Document:

Exhibit 10.23

 

***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.

 

DATED 6 November, 2011

 

(1) MAGNETIC SYSTEMS TECHNOLOGY LIMITED

 

and

 

(2) SMITH ELECTRIC VEHICLES EUROPE, LTD.

 

LICENSING AND MANUFACTURING AGREEMENT

 

 

***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.

 

THIS AGREEMENT is dated 6 November 2011

 

Parties

 

(1)                                  MAGNETIC SYSTEMS TECHNOLOGY LIMITED incorporated and registered in England and Wales whose registered office is at 11 Omega Court,350 Cemetery road Sheffield S11 8 FT (Supplier or Magtec as appropriate).

 

(2)                                  SMITH ELECTRIC VEHICLES EUROPE, Ltd. incorporated and registered in England and Wales whose registered office is at Birtley Road, Washington, Tyne & Wear, United Kingdom NE38 9DA (Customer or Smith).

 

(3)                                  Collectively Supplier and Smith may be referred to as “Parties” or Individually as “Party”.

 

Background

 

(A)                              The Supplier carries on the business of manufacturing and selling the Products.

 

(B)                                The Supplier and the Customer wish to ensure continuity of supply of the Products and have agreed to enter into this agreement on the terms set out below.

 

(C)                                The Supplier has developed and owns and has the right to grant licences for industrial designs, manufacturing technology, mechanical design, software design and manufacturing know-how for the Products.

 

(D)                               The Customer wishes to receive and the Supplier is willing to grant to the Customer, a licence on the terms and conditions set out in this agreement to use those industrial designs in order for the Customer to develop the capacity and ability to manufacture and use the Products as a component part of the End Products.

 

Agreed Terms

 

1.                                      Interpretation

 

1.1                                 The definitions and rules of interpretation in this clause apply in this agreement.

 

Activation: that point in time when the Product(s) are installed into an End Product and that End Product is switched on and driven under its own power.

 

Background IPR; the Copyright, the Registered Designs and the Design Rights and any other intellectual property rights subsisting in the Design Documents or any part of the Background Technical Information existing at the Commencement Date.

 

Background Technical Information: all know-how, experience, drawings, designs, manufacturing instructions, computer programs and all other technical information relating to the manufacture of the Product existing as at the Commencement Date as set out in Manufacturing Data Pack.

 

Business Day: a day other than a Saturday, Sunday or public holiday in England when banks in London are open for business.

 

Commencement Date: the date of this agreement.

 

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***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.

 

Copyright: all copyright, database rights and rights in the nature of copyright and database rights in any part of the world to which a Party is, or may become, entitled subsisting in the Design Documents and any documents, or other form of records, recording any part of the Background Technical Information.

 

Customer IPR: any Intellectual Property of the Customer that exists as of the Commencement Date, and any Intellectual Property that arises or is obtained or developed by, or by a contractor on behalf of, the Customer in respect of the Products in the course of or in connection with its manufacture and use as contemplated under the terms of this agreement.

 

Customer’s Premises: the address for the Customer as set out at the start of this Agreement or such other place as the Customer trades from and which the Customer shall notify to the Supplier from time to time.

 

Delivery Point: ex works Supplier.

 

Design Documents: the items short particulars of which are set out in Schedule 2.

 

Design Rights: all unregistered community design, design right and rights in the nature of design right in any part of the world, excluding the Registered Designs, to which a Party is, or may become, entitled subsisting in any design recorded or embodied in the Design Documents or any of the Background Technical Information.

 

End Products: the commercial electric vehicles to be manufactured, supplied and sold by the Customer where each such vehicle has a gross vehicle weight between 7,500 and 33,000 imperial pounds.

 

Effective Date: the date of this agreement.

 

Group: in relation to a company, that company, any subsidiary or holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company.

 

Holding company and subsidiary: mean a “holding company” and “subsidiary” as defined in section 1159 of the Companies Act 2006

 

Improvement: any improvement, enhancement or modification to the Background Technical Information.

 

Initial Term: a period of ten (10) Years commencing on the Commencement Date.

 

Intellectual Property: any patents, rights to inventions, registered designs, copyright and related rights, database rights, design rights, topography rights, trade marks, service marks, trade names and domain names, trade secrets, rights in unpatented know-how, rights of confidence and any other intellectual or industrial property rights of any nature including all applications (or rights to apply) for, and renewals or extensions of such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

 

Invoice: an invoice raised by the Supplier in accordance with Schedule 3 and clause 12.3 as appropriate.

 

Manufacturing Data Pack: information relating to the Products in order to provide assistance for the Customer to manufacture the Products set out in Schedule 2 or any other specification agreed in writing between the Parties from time to time.

 

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***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.

 

Market: commercial electric vehicles having a gross vehicle weight between 7,500 and 33,000 imperial pounds.

 

Prices: the prices for the Products set out in Schedule 3, but excluding any Expenses.

 

Option: the option granted in favour of the Seller by clause 17.

 

Option Period: the time during which the Supplier may exercise the Option, as set out in clause 17.

 

Option Shares: the 30,000 options for common shares of $12.38 (USD) each in the capital of Smith Electric Vehicles US Corp.

 

Order: an order for Products submitted by the Customer to the Supplier and accepted by the Supplier in accordance with clause 3.

 

Order Confirmation: an order confirmation document sent by the Supplier to the Customer, agreeing to fulfil the Order.

 

Order Form: an order form sent by the Customer to the Supplier, requesting the supply of Products or confirming an oral order for Products.

 

Products: the products, as identified by part number, as set out in Schedule 1 and all modifications, developments and improvements to them as amended from time to time in accordance with clause 2.3.

 

Quarterly Periods: the three-month periods commencing on 1 January, 1 April, 1 July and 1 October respectively.

 

Registered Designs: any registered designs which may be granted pursuant to any applications in respect of the Products.

 

Supplier IPR: any Intellectual Property that arises or is obtained or developed by, or by a contractor on behalf of, the Supplier in respect of the Products in the course of or in connection with its manufacture and use as contemplated under the terms of this agreement.

 

Territory: Worldwide

 

Third Party Offer: an offer by a third Party for the entire issued share capital of the Customer.

 

Unit: A Unit consists of (i) A Supplier traction motor, (ii) A Supplier gearbox, and (iii) A Supplier controller, all as defined and described with their respective part numbers in Schedule 1 of this agreement.

 

VAT: value added tax imposed in any member state of the European Union pursuant to Council Directive (EC) 2006/112 on the common system of value added tax, and national legislation implementing that Directive or any predecessor to it, or supplemental to that Directive, or any similar tax which may be substituted for or levied in addition to it or any value added, sales, turnover or similar tax imposed in any country that is not a member of the European Union.

 

Year: the period of 12 calendar months from the date of this agreement and each subsequent consecutive period of 12 calendar months during the Initial Term.

 

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***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.

 

1.2                                 Reference to a clause, paragraph or schedule is to a clause, paragraph or schedule of or to this agreement, unless the context requires otherwise.

 

1.3                                 A reference to one gender includes a reference to the other gender.

 

1.4                                 Words in the singular include the plural and in the plural include the singular.

 

1.5                                 A reference to a person includes an incorporated or unincorporated body.

 

1.6                                 A reference to a statute or statutory provision is a reference to it as it is in force for the time being taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

1.7                                 Unless the context otherwise requires, the words including and include and words of similar effect shall not be deemed to limit the general effect of the words which precede them.

 

1.8                                 The headings in this agreement are for ease of reference only and shall not affect its construction or interpretation.

 

2.                                      Sale of the Products

 

2.1                                 During the Initial Term and subject to the provisions of this agreement, the Supplier shall sell and the Customer shall buy such quantities of the Products as are specified in Schedule 3.

 

2.2                                 This agreement shall apply to all future arrangements between the Parties for the Supplier to supply and the Customer to buy the Products unless the Parties agree otherwise in writing.

 

2.3                                 With the Customer’s written consent, not to be unreasonably withheld or delayed, the Supplier may, immediately on giving written notice to the Customer elect to alter the Specification of any of the Products, provided that the alteration does not materially adversely affect the performance, quality or value of the Products.

 

3.                                      Order Process

 

3.1                                 When the Customer wishes to place any additional order for Products beyond those ordered in Schedule 3, it shall either send an Order Form to the Supplier or submit orally an order, provided that an order made orally must be confirmed by an Order Form (bearing the additional words “confirmation of oral order”) received by the Supplier within 5 Business Days from the date on which the Customer gave the oral order. Payment terms for the initial 100 Units, as set forth in Schedule A, item 1 shall be pre-paid prior to shipment. Payment terms for the second group of 400 Units, as set forth in Schedule 3, item 2 shall be paid as specified in Schedule 3, All orders shall be consistent with the rolling forecast set forth in clause 3,4. The Supplier shall accept the Order for the quantities set forth in Schedule 3 using an Order Confirmation and such Order Confirmation shall be treated as acceptance of the Customer’s Order. The Supplier shall, at its discretion, accept the Order for quantities in excess of the quantities set forth in Schedule 3 using an Order Confirmation and such Order Confirmation shall be treated as acceptance of the Customer’s Order.

 

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***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.

 

3.2                                 The Customer shall arrange delivery of the Products in accordance with the provisions of this agreement.

 

3.4                                 The first 100 Units manufactured by the Supplier shall be delivered as per the schedule set forth in the February 1, 2011 purchase order (PO Number 3959), attached hereto as Exhibit 1. The next 400 Units manufactured by the Supplier shall be shipped from the Supplier to the Customer at a rate of ten (10) Units per week. In the event the Customer wishes to increase the rate of deliver of the Units manufactured by the Supplier or wishes to have the Supplier manufacture more than the 400 units, the Customer shall deliver to the Supplier a proposed shipping schedule and a rolling 6 months forecast of anticipated Product need. The Supplier shall not be contractually bound to increase the rate of delivery of the Product or to manufacture additional Units (over the 400 Units set forth in Schedule 3 of this Agreement), but once the Supplier accepts the purchase order or increase in delivery product, shall be bound by the terms.

 

3.5                                 With regard to the Products manufactured by the Supplier and supplied to the Customer pursuant to this Agreement, the Supplier warrants that all such Products will conform in all material respects to the Specification of the Products (as set out in Schedule 1) and will be free of defects in: (i) workmanship and/or in design for Units manufactured by the Supplier and (ii) in design for Units manufactured by the Customer, for a period of 12 months from date of use provided always that this period shall not be greater than 18 months from the date of delivery. All other warranties or conditions (whether express or implied) as to quality, condition, description, compliance with sample or fitness for purpose (whether statutory or otherwise) other than those expressly set out in this agreement are excluded from this agreement to the fullest extent permitted by law.

 

3.6                                 If any third Party alleges that the manufacture, sale or use of the Products or any individual component of the Products infringes upon a  patent, copyright or other Intellectual Property right belonging to that third Party, then each Party owning or claiming ownership to the Intellectual Property rights of the alleged infringing Products 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), This provision will not apply to any Products or components thereof which the other Party alters, modifies or changes in any way without the consent of the other Party or which is sold or used for any purpose other than their originally intended purpose.

 

3.7                                 Initially, Supplier will provide Smith with 5% additional Units (“Warrantee Units”) at no cost to the Customer (i.e. for each 20 orders Supplier will manufacture 1 additional unit to be held by Smith for warranty use) capped at 20 Units for Smith to hold at their manufacturing plant to be used to replace faulty Products. In the event the Initial Warrantee rate of 5% increases, Supplier agrees to proportionately increase its Warrantee Units. Likewise, in the event the initial warrantee rate of 5% decreases, Supplier may proportionately decrease its Warrantee Units. At the time the Customer commences manufacturing of the Product and the Supplier no longer is manufacturing the Product for sale to the Customer, the Supplier shall, at its option, either manufacture the Product needed to supply the Customer with

 

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***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.

 

warrantee Units or pay to the Customer the manufacturing costs of replacement Units during the warrantee period for those Units manufactured by Supplier. In the event the Supplier continues to manufacture Units for the Customer, beyond the 500 Units identified in Schedule 3, the warrantee Units will be maintained for the warrantee period for those Units. At the time the Supplier no longer is manufacturing Units for the Customer and the warrantee period lapses, the Customer shall purchase from the supplier all Warrantee Units remaining in the warrantee inventory at the price of[***].

 

In the event of a drive line system failure, the Customer shall have the right to use quarantined Warrantee Units to effect an immediate or timely repair, In such an event, Customer shall simultaneously notify Supplier of such event and the Parties agree to adhere to the warrantee process as set forth in Schedule 5 of this agreement. All Warrantee Units will be quarantined within the Customer’s central stores or its authorized service depots and shall be used exclusively for this purpose. At the expiry of the warranty period or termination of this Agreement all Warrantee Units are to be purchased by Customer.

 

3.8                                 The Parties shall use their respective reasonable endeavours to ensure that all complaints and claims under warranty shall be settled within ninety (90) days from the initial notification. Upon failure of a Unit, the Customer shall make a good faith determination as to the cause of the failure and shall communicate such cause determination to the Supplier. If the failure is due to misuse or abuse, the Supplier shall have no liability for replacement or any cost associated with the repair or replacement of the Unit. If the Customer requests that the Supplier repair the misused Unit, all costs associated with the repair shall be borne by the Customer and a Return Merchandise Authorization (“RMA”) must be obtained from the Supplier. Upon initial notification of defective Product, Supplier shall issue to the Customer a RMA number to be used as the reference number for the returned component(s). The defective component(s), accompanied by a defect report and assigned RMA number, must then be shipped as directed by Supplier, at Supplier’s cost. The Supplier reserves the right to inspect the defective component(s) on their return in order to determine the origin of the fault, and if the defect is found not to be covered by this warranty, Customer shall reimburse the Supplier for the cost of shipment and  any costs associated with repair (Customer must authorize). If the defect is found to be covered by this warranty, Supplier shall reimburse the Customer for the cost of the in-field diagnosis, shipping costs, and repair costs, which shall not exceed [***] which is inclusive of all labour, travel and subsistence costs incurred by the Customer. A copy of a flow chart relating to the warranty returns procedure is set out in Schedule 5.

 

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***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.

 

4.                                      Supplier will train smith service team and make available supplier staff to discuss service/warranty issues the cost of training to be reimbursed to supplier. Alt warranty issues are to be communicated to supplier as soon as is practicable to determine if the problem/fault is due to a warranty issue or one which can be resolved as a routine service issue or by way of minor repair without the need to use the replacement units.

 

5.                                      Delivery of the Products

 

5.1                                 Delivery of the Products shall take place at the Delivery Point.  Acceptance of any change to the Delivery Point requested by the Customer shall be at the Supplier’s sole discretion and the Customer shall be liable for any additional Expenses incurred by the Supplier as a result of such change. The Customer shall be responsible for arranging all export documents as are necessary in relation to the Products.

 

5.2                                 Delivery or performance dates in relation to the supply by the Supplier of Products are as set forth in section 3.4 and approximate only and, time is not of the essence for delivery of the Products. The Supplier may effect delivery in one or more instalments, but shall use due diligence to ship quantities consistent with the time schedule set forth in section 3.

 

5.3                                 The Customer shall, within thirty days of the delivery of the Products to Customer’s facility, give written notice of rejection to the Supplier on account of any defect by reason of which the Customer alleges that the Products delivered do not comply with the Warranty and which was apparent on reasonable inspection. In the event a Unit or component of a Unit is defective, Supplier shall make arrangements for and be responsible for shipping associated with its return and replacement.

 

5.4                                 If the Customer fails to give notice as specified in clause 5.3 then, any defect which is one which would be apparent on reasonable visual inspection (“Overt Defect”), shall be presumed to comply with the Specifications and, accordingly, the Customer shall be deemed to have accepted such Overt Defect and the Supplier shall have no liability to the Customer with respect to that Overt Defect (except in relation to liability for any latent defects).

 

5.5                                 If the Customer rejects any delivery of the Products which do not comply with the Warranty, subject to clause 3.7 the Supplier shall, within thirty days of the Supplier accepting that the Products do not comply with the Warranty notify the Customer that it shall supply replacement Products which comply with the Warranty within 30 Business Days of sending such notice, in which event the Supplier shall be deemed not to be in breach of this agreement or have any liability to the Customer for the rejected Products.

 

5.6                                 The Customer is responsible for obtaining, at its own cost, such import licences and other consents in relation to the Products as are required from time to time and, If required by the Supplier, the Customer shall make those licences and consents available to the Supplier prior to the relevant shipment. The Supplier shall provide all needed documentation required to ship, Insure, and export/import the Product to the Customer.

 

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***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.

 

6.                                      Title and Risk

 

6.1                                 Risk in and responsibility for the Products shall pass to the Customer once they have been delivered to the carrier appointed, at the Delivery Point, to deliver the Products and the carrier has accepted the Products for shipment.

 

6.2                                 In regard to Products manufactured by the Supplier, ownership of the Products shall pass to the Customer upon payment of the Product shipped. In regard to Products manufactured by the Customer, Customer shall have ownership of the Products. Until ownership of the Products passes to the Customer, the Customer shall insure such Products for an amount at least equal to its Price. Any proceeds of the Insurance policy paid to Smith for a loss to the Products or Prototypes shall be paid to the Supplier together with any other sums required to compensate Supplier for such loss.

 

6.3                                 For Products not paid for, the Customer shall lose its rights to possession and resale of the Products if;

 

(a)               the Customer becomes subject to any of the events in clause 18.2(b) to clausel8.2(h); or

 

(b)              this agreement terminates and the Customer does not pay all outstanding amounts under this agreement within 30 days.

 

6.4                                 In the event of an occurrence as set forth in clauses 18.2(b) to clause I8.2(i) should occur, The Customer grants to the Supplier an irrevocable licence for the Supplier, its agents and employees to enter any premises where the goods of the Customer are stored to ascertain whether any Products are stored there and to inspect, count and recover them as permitted by United States Law.

 

7.                                      Grant of Licence

 

7.1                                 In consideration of the licence granted in this clause, the Customer agrees to pay to the Supplier the Royalties and fees as set out in Clause 12 and Schedule 4 of this Agreement. The Supplier will assist the Customer in developing its facility to manufacture the Products in the Territory and hereby grants to the Customer an exclusive non-transferable worldwide licence of the Supplier’s Background IPR in relation to the manufacture and use of the Products for use solely as a component part of the End Products, for the manufacturing, assembling, use, promotion, and sale of the End Product, for the term of this agreement provided always that this Licence does not include any licence relating to the design and or manufacture of magnetising tooling or automated winding equipment and related equipment. However, the Supplier agrees to provide the Customer with information relating to the magnetising tooling and automated winding equipment and related equipment to ensure that Supplier can properly complete the entire manufacturing process of the Products. The Supplier agrees that it shall not disclose or promote that the Customer is or has used the Supplier’s Background IP.

 

7.2                                 Within 60 days of the Commencement Date, the Supplier shall make available to the Customer (i) such of its Background Technical Information, Background IPR, and, Know-How as is needed and reasonably necessary, for the manufacture of the 

 

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***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.

 

Products by the Customer in the Territory and (ii) Supplier’s instructions as set forth in Schedule 2. In the intervening 60 days, the Supplier agrees to assist the Customer in regard to: (i) on-site (Supplier’s facility) training, (iii) manufacturing process review, and (iii) development of an implementation plan for Customer manufacturing.

 

7.3                                 The Supplier hereby consents to the Customer branding the Products manufactured by the Customer in the Territory. Supplier agrees not to publically promote or disclose that the Smith branded Product is, in whole or in part, a Supplier component or derivative of the Supplier’s Background IP.

 

7.4                                 The Background Technical Information supplied by the Supplier pursuant to clause 7.2 shall be used by the Customer only for the purpose of the manufacture and use of the Products and shall be subject to the provisions of clause 10.

 

7.5                                 In addition to the supply of the Background Technical Information the Supplier shall provide the Customer with such technical advice and assistance in connection with the manufacture of the Products as the Parties consider reasonably necessary provided that the Customer shall reimburse the Supplier at a rate of [***] per hour in respect of each Supplier employee with over 5 years of engineering experience and [***] per hour for Supplier employees with 5 years or less of engineering experience (such rates to be reviewed and agreed annually by the Parties) together with all expenses incurred by the Supplier in connection therewith.

 

8.                                      Quality Control

 

8.1                                 The Customer shall, in exercising its rights under clause 6 of this agreement, comply with the specifications, standards and directions relating to the Product as notified in writing by the Supplier from time to time and with all applicable laws, regulations and codes of practice.

 

8.2                                 Each Party shall promptly provide the other Party with copies of all communications, relating to the Background IPR or the Products, with any regulatory, industry or other authority.

 

9.                                      Improvements

 

9.1                                 If either Party makes, devises, discovers, or otherwise acquires rights in any Improvement, such Party shall, to the extent that it is not prohibited by law, promptly notify the other Party in writing, giving details of the Improvement and shall, if the other Party so requests, provide such further information as reasonably required to be able to effectively evaluate the Improvement. 

 

9.2                                 Information provided under clause 9.1 shall be subject to the provisions of clause 10.

 

9.3                                 To the extent that any Customer IPR is created by the Customer in respect to Improvements in relation to the Products it shall vest in and be owned absolutely by the Customer and the Customer shall grant to the Supplier a non-exclusive, royalty-free, non-transferable, worldwide right and licence to exploit such Customer IPR in connection with the production, manufacture, distribution, marketing, selling,

 

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advertising and promotion of the Products for non-competing purposes, i.e. outside of the Market. The Supplier shall not have any right to use or market such improvements using the Smith brand or to promote or advertise such Improvements are associated with the Customer. For purposes of clarity, Improvements do not include systems, components, or IP that are not a Product, as defined in Schedule 1, but that may affect or enhance the Product.

 

9.4                                 To the extent that any Supplier  IPR arises or is obtained in respect of Improvements in relation to the Products it shall vest in and be owned absolutely by the Supplier and the Supplier shall grant to the Customer an exclusive, non-transferable worldwide right and licence to exploit such Supplier IPR in connection with the production, manufacture, distribution, marketing, selling, advertising and promotion of the Products.

 

10.                               Confidentiality

 

10.1                           The Parties shall each keep secret and confidential:

 

(a)               the terms of this agreement; and

 

(b)              the Background Technical Information; and

 

(c)               any information (whether or not technical) of a confidential nature communicated to it by the other, either preparatory to, or as a result of, this agreement,

 

and shall not use the same for any purpose except for the purpose of exercising or performing its rights and obligations under this agreement and shall not disclose the same to any person other than any of its officers, employees, or subcontractors, as defined in Section 10, directly or indirectly concerned in the manufacture, use of the Products or its professional advisors, provided that prior to disclosure to any such officer, employee or professional advisor it informs such person of the confidential nature of the information and is responsible for such person’s compliance with the confidentiality obligations set out in this clause 10 and, if necessary, shall promptly enforce such obligations either on its own motion or at the request of the other party.

 

10.2                           The provisions of clause 10.1 shall not apply to such know-how and information that:

 

(a)               was known, or available on a non-confidential basis, to a Party before it was disclosed to it by the other party;

 

(b)              is or becomes generally available to the public (otherwise than through a breach of this clause 10);

 

(c)               the Parties agree in writing is not confidential or may be disclosed;

 

(d)              a Party is required to disclose by law, court order or any governmental or regulatory authority provided that, to the extent it is legally permitted to do so, it gives the other Party as much notice of such disclosure as possible and takes into account the reasonable requests of the other party in relation to the content of such disclosure; or

 

(e)               was developed independently by the Customer or the Supplier.

 

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10.3                           The provisions of this clause 10 shall remain in force notwithstanding the expiry or earlier termination of this agreement.

 

11.                               Sub-licensing and Subcontracting

 

11.1                           Neither Party shall grant sub-licences under this agreement, except as set out in Clause 11.2 below.

 

11.2                           The Customer shall be entitled to subcontract the manufacture of the Products, if the manufacturing of the Product occurs within the United States of America, Malaysia, or the European Union, and shall have the right to manufacture in any other location with the written consent of the Supplier, which shall not be unreasonably withheld; provided always that the Customer will not subcontract without the prior written approval of the Supplier, which will not be unreasonably with held, the manufacture of the MB.800.016.00 traction motor as defined in Schedule 1. If the manufacturing of the Product is to occur outside of those territories referenced above, the Customer shall be entitled to subcontract the manufacture of the Products only upon written approval of the Supplier, which shall not be unreasonably with held, The customer agrees to keep the Supplier informed of subcontractors being used by the Customer in the production of the Product, and to require the execution of a confidentiality/non-disclosure, non-use agreement with all subcontractors manufacturing the Product or any part thereof.

 

12.                               Prices, Royalties and Payment

 

12.1                           The Customer shall pay the Supplier for the Products supplied by the Supplier in accordance with the provisions of this clause Schedule 3 of this Agreement.

 

12.2                           The Customer shall pay to the Supplier royalties of the End Products calculated in accordance with Schedule 4 upon the Activation of the Unit by the Customer or the Customer’s subcontractors or agents (as appropriate) and paid in accordance with the provisions of clause 12.3. For purposes of clarity, in the event the vehicle’s performance failure is un-related to the design of the Product, Royalties for that Unit will be due and payable.

 

12.3                           Royalties payable under this agreement shall be paid within 30 days of the end of each successive Quarterly Period, and shall be paid in pounds sterling.

 

12.4                           Royalties and any other sums payable under this agreement shall be paid in pounds sterling to the credit of a bank account to be designated in writing by the Supplier.

 

12.5                           In regard to the first five hundred (500) Units, as set forth in Schedule 3, Supplier shall secure a tax treaty exemption for Products sold to the Customer. In the event such tax treaty exemption is not obtainable, all amounts of money referred to in this agreement shall be interpreted as being amounts exclusive of value added tax, any similar sales tax or any tax that replaces such sales taxes. Any such tax payable in relation to any such amounts shall be paid in addition to those amounts. If the Customer is required under any applicable law to withhold or deduct any amount from the payments due to the Supplier, the Customer shall increase the sum it pays to the Supplier by the amount necessary to leave the Supplier with an amount equal to the sum it would have received if no such withholdings or deductions had been made.

 

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***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.

 

12.6                           If at any time during the Initial Term the pounds sterling ceases to be legal tender in England, Royalties shall be paid in Euros. All amounts due to the Supplier under this agreement shall become due immediately if this agreement is terminated despite any other provision.

 

12.7                           The time for payment shall be of the essence and no payment shall be deemed to have been made until the Supplier has received payment in cleared funds.

 

12.8                           If the Customer does not make payment on or before the date on which it is due, Interest shall be payable on the overdue amount at the rate which is 2% per annum above the Bank of England base lending rate from time to time. Interest shall be payable at this rate both before and after any judgment is made against the Customer until the date on which payment in cleared funds is received in full, including all accrued interest.

 

12.9                           The Customer shall make all payments due under this agreement without any deduction by way of set-off, counterclaim, discount or otherwise unless the Customer has a valid court order from a court in England and Wales requiring an amount equal to or more than such deduction to be paid to the Supplier by the Customer, or unless such rights relied on cannot be excluded by the law of England and Wales or the insolvency laws of the jurisdiction in which the Customer is resident.

 

13.                               Royalty Audits

 

13.1                           At the same time as payment of royalties falls due, the Customer shall submit or cause to be submitted to the Supplier a statement in writing recording the calculation of such royalties payable, and in particular:

 

(a)               the Quarterly Period for which the royalties were calculated;

 

(b)              the number of End Products for which Royalties are due, as defined in section 12.2, during the Quarterly Period;

 

(c)               the amount of royalties due  and payable; and

 

(d)              any other particulars the Supplier may reasonably require.

 

13.2                           The Customer shall keep proper records and books of account showing the number of Products manufactured, Such records and books shall be and be open during normal business hours to inspection and audit by the Supplier (or its authorised representative), who shall be entitled to take copies of or extracts from the same. If such inspection or audit should reveal a discrepancy in the royalties paid from those payable under this agreement, the Customer or Supplier shall immediately make up the shortfall and reimburse the Customer or Supplier in respect of any professional charges incurred for such audit or inspection. Such right of inspection of the Supplier shall remain in effect for a period of two years after the termination of this agreement.

 

13.3                           The provisions of this clause 12 shall remain in effect notwithstanding termination or expiry of this agreement until the settlement of all subsisting claims by the Supplier.

 

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14.                               Protection of the Background IPR and Background Technical Information

 

14.1                           The Customer and the Supplier shall immediately notify the other Party in writing giving full particulars if any of the following matters come to its attention:

 

(a)               any actual, suspected or threatened Infringement of any of the Background IPR;

 

(b)              any actual, suspected or threatened unauthorised disclosure, misappropriation or misuse of the Background Technical Information;

 

(c)               any claim made or threatened that exploitation of any of the Background IPR or the Background Technical Information Infringes the rights of any third Party;

 

(d)              any person applies for, or is granted, a registered design by reason of which that person may be, or has been, granted, rights which conflict with any of the rights granted to the Customer or Supplier under this agreement;

 

(e)               any application is made for a licence of right under any Design Right; or

 

(f)                 any other form of attack, charge or claim to which the Background IPR or Background Technical information may be subject.

 

14.2                           In respect of any of the matters listed in clause 14.1:

 

(a)               the affected Party shall, in its absolute discretion, decide what action if any to take, if any;

 

(b)              the affected Party shall have exclusive control over, and conduct of, all claims and proceedings;

 

(c)               the unaffected Party shall not make any admissions other than to the Supplier and shall provide the Supplier with all assistance that it may reasonably require in the conduct of any claims or proceedings; and

 

(d)              the affected Party shall bear the cost of any proceedings and shall be entitled to retain all sums recovered in any action for its own account.

 

14.3                           The provisions of sections 101, 101A and 234 of the Copyright, Designs and Patents Act 1988, lock up and section 24(F) of the Registered Designs Act 1949 (or equivalent legislation in any jurisdiction), are expressly excluded. In the event the Supplier fails to protect the Customer’s full rights and redress under these provisions, the Customer, at its cost, upon written notification to the Supplier, shall have the rights as provided in the foregoing provisions of this clause. Likewise, In the event the Supplier fails to protect the Customer’s full rights and redress in the United States of America or elsewhere (where the foregoing provisions in this clause are inapplicable), the Customer, at its cost, upon written notification to the Supplier, shall have the right to prosecute and defend its rights. However, Customer, at its cost, shall take all actions contemplated by these provisions on behalf of the Customer upon Customer’s request to fully assure Smith having full rights and redress under these provisions.

 

15.                               LIABILITY, INDEMNITY AND INSURANCE

 

15.1                           The Customer shall indemnify the Supplier and keep the Supplier indemnified from and against all liabilities, costs, expenses, damages or losses (each a Claim)

 

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suffered or incurred by the Supplier arising out of or in connection with the Customer’s exercise of its rights granted under this agreement, any breach by the Customer including any product liability claim relating to Product manufactured, supplied or put into use by the Customer or any of its customers.

 

15.2                           The Supplier shall indemnify the Customer and keep the Customer indemnified from and against all liabilities, costs, expenses, damages or losses (each a Claim) suffered or incurred by the Customer arising out of or in connection with the Supplier’s exercise of its rights granted under this agreement, any intellectual property right or patent infringement claim by a third party concerning the Products, including any product liability claim relating to Product manufactured, supplied or put into use by the Supplier or its customers.

 

15.3                           The Parties shall, at their expense, carry product liability and comprehensive general liability insurance coverage of $5 million (USD) increasing annually in accordance with the UK Retail Prices Index in order to meet any liability in clauses 15.1 and 15.2 above. The Parties shall use their respective reasonable endeavours to ensure that such insurance policies names the other Party as co-insured and remain in effect throughout the duration of this agreement and for a period of 3 years after termination or expiry of the agreement, and shall supply the other Party with a copy of such policy on request.

 

15.4                           Nothing in this agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by negligence or for fraud.

 

16.                               Additional Parties obligations

 

16.1                           The Customer shall:

 

(a)               Promote the Products as being used only for the purpose for which they were intended;

 

(b)              obtain at its own expense all licences, permits and consents necessary for the provision of the Products;

 

(c)               only make use of the Supplier’s Background IPR for the purposes authorised in this agreement; and

 

(d)              obtain any government approval required for this Agreement in the country of the Customer before the Effective Date, and shall provide copies of such approval.

 

16.2                           The Parties shall comply with all regulations and practices in force or use to safeguard the Party’s rights in the Background IPR.

 

16.3                           The Customer shall not, directly or indirectly assist any other person to do, or omit to do, anything to diminish the rights of the Supplier in the Background IPR:

 

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16.4         The Parties acknowledge and agree that the exercise of the licence granted to the Customer under this agreement is subject to all applicable laws, enactments, regulations and other similar instruments in the United States of America, and the Customer understands and agrees that it shall, at all times, be solely liable and responsible for such due observance and performance.

 

17.          Grant of Options

 

17.1         The Customer hereby grants to the Supplier an option to acquire the Option Shares on the terms set out in this agreement.

 

17.2         Supplier will be issued stock options in a separate stock option or incentive plan (Stock Option Agreement) which will provide 30,000 stock options in the Company as further defined in said Stock Option Agreement. In regard to said Options, upon the closing of the Company’s initial public offering of common stock pursuant to a registration statement filed with the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), the Supplier shall have 24 hours to either; (i) forego the options in their entirety, at which time they shall be null and void (“Void Options”) or (ii) accept said option, which shall be automatically vested and shall be subject to said Stock Option Agreement (“Accept Options”). The Customer shall notify the Supplier of the time of the closing of the public offering by email at the following email address: m.jenkins@magtec.co.uk. Supplier shall provide the Customer with its choice at the following email address: bryan.hansel@smithelectric.com. The exercise price for the Supplier’s Options shall be $12.38 (USD). Supplier agrees to execute the Stock Option Agreement contemporaneously with execution of this agreement.

 

18.          Duration and Termination

 

18.1         This agreement shall commence on the Commencement Date and, subject to the provisions of this clause 18, shall continue until the expiry of the Initial Term, At the expiry of the Initial Term this agreement will continue thereafter until terminated on 12 months written notice by either Party or otherwise by reason of breach set out in 18.2 below,

 

18.2         Either Party may terminate this agreement by giving written notice to the other Party if any of the following events occurs:

 

(a)     the other Party commits a breach of this agreement which (in the case of a breach capable of remedy) has not been remedied within 30 days of the receipt by the other of a notice specifying the breach and requiring its remedy; or

 

(b)     a winding-up order or bankruptcy order is made against the other Party; or

 

(c)     the other Party passes a resolution or makes a determination for it to be wound up (without 3 declaration of solvency/except for the purposes of amalgamation or reconstruction, the terms of which have been previously approved in writing by the other Party); or

 

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(d)     the other Party has appointed to it an administrator or an administrative receiver; or

 

(e)     an Incumbrancer takes possession, or a receiver, manager or administrative receiver is appointed, of the whole or any part of the other Party’s assets;

 

(f)      the other Party ceases or suspends payment of any of its debts, or is unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986; or

 

(g)     any arrangement, compromise or composition in satisfaction of its debts is proposed or entered into; or

 

(h)     the other Party ceases to carry on business; or

 

(i)      any event analogous to those described in clause 18.2(b) to clause 18.2(h) occurs in relation to the other Party in any jurisdiction in which that other Party is incorporated, resident or carries on business.

 

(j)      In the event of an occurrence as set forth in clauses 18.2(b) to clause 18.2(h) should occur, the Supplier shall be entitled (at its option) to cancel any Orders which have not yet been delivered.

 

18.3         On termination of this agreement for any reason and subject as otherwise provided in this agreement to any rights or obligations that have accrued before termination, neither Party shall have any further obligation to the other under this agreement.

 

19.          Effect of Termination

 

19.1         On expiry or termination of this agreement for any reason and subject to any express provisions set out elsewhere in this agreement:

 

(a)     all outstanding sums payable by the Customer to the Supplier shall immediately become due and payable;

 

(b)     all rights and licences granted pursuant to this agreement shall cease;

 

(c)     the Customer and Supplier shall cease the exploitation of the other Party’s Background IPR, the Background Technical Information;

 

(d)     the Customer shall co-operate with the Supplier in cancelling any registrations of this licence and shall execute such documents and do all acts and things as may be necessary to effect such cancellation; and

 

(e)     the Party having a license to use (Using Party) the other Party’s Background Information (Owning Party) shall return promptly to the owning Party at the Using Party’s expense all records and copies of the Owning Party’s Background Technical Information and technical and promotional material in its possession relating to the Products, and of any information (whether or not technical) of a confidential nature communicated to it by the Owning Party, either preparatory to, or as a result of, this agreement, to the extent such material remains confidential.

 

19.2         On expiry or termination of this agreement for any reason other than termination by the Supplier under any right provided by clause 19.1 the Customer shall have the right to dispose of all stocks of Products in its possession and all Products in the course of manufacture at the date of termination, provided that any royalty payable

 

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under the provisions of clause 11 (as if such stocks were supplied at the date of termination) is paid to the Supplier within 90 days after termination.

 

19.3         The expiry or termination of this agreement for any reason shall not affect any provision of this agreement which is expressed to survive or operate in the event of expiry or termination and shall be without prejudice to the provisions of this clause 19 and to any rights of either Party which may have accrued by, at or up to, the date of such expiry or termination.

 

20.          Hiring of Employees

 

The Customer and the Seller hereby agree that they will not during the term and for a period of two years following termination of this agreement hire any employee or encourage or induce any employee to leave the employ of either Party whether such person is to be employed by that Party or by any other third Party.

 

21.          Inadequacy of Damages

 

Without prejudice to any other rights or remedies that the either Party may have, the Parties acknowledge and agree that damages alone would not be an adequate remedy for any breach of the terms of this agreement by either Party. Accordingly, either Party shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the terms of this agreement.

 

22.          Force Majeure

 

22.1         Neither Party shall be liable to the other, or be deemed to be in breach of this agreement, by reason of any delay in performing, or failure to perform, any of its obligations under this agreement if the delay or failure was beyond that Party’s reasonable control (including without limitation fire, flood, explosion, epidemic, riot, civil commotion, any strike, lockout or other industrial action, act of God, war, warlike hostilities or threat of war, terrorist activities, accidental or malicious damage and any prohibition or restriction by any government or other legal authority which affects this agreement and which is not in force on the date of this agreement).

 

22.2         A Party claiming to be unable to perform its obligations under this agreement (either on time or at all) in any of the circumstances set out in clause 22.1 shall notify the other Party of the nature and extent of the circumstances in question as soon as practicable.

 

22.3         This clause 22 shall cease to apply when such circumstances have ceased to have effect on the performance of this agreement and the Party affected shall give notice to the other Party that the circumstances have ceased.

 

22.4         If any circumstance relied on by either Party for the purposes of this clause 22 continues for more than 30 days, the other Party shall be entitled to terminate this agreement by giving one month’s notice.

 

23.          Entire Agreement

 

23.1         This agreement constitutes the entire agreement between the Parties in connection with its subject matter and supersedes any previous agreement,  warranty,

 

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statement, representation, understanding or undertaking (in each case whether written or oral) given or made before the date of this agreement by or on behalf of the Parties and relating to its subject matter.

 

23.2         Neither Party has relied on any statement, representation, agreement, understanding or promise made by the other except as expressly set out in this agreement.

 

24.          Waiver of Rights Based on Misrepresentation

 

24.1         Each Party unconditionally waives any rights it may have to claim damages against the other on the basis of any oral or written statement made by the other or by its legal advisers (whether made carelessly or not) that is not set out or referred to in this agreement (or for breach of any warranty given by the other not so set out or referred to), unless such statement or warranty was made or given fraudulently.

 

24.2         Each Party unconditionally waives any rights it may have to seek to rescind this agreement on the basis of any statement made by the other (whether made carelessly or not), unless such statement was made fraudulently.

 

25.          Limitation of Liability

 

25.1         Neither Party shall be liable to the other Party for:

 

(a)     any indirect, special or consequential loss or damage; or

 

(b)     loss of data or other equipment or property; or

 

(c)     economic loss or damage; or

 

(d)     incurring of liability for loss or damage of any nature whatsoever suffered by third parties (including in each case incidental and punitive damages); or

 

(e)     any loss of actual or anticipated profit, interest, revenue, anticipated savings or business or damage to goodwill, 

 

even if the other Party is advised in advance of the possibility of any such losses or damages.

 

25.2         The Supplier shall not be liable for any losses arising from the Customer’s subsequent use or misuse of the Products including (without limitation);

 

(a)     Normal wear and tear, so long as such wear and tear does not result in the Product failing to perform under ordinary use;

 

(b)     wilful damage;

 

(c)     the Customer’s negligence, or that of its agents or employees, or any failure to follow the Supplier’s instructions as to use of the Products;

 

(d)     abnormal working conditions beyond those referred to in the Specification; and

 

(e)     any alteration or repair of the Products by any manufacturing process or otherwise not done using standard servicing or manufacturing standards or with the consent of the Supplier, save for any latent defect which means that the

 

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Product did not comply with the Specification when manufactured by the Supplier.

 

25.3         The Customer acknowledges and agrees that the Prices reflect the limitations of liability contained in this agreement

 

26.          Assignment

 

This Agreement may not be assigned by either Party without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed, except that either Party may assign this Agreement to a wholly owned subsidiary or to a successor in connection with a merger, consolidation or sale of all or substantially all of such Party’s business related to this Agreement, provided that such successor agrees in writing to assume and be bound by all the provisions of this Agreement.

 

27.          Disputes

 

27.1         Subject as may be provided elsewhere in this agreement, all disputes, differences or questions arising in relation to this agreement shall be referred in the first instance to the managing director of the Supplier and the CEO of the Customer, who shall meet together and attempt to settle the dispute between themselves (acting in good faith) within one calendar month.

 

27.2         If the managing director and the CEO fail to resolve the matter within one calendar month, then either Party may refer the dispute to an appropriate court or tribunal, or may (at its discretion) opt for mediation (in which case such an election shall bind the other Party until a conclusion is made or the mediator rejects the case).

 

27.3         Any reference to mediation shall be made in accordance with the procedures of the Centre for Effective Dispute Resolution (CEDR). The mediation shall be conducted by a single mediator appointed by the Parties or, if the Parties are unable to agree on the identity of the mediator within fourteen (14) days after the date of the request that the dispute be resolved by mediation, or if the person appointed is unable or unwilling to act, the mediator shall be appointed by CEDR on the application of either Party. The mediation shall be conducted in English at the offices of CEDR in London, Mediation is without prejudice to the rights of the Parties to the injunctive relief or to the rights of the Parties in any future proceedings.

 

28.          Cumulative Remedies

 

Each right or remedy of the Parties under this agreement is without prejudice to any other right or remedy of the Parties, whether or not such rights or remedies are set out in this agreement.

 

29.          No Partnership or Agency

 

Nothing in this agreement shall create, or be deemed to create, a partnership, joint venture or legal relationship of any kind between the Parties that would impose liability upon one Party for the acts or failure to act of the other Party, or authorise either Party to act as agent for the other. Save where expressly stated in this agreement, neither Party shall have the authority to make representations, act in the name or on behalf of or otherwise bind the other.

 

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30.          Costs

 

Except as otherwise provided in this agreement, each Party shall pay its own costs and expenses in relation to the negotiation, preparation, execution and implementation of this agreement.

 

31.          Severance

 

The invalidity, illegality or unenforceability of any provision of this agreement, or a provision in any other agreement which is identical to one in this agreement, shall not affect the other provisions and the agreement shall be given effect as if the invalid, illegal or unenforceable provision had been deleted, unless the provision so affected is so fundamental to the agreement that one or more of the essential elements of the contract is removed and replaced with a provision with a similar economic effect to that intended by the Parties if this can be achieved by another clause.

 

32.          Counterparts

 

32.1         This agreement may be executed in any number of counterparts and by the Parties on separate counterparts, but shall not be effective until each Party has executed at least one counterpart.

 

32.2         Each counterpart, when executed, shall be an original, but all counterparts shall together constitute one and the same instrument.

 

33.          Further Assurance

 

Either Party shall, at the request and cost of the other, use all reasonable endeavours to do or procure the doing of all such further acts, and execute or procure the execution (as a deed or otherwise) of all such documents, as may from time to time be necessary to give full effect to this agreement and to vest in the requesting Party the full benefit of the assets, rights and benefits to be transferred to the requesting Party under this agreement.

 

34.          Amendment and Waiver

 

34.1         No variation of this agreement shall be effective unless it is made in writing, refers specifically to this agreement and is signed by both of the Parties.

 

34.2         No waiver of any term, provision or condition of this agreement shall be effective, except where it is clearly made in writing and signed by the waiving Party. No waiver of any particular breach of this agreement shall be held to be a waiver of any other or subsequent breach.

 

34.3         No omission or delay on the part of any Party in exercising any right, power or privilege under this agreement shall operate as a waiver by it or of any right to exercise it in future or of any other of its rights under this agreement.

 

34.4         The rights and remedies arising under, or in connection with, this agreement are cumulative and,  except where otherwise expressly provided in this agreement, do not exclude rights and remedies provided by law or otherwise.

 

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35.          Third Party Rights

 

No person who is not Party to this agreement shall have any right to enforce any term of this agreement.

 

36.          Notices

 

36.1         Any notice or other communication to be given under this agreement shall be in writing and may be delivered by hand or sent by pre-paid post (by airmail post if to an address outside the country of posting) or fax to the relevant Party at that Party’s registered office or last-known trading address and marked for the attention of the directors.

 

36.2         Any notice or document shall be deemed served:

 

(a)     if delivered by hand, at the time of delivery unless delivered after 5.00 pm in which case they shall be given on the next day (other than Saturday or Sunday) on which the banks are ordinarily open for business in the City of London (Working Day); and

 

(b)     if posted, two Working Days after posting (five Working Days if sent by airmail post).

 

36.3         Notices under this agreement shall not be validly served by e-mail.

 

37.          Survival of Obligations

 

Any of the provisions of this agreement that are expressed to take effect in whole or in part on or after termination, or are capable of having effect after termination, shall remain in full force and effect despite termination.

 

38.          Governing Law and Jurisdiction

 

38.1         This agreement shall be governed by and construed in all respects in accordance with English law. The International rules for the interpretation of trade terms prepared by the International Chamber of Commerce (Incoterms) shall apply but where they conflict with this agreement, this agreement shall prevail.

 

38.2         Subject to clause 26 and clause 37.3, the Parties submit to the exclusive jurisdiction of the courts of England and Wales and agree that, in respect of proceedings in England and Wales and in any other jurisdiction, process may be served on either of them in the manner specified for notices in clause 35.

 

38.3         Nothing in this clause 37 shall limit the right of the Supplier to take proceedings against the Customer in any other court of competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdiction preclude the Supplier from taking proceedings in any other jurisdiction, whether concurrently or not, to the extent permitted by the law of such other jurisdiction.

 

38.4         It is the Customer’s obligation to acquaint itself and to comply with all applicable requirements and restrictions imposed by law or by governmental and other authorities or corporations relating to the possession, use, import, export, or resale of the Products. It is the Customer’s obligation to ensure that no Products are exported or imported in violation of the laws of any jurisdiction into or through  which the Products are transported during the course of reaching the Customer’s

 

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warehouse. Where necessary, the Customer shall inform the Supplier at a reasonable time before delivery of any documents which it is necessary for the Supplier to provide in order to allow export of the Products in compliance with the laws of any relevant jurisdiction. The Supplier shall fully cooperate in supplying all needed documentation for shipping and importing/exporting.

 

38.5         The rights set out in this clause 37 are in addition to any other manner of service  permitted by law at the time when service is made.

 

38.          Other

 

38.1         Press Releases. No Party shall originate any publicity, news release or other public announcement, written or oral, whether relating to this Agreement or any arrangement between the Parties, without the prior written consent of the other Party, except to the extent such publicity, news release or other public announcement is required by law. Neither Party shall use the name of the other for advertising or promotional claims without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed.

 

38.2         The Supplier agrees that in the event that it receives an offer to sell a controlling interest in its shares or the majority of its business from a competitor of the Customer that it will give the Customer an option to purchase the shares or the business at a price equal to that offered by any such competitor provided always that it is after any pre-emption rights that Rolls Royce Plc may have.

 

This agreement has been entered into on the date stated at the beginning of it.

 

Signed for and on behalf of MAGNETIC SYSTEMS TEHCNOLOGY LIMITED

 

 

	
Signature
    	
/s/   Marcus Jenkins
    	
 
    
	
 
    	
 
    	
 
    
	
Name
    	
Marcus   Jenkins
    	
 
    
	
 
    	
 
    
	
Director/authorised   signatory
    	
 
    

 

 

Signed for an on behalf of SMITH ELECTRIC VEHICLES EUROPE, Ltd.

 

 

	
Signature
    	
/s/   Bryan Hansel
    	
 
    
	
 
    	
 
    	
 
    
	
Name   
    	
Bryan   Hansel
    	
 
    
	
 
    	
 
    
	
Director/authorised   signatory
    	
 
    

 

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Schedule 1     Products and Specifications

 

The products are:

 

·                  A Supplier MB.800.016.00 traction motor comprising of a motor utilising an interior permanent magnet rotor employing surface mounted rare earth magnets and a water cooled stator with three phase concentrated type windings.

 

·                  A Supplier MA.524.032.00 gearbox - a single stage fixed ratio gearbox.

 

·                  A Supplier XB.851.028.00 controller comprising of a water cooled 3-phase inverter, pre-charge and isolating relays, auxiliary inverters and DCDC converters.

 

·                  The Motor, gearbox and Power controller comprised in the part numbers above (“System”) will be equivalent in form fit and function to the equipment supplied to Smith and under an earlier Smith PO “2/19/2010-268”.

 

The Specifications for the Products are as set forth in the attached SMITH Drive High Level Specification Ver 03.

 

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Schedule 2     Manufacturing Data Pack

 

The Manufacturing data pack will contain the following information:

 

MA.524.032.00 motor gearbox:

 

Bill of Materials.

Engineering drawings of all manufactured parts.

Purchase specifications or all purchased components.

Process flow diagram showing all stages of manufacture.

Test specifications at each stage of manufacture including pass/fail criteria.

 

Engineering drawings of tooling components specific to the manufacture of the motor gearbox.

 

Manufacturing instructions for each stage of manufacturing process.

 

XB.851.028.00 Controller 

 

Bill of materials

Engineering drawings of all manufactured parts. 

Purchase specifications for all purchased components.

In the case of the printed circuit assemblies (PCA) this will include the manufacturing data pack for each PCA which will include:

 

Component BoM

PCA Gerber files

Pick and place files

 

Process flow diagram showing all stages of manufacture.

Test specifications at each stage of manufacture including pass/fail criteria.

 

Software

 

Image files of the installed software for the XB.851.026.00 controller 

PC based controller re-programming tool 

PC based parameter programming tool

 

Within 15 days of the Commencement Date of this Agreement, Supplier agrees to provide Customer access of the current Product BOM and supplier base of the Products, Smith agrees to not contact Supplier’s supply chain without first securing Supplier’s consent.

 

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Schedule 3     Prices 

 

Product Pricing and delivery schedule

 

1.                                       For the first [***] Products supplied by the Supplier [***] each as per the Suppliers quotation “Q846 Proposal 20101107 1559pdf” (Exhibit 1). These Products will be supplied at a rate of [***] per week on the basis set out in the quotation referenced to in clause 3.4 of this agreement.

 

2.                                       The Customer and the Supplier agree to the following per Unit transfer price for the [***] Units to be manufactured by the Supplier and delivered to the Customer:

 

·                  First [***] Units -[***]

·                  Second [***] Units - [***]

 

The Customer agrees to the following payment schedule, at the per Unit transfer price noted above, for the [***] Units to be manufactured by the Supplier and delivered to the Customer:

 

·      A total of [***] upon completion of [***] Units ([***] Units per week), payable in weekly increments based on the number of Units shipped.

 

·      A total of [***] upon completion of second [***] Units ([***] Units per week), payable in weekly increments based on the number of Units shipped.

 

3.                                       In the event there is a material change ([***] or greater) in material component costs, the per Product price will adjusted by the material change and the payment schedule above will correspondently be adjusted for outstanding payments.

 

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Schedule 4     Royalties and Fees

 

1.                                       The Customer will pay a Royalty to the Supplier on each End Product, for which Royalties are due, as defined in section 12.2 at the following rates:

 

	
1.1
    	
Products
    	
[***]
    	
[***]
    	
per   Product;
    
	
1.2
    	
Products
    	
[***]
    	
[***]
    	
per   Product;
    
	
1.3
    	
Products
    	
[***]
    	
[***]
    	
per   Product;
    
	
1.4
    	
Products
    	
[***]
    	
[***]
    	
per   Product; and
    
	
1.5
    	
Products
    	
[***]   plus
    	
[***]
    	
per   Product.
    

 

2.                                       The above Royalty payments are based upon the UK Consumer Pricing Index (CPI) as at 1st January 2011. The Royalty payments will be increased on 1st January of each year of this agreement to take into account any increase in the CPI over the preceding 12 months.

 

3.                                       In the event the Supplier Accepts Options, as set forth in clause 17 of this agreement, the Royalties in 1.1 and 1.2 of this Schedule 4 shall be reduced to [***] per Product (plus indexation as appropriate). For the avoidance of doubt this reduction shall not be applied on a retrospective basis. In the event the Supplier Voids Options, as set forth in clause 17 of this agreement, the Royalties in 1.1 and 1.2 of this Schedule 4 shall remain unchanged.

 

4.                                       The Customer agrees to pay the sum of [***] to the Supplier in consideration for the license granted by the Supplier to the Customer under clause 7.1 of this agreement. It is agreed that the payment schedule for this license fee will be as follows:

 

	
·
    	
[***]
    	
-   upon signing of this agreement; and
    
	
·
    	
[***]
    	
-   5 weeks after the signing of this agreement.
    
	
·
    	
[***]
    	
-   10 weeks after the signing of this agreement.
    

 

26

 

***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.

 

Schedule 5 - Warrantee Process

 

See attached, Warranty Process Flow.

 

27

 

***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.

 

 

[***]

 

 

Exhibit 1

 

	
 
    	
Phone:
    	
 
    	
816-464-0508
    
	
 
    	
Fax:
    	
 
    	
816-880-5332
    

 

12200 NW Ambassador Dr

Suite 326

Kansas City MO 64163

 

	
PO Number: 3959
    	
Purchase Order
    	
 
    

 

	
Vendor:
    	
 
    	
Ship To:
    
	
 
    	
 
    	
 
    
	
MAGTEC
   MAGNETIC SYSTEMS TECHNOLOGY LIMITED 
   222-226 NEWHALL ROAD 
   SOUTH YORKSHIRE SHEFFIELD S9 2QL 
   United Kingdom

 
    	
 
    	
Smith Electric Vehicles US Corp. 
   9200 NW 112th Street 
   Kansas City, MO 64153
    
	
Phone: 01142448416                     Fax: 01142448417
    	
 
    	
 
    

 

	
Ship Via:Local Truck
    	
Order Date:02/01/2011

Prepaid Freight: No
    	
 
    	
Terms:Net on Receipt

Tax ID:[***]
    

 

Initial Magtec Production Order of [***] and Payment. Terms to be agreed upon pending further discussions between Magtec and Smith Electric Vehicles. This order is to allow the production process to move forward. Current terms:

Price

The price of each system is:

P146/P144 base system £[***]

SEV US branding £[***]

Additional cost of using metal Hypertac connectors £[***]

Total price per system £[***]

This price excludes UK VAT at the current rate and is valid until 24 December 2010.

The quoted price is for delivery ex-works Sheffield UK.

5. Terms and Conditions

Except where sated otherwise, this quotation is subject to the terms and conditions set out in

Orgalime, ?General Conditions for the Supply of Mechanical, Electrical and Electronic Products?,

£2000.

5.1 Payment terms

The following payment schedule is required:

Payment to be made on order placement £[***]

Payment to be made [***]  weeks after order placement £[***]

Payment to be made  [***]  weeks after order placement £[***]

Payment to be made on the first [***]systems £[***] per system

Payment to be made on the remaining [***]systems £[***] per system

Each system will be invoiced individually.

The first three payments are to be made on the date of order placement end [***] and  [***] weeks from that date respectively.

Payment for each system will become due when SEV is notified that the goods are available for shipping and the presentation of a Magtec Invoice.

 

	
Line Part Number/Rev/Description
    	
 
    	
 
    	
Order Qty.
    	
 
    	
Unit Price
    	
 
    	
Ext price
    	
 
    	
Tax
    
	
1  Payment 1
    	
 
    	
 
    	
1.00Ea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
Payment with Initial order
    	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    	
 
    	
 
    
	
-  Shipping   Release Requirement -
    	
 
    	
Due Date
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    

 

POForm:001:00

 

1

 

	
 
    	
Phone:
    	
 
    	
816-464-0508
    
	
 
    	
Fax:
    	
 
    	
816-880-5332
    

 

12200 NW Ambassador Dr

Suite 326

Kansas City MO 64163

 

	
 
	
PO Number: 3959
    	
Purchase Order
    	
 
    
	
 
	
 
    	
 
    	
 
    
	
 
    	
 
    	
02/02/2011
    	
 
    	
 
    	
1.00Ea
    	
 
    
										

 

	
Line Part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
2  Payment 2
    	
 
    	
 
    	
 
    	
1.00Ea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
2nd payment
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
03/09/2011
    	
 
    	
 
    	
 
    	
1.00Ea
    	
 
    	
 
    	
 
    	
 
    

 

	
Line Part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
3  Payment 3
    	
 
    	
 
    	
 
    	
1.00Ea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
3rd and final payment
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
04/13/2011
    	
 
    	
 
    	
 
    	
1.00Ea
    	
 
    	
 
    	
 
    	
 
    

 

	
Line Part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
4  Magtec Drive System
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
Controller, Motor and Gear   Unit
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00/1
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
03/30/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
04/06/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
04/13/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
04/20/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
04/27/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    

 

	
Line 4 was orginally   for[***]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Line Part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
5  Magtec Drive System
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
Controller, Motor and   Drive Unit Price 2
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00/1
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
05/04/2011
    	
 
    	
 
    	
 
    	
[***] Ea
    	
 
    	
 
    	
 
    	
 
    

 

POForm:001:00

 

2

 

	
 
    	
Phone:
    	
 
    	
816-464-0508
    
	
 
    	
Fax:
    	
 
    	
816-880-5332
    

 

12200 NW Ambassador Dr

Suite 326

Kansas City MO 64163

 

	
PO Number: 3959
    	
Purchase Order
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
05/11/2011
    	
[***] Ea
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
05/18/2011
    	
[***] Ea
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
05/25/2011
    	
[***] Ea
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
06/01/2011
    	
[***] Ea
    	
 
    

 

Line 6 was orginally for[***] units.

 

	
Line part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
6  08-09-1290
    	
 
    	
 
    	
 
    	
[***] EA
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
MOTOR CONTROLLER,P146
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
06/01/2011
    	
 
    	
 
    	
 
    	
[***] EA
    	
 
    	
 
    	
 
    	
 
    

 

	
Line part Number/Rev/Description
    	
 
    	
 
    	
 
    	
Order Qty
    	
 
    	
Unit Price
    	
 
    	
Ext Price
    	
 
    	
Tax
    
	
7  08-09-1290
    	
 
    	
 
    	
 
    	
[***] EA
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
No
    
	
MOTOR CONTROLLER,P146
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    	
 
    	
 
    

 

- Shipping Release Requirement -

 

	
 
    	
 
    	
Due Date
    	
 
    	
 
    	
 
    	
Quantity
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
06/01/2011
    	
 
    	
 
    	
 
    	
[***] EA
    	
 
    	
 
    	
 
    	
 
    

 

For delivery of 2nd set of [***]

 

	
Authorized By: Shane Pascoe
    	
 
    	
Line(s) Subtotal: 
    	
 
    	
[***]
    	
 
    
	
 
    	
 
    	
Misc. Charge Subtotal:
    	
 
    	
 
    	
[***]
    
	
 
    	
 
    	
Total:
    	
 
    	
[***]
    	
 
    

 

POForm:001:00

 

3

 

SMITH Drive High Level Specification Ver 03

 

This document provides a high level specification for Magtec:

MB.800.016.00                                                              traction motor

MA.524.032.00                                                           gearbox

XB.851.028.00                                                              controller

 

Contents

 

	
1.
    	
Drive System Specification
    	
2
    
	
1.1
    	
Functional Specification
    	
2
    
	
1.1.1.
    	
Control Strategy
    	
2
    
	
1.1.2.
    	
Safety Strategy
    	
2
    
	
1.1.2.1.
    	
IO circuit Failure
    	
2
    
	
1.1.2.2.
    	
HVDC insulation detection
    	
2
    
	
1.1.2.3.
    	
Emergency Stop
    	
2
    
	
1.2
    	
Demonstrated performance   characteristics
    	
2
    
	
1.2.1.
    	
Traction torque and power
    	
2
    
	
1.2.2.
    	
Stall torque
    	
2
    
	
1.2.3.
    	
Motor speed
    	
3
    
	
1.2.4.
    	
24v DCDC converter
    	
3
    
	
1.2.5.
    	
Air Compressor AC drive
    	
3
    
	
1.2.6.
    	
PAS pump AC drive
    	
3
    
	
1.2.7.
    	
High temperature operation
    	
3
    
	
1.2.8.
    	
Low temperature operation
    	
3
    
	
1.2.9.
    	
HVDC insulation to chassis
    	
4
    
	
1.3
    	
Warranty Limitations
    	
4
    
	
1.3.1.
    	
DC link contactors
    	
4
    
	
1.3.2.
    	
Over speed
    	
4
    
	
2.
    	
Performance Requirements
    	
5
    
	
2.1
    	
Performance
    	
5
    
	
2.2
    	
Vehicle dynamic   performance targets
    	
5
    
						

 

1

 

1.                                                              Drive System Specification

 

1.1                                                       Functional Specification

 

1.1.1.                                          Control Strategy

 

The control system provides:

 

·                  Management of power flow to the drive line, 24v DCDC converter and PAS and Air compressor systems.

·                  Regenerative braking during coasting, service braking and over speed motor control

·                  Communication with vehicle, battery system and driver interfaces

·                  Communication with Smith Telemetry systems

·                  Pre-charge and connection of the battery system to the drive system power stage

·                  Management of power in extreme cold and hot ambient conditions

·                  Creep mode

·                  Shunt mode

·                  Customer programmable parameters

 

1.1.2.                                          Safety Strategy

 

1.1.2.1.                                IO circuit Failure

 

The control systems provides error checking of the accelerator input controls to prevent unexpected movement of the vehicle on failure of the external sensor systems, the brake pedal input will always have priority over any generated drive command, as tested and verified by Magtec.

 

1.1.2.2.                                HVDC insulation detection

 

The system does not monitor the state of the HVDC system insulation to chassis. This function is performed by the Smith battery system.

 

1.1.2.3.                                Emergency Stop

 

The system is provided with a hardware input that can be used to prevent operation of the traction system and isolate the HVDC contactors that connect the drive system to the vehicle batteries.

 

1.2                                                       Demonstrated performance characteristics

 

1.2.1.                                          Traction torque and power

 

The performance of the equipment has been demonstrated on Magtec test rigs and in Smith vehicles and is capable of providing a motor torque and power of 600Nm and 120kW when operated from a 310v DC link as used in the Smith vehicles.

 

These figures assume zero losses in the controller, motor and gearbox and have been calculated from  the measured DC link  power (DC link voltage and DC link current) divided by the measured motor speed.

 

The efficiency of the Controller, motor and gearbox have been measured on Magtec’s test rigs and have been found to be above [***] % at full power at speeds above [***].

 

1.2.2.                                          Stall torque

 

The stall torque has not been measured directly. The theoretical value of the stall torque is [***] % of the rated low speed torque.

 

2

 

1.2.3.                                          Motor speed

 

The drive system will limit the power above[***] reducing it to zero at[***]

 

The drive system is configured to provide regenerative braking to prevent the speed increasing further, dependent on the thermal and voltage capability of the battery system and other electronic components to absorb the regenerated power.

 

The over speeding condition will be controlled between[***] and[***] and an operator’s warning signal will be provided.

 

1.2.4.                                          24v DCDC converter

 

The DCDC converter has been tested and can provide a continuous output power of 1167W at 27.8v and 42A.

 

1.2.5.                                          Air Compressor AC drive

 

The air compressor AC drive system has a name plate rating of 1.5kW has been tested with the Smith air compressor system on both test rigs and Magtec and on the Smith vehicles. The compressor drive operated reliably during testing and after heat soaking at 50 degree C ambient.

 

The minimum operating temperature of the Air Compressor drive is -10 degrees C.

 

1.2.6.                                          PAS pump AC drive

 

The PAS pump AC drive system has a name plate rating of 2.2kW and has been tested with the Smith electric PAS system on both test rigs and Magtec and on the Smith vehicles. The PAS system operated reliably during testing and after heat soaking at 50 degree C ambient.

 

The minimum operating temperature of the PAS pump drive is -10 degrees C.

 

1.2.7.                                          High temperature operation

 

The equipment has been heat soaked at +50 degrees C on Magtec’s test rigs and all control and I/O functions have been maintained.

 

The equipment has been started at full command after soaking at +50 degrees C on Magtec’s test rigs and operated as designed with the output power and torque being de-rated as expected.

 

The equipment has been operated on Smiths vehicles at high ambient temperatures until the equipment has reached its thermal limits and has de-rated its power and torque in a controlled manner.

 

1.2.8.                                          Low temperature operation

 

The equipment has been heat soaked at -20 degrees C on Magtec’s test rigs and all control and I/O functions have been maintained.

 

The equipment has been started at full command after soaking at -20 degrees C on Magtec’s test rigs and operated as designed with the output power and torque being de-rated as expected.

 

3

 

1.2.9.                                          HVDC insulation to chassis

 

The drive system has been demonstrated to operate with the Smith battery system without generating a HVDC system Isolation failure to chassis.

 

1.3                                                       Warranty Limitations

 

1.3.1.                                          DC link contactors

 

The Main contactors in the Motor controller are rated to break the full load current 5 times. Activation of the emergency stop button in the vehicle will cause the contactors to open immediately and repeated activation of the emergency stop will cause fatigue and damage to these contactors.

 

1.3.2.                                          Over Speed

 

[***]

 

4

 

2.                                                              Performance Requirements

 

The requirements listed in this Section have been provided by Smith.

 

Magtec is responsible for the drive system performance and compliance as requested by Smith In some cases the product may already meet the requirements but as testing to the standard has not been undertaken, this cannot be confirmed at this time.

 

Smith is responsible for integration of the Magtec drive system and the whole vehicle compliance. In some cases compliance is required for the vehicle as opposed to the drive system components and can only be confirmed through vehicle level testing or engineering.

 

However it is understood that Smith may request Magtec to undertake further engineering as allowed for in the body of the contract.

 

2.1                                                       Performance

 

Operation temperatures                                                                                           -20 to +50 degrees C

Storage temperatures                                                                                                       -40 to +50 degrees C

Humidity tolerance                                                                                                                   5% to 95%

 

2.2                                                       Vehicle dynamic performance targets

 

The table below gives the target vehicle performance under various vehicle weights and battery power limitations. These results have been calculated on the basis of a first order loss model of the vehicle and will depend on the actual vehicle loss characteristics. The parameters used in the model are included in the second table.

 

	
Calculated performance
    	
 
    	
Units
    	
 
    	
5.0T GVW
    	
 
    	
7.5t GVW
    	
 
    	
7.5t GVW
    	
 
    	
10.0t GVW
    	
 
    	
10.0t GVW
    	
 
    	
12.0t GVW
    	
 
    	
12.0t GVW
    	
 
    
	
Max vehicle speed
    	
 
    	
mph
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Battery voltage at max   drive power
    	
 
    	
V
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max battery power
    	
 
    	
W
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max drive input power
    	
 
    	
W
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Maximum drive output power
    	
 
    	
W
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max tractive effort
    	
 
    	
N
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Rolling resistance
    	
 
    	
N
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max Dynamic Driving force
    	
 
    	
N
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max Dynamic Grade
    	
 
    	
%
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Minimum Static Driving   force
    	
 
    	
N
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Maximum starting grade
    	
 
    	
%
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
0-30 mph acceleration time   on 0% grade
    	
 
    	
s
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
0-50 mph acceleration time   on 0% grade
    	
 
    	
s
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    

 

5

 

	
Parameter
    	
 
    	
Units
    	
 
    	
5.0T GVW
    	
 
    	
7.5t GVW
    	
 
    	
7.5t GVW
    	
 
    	
10.0t GVW
    	
 
    	
10.0t GVW
    	
 
    	
12.0t GVW
    	
 
    	
12.0t GVW
    	
 
    
	
Vehicle Mass
    	
 
    	
kg
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Frontal Area
    	
 
    	
m.m
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Coefficient of drag
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Coefficient of rolling   resistance
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Tyre size
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Tyre circumference
    	
 
    	
m
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Tyre rolling radius
    	
 
    	
m
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Diff ratio
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Differential efficency
    	
 
    	
%
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Nominal DC link voltage
    	
 
    	
V
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Battery modules
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Net Battery resistance
    	
 
    	
Ohms
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Battery current limit
    	
 
    	
A
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
gearbox torque efficiency
    	
 
    	
%
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
gearbox ratio
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Stiction force
    	
 
    	
N
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Combined controller motor   and gearbox mu
    	
 
    	
%
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Auxilliary power
    	
 
    	
W
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max motor torque
    	
 
    	
Nm
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    
	
Max Motor speed
    	
 
    	
rpm
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    

 

Speed time profiles for each vehicle from a standing start on 0%, 4% and 6% grades are shown below:

 

Acceleration times for 5.0t GVW and 175A battery current

 

 

6

 

Acceleration times for 7.5t GVW and 250A battery current

 

 

Acceleration times for 7.5t GVW and 350A battery current

 

 

7

 

Acceleration times for 10.0t GVW and 250A battery current

 

 

Acceleration times for 10.0t GVW and 350A battery current

 

 

8

 

Acceleration times for 12.0t GVW and 250A battery current

 

 

Acceleration times for 12.0t GVW and 350A battery current

 

 

9Exhibit 10.24

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

DEVELOPMENT, SUPPLY, AND LICENSE AGREEMENT

 

THIS AGREEMENT (“Agreement”) is dated this 1st day of Jan, 2011 (the “Effective Date”), by and between Smith Electric Vehicles US Corp of 12200 N.W. Ambassador Drive, Kansas City, MO 64163, USA (“Smith”), and Sensor-Technik UK Ltd, and Affiliates of Unit I, Stoke Mill, Mill Road, Sharnbrook, Bedfordshire, MK44 INN, UK (“Sensor-Technik”) (collectively the “Parties,” and each individually a “Party”), based upon the following recitals.

 

A.                                           Smith and Sensor-Technik desire to collaborate in the development, manufacturing, and sale of remote vehicle monitoring technology (defined hereafter and referred to as the Technology) as specified in Schedule A (“Products”), on the terms and conditions set forth in this Agreement;

 

B.                                           Smith desires to retain the services of Sensor-Technik to develop the Technology and Products specified in Schedule A on the terms and conditions set forth in this Agreement;

 

C.                                           Sensor-Technik desires to license the Technology and Products and know-how for non-competing uses as defined under the terms and conditions set forth in this Agreement;

 

D.                                           Smith desires to use the Technology and to manufacture the Products specified in Schedule A on the terms and conditions set forth in this Agreement; and

 

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 delivered to the receiving Party within

 

1

 

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Smith – Sensor-Technik Development, Supply, and License Agreement

 

thirty (30) days after the date of disclosure by the disclosing Party to the receiving Party. Confidential Information excludes any information, data or material which (a) the disclosing Party expressly agrees in writing is free of 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.

 

1.4                                      “Foreground Intellectual Property” means Intellectual Property resulting directly from and authored, conceived, developed, reduced to practice or otherwise created during the performance of this Agreement.

 

1.5                                      “Field of Use” means commercial electric vehicles.

 

1.6                                      “Independently Developed Foreground Intellectual Property” means Foreground Intellectual Property developed solely by a Party during the course of performing under this Agreement.

 

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

 

1.8                                      “Products” means (i) those products and accessories identified in Schedule A, (ii) Service Parts, and (iii) Intellectual Property and rights for and concerning the Products identified in Schedule A.

 

1.9                                      “Technology” means remote vehicle monitoring through use of telemetry.

 

1.10                               “Territory” means the World. 

 

ARTICLE 2. SUPPLY OF PRODUCT

 

2.1                                      Development and Production of Prototypes. Sensor-Technik agrees to develop and produce Products that meet the specifications provided by or agreed on by Smith and as defined in Attachment B (“Product Specifications”). Such Product Specifications shall be dated and signed off on by both Parties and are incorporated herein by this reference. Sensor-Technik agrees to provide all on-going and final documents concerning the ownership and use of the web-site, software, source code, technical specification, build of materials, source supplier contact information, technical drawings, and other associated documents and information concerning the Product, Product use and integration, and Product manufacturing.

 

2.2                                      Initial Supply of Product. Until such time as Smith commences manufacturing production of the Product, Sensor-Technik agrees to use its best efforts to supply to Smith the Product at the prices set forth in Attachment A and in the quantities mutually agreed upon and as set forth in Smith’s purchase order. All sales of the Product shall 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 – Sensor-Technik Development, Supply, and License Agreement

 

made by purchase order, which may be provided by facsimile, email, or other mutually agreed to format. All purchase orders issued under this Agreement shall be deemed to incorporate and be governed by the terms and conditions of this Agreement. No increase in the Transfer Price of the initial supply of the Product may be made (whether on account of increased cost of materials, labor or transport costs, other fixed or variable costs, fluctuation in exchange rates, pricing errors or otherwise) without the prior written consent of Smith. In the event Smith changes the sourcing of components or parts making up the Product, as set forth in Schedule C, the Transfer Price for the Product produced by Sensor-Technik shall be adjusted by the difference of the cost for such part or component as set forth in Attachment C (the Costed BOM) and the newly sourced part, as established by the invoice for such part or component. Except for technical service fees which may be negotiated under Section 15.2 of this Agreement, Sensor-Technik shall have no rights to any additional fees or royalties for Product produced by Smith.

 

2.3                                      Rolling Forecast. Smith agrees to provide to Sensor-Technik on approximately the first day of each month a good faith rolling 3 month estimate of Product needs. The first ninety (90) days of the rolling forecast shall be a firm purchase commitment to Sensor-Technik by Smith.

 

2.4                                      Delivery Terms. All Products sold to Smith shall be sold Ex Works (Sensor-Technik facility) to the location designated by Smith. Title shall pass to the receiving Party simultaneously with passage of risk of loss to the receiving Party as specified in Incoterms 2000.

 

2.5                                      Testing and Inspection. In regard to all Products sold by Sensor-Technik to Smith, Sensor-Technik shall use commercially reasonable efforts to inspect and test Products prior to delivery.

 

2.6                                      Discrepancy. In regard to all Products sold by Sensor-Technik to Smith, 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 of the discrepancy. Appropriate adjustments shall be made in the ordinary course.

 

2.7                                      Non-Conformity. In regard to all Products sold by Sensor-Technik to Smith, if the Products are non-conforming products to the specifications and requirements, Sensor-Technik shall use commercially reasonable efforts to supply conforming Products as soon as reasonably possible and shall be solely responsible for any costs in shipment in providing conforming products.

 

2.8                                      Warrantee by Sensor-Technik of Products Sold. All Products and associated device software sold by Sensor-Technik to Smith under this Agreement are warranted to be free from defects in material and workmanship under normal use for the period set forth in Attachment A. Sensor-Technik also warrants the Product design for the Product and associated device software both sold by Sensor-Technik to Smith and as manufactured by Smith to the specifications set forth in Attachment B. Sensor-Technik does not warrant the StormMQ component itself; Senso-Technik only warrants that the StormMQ is compatible with the Products and associated device software and meet the

 

3

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

specifications and requirement established by Smith. Sensor-Technik warrants that the Products are not subject to any infringement claims.

 

NO OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE MADE WITH RESPECT TO THE PRODUCTS INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY.

 

2.9                                      Defective Products.  As used in this Agreement, the term “Defective Products” means any Product which fails to meet the warranty contained in Section 2.8 within the warranty periods described in Schedule A. “Defective Products” shall specifically exclude, without limitation, any Products (i) which have been subjected to misuse, negligence, accident, or improper maintenance, installation, or application or (ii) which have been altered without the Sensor-Technik’s prior written consent.

 

2.10                               Product Returns. At Sensor-Technik’s election, Smith shall either (i) return to a location designated by Sensor-Technik, at Sensor-Technik’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 Smith’s premises for inspection by Sensor-Technik’s or its designated representative.

 

2.11                               Notification. Smith agrees it shall give reasonable advanced notice to Sensor-Technik of any intended communications with Sensor-Technik’s suppliers, so as to permit a representative from Sensor-Technik to be involved in such communication. This obligation shall continue until such time as Smith commences manufacturing the Product.

 

ARTICLE 3. INTELLECTUAL PROPERTY RIGHTS.

 

3.1                                      Independent Ownership. Each Party is and remains the owner of its Background Intellectual Property and Independently Developed Foreground 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 any Independently Developed Foreground Intellectual Property, except as set forth in this Agreement. 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.

 

3.2                                      Infringement Claims. 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 owning or claiming ownership to the Intellectual Rights of 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).

 

4

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

3.3                                      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.

 

ARTICLE 4. IP OWNERSHIP AND RIGHT TO MANUFACTURE

 

4.1                                      IP Ownership. Irrespective of Article 3, the Parties agree that Smith owns all intellectual rights and know how to and concerning the Products and Specifications of the Product, as specified in Attachment D.

 

4.2                                      Smiths Right to Manufacture. Smith shall have the absolute right to manufacture the Products without any obligation to Sensor-Technik and Smith agrees to provide Sensor-Technik with a minimum of a ninety (90) days written notice of its intent to manufacture.

 

4.3                                      Sensor-Technik Right to Manufacture. Smith grants Sensor-Technik the right to manufacture and sell the Products to any party outside of the Field of Use and outside of the United States of America.

 

ARTICLE 5. EXCLUSIVITY AND TAXES

 

5.1                                      Exclusivity. Sensor-Technik shall not manufacture or sell the Products for direct competition with Smith within the Field of Use within the Territory. Notwithstanding the foregoing, Sensor-Technik shall be free to sell the Products to any party outside of the Field of Use and outside of the United States of America.

 

5.2                                      Taxes. Both Parties agree to cooperate with the preparation and filing of all documentation required to fulfill their respective obligations under this Agreement. This specifically includes the preparation and filing of any documentation which would reduce tax rates, including Value Added Taxes (VAT) and taxes on royalties. Smith will pay any applicable sales, use or similar tax imposed in connection with the sale of Product to Smith; provided, that Sensor-Technik shall not charge or collect, and Smith shall have no liability for, taxes on any sale of Product for which Smith has provided Sensor-Technik with an appropriate direct pay permit, resale certificate or other documentation evidencing an exemption from such taxes, or for which Sensor-Technik may eliminate or reduce such taxes through reasonable commercial efforts. For all sales of Items upon which tax reimbursement to Sensor-Technik is applicable, Sensor-Technik shall separately itemize all applicable taxes on invoices submitted to Smith.

 

ARTICLE 6. RECALL

 

6.1                                      Recall Procedures. If a recall or field corrective action caused solely by Defective Products provided or produced by Sensor-Technik is required, then Smith will promptly notify Sensor-Technik 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

 

5

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

Defective Products, and shall immediately assist in preparing and implementing a recall or field corrective action of Defective Products. For Products produced and supplied by Sensor-Technik to Smith, Smith’s exclusive remedy, in the event of such a recall or field corrective action of Defective Products is for Sensor-Technik, at its option, to either repair or replace Defective Products or refund the purchase price for Defective Products and 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 the Smith to perform in-field replacement activities, if any, for Defective Products. However, Sensor-Technik shall have no liability for recall or field corrective action for any Product manufactured by Smith. Smith shall no liability to Sensor-Technik for any claims of any nature or kind for any product Sensor-Technik manufactures for its own use or that it sells. Sensor-Technik does not warrant the StormMQ component itself; Sensor-Technik only warrants that the StormMQ is compatible with the Products and associated device software and meet the specifications and requirement established by Smith.

 

ARTICLE 7. PRODUCT LIABILITY

 

7.1                                      Losses Defined. As used in this Article 7, 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.

 

7.2                                      Indemnity for Losses. Sensor-Technik shall defend, indemnify, and hold harmless Smith for Losses proximately caused by Defective Products manufactured by Sensor-Technik, other than Losses which are proximately caused by (i) Smith’s acts or omissions, or the acts or omissions of any person which purchases, resells, uses, or operates Products, or (ii) misuse of the Products. If it cannot be readily determined whether or the extent to which the Losses were proximately caused by Defective Products, either Party may submit the matter to binding arbitration pursuant to Article 10 to determine the amounts attributable to the Defective Products or to each Party, as the case may be.

 

ARTICLE 8. LIMITATION OF LIABILITY

 

8.1                                      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.

 

ARTICLE 9. FORCE MAJEURE

 

9.1                                      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

 

6

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

authority. 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.

 

ARTICLE 10. GOVERNING LAW, ARBITRATION AND SPECIFIC PERFORMANCE

 

10.1                               Governing Law. This Agreement shall be governed by and construed according to the laws of the State of New York, USA. By its execution of this Agreement, each Party submits to the jurisdiction of any state or federal courts located in the State of New York, USA.

 

10.2                               Informal Settlement 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 11.2, and if they are not settled by negotiation, they shall be resolved by binding arbitration upon written request of either Party.

 

10.3                               Arbitration Procedures. Any arbitration shall take place in New York, USA in accordance with the Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted by a single neutral arbitrator agreed upon by the Parties. In relation to any matters not governed by such rules, the arbitrator shall determine the rules of procedure to be followed, provided, however, that in such case, the opportunity to cross-examine any witness shall be given to both Parties upon request of either Party.

 

10.4                               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 or an order of enforcement, as the case may be.

 

ARTICLE 11. TERM AND TERMINATION

 

11.1                               Term of Agreement. The term of this Agreement shall be perpetual. This Agreement may be terminated by either Party upon a material breach of the non-terminating party, subject to section 11.2 and the terms and conditions of this Agreement.

 

11.2                               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

 

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Smith – Sensor-Technik Development, Supply, and License Agreement

 

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 10.

 

11.3                               Effect of Termination. In the event Sensor-Technik terminates this Agreement pursuant to this Article 11, Smith shall have no further liability to Sensor-Technik other than to pay for Product ordered by Smith and subsequently delivered by Sensor-Technik.

 

11.4                               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.

 

ARTICLE 12. CONFIDENTIALITY

 

12.1                               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.

 

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

 

ARTICLE 13. INSURANCE

 

13.1                               Insurance. 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 as follows: Commercial General Liability covering liability arising from premises, operations, independent contractors, product liability, products-completed operations, personal and advertising injury, and blanket contractual liability $            US each occurrence.

 

8

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

ARTICLE 14. PAYMENT

 

14.1                               Method of Payment. Any payments to Sensor-Technik under this Agreement shall be net ninety (90) days from date of shipment, made by wire transfer to such bank or account as Sensor-Technik shall specify in writing from time to time, or as otherwise mutually agreed, and shall be made in US Dollars.

 

14.2                               Late Payments. Any amounts not paid by Smith when due under this Agreement shall be subject to interest from the date payment is due through the date upon which Sensor-Technik has collected immediately available funds in an account designated by Sensor-Technik at a rate equal to the sum of six percent (6%) per annum, calculated daily on the basis of a 360-day year.

 

ARTICLE 15. TECHNICAL SUPPORT AND DEVELOPMENT FEE

 

15.1                               Integration. Smith shall pay to Sensor-Technik a project fee in the amount of [***] for Sensor-Technik’s technical and engineering support, development of the Product, and the integration of the Product into Smith’s vehicle platform. No additional fees are due from Smith to Sensor-Technik for the Product, other than the Transfer Price for Product Manufactured by Sensor-Technik for Smith as set forth in Section 2.2 of this Agreement.

 

15.2                               On-going Support. Sensor-Technik agrees to provide technical and engineering support for the Product and the manufacturing of the Product on an as needed and on-going basis. The Parties agree to negotiate in good faith, and to enter into a consulting agreement concerning this on-going technical support.

 

ARTICLE 16. GENERAL PROVISIONS

 

16.1                               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.

 

16.2                               Government Approvals; Regulatory Requirements.

 

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

 

(b)                                    For Products manufactured by the Party, that Party is responsible for final quality control testing, for providing adequate warnings and instructions for use of the Products (including proper labeling and packaging), and release of Product documentation. Each Party shall be responsible for reporting to the other Party any adverse events related to the Products or their use.

 

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***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 – Sensor-Technik Development, Supply, and License Agreement

 

16.3                               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.

 

16.4                               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.

 

16.5                               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.

 

16.6                               Notices. Any notice under this Agreement shall be in writing (letter, email 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

Attention: Robin Mackie, CTO

Email: Robin.Mackie@smithelectric.com

Facsimile: 816.464.0510

Telephone: 816.464.0508

 

With copies to:

Attention: Jacques Schira, General Counsel

Email: Jacques.schira@smithelectric.com

Facsimile: 816.464.0510

Telephone: *****

 

(b)                                     Notice sent to Sensor-Technik shall be addressed as follows:

 

Sensor-Technik

Attention: Mark Wood, UK Engineering Manager

Email: mark@sensor-technik.co.uk

Facsimile: 01234 782054

Telephone: 01234 782049

 

With copies to:

Attention:

Email:

Facsimile:

Telephone:

 

10

 

***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 – Sensor-Technik Development, Supply, and License Agreement

 

(c)                                       The Parties by notice given in accordance with this Section may designate other addresses to which notices shall be sent.

 

16.7                               Amendments. This Agreement supersedes all previous agreements, oral or written, between Smith and Sensor-Technik 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.

 

16.7                               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.

 

16.9                               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.

 

16.10                        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.

 

16.11                        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.

 

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

 

	
Smith Electric Vehicles Us   Corp.
    	
 
    	
Sensor-Technik   UK, Ltd.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
By
    	
 
    	
/s/   Robin Mackie
    	
 
    	
By
    	
 
    	
[ILLEGIBLE]
    	
 
    
	
Title
    	
 
    	
CTO
    	
 
    	
Title
    	
 
    	
[ILLEGIBLE]
    	
 
    

 

 

Attachment A - Products, Pricing, and Warrantee

 

·              The Product is made up of those Components set forth in Attachment D and built to the specifications set forth in Attachment C.

 

11

 

***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.

 

·              The Transfer Price for Product produced by Sensor-Technik and delivered to Smith shall be as set forth in the following table. The Transfer Price may vary depending on PO delivery time table.

 

·              The Product warrantee period is five (5) years from the date the Product is received by Smith.

 

Attachment B – Product Specifications

 

Product Specifications are set forth in the attached “Smith Power Telematics System — Project Specification Document (issued 27th April 2010), incorporated herein by this reference.

 

Attachment C – Costed Build of Materials

 

The Costal Build of Materials (BOM) is attached in the spread sheet entitled “Smith Power Telematics System BOM” dated         .

 

Attachment D – Components

 

The Product is comprised of the following components. This chart details the ownership of these components:

 

 

	
Component
    	
 
    	
Item
    	
 
    	
Ownership
    
	
Remote Device
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Printed   Circuit Board (TAD 260)
    	
 
    	
Smith
    
	
 
    	
 
    	
Firmware   (including all source code)
    	
 
    	
Smith
    
	
 
    	
 
    	
Compression   algorithm (developed by StormMQ)
    	
 
    	
Smith
    
	
 
    	
 
    	
Storm   MQ AMQP client
    	
 
    	
Open   Source Code
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
The   Server
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Business   logic (Java Application)
    	
 
    	
Smith
    
	
 
    	
 
    	
Sysadmin   scripts (DOE and Cenex scripts)
    	
 
    	
Smith
    
	
 
    	
 
    	
Database   schema
    	
 
    	
Smith
    
	
 
    	
 
    	
The   website (including all source code, layout and design)
    	
 
    	
Smith
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additional   Software
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   HEX loader software (including all source code)
    	
 
    	
Smith
    
	
 
    	
 
    	
The   VAS software (including all source code)
    	
 
    	
Smith
    

 

12

 

***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.

 

Attachment A - Product Pricing

 

EDISON

 

	
Sensor-Technik UK P/N
    	
 
    	
Description
    	
 
    	
List Price
    	
 
    	
 
    
	
Z/Smith-02A
    	
 
    	
Edison Cable Loom
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-02B
    	
 
    	
Edison Ambient Temp Sensor
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-02C
    	
 
    	
Edison DCDC Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
Optional
    
	
Z/Smith-02D
    	
 
    	
Edison Aircon Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
Optional
    
	
Z/Smith-02E
    	
 
    	
Edison Heater Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
Optional
    
	
Z/Smith-02F
    	
 
    	
Edison Smith Link Remote Device
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-02G
    	
 
    	
Edison Antenna Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    

 

NEWTON

 

	
Sensor-Technik UK P/N
    	
 
    	
Description
    	
 
    	
List Price
    	
 
    	
 
    
	
Z/Smith-03A
    	
 
    	
Newton Cable Loom
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03B
    	
 
    	
Newton Ambient Temp Sensor Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03C
    	
 
    	
Newton DCDC Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03D
    	
 
    	
Newton Aircon Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03E
    	
 
    	
Newton Heater Current Sensor Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03F
    	
 
    	
Newton Smith Link Remote Device
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03G
    	
 
    	
Newton Antenna Assembly
    	
 
    	
[***]
    	
 
    	
 
    
	
Z/Smith-03H
    	
 
    	
Molex Mating Kit - Vehicle Side
    	
 
    	
[***]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    

 

A-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.

	
  

  	
  ***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. Statement of Warranty Product: Smith
  Link Remote Device & Harness Assembly Effective Date: 31/01/2011 Warranty
  Period: 5 Years (from date of dispatch) All products manufactured by or for
  Sensor-Technik UK will be warranted for a period of 5 years from date of
  dispatch to Smith Electric Vehicles. This warranty covers the following
  products: . TAD-290 Remote Device & firmware . Remote Device Cable Loom
  Assembly . Design of device, firmware and cable loom assembly The following
  conditions apply to this warranty: 1. The hardware warranty only applies to
  devices manufactured by TAD Electronics for Sensor-Technik UK and cable loom
  assemblies manufactured by Sensor-Technik UK for the Smith Link Application.
  2. This warranty also covers the software supplied with the device with the
  following restrictions: a. The warranty is only applicable if the software is
  supported and maintained by TAD Electronics. b. If the software is supported
  and maintained by someone other than TAD Electronics, Sensor-Technik UK will
  warrant the design only. c. If changes are made, without authorisation from
  Sensor-Technik UK, then the design warranty will be void. 3. If suppliers
  other than TAD Electronics (for devices) and Sensor-Technik UK (Cable looms)
  are used, Sensor-Technik UK will provide a warranty for the design only with
  the following conditions: a. If alternative suppliers are to be used,
  Sensor-Technik UK will need to authorise any change, removal or adjustment of
  components. Failure to do so will void the design warranty. b. If an
  alternative supplier deviates, without authorisation from Sensor-Technik UK,
  from the assembly instructions supplied by Sensor-Technik UK, the design
  warranty will be void. 4. If goods are returned to Sensor-Technik UK under
  warranty and found with no fault, Sensor-Technik UK reserves the right to
  invoice Smith Electric Vehicles for any and all charges incurred and will
  return the goods to Smith Electric Vehicles, the cost of which is to be
  covered by Smith Electric Vehicles. 5. Sensor-Technik UK will make every
  effort to repair and return an original device or cable loom. In the event
  that a repair is not possible or feasible, like-for-like replacements will be
  supplied. 6. Any returns from Smith Electric Vehicles should be accompanied
  by a complete RMA form (available on request from Sensor-Technik UK). Returns
  without a complete RMA form may take longer to complete and may incur
  processing charges. 7. If the reason for return is to bring early hardware
  versions up to the present iteration, Sensor- Technik UK may levy a charge to
  cover the costs of labour involved when applicable. 8. Sensor-Technik UK maintains
  a complete list of all devices and systems dispatched and will use this list
  when assessing any warranty claims. This list is automatically updated and
  sent to the Smith Electric Vehicles Telemetry Team with each shipment of
  devices and is also available on request. 9. This warranty only covers
  products supplied for Smith Link, any other products supplied by Sensor-
  Technik UK to Smith Electric Vehicles are not subject to the conditions of
  this warranty. For Sensor-Technik UK Mark Wood General Manager –
  Sensor-Technik UK 

  

 

A-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 ELECTRIC VEHICLES Smith Power
  Telematics System Project Specification Document Author –Alan Malby
  Powertrain Manager - Smith Electric Vehicles Ltd Issued: 27th April 2010
  Issue 06 Draft For Discussion Smith US Business Lead Smith US Technical Lead
  Smith UK Technical Lead R. Mackie A. Malby This document including without
  limitation the specifications for Project , constitutes SEV Confidential
  Information and Background Intellectual Property. Do not use or disclose
  except to the extent permitted under the agreement between all members.
  Strictly Confidential 

  

 

B-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. Document History Version Amendment 1.0
  Draft Created as an original document 2.0 Draft Various updates post
  all-party discussion 3.0 Draft Various updates post audio on 4th Feb 2010 4.0
  Draft Various Updates post receipt of DOE and confirmed LCVPP requirement 5.0
  Draft Various Updates – confirm vehicle platform system complexity matrix 6.0
  Draft Various Updates – branding, 

  

 

B-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. Table of Contents Document History 2 1
  GENERAL INFORMATION 7 1.1 CONFIDENTIALITY 7 1.2 PURPOSE 7 1.3 Scope 7 1.4
  PATENTS, INDUSTRIAL PROPERTY RIGHTS, COPYRIGHTS and EXCLUSIVITY 7 2
  ORGANISATION 8 2.1 PROJECT MANAGEMENT 8 2.2 Organisation Chart 8 2.2.1
  Overall Project Framework Milestones and Gateways 9 2.2.2 Key Systems Comms
  Protocol Info 9 2.2.3 One Page Timing Plan 11 2.3 RASIC 12 2.4 Design
  Activities 12 2.4.1 Change Management 12 2.5 Design Validation Activities 12
  2.6 Purchasing Activities 13 3 COST 13 3.1 Fixed and Operating Costs 13 3.2
  Bulk Purchase and Economies of Scale 13 4 Product Description 14 4.1 Hero
  Card 14 4.2 Concept 14 4.3 Active Modes of Operation 15 4.4 Server 15 4.4.1
  Server Security 15 

  

 

B-3
 

	
  

  	
  ***Confidential
  treatment requested pursuant to a request for confidential treatment filed
  with the Securities and Exchange Commission. 4.4.2 Data Back-Up and Archiving
  15 4.5 Web Interface 15 4.6 User Access Levels 16 4.7 Vehicle Access Software
  (VAS) 16 4.8 Markets and Territories 16 4.9 Service Training Plan and
  Literature 16 5 Design Requirements 18 5.1 Future Proofing 18 5.2 Remote
  Device 18 5.3 RD, Data Logging Parameters, VAS and Web UI 19 5.3.1 National
  and Global Network Service Provider Coverage Area Vs Cost 19 5.4 Server
  Maintenance and Updates 19 5.5 Wake-Up Strategy 20 5.5.1 Valance/Zebra/ENOVA
  Systems 20 5 DVP & R 21 5.1 Component Level Testing 21 5.2 Vehicle Level
  Testing 21 5.3 Server Level Testing 21 5.4 Vehicle Access Software (VAS) 21
  5.5 DVP & R 21 6 Quality 22 6.1 Overall Quality Targets and Measures 22
  6.2 Manufacturing Quality Planning 22 6.3 Assured Quality Lessons Learned 22
  6.3.1 RMA Process and Warranty 23 6.4 Supplier Quality Planning 24 

  

 

B-4
 

	
  

  	
  ***Confidential
  treatment requested pursuant to a request for confidential treatment filed
  with the Securities and Exchange Commission. 6.5 First Off 24 6.6 Conformity
  of Production 24 6.7 Project Issues Management 24 Appendices 

  

 

B-5
 

	
  

  	
  ***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. Tables Table 1 - Newton Platform - Key
  System Complexity 9 Table 2 - Edison Platform - Key System Complexity 9 Table
  3 - Fixed and Operating Cost Summary 13 Figures Figure 1 - System
  Architecture - Newton 120kW, ENOVA based system as example 14 Figure 2 -
  Valance Wake Up Sequence 20 Figure 3 - ENOVA Wake Up Sequence 20 

  

 

B-6
 

	
  

  	
  ***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. 1 GENERAL INFORMATION 1.1
  CONFIDENTIALITY . This specification is subject to the terms as defined
  within the SEV heads of terms and all subsequent contracts made available to
  Sensor Tecknik. 1.2 PURPOSE . The Product Design Specification is intended to
  clearly define the technical requirements and responsibilities which are to
  be used by the project in the development of the systems, sub- systems and
  components of the Telematics Project. Due to legacy product complexity and
  timing challenges a thorough and complete set of information such as
  information protocols is beyond the scope of this and any single document.
  Such technical specifics are supplied in separate documents. See Appendices
  for further information. 1.3 Scope . The scope of this document is
  compromised by the fact that full DOE data mining and report out is not yet
  fully understood. It is accepted that further NRE costs will be incurred once
  this is fully understood and if further HW development is required. Currently
  PO ref: 3/31/2010-496 covers development of all HW, SW and server
  specification up to and including Level A and B iterations. o It is envisaged
  that this specification will cover ALL aspects of the CENEX LCVPP data
  requirement (subject to satisfactory independent testing) o It is envisaged
  that this PO will cover SOME aspects of the US DOE data requirement (subject
  to satisfactory independent testing) . The Server UI, function and report out
  specification is also beyond the scope of a single document and it has been
  agreed that this will take place jointly. Verbal exchange, interaction with the
  UI and direct development is the quickest route to a finalised specification.
  1.4 PATENTS, INDUSTRIAL PROPERTY RIGHTS, COPYRIGHTS and EXCLUSIVITY . As per
  all subsequent contracts made available to Sensor Technik. 

  

 

B-7
 

	
  

  	
  ***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. 2 ORGANISATION 2.1 PROJECT MANAGEMENT .
  The supervision of the development of the Telematics project is the
  responsibility of the SEV Project team. . The RASIC Section defines the
  allocation of activities between the suppliers and SEV. . It is the
  responsibility of the supplier to manage and monitor the progress of
  responsible tasks and to act to protect the program timing when necessary.
  Together with Smith the Supplier must support and maintain an up to date
  program log of all actions, planning, costing activities and have this
  available for the project team to review periodically. Supplier project
  management resource and some supplier design resource MUST be available on
  site at SEV UK, Washington as and when the project requires. 2.2 Organisation
  Chart Telemetry Project Organisation SEV US SEV UK ST – Development Adept
  Science 

  

 

B-8
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 2.2.1
  Overall Project Framework Milestones and Gateways It will not be possible to
  deliver the full technical specification at first release. This will be
  delivered over a series of two iterations (Level A and Level B). Due to
  legacy complexity it will also not be possible to deliver the system across
  ALL Smith EV platforms in a single development. Vehicle System supplier
  complexity is summarised in the following Tables: A B C Motor [***] [***]
  [***] Battery [***] [***] [***] Charger [***] [***] [***] Reference Name Old
  Current (DOE) New Product (DOE) Table 1 - Newton Platform - Key System
  Complexity A B C Motor [***] [***] [***] Battery [***] [***] [***] Charger
  [***] [***] [***] Reference Name Old Current (Sains Fast Charge) New Product
  (LCVPP) Table 2 - Edison Platform - Key System Complexity 2.2.2 Key Systems
  Comms Protocol Info [***]Comms Protocol: [***] [***] Comms Protocol: [***]
  [***]Comms Protocol: [***] [***]: [***] 

  

 

B-9
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - Roll
  out of the system to Smith platforms will be in the following order under PO:
  3/31/2010-496 Priority ONE and In Parallel – delivered in Level A Sample
  Newton: [***] Edison: [***] Priority TWO – delivered in Level B Sample
  Newton: [***] Edison: [***] Priority THREE – not covered by this PO but for
  future consideration Edison PV[***] Edison CC and PV [***] Newton[***] 

  

 

B-10
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 2.2.3
  One Page Timing Plan High level Dates are shown in the Figure below. M T W Th
  F M T W Th F M T W Th F M T W Th F M T W Th F M T W Th F M T W Th F M T W Th
  F M T W Th F M T W Th F M T W Th F M T W Th F M T W Th Specs and Commercials
  Issue Pre-lim Spec Issue Coomercial Terms Trial "#2" Commercials
  Agreed Commercial Vehicle Show Agree Plan for Telemetry at CV Show Start
  Develop "Show Version" Final review for CV Show Release Show
  Version Show START-FINISH Main Development Program Finalise Spec for current
  PO Dev Work Remote Device Commence Place PO for LCVPP HW and Harness Package
  Confirm Newt and Edison Confirm Specs for current clamps, temp sensors
  Install & Test RD on Newt and Edison Generate Foundation Install SOP
  Volume Pricing Discussion (SEV US) Place PO for DOE (SEV US) 1st Edison LCVPP
  Vehicle Ready to Ship with Telemetry 1st Newton DOE Vehicle Ready to Ship
  with Telemetry MIRA Independent Assessment Install RD on Zebra Spec Vehicle
  Develop Med-Dea based platform Continuous Improvement Program Capture Issues
  and Begin expanded GUI development Wk 20 Wk 21 TBD Wk 22 Wk 13 Wk 14 Wk 15 Wk
  23 Wk 16 Wk 17 Wk 18 Wk 19 Wk 25 Wk 24 Week Week 1 Week 2 16 17 18 19 20 21
  22 23 24 25 Week April April April April April May May May May May June June
  Comments: 1) Pricing and PO for US parts pending Line 23 2) DOE build start
  pending Line 23 too 3) MIRA testing can only commence IF we have a vehicle to
  ship. Consider a none LCVPP vehicle as a substitute for 2 weeks. [***] [***]
  [***] [***] [***] 

  

 

B-11
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 2.3
  RASIC Task SEV Sensor Technik [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Key:
  R – Responsible; A – Accountable; C – Consulted; I – Informed 2.4 Design
  Activities The design activity will be shared across all partner companies
  however. Specific responsibilities are shown in the RASIC. 2.4.1 Change
  Management All changes during the project are subject to the approval of SEV
  through the Project meeting forum. If SEV request it, the supplier is to
  confirm the effects of any change with the submission of Project Change
  request. A part life cycle record (design history, modification record) is to
  be maintained by the supplier. All amendments including those relating to the
  production process, logistics and manufacturing are to be documented and
  recorded. 2.5 Design Validation Activities The design validation activity
  will be shared across all partner companies however. Specific validation
  tasks are shown in the RASIC. [***] 

  

 

B-12
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 2.6
  Purchasing Activities Purchase requests will be made via SEV US for Project
  NRE and parts for DOE platforms. SEV UK will place purchase requests for
  LCVPP since they are currently separate financial entities. 3 COST 3.1 Fixed
  and Operating Costs More to be added – pending confirmation of spec for
  [***]. Table 3 - Fixed and Operating cost Summary 3.2 Bulk Purchase and
  Economies of Scale The supplier will provide volume pricing summary to Smith
  Electric Vehicles. 

  

 

B-13
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 4
  Product Description 4.1 Hero Card 4.2 Concept The system comprises a Remote
  Device, GPRS network, Server, Web Interface and Storage Unit. The Remote
  Device (RD) will observe directly defined set of [***], [***]and [***]based
  signals which will vary dependent upon [***] signal source generator as a
  function of supplier choice. These signals will then be transmitted via
  Global Packet Radio Service (GPRS) for handling and display by the server
  using a Web Interface. The RD shall also determine the operational state of
  other consumable domestic systems such as HVAC. Figure 1 - System
  Architecture - Newton 120kW, ENOVA based system as example Telemetry Delivers
  o Improved customer focus, shareholder value, customer service and
  satisfaction o Increased understanding of vehicle/system performance
  indicators/parameters o Increased understanding of customer usage profiles o
  Increased efficiencies in SEV logistics o Warranty Cost Reduction o The
  foundation for a Saleable Remote Asset Management System o Potential to be
  used as an EOL Process o Compliance with USA and UK funding body data mining
  requirements [***] 

  

 

B-14
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - The
  server side will also store all of this information; associate it with its
  client side RD and the vehicle for export/analysis in real time and at a
  later date. The RD will incorporate a data logging device to maintain the
  minimum requirement that allows a field service Engineer to retrieve data
  from the vehicle in the event of GPRS network coverage/Server side failure.
  The system will be transparent to vehicle system, sub-system and component
  performance and will not impact safety or homologation. 4.3 Active Modes of
  Operation The RD (client side) will be OFF with zero current draw when the
  vehicle is switched OFF. The RD will transmit and log in both vehicle charge
  and discharge modes. 4.4 Server The server side will be always active,
  regardless of vehicle mode of operation and available to monitor the status
  of all RDs at all times. This includes access and retrieval of stored data.
  4.4.1 Server Security The supplier will provide a statement on server
  security stating that any and all known standards are complied with. 4.4.2
  Data Back-Up and Archiving The capacity of the server should be sufficient to
  store a minimum of [***] months worth of data for [***] vehicles. The server
  data shall NEVER be deleted moreover this will be compressed and archived and
  stored on a different server but will none the less be freely and directly
  available to SEV US/SEV UK Engineers for immediate analysis. 4.5 Web
  Interface The web Interface will allow the user to see which RDs are
  currently active, failed or switched off. Vehicle charge/discharge state etc.
  The web interface will support the analysis of vehicle system location,
  vehicle route, vehicle speed statistics and system performance statistics.
  The interface will support the need to view this data in real time as well as
  act as the data post-processing front end for stored data. The web interface
  will be capable of monitoring data in real-time via direct display and also
  have the ability to produce summary reports and act as an automated End of
  Line facility. There will be some “core” parameters that apply across all
  platforms however; due to the different design and specification of existing and
  potential future systems a “schema” type utility for “mapping” Web Interface
  displayed items to all of the potential future system performance parameters
  will be required. Therefore the Web Interface SW must include a means of
  “adding” and recognising the different vehicle systems and their associated
  data. 

  

 

B-15
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - It is
  intended to have “carry over” vehicle telemetry HW – employ a “1 kit fits
  all” philosophy” – however vehicle platform variation means that the server
  must recognise that the RD is fitted to a particular platform: e.g recognise
  the difference between Newton and Edison and configure the UI display and all
  subsequent statistics accordingly. 4.6 User Access Levels User access will be
  granted by password. The system will have the functionality to add new users
  and amend access levels. The system currently should afford access to 2
  levels of user. Activity/Access Level Super User (SEV Personnel) Fleet
  Manager (none SEV Personnel) [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] 4.7 Vehicle Access Software (VAS) There
  will remain the minimum requirement that a service technician shall be
  capable of retrieving data from the data storage device should the telemetry
  fail. The VAS will replicate the server functionality in its entirety. It
  will support retrieval of data from the RD via hard-wire link preferably USB.
  4.8 Markets and Territories The system components will be certified to ALL
  required or suitably related automotive and telecommunication standards in
  USA, UK, South America, Europe, India, China, Hong Kong, Australasia, Arab
  Nations, South Africa and other emerging markets with a particular emphasis
  on electromagnetic compatibility. The supplier will provide objective
  data/statement in support of it’s upholding that the RD is specified with all
  appropriate automotive EMC standards. 4.9 Service Training Plan and
  Literature Successful role out will require a plan to train key individuals
  at a level appropriate to their user access authority. Super User Level:
  [***] days (assumes user already has expert level of vehicle system
  knowledge) Fleet Manager Level: [***] days 

  

 

B-16
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 4.10
  Branding The RD “box” will be branded “SMITHtel-m” - no formal Font
  Description but equivalent motor example is shown below. Paint Spec: RAL 2008
  Supplier: http://pdf.shepherdmarine.com/colour_charts/ral_chart.html 4.11
  Remote Device Firmware Updates Updates will be achieved by USB auto-update
  process. 

  

 

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  Telematics
  Specification Strictly Confidential Telematics Specification Document - 5
  Design Requirements 5.1 Future Proofing The system design and specification
  is future proofed as far as is possible with the current level of information
  for the addition and integration of further power train systems and vehicle
  subsystems. Namely: 1. [***] CEU – using [***] Communication Protocol 2.
  [***] Inverter - using [***]Communication Protocol 3. [***] Inverter - using
  [***] Communication Protocol 4. [***] Charger – using [***] Communication
  Protocol 5. [***] Battery Systems and associated Charger using [***] 6. [***]
  Charger using [***] 7. [***] (Option 1) – using [***] – max [***]Kbps 8.
  [***] (Option 2) – using [***] – max [***]Kbps 9. ICE Range Extender – using
  [***]??? 10. Fourth [***] 11. Air Conditioning System Status 12. Ambient
  Temperature Measurement a. Cabin b. External ambient 13. Requirements of DOE
  Data Mining Exercise 14. Requirements of LCVPP Mining Exercise 5.2 Remote
  Device The [***]-Bit RD I/O has been biased towards the expected increased
  use of [***] in vehicle systems going forward. The DOE requirement is
  unclear. Current RD I/O spec is as follows: [***] [***] Ports [***] [***]
  Ports Frequency IN [***] OFF (max [***] KHz) Digital Outputs [***] OFF (low
  side switching) Current TD [***] OFF Voltage Inputs [***] OFF Temp Sensor
  Inputs [***] OFF Dedicated diagnostic Port – (for supplier use only) Sealing:
  IP [***] rated and all other requirements are to match those experienced in
  an automotive environment. 

  

 

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  Telematics
  Specification Strictly Confidential Telematics Specification Document - 5.3
  RD, Data Logging Parameters, VAS and Web UI See Attribute Specification
  spreadsheet for specific details of these. It has been accepted that UI
  layout/configuration and complete functionality specification is beyond the
  scope of this document and this will be developed as the project progresses
  via reviews/hand drawings etc. 5.3.1 National and Global Network Service
  Provider Coverage Area Vs Cost The network provider should be sourced as a
  function of maximum coverage area. It is permissible to use the same provider
  for all geographical locations if possible. Cost should not be considered as
  a disabler to coverage. AT&T should be included when consideration is
  given to sourcing the network provider. A clear statement that confirms that
  there is sufficient bandwidth and a rapid uplink speed will be required.
  [***] will be used in the US [***] will be used in the UK 5.4 Server
  Maintenance and Updates Servicing philosophy remains open subject to
  commercial negotiation and development of the SEV Server strategy. 

  

 

B-19
 

	
  

  	
  ***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. Telematics Specification 5.5 Wake-Up Strategy
  5.5.1 Valance/Zebra/Enova Systems The RD should wakeup within [***] second of
  receipt of power. This specification ensures that the RD is awake and online
  to monitor [***] and [***] systems wake-up. Remote Device Wake-Up Sec Remote
  Device Remote Device Wake-up Sec [***] [***] [***] [***] [***] Wake Up proper
  Secs Wake-Up Secs Figure 2 - Valance Wake Up Sequence Remote Device Wake-up
  Sec Remot Device Wake Up proper Secs Wake-Up Secs Figure 3 - ENOVA Wake Up
  Sequence  Telematics Specification
  Document- [***] [***] [***] [***] Strictly Confidential

  

 

B-20
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 5 DVP
  & R 5.1 Component Level Testing The supplier will be responsible for the
  component level testing and will provide all Design Validation plans and
  results to Smith Electric Vehicles upon request. 5.2 Vehicle Level Testing
  Both [***] will carry out the testing work performed at vehicle level – see
  DVP & R for more details. 5.3 Server Level Testing Both [***] will carry
  out the testing work performed at sever level – see DVP & R for more
  details. 5.4 Vehicle Access Software (VAS) Both [***] will carry out the
  testing work performed at VAS level – see DVP & R for more details. 5.5
  DVP & R [***] are responsible for developing the DVP&R as per RASIC 

  

 

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  Telematics
  Specification Strictly Confidential Telematics Specification Document - 6
  Quality 6.1 Overall Quality Targets and Measures Failure rates of supplied
  components shall not exceed more than [***]% of all supplied items by volume.
  6.2 Manufacturing Quality Planning The supplier will remain responsible for
  demonstrating its ability to deliver volume production. The body and location
  of the plant will be nominated by the supplier. A visit to this location by
  SEV Engineering staff will be required before volume production begins. 6.3
  Assured Quality Lessons Learned The supplier will present to Smith Electric
  Vehicles the “Top 10” quality issues in order to support Smith “Drive to
  Zero” quality returns initiative. 

  

 

B-22
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - 6.3.1
  RMA Process and Warranty The supplier will conform to the Smith Electric
  Vehicle RMA process as defined below. All costs associated with shipping of
  rejected units will be funded by the supplier. CUSTOMER COMPLAINT LOGGED
  RETURN AGREED RETURN MATERIAL AUTHORISATION ENTRY INPUT DETAILS REASON, QT Y
  , M/C SERIAL NUMBER GENERATE RMA NUMBER CONTACT CUSTOMER WITH RMA NUMBER AND
  SHIP TO DETAILS RECEIVE PART / MACHINE IN TO INSPECTION WH RMA DISPOSITION
  ENTRY CRED IT CUSTOMER RETURN TO INVENTORY HOLD U N T IL READY TO AC T REWORK
  AND RETURN RECEIVE INTO INVENTORY RAISE NONCONFORMANCE / PUT TO INSPECTION
  DMR PROCESSING WHEN REQUIRED RECEIVE INTO INVENTORY RAISE WO / JOB FOR T EST
  / PDI BEFORE SHIPMENT COMPLETE OPERATIONS RECEIVE INTO FINISHED GOODS RECEIVE
  INTO INVENTORY RAISE WO / JOB FOR REWORK & INSPECT ION OPERATIONS
  COMPLETE OPERATIONS RECEIVE INTO F IN ISHED GOODS CREATE ZERO VALUE SALES
  ORDER SHIP M ACHINE WITH STD PROCESS TWO OPTIONS AGREE CURRENT VALUE OF
  MACHINE CREDIT CUSTOMER AGAINST INVOICE SHIP NEW MACHINE FROM INVENTORY AGAINST
  NEW ORDER SHIP NEW MACHINE F ROM INVENTORY AGAINST NEW ORDER AGREE D
  ISCOUNTED RATE FOR NEW M/CS [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
  [***] [***] [***] [***] [***] [***] [***] [***] [***] 

  

 

B-23
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - All
  supplier components will be warranted for a period of 3 years from date of
  fitment. 6.4 Supplier Quality Planning The supplier will demonstrate 6.5
  First Off First Off Production Level (A Sample) - 3 RD’s will be subject to
  continuous dedicated assessment and sign off. 6.6 Conformity of Production
  All HW and SW iterations will undergo a period of trial and DVP&R before
  being issued to Smith Electric Vehicles Production Department for volume
  production. 6.7 Project Issues Management This will be led by Smith Electric
  Vehicles via regular Project Technical and Commercial review. 

  

 

B-24
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document -
  Appendix A – [***] Message Lists 1. [***] Message Information There are at
  least [***] ID’s that need to be read. These are tabulated below, the
  detailed message structure is contained in the document Smith Electric
  Vehicles Newton Redundant Battery System (17th Feb 2009). Note that this
  document details the structure for ALL employed [***]. The RD should be
  configured for the number of employed [***] as required. SEV [***] ID Number
  [***] ID Message Name Rate 1 [***] [***] [***]ms Information: This message
  set is sent from the [***] micro to each [***] in the system. The following
  can be learned from this message: • [***] 

  

 

B-25
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - SEV
  [***] ID Number [***] ID Message Name Rate 2 [***] [***] [***]ms Information:
  This message set is sent from each [***] in the system to the [***] micro.
  The messages are a GENERAL OVERVIEW AT POD LEVEL. The following can be
  learned from this message: • [***] • [***] • [***] • [***] • [***] • [***] •
  [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***]
  • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] •
  [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***] • [***]
  • [***] 

  

 

B-26
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - SEV
  [***] ID Number [***] ID Message Name Rate 3 [***] [***] [***]ms Information:
  This message set is sent from each [***] in the system to the [***] micro.
  The messages are a GENERAL OVERVIEW AT POD LEVEL. The following can be
  learned from this message: • [***] • [***] • [***] • [***] • [***] • [***] •
  [***] • [***] • [***] • [***] • [***] Tanfield [***] ID Number [***] ID
  Message Name Rate 4 [***] [***] [***]ms Information: This message set is sent
  from each [***] in the system to the [***] micro. The messages are used TO
  SET CRITICAL THRESHOLDS IN THE CHARGER. The following can be learned from
  this message: • [***] • [***] • [***] • [***] • [***] SEV [***] ID Number
  [***] ID Message Name Rate 5 [***] [***] [***]ms Information: This message
  set is sent from each [***] in the system to the [***] micro. The messages
  are used to CONTROL CHARGING. The following can be learned from this message:
  • [***] • [***] 

  

 

B-27
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document - SEV
  [***] ID Number [***] ID Message Name Rate 6 [***] [***] [***]ms Information:
  This message set is sent from each [***] in the system to its charger. The
  messages are used to CONTROL CHARGING. The following can be learned from this
  message: • [***] • [***] • [***] • [***] • [***] • [***] Tanfield [***] ID
  Number [***] ID Message Name Rate 7 [***] [***] [***]ms Information: This
  message set is sent from each [***] in the system to its charger. The
  messages are used to CONTROL CHARGING. The following can be learned from this
  message: • [***] • [***] SEV [***] ID Number [***] ID Message Name Rate 8
  [***] [***] ? 9 [***] [***] 10 [***] [***] 11 [***] [***] 12 [***] [***] 13
  [***] [***] 14 [***] [***] 15 [***] [***] 

  

 

B-28
 

	
  

  	
  Telematics
  Specification Strictly Confidential Telematics Specification Document -
  Tanfield [***] ID Number [***] ID Message Name Rate 16 [***] [***] 17 [***]
  [***] 18 [***] [***] Information: This message set is sent from each [***] in
  the system to deliver DISCRETE INFORMATION AT MODULE LEVEL for each and every
  module in all pods. Note!! It is also a requirement that ALL of the messages
  i.e system information, alarms, and warnings etc that are set to the [***]
  Display from the MBS on [***] 1 are monitored by the RD. 

  

 

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  ***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. Appendix B – Reference Documents 1)
  Telemetry System Attribute Specification_V02 Description: Breakdown of
  required parameters, signal source and acquisition rate, Level A or Level B
  iteration 2) MT3125B RESERVED CANSpec 09.10.31 Description: EDN Charger CAN
  Spec 3) NLG5_CAN_Spec_201 Description: BRUSA Charger CAN Spec Mes-Dea charger
  spec to follow Appendix C – Definitions Drive Event – From driver “Key on” to
  “Key off” Charge Cycle – From battery “current draw” to battery “zero current
  draw” – regardless of whether charging lead is connected or not Discharge
  Cycle – A series of drive events that occur before the beginning of the next
  Charge Cycle 

  

 

B-30

 

 

 

***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.

 

Attachment C

 

TAD Electronics

TAD-290 Smiths V7 BOM Iss2

 

 

C-1

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