]    until the conforming Product is delivered to Smith.

 

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ARTICLE 9. QUALITY ASSURANCE, WARRANTY AND RECALL

 

9.1           Conformity with Specifications.  All Products sold are warranted to conform to the Product’s specifications (as described in Section 9.4 of this Agreement) and to be free from defects in material and workmanship under normal use

 

No other warranties, express or implied, are made with respect to the products including, but not limited to, any implied warranty of merchantability or fitness for a particular purpose.

 

9.2           Defective Products.  As used in this Agreement, the term “Defective Products” means any Product which fails to meet the warranty contained in Section 9.1 within the warranty periods described in Section 9.4.  “Defective Products” shall specifically exclude, without limitation, any Products (i) which have been subjected to misuse, negligence, accident, improper maintenance, or improper installation or application, (ii) which have been repaired or altered without AVIA Ashok prior written consent, (iii) fails to perform its intended use solely due to the specifications provided by Smith to AVIA, (iv) or component parts not provided by AVIA and added to the finished vehicle by Smith.

 

9.3           Warranty Obligation.  Except as set forth in Section 9.6 and Article 10, Smith’s sole obligation and exclusive remedy, regarding Defective Products is for AVIA Ashok, at its option, to either repair or to replace Defective Products.

 

9.4           Warranty Period.  The warranty period for Products shall be as set forth in Attachment A from the date of delivery.

 

9.5           Product Returns.  At AVIA Ashok’s election, Smith, having received the Defective Product shall either (i) return to a location designated by AVIA Ashok, and at AVIA Ashok’s cost, any allegedly Defective Products for which claims are made, with a written explanation of the claimed failures, or (ii) make the allegedly Defective Products available at Smith’s premises for inspection by AVIA Ashok or its designated representative. If the allegedly Defective Products are determined to be in compliance with the warranty under Section 9.4 to the reasonable satisfaction of the Parties, they shall be returned to retained by Smith, and Smith shall bear the cost of any freight in both directions and any costs incurred in inspecting the Products.

 

9.6           Mandatory Recall Procedures.

 

(a)           If a recall or field corrective action caused solely by defective products is mandated by a governmental agency, including the United States federal of state governmental agencies, or by the Mexican or Canadian governmental agencies, then Smith will promptly notify AVIA Ashok in writing of the required recall or field corrective action, with reasonable detail and with reasonable supporting documentation. The Parties shall immediately, diligently and in good faith work together to determine the cause of the Defective Products, and shall immediately assist in preparing and implementing a recall or field corrective action of Defective Products. In the event of such a recall or field corrective action of

 

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Smith – AVIA Ashok Supply Agreement

 

Defective Products: (a) AVIA Ashok, at its option, may either or replace Defective Products or refund the purchase price for Defective Products, and (b) AVIA Ashok shall pay the reasonable cost of (1) preparing, printing and mailing a recall notice to inform dealers, distributors and customers of the name of the recall. (ii) freight for replacement parts required to repair or replace Defective Products, and (iii) reasonable labor costs and expenses for Smith to perform in-field replacement activities, if any, for Defective Products.

 

(b)           Voluntary Recall Procedures. If a recall or filed corrective action caused solely by Defective Products is initiated by AVIA or Smith, then the initiating Party will promptly notify the non-initiating Party in writing of the voluntary recall or field corrective action with reasonable detail and with reasonable supporting documentation. The Parties shall immediately, diligently and in good faith work together to determine the cause of the Defective Products, and shall immediately assist in preparing and implementing a recall or field corrective action of Defective Products. In the event of such a recall or field corrective action of Defective Products and under the condition that the defective parts have been supplied by AVIA Ashok(a) AVIA Ashok, at its option, may either repair or replace Defective Products or refund the purchase price for Defective Products, and (b) AVIA Ashok shall pay the reasonable cost of: (i) preparing, printing and mailing a recall notice to inform dealers, distributors and customers of the nature of the recall. (ii) freight for replacement parts required to repair or replace Defective Products. and (iii) reasonable labor costs and expenses for Smith to perform in-field replacement activities, if any, for Defective Products.

 

(c)                                  AVIA shall not be liable for recall expenses stemming from or arising out of (i) specifications requested by Smith or (ii) components added to the AVIA Products by Smith.

 

ARTICLE 10. PRODUCT LIABILITY

 

10.1         Losses Defined. As used in this Article 10, the term “Losses,” when capitalized, means any loss, cost, damage and expense (including reasonable attorneys’, other professionals and court fees), arising from any death of or injury to any person, or damage to any property.

 

10.2         Indemnity for Losses. AVIA Ashok shall defend, indemnify, and hold harmless Smith and its Affiliates for Losses proximately caused by Defective Products. Each Party shall defend, indemnify and hold harmless the other Party and its Affiliates from the appropriate Losses (a) caused by or related to Products, other than Losses which are proximately caused by Defective Products or (b) which are proximately caused by the Party’s acts or omissions, including, but not limited to, (i) specifications as to design or materials, as contained in Attachment B, (ii) any failure to provide adequate warnings or instructions for use of the Product (including proper packaging and labeling), (iii) testing, storage, handling, release, export, import or shipment of the Product and (iv) misuse of the Products. The Parties shall only be responsible for indemnification under this section 10.2 for their own products and parts. Smith shall defend, indemnify, and hold harmless

 

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Smith – AVIA Ashok Supply Agreement

 

AVIA for Losses stemming from or arising out of (i) specification requested by Smith or (ii) components added to the AVIA Products by Smith.

 

10.3         Notice of Claims. If any claim is made or threatened against either Party or its Affiliates which is allegedly caused by the Products, regardless or whether the claim is based upon strict liability, negligence, warranty, or any other theory of recovery, each Party will provide to the other Party prompt notice of the claim and copies of all documents they receive which relate to the claim.

 

10.4         Defense of Claims. With respect to any claim described in Section 10.3, the Parties shall immediately discuss the claim and shall attempt to determine if the claim relates to Defective Products. If a claim relates solely to Defective Products, AVIA Ashok shall defend, indemnify, and hold Smith harmless from and against the claim and all related Losses. If a claim does not relate to Defective Products, but does relate to a Party’s acts or omissions, as specified in Section 10.2, then the Party bearing fault shall defend, indemnify, and hold the other Party harmless from and against the claim and all related Losses. If a claim contains allegations for which the both Parties is obligated to indemnify or fault cannot he determined, then each Party shall separately defend their own interests.

 

10.5         Conditions to Indemnification Obligations. The indemnification and defense obligations under this Article 10 are contingent on (i) the indemnified Party not entering into any settlement or concession with regard to an indemnified claim without prior approval of the indemnifying party and (ii) the indemnifying Party having full control of the defense of the indemnified claim, with the reasonable cooperation of the indemnified Party. If the indemnifying Party does not confirm that it will assume control of the defenses of any claim for which the indemnified Party seeks indemnification (and provide reasonable assurance regarding its fulfillment of this obligation), the indemnified Party shall have the right to take appropriate legal action and the indemnifying Party shall promptly reimburse the indemnified Party for all reasonable costs and expenses of defending the applicable claim upon presentation of reasonable supporting documentation.

 

ARTICLE 11. LIMITATION OF LIABILITY

 

11.1         No Recovery of Certain Damages. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT OR WARRANTY, ALLEGED NEGLIGENCE OR OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR SPECIAL INCIDENTAL OR CONSEQUENTIAL DAMAGES.

 

11.2         Available Remedies. Except as limited Pursuant to Article 9 and Article 10, or otherwise limited by other provisions of this Agreement, in the event of any breach or termination of this Agreement, either Party shall be entitled to pursue all remedies available at law or in equity.

 

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Smith – AVIA Ashok Supply Agreement

 

ARTICLE 12. SUPPLY OF SERVICE PARTS

 

12.1         Master Spare-part Agreement - Smith will act as an exclusive Master Spare-part and Service-part Distributor of parts for electric vehicles as defined by this Agreement to final customers of Smith in the Territory.

 

12.2         AVIA, its subsidiaries, affiliates, other group companies and their cooperation partners, and contracting partners will not distribute or sell the defined parts to customers of Smith - those having already received the product in the field of use within the territory.

 

12.3         Service Parts. AVIA or their designee shall supply new component parts to Smith for the Products for use as service parts (“Service Parts”) in addition to sale of Products set forth in Attachment A of this Agreement. A spare-parts catalogue with a corresponding parts price list are as set forth in Attachment A. The spare-parts catalogue will be updated in scope and pricing after every calendar year. All prices will be offered in USD and are valid as ex-works AVIA. Smith shall have the right to brand all vehicle manuals, parts lists, and on-line service and parts systems. AVIA shall provide on-line manuals, parts lists, and parts pricing to Smith and shall keep Smith current on all such systems.

 

12.4         Smith shall buy from AVIA a first set of common used spare parts - the “spare-parts-set” of the product within 90 days after this Agreement becomes effective. The selection of the parts and the unit quantities of the spare-parts-set will be defined by Smith. The total value of the parts of the first “spare-parts-set” shall not exced 100k USD. The spare-parts-set will be used as a parts pool with an automatized re-filling procedure organized by AVIA, but approved by Smith. Any spare-parts consumed by Smith out of this parts pool will be invoiced with the agreed prices of the latest price list and with payment terms of 90 days. AVIA will be notified about all consumptions on a weekly basis and will (a) invoice the consumed parts and (b) organize the delivery of the new parts to the spare-parts-pool (re-fill) at Smith.

 

12.5         AVIA will sell the first spare parts set to Smith at the listed prices, with payment terms of 180 days. After 180 days, the payment period will automatically be prolonged by another 180 days. The automatic prolongation will be continued as long as this Agreement between the parties remains effective. Starting with the first prolongation. AVIA will invoice Smith with interests on the total value of the defined “Spare-parts-set”, using USD-LIBOR +1% year. Invoices to be issued by AVIA every 6 months with 30 days payment terms, using the LIBOR level of the day of invoicing.

 

12.6         In the event of an expiration or termination of this Agreement. Smith will buy all parts of the spare-parts-pool at the prices of the latest spare parts price list or will return all parts - originally packed and un-damaged - to AVIA. Un-packed or damaged parts will need to be bought by Smith.

 

12.7         Any other parts of the AVIA spare-parts-catalogue which are not a defined part of the spare-parts-pool of Smith and the described re-fill procedure, will be sold by AVIA to

 

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Smith with ex works terms, in USD and 30 days payment terms (after date of invoice / date of shipping).

 

12.8         Availability of Service Parts. AVIA Ashok shall supply Service Parts for seven (7) years after the Product ends or is no longer purchased by Smith. Service Parts shall be packaged in the same manner as non-service Products unless Smith agrees to pay for special packaging.

 

12.9         Right to Service. Smith shall have the right to service or have serviced the Product at its discretion in alignment with the service regulations of AVIA Ashok. AVIA Ashok agrees to provide to Smith all relevant technical data and service related materials for the Products, which are usually provided to customers and dealers. Smith shall have the right to use such data and materials and to brand such service related materials with the Smith brand.

 

12.10       Technical Support. AVIA Ashok agrees to provide commercially reasonable technical support to Smith for Product supplied under this Agreement.

 

ARTICLE 13. PRODUCT CHANGES

 

13.1         If either Party desires to make changes to the Products, it shall submit a written request to the other Party. Within a reasonable period, the Party that received the request shall notify the other Party of its acceptance or rejection of the proposal. In the event the Product change results from Smith’s modification to specification, AVIA Ashok shall provide Smith with its charges for the change, a proposed implementation date, and the impact of such change to the Product unit price.

 

ARTICLE 14. FORCE MAJEURE

 

14.1         Force Majeure Defined. Each Party shall be temporarily excused from performing its obligations under this Agreement (other than the payment of money) for so long as such performance is prevented or delayed by any event of Force Majeure. The term “Force Majeure” shall, for purposes of this Agreement, be defined as: (i) any acts of God, terrorism, natural disasters, or wars, or (ii) any act or omission of any government authority.

 

14.2         Notice and Mitigation. A party affected by an event of Force Majeure shall promptly notify the other Party and shall use commercially reasonable efforts to overcome and mitigate such event of Force Majeure. Without limiting the foregoing, if AVIA Ashok is unable to supply any Products due to Force Majeure, Smith shall be free to purchase such Products from other entities.

 

Article 15. goverNING LAW, ARBITRATION AND SPECIFIC PERFORMANCE 

 

15.1         Governing Law. This Agreement shall be governed by and construed according to the laws of England as such laws are applied to contracts between residents of England to be performed entirely within such state. By its execution of this Agreement, each Party submits to the jurisdiction of any state or federal courts located in England.

 

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15.2         Informal Settlement Procedures. The Parties shall attempt to settle any and all claims, disputes, controversies or difference arising between the Parties which arise out of or in relation to or in connection with this Agreement shall in the first instance be attempted to be settled by good faith negotiations between the Parties pursuant to Section 16.3, and if they are not settled by negotiation, they shall be resolved by binding arbitration upon written request of either Party.

 

15.3         Arbitration Procedures. The Parties shall attempt to settle any and all claims, disputes, controversies or differences arising between the Parties which arise out of or in relation to or in connection with this Agreement shall in the first instance be attempted to be settled as provided in Section 16.3, and if they are not settled by negotiation, they shall be resolved by binding arbitration upon written request of either Party.

 

15.4         Entry of Judgment. The arbitration award shall be final and binding upon both Parties, and judgment on the arbitration award may be entered in any court having jurisdiction over the Party against whom enforcement is sought or such Party’s property, and application may be made to such court for judicial acceptance of the award on an order of enforcement, as the case may be.

 

15.5         Notice of Default; Informal Discussions. In the event of a claimed material breach by either Party, the non-breaching party shall provide to the breaching Party a notice of default. Such notice shall clearly specify the nature of the alleged default and what actions it believes are required to correct the default. Upon receipt of said notice of default, the defaulting party shall have sixty (60) days to correct the default. If following the sixty day cure period the matter is not resolved, either Party may notify the other Party that it requests that the Parties attempt to resolve the dispute or determine the remedy for the event of default pursuant to informal dispute resolution. The notice of informal dispute resolution must provide reasonable details describing the nature of the default. Within fifteen (15) days after either Party receives a notice requesting informal dispute resolution, an authorized representative of each Party shall meet and confer for a reasonable period of time to: (i) exchange information pertaining to the dispute or event of default, and (ii) attempt in good faith to agree upon a resolution to the dispute or a remedy for the event of default, as applicable. If the informal dispute resolution procedures or corrective action plan fail to resolve the dispute or achieve an agreement on the remedy for the event of default within sixty (60) days after the receipt of the notice requesting informal dispute resolution, then either Party may pursue arbitration pursuant to Article 15.

 

ARTICLE 16. TERM AND TERMINATION

 

16.1         Term of Agreement. This Agreement shall become effective on the Effective Date and shall remain in effect for five (5) years. No later than 180 days prior to the conclusion of the initial period, the Parties shall agree on a further period of five (5) years on a minimum purchase of products as specified under Attachment A for the next five (5) years period.

 

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16.2 Termination Either Party may terminate this Agreement for material Breach, including failure to timely pay sums due, upon the following the procedures set forth in section 16.3 of this Agreement.

 

16.3  Effect of Termination.  In the event Smith terminates this Agreement pursuant to Section 16.2 Smith shall have no further liability to AVIA other than to pay for Product ordered by Smith and subsequently delivered by AVIA prior to the expiration of the notice period and which conform to the terms and conditions of this Agreement. Subject to the terms of this Agreement in all other events of termination the party terminating this Agreement shall have all rights and remedies available under law and equity.

 

16.4  No Prejudice.  The provisions of this Article are without prejudice to any other rights or remedies either Party may have by reason of the default of the other Party.

 

16.5  In the event that AVIA or its affiliated parent company decides to discontinue its production at Prague, Czech Republic, AVIA will provide Smith with a ninety (90) days advanced written notice. AVIA will offer the product (Cab-Kit and/or Frame-Kits) to Smith from other manufacturing locations of the Ashok Leyland Group and to then offer manufacturing and assembly assets, single parts, sub-assemblies, know how and intellectual property rights of AVIA required to manufacture and assemble the Product at a fair market value to Smith. All rights, titles and interests in and to such assets will be clear of claims and encumbrances.

 

ARTICLE 17. CONFIDENTIALITY

 

17.1  Scope of use. Each Party agrees that it shall not use or disclose any of another Party’s Confidential Information, except as authorized herein. All confidential information of a Party shall remain such party’s property during and after the term of this Agreement.

 

17.2  Non- Disclosure. Each Party (the “Receiving Party”) shall protect all Confidential Information of the other Party (the “Disclosing Party”) against disclosure to third parties in the same manner as it would protect its own similar confidential information against disclosure to others for a period from the Effective Date unit two (2) years following termination of this Agreement. Notwithstanding the above, during such period, each Party may make any disclosure of any of the Disclosing Party’s Confidential Information to (i) its Affiliates, (ii) its and its Affiliates’ employees, agents and consultants who have a need to know and (ii) any others to whom such disclosure is expressly authorized hereunder and is necessary to the Receiving Party’s fulfillment of its obligations hereunder. The Receiving Party shall appropriately notify each person to whom any such disclosure is made that such disclosure is made in confidence and shall be kept in confidence by such person. If the Receiving Party reasonable believes that disclosure of Confidential Information is required in accordance with applicable law, then prior to such disclosure (if permitted under applicable law) the Receiving Party shall (a) notify the Disclosing Party and afford the Disclosing Party an opportunity to limit the scope of the required disclosure and (b) take reasonable efforts to minimize the extent of any required

 

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Smith – AVIA Ashok Supply Agreement

 

disclosure and to obtain an undertaking from the recipient to maintain the confidentiality thereof.

 

ARTICLE 18. INSURANCE

 

18.1         Each Party (or an Affiliate of a Party shall on behalf of that Party) shall obtain and maintain consistent with the provisions of this Agreement, at its sole expense, the following types of insurance coverage, to remain in force during the term of this Agreement, with minimum limits as hereafter set forth: Commercial General Liability covering liability arising from premises, operations, independent contractors, products completed operations, personal and advertising injury, and blanket contractual liability as may be agreed.

 

18.2         All policies of insurance maintained by each Party in accordance with this Agreement shall be written as primary policies: not contributing with or in excess of coverage that the other Party may carry. Each Party shall be an additional insured under the other Party’s insurance policy, and at the other Party’s request, each Party shall provide the other Party with a certificate of insurance evidencing compliance with the limits, insurance requirements and waiver of subrogation set forth above. Such certificate shall be in a form acceptable to, and underwritten by an insurance company reasonably satisfactory to the other Party and with an A.M. Best Company rating of A- or above. By requiring insurance herein, neither Party represents that coverage nor limits, will necessarily be adequate to protect the other Party. The purchase of appropriate insurance coverage by each Party or the furnishing of a certificate of insurance shall not release each Party from its respective obligations or liabilities under this Agreement.

 

ARTICLE 19. GENERAL PROVISIONS

 

19.1         No Inducement. The Parties represent to each other and each agrees that, neither it nor any person acting on its behalf has, in contravention of any applicable law, given or offered to give or shall give or offer to give any sum of money or other material consideration to any person, directly or indirectly, as an inducement to obtain business under this Agreement or to influence the granting of licenses or other governmental permissions to enter into this Agreement or perform obligations hereunder.

 

19.2         Government Approvals; Regulatory Requirements.

 

(a)           AVIA Ashok and Smith, respectively, shall be responsible for compliance with and for the obtaining of approvals and permits as may be required under federal, state, and local laws, ordinances, regulations, and rules for the performance of their respective responsibilities and obligations under this Agreement.

 

(b)           Each Party is responsible for final quality control testing, for providing adequate warnings and instructions for use of the Products (including proper labeling and packaging. Smith shall modify any Product, documentation, or Product labeling without written approval from AVIA Ashok. Each Party shall be

 

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responsible for reporting to the other Party any adverse events related to the Products.

 

19.3         No Agency. This Agreement does not constitute either Party the agent or legal representative of the other Party. Neither Party is authorized to create any obligation on behalf of the other Party.

 

19.4         Assignment. Neither Party may assign any of its rights or obligations under this Agreement without first obtaining the written consent of the other; provided, however, that both Parties have the right to assign any of its rights or obligations hereunder to any division, subsidiary, or affiliate of the Corporation, or to any successor to its business. Nothing herein shall preclude either Party from subcontracting any of its obligations under this Agreement to any other party.

 

19.5         No Implied Waiver. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement shall in no way affect the full right to require such performance at any later time. The waiver by either Party of a breach of any provision of this Agreement shall not constitute a waiver of the provision itself. The failure of either Party to exercise its rights provided under this Agreement shall not constitute a waiver of such right.

 

19.6         Notices. Any notice under this Agreement shall be in writing (letter or facsimile) and shall be effective upon receipt or refusal or failure to accept receipt by the addressee at its address indicated below.

 

(a)           Notice sent to Smith shall be addressed as follows:

 

Smith Electric Vehicles US Corp.

 

Attention: Bryan Hansel, CEO

Email: bryan.hansel@sev-us.com

Facsimile: 816.164.0510

Telephone: 816.164.0508

 

With copies to:

Attention: Jacques Schira, General Counsel

Email: Jacques.schira@sev-us.com

Facsimile: 816.164.0510

Telephone: *****

 

(b)           Notice sent to AVIA Ashok shall be addressed as follows:

 

AVIA Ashok Leyland Motors s.r.o.

 

Attention: Marcus Pauels, COO

Email: marcus.pauels@aal.cz

Facsimile: +420.225.142.051

Telephone: +420.225.142.001

 

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With copies to:

Attention: Tomas Juicka, CFO

Email: tomas.juicka@aal.cz

Facsimile: +420.225.142.035

Telephone: +420.225.142.001

 

19.7         Amendments. This Agreement supersedes all previous agreements, oral or written, between Smith and AVIA Ashok with respect to the subject matter of this Agreement. No amendment or modification to this Agreement shall be binding upon either Party unless it is in writing and is signed by both Parties.

 

19.8         Headings. The Article, Section, and/or Paragraph headings in this Agreement are used for convenience of reference only and shall not be deemed a part of this Agreement for any purpose.

 

19.9         Severability. If any provision of this Agreement shall be held to be invalid, illegal, or unenforceable under any statute, regulation, ordinance, executive order, or other rule of law, that provision shall be deemed severed to the extent necessary to comply with such statute, regulation, ordinance, order, or rule, and the Parties shall negotiate in good faith to arrive at an alternative replacement provision approximating the Parties’ original business objective. The remaining provisions of this Agreement shall remain in effect.

 

19.10       Entire Agreement. This Agreement contains all the representations and agreements between the Parties hereto and there are no other agreements or understandings, oral or in writing, regarding the matters covered by this Agreement. No terms submitted by either Party which are in addition to or inconsistent with those set forth in this Agreement shall apply to this Agreement unless agreed to in a writing signed by both Parties. The Exhibits attached to this Agreement are made a part of and incorporated in this Agreement.

 

19.11       Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by facsimile of this Agreement or an executed counterpart shall be deemed a good and valid execution and delivery of this Agreement.

 

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IN WITNESS WHEREOF, Smith and AVIA Ashok have caused this Supply Agreement to be executed by their duly authorized representatives as of the day and year first above written.

 

 

SMITH ELECTRIC VEHICLES US CORP

 

 

	
By
    	
/s/   Bryan Hansel
    	
 
    
	
 
    	
 
    	
 
    
	
Title
    	
CEO
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
7/10/2010
    	
 
    

 

 

AVIA ASHOK LEYLAND MOTORS s.r.o.

 

 

	
By
    	
/s/   Marcus Pauels
    	
 
    
	
 
    	
 
    	
 
    
	
Title
    	
COO
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
7/10/2010
    	
 
    

 

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Attachment A – Products and Pricing

 

Products.  The “Product” of AVIA is defined as Frame-Kit, Cab-Kit and related components, manufactured and delivered by AVIA Ashok to Smith US, which are designed and destined to be completed by Smith for use in the Field of Use. Smith may add or delete certain components of the Cab-Kit or the Frame-Kit after agreement with AVIA in order to optimize manufacturing and procurement and to improve timing of order execution. AVIA will check feasibility and the cost-effects and after approval by both Parties, agree to provide adjusted pricing to Smith in the event of such specification modification. Certain components of the Cab-Kit and the Frame-Kit are not subject for deletion.

 

Smith shall have the right to build/assemble chassis (Frame-KITs) in the future in the United States at its cost and pursuant to AVIA’s specifications for use with the AVIA cab in the Territory for use in the Field of Use. AVIA agrees to work with Smith in the transfer of know-how and design from AVIA to Smith in the implementation of its building/assembling of chassis.

 

“Cab-Kit” means the design and scope of the current fully trimmed cabin of the AVIA Ashok truck-chassis (“D Line”) as per attachment D as individually aligned by AVIA Ashok and Smith for Smith and the US homologation requirements as of the date of this Agreement without any facelift.

 

Pricing.

The pricing for the Frame-Kits and Cab-Kits of AVIA Ashok is as follows:

 

 

The stated pricing is valid for orders received before December 31st,  2010. The above prices and future negotiated prices will be adjusted to reflect any deletions or additions resulting from component removal from the Cab-Kits and/or the Frame-Kits, and rebates due resulting from such adjustments will be paid by AVIA to Smith.

 

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Attachment B – Product Specifications

 

·      Description of a glider

 

·         Chassis content/deletions

 

Without engine

Without fuel tank and fuel installation

Without SCR

Without air intake system

Without exhaust system

Without cooling system

Without engine mounting

Without clutch

Without gearbox

Without gearbox shifting

Without clutch control

Without compressor air pipes

Without batteries and battery brackets

Without spare wheel

Without side protections

Without air condition compressor

 

·         Cab content/deletions

 

Without lights and lamps

Without seatbelts

Without mirrors / holders installed

 

·      Wheel bases / GVW

 

	
 
    	
 
    	
Wheelbase
    
	
Type (GVW)
    	
 
    	
3.9 m
    	
 
    	
4.5 m
    	
 
    	
5.1 m
    
	
D75   (7.5 1)
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
No
    
	
D100   (10 1)
    	
 
    	
Yes
    	
 
    	
Yes
    	
 
    	
Yes
    
	
D120   (12 1)
    	
 
    	
Yes
    	
 
    	
Yes
    	
 
    	
Yes
    

 

·      Variants i.e. bus chassis

 

5.1 m chassis for 12 t version with air suspension on rear axle /with or without cab floor

 

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Attachment C – Minimum Product Cab- Kit Purchase Volumes

 

	
 
    	
·
    	
2009
    	
=>
    	
[***]
    	
units
    
	
 
    	
·
    	
2010
    	
=>
    	
[***]
    	
units
    
	
 
    	
·
    	
2011
    	
=>
    	
[***]
    	
units
    
	
 
    	
·
    	
2012
    	
=>
    	
[***]
    	
units
    
	
 
    	
·
    	
2013
    	
=>
    	
[***]
    	
units
    
	
 
    	
·
    	
2014
    	
=>
    	
[***]
    	
units
    

 

Attachment D - Photos

 

 

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Attachment E – Cost Reduction Projects

 

Cost down project objective-

 

1.     Reduce overall bill of material (BOM) cost of the chassis and Cab by 20% within 6 months

2.     Reduce overall Smith Labour required in Chassis and Cab preparation by 50%

3.     Minimisation of transport costs

 

Project focus- continuous review of cost down opportunities not limited to the following

 

1.     Localisation of chassis assembly in the USA utilising Avia components.

2.     Cab Project

a.     Smith Cab Harness integration.

b.     Seatbelt Anchorage integration by Avia

c.     USA Specification Seatbelt installation by Avia.

3.     Braking- the installation of the USA department of trade certified (US.DOT) system by Avia

4.     Chassis Harness- Specification, Development and Integration of Smith harness requirements with the existing Avia Chassis Harness.

5.     Chassis Mechanical

a.     Rear axle diff lock removal.

b.     Deletion/Removal off rear mud guard.

c.     Deletion/Removal off rear bumper.

d.     Removal of identified chassis rivets and replacement of bolts as specified.

e.     5.1 meter chassis- movement of identified chassis member to meet the Smith drive shaft mounting requirements

f.      Deletion of surplux hardware associated with the mounting of the front mud guard.

6.     Cab Mechanical

a.     Deletion of the Avia steering wheel logo.

b.     Front Cab pivot brackets over torque on shipping pallets.

c.     Side mirror Cab top mount to be re-aligned to Smith specification.

d.     Right side Cab step hole alignment to be corrected

 

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