Document:

EXHIBIT 10.26

 

***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.

 

FLEET MAINTENANCE AGREEMENT

 

	
DATED
    	
 
    	
13 October  2005
    
	
 
    	
 
    	
 
    
	
DCL
    	
 
    	
DAIRY   CREST LIMITED (Company no  2085882) whose registered office   is at Claygate House, Littleworth Road, Esher, Surrey KT10 9PN
    
	
 
    	
 
    	
 
    
	
SEV
    	
 
    	
SEV   GROUP LIMITED (company no 4463640) whose registered office is   at Unit 95/2, Tanfield Lea Industrial Estate North, Stanley, Co Durham, DH9   9NX
    

 

1.             Definitions

 

1.1           In this Agreement:

 

1.1.1        the following expressions have the following meanings unless inconsistent with the context:

 

“the Act” means the Employment Rights Act 1996.

 

“Additional Charges” means the charges to be calculated by SEV on a time and materials basis at the rates described in Clause 7 of this Agreement in respect of the provision of Excepted Services pursuant to Clause 6 of this Agreement.

 

“Agreement” means this agreement including the Schedules and the appendix made between SEV and DCL

 

“Bodywork” means, without limitation, the panels, doors, glazing, trim, seating and any custom built additions not supplied by the original Vehicle manufacturer

 

“CDV” means an Engine powered car derived van included in this Agreement

 

“Charger” means the battery charger and related equipment of an  EGV.

 

“Chassis” means the main frame, sub-frames and mounting brackets of the vehicle

 

“Code of Practice” means the HMSO code of practice set out in the appendix

 

“Commencement Date” means 16 October 2005.

 

“Contracted Period” means the period during which this Agreement is in effect.

 

“Contract Procedure Manual” means a separate operating manual that identifies procedures and documentation relevant to this Agreement.

 

“DCL Financial Year” means the period of 12 (twelve) months commencing on the first day of each financial year of DCL during the term of this Agreement as notified by DCL to SEV in writing or as otherwise agreed between the parties in writing (and, in the

 

 

***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.

 

absence of such notification or agreement, the period of 12 (twelve) months commencing on 1 April each year during the term of this Agreement).

 

“EGV” means an electric powered goods vehicle included in this Agreement.

 

“Employees” means the employees employed by SEV during the Contracted Period who provide the Maintenance Services, including but not limited to the Transferring Employees and/or the Future Transferring Employees

 

“Employment Costs” means all salaries, wages, commissions, bonuses, all statutory contributions, holiday pay (including payment for accrued but untaken holiday), national insurance contributions, pension contributions made to or on behalf of an  employee, taxation (including all income tax deductible under PAYE) and all other employment costs.

 

“Engine” means an internal combustion engine consisting of the main engine block and head plus all the internal components thereof.

 

“Excepted Services” means those services referred to in Clause 6.1 of this Agreement which do not fall within Maintenance Services.

 

“Final Future Transferring Employees List” means the list of Future Transferring Employees who will transfer to DCL and/or a Replacement Supplier in accordance with Clauses 19 or 20 (as the case may be) upon the Termination Date.

 

“Fleet Size” means the total number of Operational Vehicles and Spare Vehicles in use by DCL from time to time and included in this Agreement.

 

“FTA” means Freight Transport Association or such other replacement association or organisation operating in the United Kingdom from time to time whose aims are to represent the freight transport industry generally

 

“Future Maintenance Services” means any services which are the same as or similar to the Maintenance Services, which will be provided by DCL and/or any Replacement Supplier after the Termination Date.

 

“Future Transfer Date” means the date(s) on which the Future Transferring Employees are transferred to DCL and/or any Replacement Supplier pursuant to Clauses 19 or 20 (as the case may be).

 

“Future Transferring Employees” means any employee of SEV who is wholly or mainly assigned to work in the provision of the Maintenance Services immediately prior to the Termination Date and whose employment is liable to transfer to DCL and/or any Replacement Supplier pursuant to Clauses 19 or 20 (as the case may be).

 

“Liabilities” includes without limitation  all costs, expenses, losses, damages, claims, proceedings, awards, fines, orders (including, but not limited to, any order or notice issued by the Pensions Regulator) and other liabilities (including reasonable legal and other professional fees and expenses) whenever arising or brought

 

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“LGV” means an Engine powered large (over 7.5t gross vehicle weight) goods vehicle included in this Agreement.

 

“Maintenance Agreement” means the agreement entered into by DCL and SEV on 28 March 1999.

 

“Maintenance Charges” means the aggregate charge  for the Maintenance Services calculated in accordance with Clause 3 of this Agreement.

 

“Maintenance Rate” means the weekly charge levied by SEV to DCL tor each Vehicle included in this Agreement and set out in Schedule One.

 

“Maintenance Services” means the provision of maintenance services as defined in Clause 4 of this Agreement.

 

“MGV” means an Engine powered medium (over 3.5t but less than 7.5t gross vehicle weight) goods vehicle included in this Agreement.

 

“Opening Fleet Size” means the Fleet Size on the later of the Commencement Date of the first day of any DCL Financial Year and stated in Schedule One

 

“Operational Vehicles” means Vehicles from time to time that are in regular use in the course of DCL business

 

“Permitted Sub-Contractor” means any person who SEV appoints to undertake work as all or part of the Maintenance Services pursuant to Clause 11  below.

 

“PG9 Notice” means a PG9 Notice issued by VOSA.

 

“Place of Repair” means any agreed location where the Vehicles are serviced or repaired

 

“Place of Use” means any location within the local vicinity of the Site where the Vehicles are operated.

 

“Provisional Future Transferring Employees List” means the list of Future Transferring Employees who SEV believes will transfer to DCL and/or a Replacement Supplier in accordance with Clauses 19 or 20 (as the case may be) upon the Termination Date.

 

“Redundancy Costs” means in relation to each Transferring Employee the amount designated as such in Schedule Two and calculated as the sum of:-

 

(i)            the statutory redundancy payment (calculated in accordance with section 162 of the Act) to which such Transferring Employee would have been entitled  had he been dismissed by reason of redundancy with effect from the Commencement Date;

 

 (ii)          any contractual entitlement to additional redundancy or severance pay (including any such entitlement arising by virtue of custom and practice) which would accrue to such Transferring Employee were he dismissed in such circumstances.

 

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(iii)          the contractual notice pay (or payment in lieu of notice) which would have been payable to such Employee in such circumstances together with any additional notice pay which would have been payable by virtue of section 86(1) of the Act.

 

(iv)          all income tax and national insurance contributions properly payable in connection with the payments set out in (i) to (iii) above 

 

but subject to variation in accordance with clause 11.7.

 

“Regulations” means the Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended).

 

“Replacement Supplier” means any person employed or engaged to provide to DCL services similar to the Maintenance Services provided prior to the Termination Date.

 

“Retail Price Index” means the UK Index of Retail Prices (All Items) maintained by the Central Office of Information calculated by reference to the published figures in respect of such Index current at the last day of December in each year  during the term of this Agreement. In the event of the abolition or a fundamental variation in the basis of the said Index prior to the date upon which the Retail Price Index is to be applied hereunder, the parties shall, at their mutual expense, obtain the opinion of an independent Fellow of the Institute of Chartered Accountants in England and Wales as to the increase which ought to be made (having regard to such varied or substituted index or indices as he considers appropriate) and the opinion of such accountant (who shall act as an expert and not as an arbitrator) shall be final and binding on the parties

 

“Schedule One” means the Schedule One hereto setting out the variable terms of this Agreement and to be revised by SEV on the first day of each DCL Financial Year following which a signed copy of the new Schedule One shall be attached to each part of this Agreement.

 

“SGV” means an Engine powered small (up to 3.5t gross vehicle weight) goods vehicle included in this Agreement.

 

“Site” means the addresses of DCL premises where the Vehicles are stored when not in use.

 

“Spare Vehicles” means Vehicles held in a maintained and roadworthy condition for occasional use by DCL

 

“Surplus Vehicles” means Vehicles from time to time no longer in use by DCL either as Operational Vehicles or Spare Vehicles.

 

“Termination Date” means the date on which this Agreement terminates pursuant to Clause 16

 

“Transferring Employees” means the persons employed by DCL who are providing the Maintenance Services or services which are the same or similar to the Maintenance Services immediately before the Commencement Date whose contracts of employment after the Commencement Date will be or are deemed effected between

 

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SEV and such persons under Regulation 5 of the Regulations and who are listed in Schedule Two.

 

“Vehicle” means any vehicle included in this Agreement.

 

“VOSA” means the Vehicle and Operator Services Agency

 

1.1.2        references to any statute or statutory provision include, unless she context otherwise requires, a reference to the statute or statutory provision as modified or reenacted and in force from time to time prior to the Commencement Date and any subordinate legislation made under the relevant statute or statutory provision in force prior to the Commencement Date;

 

1.1.3        references to persons will include bodies corporate, unincorporated associations and partnerships;

 

1.1.4        references to a document being “in the agreed terms” are to that document in the form agreed and for the purposes of identification initialled by or on behalf of DCL and SEV;

 

1.1.5        all obligations, representations and warranties on the part of two or more persons are entered into, given or made by such persons jointly and severally;

 

1.1.6        references to the singular include the plural and vice versa;

 

1.1.7        references to Clauses and Schedules are to Clauses of and Schedules to this Agreement, and references to paragraphs are to paragraphs in the Schedule in which such references appear;

 

1.1.8        the Schedules form part of this Agreement and will have the same force and effect as if expressly set out in the body of this Agreement;

 

1.1.9        the headings in this Agreement will not affect its interpretation; and

 

1.1.10      any phrase introduced by the term “include”, including”, “in particular” or any similar expression will be construed as illustrative and will not limit the sense of the words preceding that term.

 

1.2           SEV and DCL hereby expressly agree that this Agreement shall replace and take precedence over any terms set out in the Maintenance Agreement. Accordingly, SEV and DCL hereby agree that the Maintenance Agreement is deemed to have been terminated by them with effect from the date of this Agreement.

 

1.3           Within a period of three months of the Commencement Date, DCL shall enter into a master contract hire agreement with SEV (or SEV’s nominated third party finance provider) in respect of the supply of all DCL’s requirements for new small (up to 3.5t gross vehicle weight) goods vehicles for an initial period of 18 (eighteen) months from the Commencement Date. On completion of this initial 18 (eighteen) month period, and at each 18 (eighteen) month interval thereafter during the continuance of this Agreement, DCL will review the contracted rates and provided the rates remain within

 

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the same competitive framework as the original agreement, DCL will renew the master contract hire agreement for a further 18 (eighteen) months.

 

2.             SEV’s Obligations

 

In consideration of the payment by DCL from time to time of the Maintenance Charges in accordance with the provisions of Clause 3 below SEV shall during the term of this Agreement.

 

2.1           provide the Maintenance Services in respect of the vehicles upon the terms and conditions of this Agreement and with all due skill, care and diligence using goods of satisfactory qualify and fit for the purpose;

 

2.2           ensure the Vehicles are in a roadworthy condition and comply with all relevant legal and statutory requirements so far as the same is possible by the provision of the Maintenance Services, however, SEV shall not be liable under this Clause 2.2 in the event that the Vehicles are not in a roadworthy conditions due to DCL breaching a term of its obligations under Clause 9 or the Code of Practice;

 

2.3           abide by the health and safety policy from time to time of DCL whilst working on DCL property (subject to the prior notification of any changes to the same by DCL to SEV);

 

2.4           advise DCL in writing in the event of a Vehicle not meeting its maintenance schedule for reason of being unavailable to SEV for Maintenance Services;

 

2.5           provide to DCL a defect reporting book and annual service schedule chart for each Site;

 

2.6           provide a “freefone’ number for reporting out-of-hours breakdowns;

 

2.7           provide the following reports to DCL in a format as agreed with DCL;

 

2.7.1        weekly overdue service status current to date of printing;

 

2.7.2        monthly Vehicles serviced report;

 

2.7.3        monthly notification of any CDV, SGV, MGV or LGV predicted to exceed 25,000 miles per annum;

 

2.7.4        monthly fleet list of the Vehicles included in the Fleet Size for the purposes of calculating Maintenance Charges;

 

2.7.5        any further reports that may be reasonably requested by DCL from time to time;

 

2.8           provide suitable storage for vehicle records and reports of Maintenance Services for a period of 3 years from the date the Maintenance Services took place and allow DCL access to them on request and at the end of this period deliver said documents to a designated UK location as requested by DCL;

 

2.9           advise DCL in the event of SEV being aware of obsolete components that have a widespread usage on the Vehicles;

 

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2.10         use its reasonable endeavours to suggest and/or implement such new processes or procedures as may be deemed reasonable by SEV in the circumstances or as may be reasonably requested by DCL in order to ensure that the Maintenance Services are provided in an efficient and effective way.

 

3.             Maintenance Charges

 

3.1           The Maintenance Charges shall be the aggregate charge during the continuance of this Agreement calculated calendar monthly in advance using the prevailing Fleet Size and the Maintenance Rate for each Vehicle included therein.

 

3.2           The Maintenance Charges shall not include the cost of any Excepted Services.

 

3.3           The Maintenance Charges shall be invoiced by SEV calendar monthly in advance and shall be payable by DCL within fourteen days of the invoice date.

 

3.4           SEV shall not be entitled to Maintenance Charges in respect of any Vehicle which is more than two weeks overdue for service inspection through no fault of DCL during the period from the week ending date when such inspection becomes two weeks overdue until the week ending date that the service inspection is duly carried out. DCL shall be entitled to receive a refund in respect of any such amounts that have already been paid and such refund to be made by credit note issued by SEV each week that the Vehicle remains overdue for service inspection.

 

3.5           Maintenance Charges shall be increased annually on the first day of each DCL Financial Year in line with the last published Retail Price Index and stated in Schedule One effective for the following year of this Agreement, a signed copy of which shall be attached to each copy of this Agreement.

 

3.6           Subject to a genuine dispute, SEV reserves the right to charge DCL interest in respect of the rate payment of any Maintenance Charges or Additional Charges due under this Agreement at the rate of 3% per annum above the base rate from time to time of Lloyds TSB Bank PLC from the due date therefor until payment (as well after as before any judgement binding on either party).

 

4.             Maintenance Services

 

The Maintenance Services shall comprise the provision by SEV during the continuance of this Agreement of the following:

 

4.1           servicing and inspections at intervals stated in Schedule One using the FTA report form for SGV, MGV, LGV and CDV and SEV’s report form for EGV;

 

4.2           preparation and submission of SGV, MGV, LGV and CDV for the relevant annual VOSA test;

 

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4.3           recalibration and resealing of tachograph equipment on MGV and LGV to VOSA requirements;

 

4.4           in respect of transport refrigeration equipment on MGV and LGV up  to eight years old, servicing and inspections at intervals stated in Schedule One and repairs as required;

 

4.5           in respect of tail-lift equipment on MGV and LGV up to eight years old, preventative maintenance inspections at intervals stated in Schedule One and repairs as required to the electrical and hydraulic systems but not to the main frame, sub-frames, platform or  mountings;

 

4.6           labour and parts to make repairs to Vehicles and Chargers due to normal wear and tear;

 

4.7           tyre inspections every month, puncture repairs and replacement of tyres with equal to or less than 2mm of tread remaining and in the event of the Company failing to change a tyre with equal to or less than 2mm of tread remaining that is identified on the monthly inspection or which is not available for inspection and the Customer is not informed as such, issue a credit note to the Customer equal to two weeks Maintenance Charge for the Vehicle concerned;

 

4.8           transport to and from the Place of Repair;

 

4.9           respond to Vehicle breakdowns within two hours of receiving notification of the breakdown either by attending to the Vehicle if located at the Place of Use or by informing DCL of action to be taken if located at the Site. In the event of SEV failing to attend at the Place of Use within two hours then a senior representative of SEV will meet DCL to explain the reason for the failure. SEV shall undertake necessary repairs or where a repair cannot be completed, recover the vehicle back to the Site or Place of Repair and record the action taken in the defect reporting book;

 

4.10         battery topping (and removal of over-spill) at a maximum of fortnightly intervals for EGV;

 

4.11         replacement of light lenses, mirror glasses, heads and aims, number plates and vehicle charging connectors and parts thereof damaged through accident or driver abuse;

 

4.12         minor Bodywork repairs due to normal wear and tear in order to maintain Vehicles in roadworthy condition, specifically:

 

4.12.1      repairs to locks, catches, handles and hinges;

 

4.12.2      repairs to seats and seat frames;

 

4.12.3      repairs to window mechanisms (excluding glass);

 

4.12.4      minor repairs to remove sharp edges, straighten bent panels, refit bumpers and secure loose items.

 

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5.             Times for Maintenance Services

 

SEV will provide maintenance Services 24 hours a day Monday to Friday and until 6pm on Saturday (excluding Christmas Day). In the event of Maintenance Services being provided by SEV at DCL’s request outside of this time frame, SEV will levy Additional Charges in respect of the work earned out at the rates set out in Schedule One.

 

6.             Excepted Services

 

6.1           The Maintenance Services shall not include:

 

6.1.1        the transportation or relocation of the Vehicles other than as described in Clause 4.8;

 

6.1.2        repairs required due to the use (other than by SEV) of defective or inappropriate supplies or accessories;

 

6.1.3        repairs required due to any disaster affecting the Vehicles inducing without limitation fire, flood, water, wind, lightning, vandalism or burglary (other than as described in Clauses 4.11 and 4.12);

 

6.1.4        repairs required due to the neglect, misuse or abuse of the Vehicles by DCL, its employees or agents (other than as described in Clauses 4.11 and 4.12);

 

6.1.5        repairs required to rectify damage caused by continuing to operate a Vehicle with a serious defect that should reasonably have been recognised as such by DCL;

 

6.1.6        vehicle recovery from the Place Of Use to the Site (or any other location) due to a breakdown caused by a fault not covered by the Maintenance Services;

 

6.1.7        repairs or replacement of wheel rims;

 

6.1.8        repairs or replacement of CDV, SGV, MGV and LGV Engine, gearbox, prop shaft (excluding mountings) and drive axle repairs or replacement on Vehicles over six years old;

 

6.1.9        repairs or replacement of transport refrigeration equipment on EGV and SGV; transport refrigeration equipment Engine on MGV and LGV, and; repairs or replacement of transport refrigeration equipment on MGV and LGV more than eight years old;

 

6.1.10      repairs or replacement of tail-lift equipment on EGV and SGV, tail-lift main frame, sub-frames, platform and mountings on MGV and LGV and, repairs or replacement of tail-lift; equipment on any MGV or LGV more than eight years old;

 

6.1.11      daily Vehicle checks as specified in the Code of Practice and any damage caused by failing to carry out same;

 

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6.1.12      oils and fluids required to complete the daily Vehicle checks,

 

6.1.13      repairs to the Bodywork of the Vehicles other than as described in Clause 4.12;

 

6.1.14      repairs to the Chassis of the Vehicles;

 

6.1.15      repairs to the Bodywork as described in Clause 4.12 for a period of thirteen weeks from the Commencement Date;

 

6.1.16      damage or failure caused by corrosion of the Bodywork or Chassis;

 

6.1.17      upgrades, conversions and retrofits required due to the obsolescence of the original components used by the vehicle manufacturer;

 

6.1.18      repainting (other than to avoid leaving exposed bare metal following repairs described in Clause 4.12.4) or refurbishing of the Vehicles;

 

6.1.19      cleaning of the Vehicles save as necessary to complete the Maintenance Services;

 

6.1.20      traction battery (including boxes and connectors) replacement, maintenance (other than as described in Clause 4.10) and repair;

 

6.2           SEV shall upon request by DCL provide all or any of the Excepted Services but shall be entitled to charge for the same by levying Additional Charges in the manner described in Clause 7.

 

6.3           Without prejudice to Clause 6.2, SEV shall be entitled to levy Additional Charges in the manner described in Clause 7 if Maintenance Services are provided at DCL request in circumstances where it is agreed that DCL request was  unnecessary.

 

7.             Additional Charges

 

7.1           Rates for Additional Charges shall be increased annually in line with the last published Retail Price Index on the first day of each DCL Financial Year and stated in Schedule One effective for the following year of this Agreement.

 

7.2           Additional Charges shall be levied by SEV on completion of Excepted Services within fifteen working days otherwise DCL shall have no obligation to pay  the Additional Charges. The Additional Charges shall be payable by DCL within fifteen working days of receipt of the invoice.

 

7.3           Additional Charges for labour and travelling time shall be levied at the rates stated in Schedule One.

 

7.4           Transportation of Vehicles on SEV transport shall be levied on a time plus mileage basis at the rates stated in Schedule One.

 

7.5           The time charged from the initial location of SEV transport to the point of collection and back shall be limited to a maximum of one hour each way

 

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7.6           Any CDV, SGV, MGV or LGV, reported monthly by SEV as described in Clause 2.7.3 and operating in excess of 25,000 miles per annum shall be subject to an Additional Charge, calculated on a pro-rata basis, levied annually on the first day of each DCL Financial Year

 

7.7           Subject always to Clause 2.1. SEV reserves the right to supply new, reconditioned or  used replacement parts and materials in the performance of its duties hereunder.

 

7.8           New, used and reconditioned spare parts and materials used in the completion of Excepted Services shall be levied by SEV to DCL at a price agreed by DCL for each case.

 

7.9           Where SEV employs sub-contractors for Excepted Services, the Additional Charges shall be levied at the rates stated in Schedule One.

 

7.10         SEV shall have the consent of DCL to undertake Excepted Services without prior notification for which the Additional Charge does not exceed the amount stated in Schedule One and provided it is agreed that the Excepted Services were required; DCL accepts full liability for the payment thereof. Payment for Excepted Services in excess of the value stated in Schedule One that are completed without prior approval of DCL shall be payable in full only at the discretion of DCL

 

8.             Fleet Size

 

8.1           The prevailing Fleet Size shall be recalculated by SEV and agreed by DCL on the last day of each calendar month for the purpose of calculating Maintenance Charges.

 

8.2           Spare Vehicles in the ratio of one Spare Vehicle to every ten Operational Vehicles (calculated by Vehicle category, and allowing for reasonable substitutes, across the whole fleet) shall be held at each Site and are included in this Agreement in respect of Fleet Size calculations.

 

8.3           The Fleet Size  shall be allowed to fluctuate within a range defined as the Opening Fleet Size less ten percent to the Opening Fleet Size plus ten percent without penalty or notice. The Fleet Size, in respect of Maintenance Charges calculations shall only be allowed to exceed this range following either a revision of Schedule One agreed by SEV and DCL or on the first day of a DCL Financial Year.

 

8.4           DCL shall first offer all Surplus Vehicles that DCL wishes to sell for sale to SEV. Any Surplus Vehicle purchased by SEV shall be removed from DCL site within ten working days. Unless purchased by SEV, disposal of Surplus Vehicles shall be the responsibility of DCL.

 

8.5           Notwithstanding any other term of this Agreement, DCL shall within a period of five months of the Commencement Date reduce the number of MGV and LGV Vehicles in respect of which SEV is to provide Maintenance Services to a maximum of 52 Vehicles;

 

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so as to enable SEV to undertake appropriate redundancy consultation and selection processes with those Transferring Employees involved in  the maintenance of such MGV and LGV Vehicles and where appropriate to effect the dismissal of those Transferring Employees on the  ground of redundancy.

 

9.       DCL’s Obligations

 

During the term of this Agreement, DCL shall:

 

9.1      pay SEV Additional Charges as required to ensure that any vehicle to be added to this Agreement after the Commencement Date is in a roadworthy condition, including bodywork as described in Clause 4.12. and capable of passing a VOSA inspection prior to inclusion in this Agreement;

 

9.2      use its reasonable endeavours to ensure the Vehicles are  operated in accordance with the Vehicle manufacturers’ instructions and for the purposes for which they were designed;

 

9.3      use its reasonable endeavours to ensure that daily Vehicle checks, in accordance with the Code of Practice are completed (and recorded daily in writing) and that tyre pressures, engine oil, coolant and windscreen washer fluid are maintained at the  correct levels and topped up if necessary;

 

9.4      replace, at both DCL and SEV discretion and where practical, any blown bulbs or fuses using spares provided by SEV on a free of charge basis;

 

9.5      ensure that any faults or defects are reported without unnecessary delay to SEV using the procedure specified in the Contract Procedure Manual;

 

9.6      to provide and make use of a Spare Vehicle in the event of a Vehicle being unavailable for operation due to Maintenance Services;

 

9.7      if requested, in so far as is practical to do so, provide assistance to SEV to tow a Vehicle back to the Site or Place of Repair;

 

9.8      ensure that no alterations, modifications, repairs or maintenance to the Vehicles that directly affects SEV obligations under this Agreement, are carried out other than by SEV without prior consultation with SEV and such consent not to be unreasonably withheld;

 

9.9      provide a valid road fund licencse for each Vehicle;

 

9.10    provide a safe working area at each Site in which SEV personnel may work on the Vehicles;

 

9.11    provide a safe working area where batteries can be cleaned without contamination of the water course;

 

9.12    provide a reasonable amount of electricity and water  to SEV whilst working on the Vehicles on Site at no charge to SEV;

 

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9.13    promptly notify SEV in writing in the event that a Vehicle is to be included within or removed from the scope of this Agreement

 

10.     Access to Premises

 

10.1    DCL shall allow SEV and authorised sub-contractors reasonable access to any premises controlled by DCL in order to provide the Maintenance Services (the “Premises”) and to the extent necessary for SEV to provide the Maintenance Services. The access shall be granted during the normal working hours for the relevant Premises. If access is required outside the normal working hours for the relevant Premises, SEV shall arrange an appointment in advance with DCL.

 

10.2    SEV shall make sure that all of its employees, agents and sub contractors attending the Premises:

 

10.2.1      carry and keep visible suitable means of identification;

 

10.2.2      comply with reasonable regulations applying to conduct at the Premises.

 

10.2.3      comply with lawful directions given by authorised personnel of DCL relating to conduct on the Premises.

 

10.3    SEV shall be liable for any damage caused to the Premises by its employees, agents, sub-contractors and invitees.

 

10.4    Unless otherwise agreed, SEV shall be responsible for property which it brings onto the Premises and shall remove it from the Premises when requested by DCL.

 

10.5    The use of the Premises is entirely at DCL’s discretion and DCL may ask SEV to vacate the Premises or stop providing Maintenance Service from Premises from time to time by giving SEV at least 30 days’ written notice.

 

10.6    SEV shall not be liable for the failure to provide Maintenance Services due to being unable to gain access to Vehicles through DCL exercising their rights under this Clause 10.

 

11.     Transferring Employees

 

1l.1     DCL and SEV acknowledge and agree that, pursuant to the Regulations, the contracts of employment between DCL and the Transferring Employees (except in so far as such contracts relate to any occupational pension scheme as defined in Regulation 7 of the Regulations) will have effect after the Commencement Date as if originally made between SEV and the Transferring Employees. SEV and/or any Permitted Sub-Contractor will make such pension provisions in respect of the Transferring Employees as complies with its obligations under sections 257 and 258 Pensions Act 2004 and the regulations under these sections, namely the Transfer of Employment (Pension Protection) Regulations 2005.

 

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11.2    DCL and SEV agree that the following provisions of this Clause 11 will apply irrespective of whether or not the Regulations apply as a matter of law

 

11.3    All Employment Costs in relation to the  Transferring Employees in respect of:

 

11.3.1      up to and including the Commencement Date (whether or not due for payment at that date) will be borne by DCL

 

11.3.2      after the Commencement Date up to and including the Termination Date will be borne by SEV;

 

and will if necessary be apportioned on a  time basis between SEV and DCL

 

11.4    DCL will indemnify and will keep SEV indemnified in full against all Liabilities arising directly or indirectly in connection with.

 

11.4.1      the employment or termination of employment by DCL of any of the Transferring Employees (whether or not terminated by notice and, if so terminated, whenever that notice expires) up to and including the Commencement Date;

 

11.4.2      any act, omission or default of DCL up to and including the Commencement Date in respect of the employment by DCL of the Transferring Employees;

 

11.4.3      DCL’s failure to inform or consult as required under Regulation 10 and 10A of the Regulations except to the extent that any such action or claim (or any part of such action or claim) arises from any failure by SEV to give DCL the information required from SEV to enable DCL to comply with its obligations under Regulation 10(3) of the Regulations;

 

11.4.4      any claim by a Transferring Employee that such person is entitled for any reason to take benefits not relating to old age, invalidity or survivors pursuant to the terms of any pension scheme in which SEV is not then participating, or pursuant to the Transferring Employee’s terms and conditions of employment prior to the Commencement Date;

 

11.4.5      any claim by any trade union, staff association or staff body recognised by DCL in respect of all or any of the Transferring Employees arising out of DCL’s failure to comply with its legal obligations to such trade unions or staff associations or bodies; and

 

11.4.6      any claim by any former, existing or future employee of DCL (other than the Transferring Employees) against SEV concerning or relating to any matter whatever.

 

11.5    Subject to Clause 11.6. SEV will indemnify and keep DCL indemnified in full against all Liabilities arising directly or indirectly in connection with:

 

11.5.1      any Employment Costs arising in relation to the Contracted Period in relation to the Employees;

 

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11.5.2      the employment or termination of employment by SEV of any of the Employees (whether or not terminated by notice and, if so terminated, whenever that notice expires); and

 

11.5.3      any act, omission or default of SEV in respect of the employment by SEV of the Employees.

 

11.6    SEV has indicated to DCL that following the Commencement Date, it will undertake a review of the provision of the Maintenance Services and the services that SEV already provides to DCL, which are similar to the Maintenance Services, and it is possible that headcount reductions may be necessary within its workforce as a result of that review. To the extent that such headcount reductions are effected through compulsory redundancies which affect the Transferring Employees, DCL understands that SEV will seek to establish that such redundancies are for an economic technical or organisational reason entailing a change in the workforce. Accordingly, DCL agrees that (subject to Clause 11.7) in the event that SEV terminates the employment of any of the Transferring Employees on the ground of redundancy and:-

 

11.6.1      the date on which the applicable redundancy notice is issued falls on or within a period of 6 months commencing on and including the Commencement Date; and

 

11.6.2      a copy of such redundancy notice is served (in accordance with clause 32.1) upon DCL within the same period;

 

then DCL will reimburse the Redundancy Costs validly incurred by SEV in association with such termination(s) to SEV within 14 days of receipt of an invoice from SEV detailing the name of the Transferring Employee, the effective date of termination of their employment and the date and amount of any payment of the Redundancy Costs (including a breakdown of PAYE deducted).

 

11.7    DCL will reimburse Redundancy Costs to SEV in accordance with Clause 11.6 up to a maximum total sum as set out in Schedule Two (“the Redundancy Cap”). However, in the event that the basis of calculation of the Redundancy Costs applicable to all or any of the Transferring Employees as stated in Schedule Two (“the Anticipated Redundancy Costs”) is challenged (whether by one or more of the Transferring Employees or by any trade union, staff association or staff body recognised by DCL or SEV in respect of all or any of the Transferring Employees) with the result that the Anticipated Redundancy Costs are agreed by the parties or adjudged by a competent court or tribunal to be less than the actual Redundancy Costs (“the Actual Redundancy Costs”), DCL agrees to forthwith pay to SEV in addition to the Anticipated Redundancy Costs such sum as represents the difference between the Anticipated Redundancy Costs and the Actual Redundancy Costs; provided that DCL’s liability in respect of such difference shall not exceed the sum of [***]

 

[***]

 

11.8    SEV will for the purposes of its accounts and tax return consider whether any payment received from DCL under the terms of Clause 11.6 can be treated as a non taxable income receipt with a claim being made for the Redundancy Costs as deductible for corporation tax purposes. Provided SEV considers that there are reasonable grounds

 

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for submitting its tax return on this basis then upon acceptance by the HM Revenue and Customs of this treatment or upon expiry of the relevant time limit for the HM Revenue and Customs to raise enquiries in relation to the tax return covering the provision of the Maintenance Services SEV will pay to DCL an amount equal to the reduction in the SEV’s corporation tax liability attributable to the deductibility of the Redundancy Costs within 14 days of such acceptance or expiry.

 

11.9                       SEV shall only terminate the employment of any Transferring Employees under Clause 11.6 in the event that headcount reductions are necessary (as specified under Clause 11.6) and SEV has used all reasonable endeavours to try and find alternative employment for such employees within SEV.

 

11.10                 SEV hereby undertakes to DCL that it will comply with all relevant legislation and case law and will use best practice in any redundancy process it undertakes in relation to the Transferring Employees where it intends to call upon or does call upon DCL to reimburse any Redundancy Costs so as to ensure that such dismissals are fair and reasonable in all the circumstances.

 

11.11                 DCL acknowledges that SEV requested DCL to provide it with various employment details in relation to the Transferring Employees as set out in Schedule Three (“Transferring Employees Information”) before: the Commencement Date DCL used all reasonable endeavours to ensure that it provided SEV with all the Transferring Employees Information and warrants that to the best of its knowledge and belief (having undertaken all reasonable investigations and conducted all relevant enquiries) the Transferring Employees Information was true complete and accurate when given and remains true, complete and accurate until the Commencement Date.

 

11.12                 DCL acknowledges that SEV is relying on the warranty set out in Clause 11.11.

 

11.13                 The rights and remedies of SEV in respect of any breach of the warranty set out in Clause 11.11 shall not be affected by completion of the transfer of the Transferring Employees, by any knowledge of SEV or its advisers, by  the rescission or non-rescission of this Agreement, by any investigation made by or on behalf of SEV into the affairs of DCL or by SEV failing to exercise or delaying the exercise of any of its rights or remedies.

 

11.14                 SEV hereby warrants to DCL that as at the date of this Agreement no claim is contemplated against DCL in relation to clause 11.11

 

11.15                 DCL shall subject to clause 11.16 indemnify and keep SEV indemnified against any Liabilities incurred by SEV during a period of 12 months from the Commencement Date or any potential Liabilities of which SEV becomes aware during the period of 12 months from the Commencement Date as a result of a breach by DCL of the warranty set out in clause 11.11 provided that:

 

11.15.1             SEV promptly notifies DCL of any allegation of loss or damage within a period of 12 months from the Commencement Date.

 

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11.15.2    SEV makes no admission or prejudicial statement without DCL’s consent (such consent not to be  unreasonably withheld or delayed);

 

11.15.3    the parties conduct and settle all negotiations and proceedings in a manner which is mutually acceptable in the circumstances, both parties acting reasonably in the circumstances; and

 

11.15.4    SEV complies with its common law duty to mitigate its losses.

 

11.16    DCL shall not be liable to SEV under the provisions of this clause 11 for indirect loss, consequential loss or loss of profits.

 

11.17    DCL and SEV acknowledge that DCL may, in the normal course of its business, acquire various undertakings during the term of this Agreement (“New Undertakings”) which may consist of (amongst other things) vehicles and employees involved in the maintenance and repair of such vehicles (“New Employees”). Accordingly, and in the event that;

 

(i)          DCL completes the acquisition of a New Undertaking and becomes the employer of the New Employees;

 

(ii)         DCL notifies SEV of its desire for SEV to provide such Maintenance Services in respect of such New Undertaking;

 

(iii)        SEV is prepared to provide such Maintenance Services in accordance with the terms of this Agreement; and

 

(iv)       the parties agree that the Now Employees are to be employed by SEV (whether in accordance with the Regulations or otherwise as the case may be) in order to enable SEV to provide such Maintenance Services.

 

the parties agree to use all reasonable endeavors to effect and document the employment by SEV of the New Employees (again whether in accordance with the Regulations or otherwise as the case may be) and the inclusion of the applicable vehicles within the scope of this Agreement within such timescale as the parties may agree (both parties acting reasonably in the circumstances). For the avoidance of doubt, the parties agree that;

 

11.17.1    where the New Employees are to transfer to SEV in accordance with the Regulations then the terms of such transfer shall be in substantially the same form as that wording set out in this Agreement in respect of the Transferring Employees; and

 

11.17.2    whether the New Employees are to be employed by SEV pursuant to the Regulations or otherwise the agreement between SEV and DCL providing for their employment by SEV shell include provisions which are the same or substantially the same as clauses 18, 19 and 20 of this Agreement.

 

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12.     Changes in Legislation

 

In the event of changes in legislation taking place during the Contracted Period that directly affects DCL Vehicles, SEV shall seek a cost effective resolution and such costs incurred by SEV in, meeting the new legal requirements shall be met in full by DCL, either through Additional Charges or a revision of Schedule One.

 

13.     Warranties and Liability

 

13.1    SEV does not warrant that the Maintenance Services will cause Vehicles to operate without breakdown or interruption.

 

13.2    SEV warrants and represents to DCL that:

 

13.2.1      all written information and materials given by SEV to DCL are, when given and so far as SEV is aware at the time, accurate in all material respects,

 

13.2.2      it has full right, power and authority to provide the Maintenance Services to DCL on the terms of this Agreement;

 

13.2.3      it will provide the Maintenance Services with the degree of skill, diligence, prudence, foresight and care which would reasonably be expected from a skilled, experienced and properly resourced person providing similar services to that of SEV in this Agreement in similar or the same circumstances, and

 

13.2.4      it will use all reasonable endeavours to make sure that, when complying with its obligations under this Agreement, it does not unreasonably interfere with the activities of DCL, its members, employees or agents.

 

13.3    All warranties and representations shall, unless otherwise expressly stated, continue in full force and effect during the term of this Agreement and shall survive termination.

 

13.4    Subject always to Clause 13.7, SEV shall indemnify DCL against all claims, demands, actions, costs and expenses (including legal costs and disbursements) which DCL incurs directly or  indirectly as a result of any act,  omission or default of SEV, its employees, officers, agents, sub-contractors, suppliers and invitees in respect of:

 

13.4.1      any breach of the warranties in Clause 13.2;

 

13.4.2      damage to real or personal property;

 

13.4.3      injury to persons, including injury resulting in death.

 

13.5    If and to the extent that a Vehicle breakdown is caused by SEV failure to meet its obligations described in Clause 2.1, SEV shall (subject always to Clause 13.7) indemnify DCL against any costs directly associated with and attributable to the breakdown in relation to the Vehicle concerned and the provision of a Spare Vehicle.

 

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SEV’s liability under this Clause 13.5 shall be SEV’s entire liability to DCL in relation to a Vehicle which breaks down.

 

13.6    SEV’s entire liability in respect of the sums payable pursuant to the indemnities contained in Clauses 13.4 and 13.5 shall be limited to the annualised value of the Maintenance Charges calculated on the Commencement Date or the last anniversary thereof, unless SEV is insured in respect of such liability, in which case SEV’s liability under Clauses 13.4 and 13.5 shall be limited to the extent of such cover.

 

13.7    Nothing in this Agreement shall limit either party’s liability to the other for death or injury resulting from its own or its employees’, agents’ or sub-contractors’ negligence or fraudulent misrepresentation.

 

14.     Amendments

 

Any provision of this Agreement may be amended with the written consent of both parties.

 

15.     Duration of Agreement

 

This Agreement shall commence on the Commencement Date and shall continue for an initial period of five years until terminated in the manner described in Clause 16 below.

 

16.     Termination

 

16.1    Following expiry of the initial period described in  Clause 15 above, DCL or SEV giving not less than six months notice in writing may terminate this Agreement. In addition, DCL may terminate this Agreement with effect from the 3rd, 4th or 5th anniversary of the Commencement Date by giving not less than six months notice in writing to SEV. During the notice period, all Clauses and provisions of this Agreement shall remain in effect. Any defects in Vehicles notified to SEV by DCL during the notice period shall be remedied prior to the end of this Agreement. If Schedule One has expired during the notice period then all Maintenance Charges and Additional Charges shall be charged at the rates shown in the last effective Schedule One increased in line with the last published Retail Price Index.

 

16.2    DCL or SEV may terminate this Agreement forthwith by notice in writing to the other if:

 

16.2.1      the other is in breach of this Agreement and shall have failed (where the breach is capable of remedy) to remedy the breach within 14 days of the date of a request in writing from the party not in breach requiring the breach to be remedied;

 

16.2.2      has a Receiver, Manager, Administrator or Administrative Receiver appointed over all or any part of its undertaking, assets or income resolution for its

 

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winding up or has a petition granted by any Court for its winding up or for an Administration Order.

 

16.3    DCL may terminate this Agreement with immediate effect if Dairy Crest and/or SEV (on behalf of Dairy Crest) receives more than three PG9 Notices in relation to the Vehicles or a Vehicle in the preceding 6 month period specifically caused by SEV failing to meet its obligations under this Agreement or in the event that SEV breaches the Codes Of Practice relevant to the Maintenance Services more than 3 times in the preceding 6 month period.

 

16.4    SEV shall remain liable for the repairs described in Clause 4.12 identified by DCL for a period of thirteen weeks from the end of the Contracted Period and shall provide such repairs on a free of charge basis.

 

16.5    From receipt of notice of termination of this Agreement. SEV agrees not to employ any person to work wholly or mainly in the provision of the Maintenance Services without the consent of DCL or any Replacement Supplier having first been obtained (provided that such consent is not unreasonably withheld or delayed).

 

16.6    All Employment Costs in relation to the Future Transferring Employees in respect of the period:

 

16.6.1      up to and including the Termination Date (whether or not due for payment at that date) will be borne by SEV;

 

16.6.2      after the Termination Date will be borne by DCL and/or any Replacement Supplier;

 

and will if necessary be apportioned on a time basis between SEV and DCL and/or any Replacement Supplier.

 

16.7    SEV shall take all such steps as shall be necessary to agree with DCL and/or any Replacement Supplier a plan for the orderly hand-over of the Maintenance Services to DCL and/or any Replacement Supplier, such that the Maintenance Services or Future Maintenance Services can be carried on with the minimum of interruption and inconvenience to DCL and/or any Replacement Supplier and to effect such handover.

 

16.8    SEV shall with effect from the Termination Date, and until such time as the plan for the handover of the Services pursuant to Clause 16.7 has been fully implemented, SEV agrees to continue the provision of the Maintenance Services to DCL in accordance with the terms and conditions of this Agreement.

 

16.9    SEV shall with effect from the Termination Date immediately cease any publicity linking itself to, and any holding of itself out as being in any way linked with, DCL.

 

16.10  Termination in accordance with this Clause 16 shall not prejudice or affect a right or action which has accrued to either party.

 

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16.11  Any provisions which expressly or by implication are necessary for the enforcement or interpretation of this Agreement shall survive termination

 

17.     Provision of Information at the Termination Date

 

17.1    Within 14 days of receipt of written notice from DCL in accordance with Clause 16 or as soon as reasonably practicable thereafter SEV shall, subject to the appropriate confidentiality undertakings being given, and further subject to any restrictions imposed by law including, without limitation, any obligation under the Data Protection Act 1998, provide DCL with;

 

17.1.1      SEV’s Provisional Future Transferring Employees List:

 

17.1.2      all material terms and conditions of employment relating to the employment of the persons listed on SEV’s Provisional Future Transferring Employees List and written job descriptions if such written job descriptions are in place:

 

17.1.3      a list of all other Employees who are engaged, or have beer engaged during the preceding six months, in the provision of the Maintenance Services, together with details of their roles and an explanation of why SEV does not consider that they will transfer under the Regulations (for example because SEV does not consider that the Regulations will apply at all or to them).

 

 

such information together being “Staffing Information”.

 

17.2    Where Staffing Information has been provided in accordance with Clause 17.1 and SEV makes or becomes aware of any material changes or discovers material new information SEV shall notify DCL, in writing, upon any such change or discovery.

 

17.3    SEV shall warrant and represent to DCL that to the best of its knowledge and belief any Staffing Information (including copies thereof) shall be complete and accurate in all respects and shall be kept complete and accurate.

 

17.4    Fourteen (14) days prior to any Future Transfer Date, SEV shall provide DCL with SEV’s Final Future Transferring Employees List and shall warrant and represent that as at  that Future Transfer Date:

 

17.4.1      SEV’s Final Future Transferring Employees List shall be complete and accurate;

 

17.4.2      all the Future Transferring Employees are employed by SEV and no other person employed by SEV shall be working in or assigned to the provision of the Maintenance Services; and

 

17.4.3      it shall have disclosed to DCL, all material terms and conditions of employment relating the Future Transferring Employees.

 

17.5    From receipt of notice of termination of this Agreement; or in respect of the actual or proposed termination of SEV’s provision of some (but not all) of the Maintenance

 

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Services, the date upon which either party notifies the other of such partial termination, SEV shall not, and will not, other than in the ordinary course of business (to include but not limited to any steps considered necessary by SEV to ensure compliance with the term of this Agreement) (or if not within the ordinary course of business. without the prior written consent of DCL, such consent not to be unreasonably withheld or delayed):

 

17.5.1                replace a material number of the employees on SEV’s Provisional Future Transferring Employees List, deploy or assign any other person to perform the Maintenance Services or increase the number of such employees or terminate or give notice to terminate the employment or contracts of any persons on SEV’s Provisional Future Transferring Employees List; or

 

17.5.2                make, propose or permit any material changes to the terms and conditions of employment of any employees listed on SEV’s Provisional Future Transferring Employees List which may reasonably be viewed as detrimental from an  employer’s perspective or

 

17.5.3                increase the proportion of working time spent on the Maintenance Services by any of the Employees without the prior consent of DCL (which shall not be withheld unless the  granting of consent would result in an increase in the overall number of Employees to be transferred under the Regulations to DCL and/or a Replacement Supplier); or

 

17.5.4                introduce any new contractual or customary practice (including for the avoidance of couot any payments on termination of employment) applicable to any person listed on SEV’s Provisional Future Transferring Employees List,

 

and SEV will promptly notify DCL of the period of notice given (by SEV) or received (from any person listed on SEV’s Provisional Staff Future Transferring Employees or SEV’s Final Future Transferring Employees List) regardless of when such notice takes effect.

 

17.6                         Where SEV proposes to effect or effects (whether in the ordinary course of business or otherwise) any changes envisaged under Clause 17.5.2, SEV shall supply a copy and/or details of any such amendments at two monthly intervals prior to three (3) months before the Future Transfer Date and at monthly intervals thereafter uo to the Future Transfer Date to DCL.

 

18.                               Application of the Regulations

 

18.1                         SEV and DCL anticipate that the Regulations will apply in respect of the termination of the Agreement and the subsequent transfer of the Maintenance Services to DCL and/or to a Replacement Supplier. However, should the Regulations not apply for whatever reason, SEV and DCL agree to nevertheless act in accordance with, and be bound by, the Regulations.

 

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18.2                         With effect from  the termination of this Agreement (for whatever reason), DCL shall procure the transfer of the Management Services either from SEV to DCL or from SEV to any Replacement Supplier

 

18.3                         In the event that the Regulations do apply, the provisions of Clause 20 shall apply.

 

18.4                         If the Regulations do not apply, the provisions of Clause 19 shall apply.

 

19.                               If the Regulations do not apply at the Termination Date

 

19.1                         If the Regulations do not apply to the full or partial termination or expiry of this Agreement (for any reason) then the provisions of this Clause 19 shall apply.

 

19.2                         DCL shall offer (or where applicable) procure that the Replacement Supplier offers employment to any employee of SEV who is wholly or mainly assigned to work in the provision of the Maintenance Service immediately prior to the Termination Date (“Future Agreed Transferring Employees”); such offer in each case to:

 

19.2.1                commence on the day immediately following the date on which the Agreement terminates,

 

19.2.2                be on terms no less favourable than the terms on which the Future Agreed Regulation Transferring Employees are engaged by SEV immediately before the termination of this Agreement;

 

19.2.3                be made in writing and copied to SEV

 

20.                               If the Regulations do apply at the Termination Date

 

20.1                         If the Regulations do apply to the full or partial termination or expiry of this Agreement (for any reason) then DCL and SEV acknowledge and agree that, pursuant to the Regulations, the contracts of employment between SEV and the Future Transferring Employees (except in so far as such contracts relate to any occupational pension scheme as defined in Regulation 7 of the Regulations) will have effect after the Termination Date as if originally made between the DCL and/or any Replacement Supplier and the Future Transferring Employees.

 

20.2                         DCL shall provide (or, if appropriate shall procure the provision by the Replacement Supplier of) such information as may be requested by SEV in order to comply with its duties of information and consultation under the Regulations and under sections 259-261 of the Pensions Act 2004.

 

20.3                         SEV will from the Termination Date keep DCL and/or any Replacement Supplier indemnified in full against all Liabilities arising directly or indirectly in connection with:

 

20.3.1                SEV’s failure to inform or consult as required under Regulation 10 of the Regulations except to the extent that any such action or claim (or any part of

 

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such action or claim) arises from any failure by DCL or any Replacement Supplier to give SEV the information required from DCL or any Replacement Supplier to enable SEV to comply with its obligations under the Regulations;

 

20.3.2                any claim by a Future Transferring Employee that such person is entitled for  any reason to take benefits (other than benefits relating to old age, invalidity or survivorship) pursuant to the terms of any pension scheme in which DCL or any Replacement Supplier is not then participating, or pursuant to the Future Transferring Employee’s terms and conditions of employment prior to Termination Date.

 

21.                               Step in rights

 

21.1                         If SEV fails to provide part or all of the Maintenance Services in accordance with this Agreement in any material respect. DCL may notify SEV that it intends to exercise its rights under this Clause 21. DCL agrees that it shall provide SEV with notice of its intention to exercise this Clause and shall provide SEV with a reasonable opportunity to rectify the failure to provide Maintenance Services to the satisfaction of Dairy Crest.

 

21.2                         DCL shall notify SEV of the reasonable costs to be incurred by DCL in the event that this Clause 21 is exercised by DCL.

 

21.3                         If SEV does not substantially remedy the failure within a reasonable period of the notice referred to in Clause 21.1 (not to exceed 15 days), DCL may itself provide or may employ and pay a third party supplier to provide the Maintenance Services or any part of the Maintenance Services. DCL’s reasonable costs in doing this may, at DCL’s option, be deducted from any sums due to the SEV or shall be recoverable from SEV by DCL as a debt.

 

21.4                         To the extent to which the Maintenance Services are being provided by DCL or a third party supplier under Clause 21.3, SEV will be relieved of its obligations to provide the Maintenance Services. SEV will not be liable for the acts or omissions of DCL or the third party supplier in providing the Maintenance Services.

 

21.5                         DCL shall permit SEV to resume delivery of the Maintenance Services once it is satisfied on reasonable grounds that SEV will be able to resume delivery of the Maintenance Services in accordance with this Agreement.

 

21.6                         SEV shall co-operate in all reasonable respects with DCL and any third party supplier engaged by DCL under this Clause.

 

22.                               Insurance

 

22.1                         SEV shall maintain in force (at its own expense) for the term of this agreement and for six years after its termination:

 

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22.1.1                employer’s liability insurance for the minimum amount of £5 million to cover injury (including death) relating to the provision of the Maintenance Services to DCL; and

 

22.1.2                comprehensive general liability insurance, including professional indemnity, public liability and product liability insurance, for the minimum amount of £5 million to cover injury (including death), loss and damage relating to the provision of the Maintenance Services to DCL.

 

22.2                         The insurance policies referred to in Clause 22.1 shall be with a reputable insurer and shall not include unreasonable excesses which are unusual for this type of insurance.

 

22.3                         Within 14 calendar days of a request by DCL, SEV shall provide evidence of the insurances which it is obliged to maintain under Clause 22.1.

 

23.                               Legal status

 

SEV is an independent contractor and nothing in this Agreement shall be deemed to constitute a partnership or any employment relationship between the parties nor shall anything in this Agreement be deemed to constitute one party the agent of the other for any purpose.

 

24.                               Force Majeure

 

24.1                         SEV shall not be liable for any breach of its obligations hereunder resulting from causes beyond its reasonable control including but not limited to fires, insurrection or riots, embargoes, inability to obtain supplies and raw materials due to strikes or market shortages (acknowledged by DCL) affecting the relevant third party suppliers, or regulations of any civil or military authority (an “Event of Force Majeure”).

 

24.2                         If a default due to an Event of Force Majeure shall continue for more than eight wooks then the party not in default shall be entitled to terminate this Agreement on giving written notice to the other party. Neither party shall have any liability to the other in respect of the termination of this Agreement as a result of an Event of Force Majeure. However, any termination of this Agreement shall not affect any liability of DCL to discharge any Maintenance Charges and/or Additional Charges outstanding at that time.

 

25.                               Invalidity and Severability

 

Each of the provisions contained in this Agreement shall be construed as independent of every other such provision, so that if any provision of this Agreement shall be found by any Court or administrative body of competent jurisdiction to be invalid or unenforceable the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect

 

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The parties hereby agree to attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision that achieves to the greatest extent possible the economic, legal and commercial objectives of the invalid or unenforceable provision

 

26.                               Assignment and sub-contractors

 

26.1                         Neither party shall be entitled to assign the benefit of this Agreement without the prior written consent of the other party nor shall such consent be unreasonably withheld.

 

26.2                         SEV, with the consent of DCL and without incurring unnecessary expense, may sub-contract the performance of its obligations under this Agreement or any part thereof and such consent will not be unreasonably withheld.

 

26.3                         SEV shall not engage agents or sub-contractors to provide the Maintenance Services (or any material part of the Maintenance Services) without DCL’s prior consent and DCL’s consent shall not be unreasonably withheld or delayed.

 

26.4                         SEV shall remain responsible for obligations that are performed by agents or sub-contractors (and for the acts or omissions of agents and sub-contractors) as if they were acts or omissions of SEV.

 

27.                               Value Added Tax

 

Save insofar as otherwise expressly provided, all amounts stated in this Agreement are expressed exclusive of value added tax and any value added tax arising in respect of any supply made hereunder shall on the issue of a  valid tax invoice in respect of the same be paid to the party making such supply by the party to whom it is made in addition to any other consideration payable therefor.

 

28.                               Law and jurisdiction

 

This Agreement shall be governed by and construed in all respects in accordance with the law of England and Wales and both parties submit to the exclusive jurisdiction of the English Courts.

 

29.                               Headings

 

Headings to Clauses in this Agreement are for the purposes of information and identification only and shall not be construed as forming part of this Agreement.

 

30.                               Entire agreement

 

30.1                         This Agreement, and the documents referred to in it,  constitute the entire agreement and understanding of the parties and extinguishes any prior drafts, and all previous

 

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contracts, arrangements, representations, warranties of any nature whether or not in writing between the parties relating to its subject matter

 

30.2                         Each of the parties acknowledges and agrees that in entering into this Agreement, and the documents referred to in it, it does not rely on, and shall have no remedy in respect of, any statement, representation, warranty or understanding (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement

 

31.                               Third party rights

 

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

 

32.                               General

 

32.1                         Notices between the parties relating to this Agreement shall be in writing and shall either be delivered personally or sent by first class post or fax to the registered office for the time being of the recipient. Communications if delivered by hand shall be treated as received when delivered, if sent by first class post 48 hours after posting, if sent by air-mail post 72 hours after posting and if sent by fax when sent. Any notices that would be treated as received out of business hours (9.00 a.m. to 5.00 p.m Monday to Friday, excluding bank holidays) shall be deemed given on the next business day (Monday to Friday, excluding bank holidays).

 

32.2                         Except as expressly provided under this Agreement, the rights and remedies contained in this Agreement are cumulative and are not exclusive of any other rights or remedies provided by law or otherwise.

 

32.3                         A failure or delay by either party to exercise any right or remedy under this Agreement shall not be construed or operate as a waiver of that right or remedy nor shall any single or partial exercise of any right or remedy preclude the further exercise of that right or remedy.

 

32.4                         A waiver by either party of any breach of or default under this Agreement shall not be considered a waiver of a preceding or subsequent breach or default.

 

32.5                         A purported waiver or release under this Agreement is not effective unless it is a specific authorised written waiver or release.

 

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.

 

SCHEDULE ONE

 

Effective 16 October 2005 to 31st March 2006

 

Opening Fleet Size: 2367

 

Maintenance Rate and Service Intervals:

 

	
Vehicle 
   Type
    	
 
    	
Make/Model
    	
 
    	
Service Interval
    	
 
    	
Maintenance Rate
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Smith’s   Cabac/Consort
    	
 
    	
 
    	
 
    	
 
    
	
EGV
    	
 
    	
W&E   Rangemaster & 4/40
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Electricars   E/F model
    	
 
    	
    13   weeks
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ford   Fiesta Van
    	
 
    	
 
    	
 
    	
 
    
	
COV
    	
 
    	
Ford   Escort Van 
    	
 
    	
    13   weeks
    	
 
    	
[***] per week
    
	
 
    	
 
    	
Vauxhall   Astra Van
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ford   Transit <3.5t GVW
    	
 
    	
 
    	
 
    	
 
    
	
SGV
    	
 
    	
LDV   Convoy <3.5t GVW 
    	
 
    	
    13   weeks
    	
 
    	
[***] per week
    
	
 
    	
 
    	
Mercedes   <3.5t GVW
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MGV
    	
 
    	
Leyland   DAF with Fridge 
   3501-/7500kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MGV
    	
 
    	
Leyland   DAF with T/L & Fridge 
   3501-7500kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LGV
    	
 
    	
Leyland   DAF with Fridge 
   7501-14740kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LGV
    	
 
    	
Leyland   DAF with T/L & Fridge 
   7501-14740kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LGV
    	
 
    	
Leyland   DAF with Fridge 
   14740-18000kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LGV
    	
 
    	
Leyland   DAF with T/L & Fridge 
   14740-18000kgs
    	
 
    	
   6   weeks A/B/C
    	
 
    	
[***] per week
    

 

28

 

***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.

 

Age related Discounts/Surcharges for SGV, MGV & LGV:

 

	
Age of Vehicle
    	
 
    	
Discount/Surcharge from Weekly Charge
    	
 
    
	
Year 1
    	
 
    	
[***] discount
    	
 
    
	
Year 2
    	
 
    	
[***] discount
    	
 
    
	
Year 3
    	
 
    	
[***] discount
    	
 
    
	
Year 4
    	
 
    	
NIL
    	
 
    
	
Year 5
    	
 
    	
NIL
    	
 
    
	
Year 6
    	
 
    	
NIL
    	
 
    
	
Year 7
    	
 
    	
NIL
    	
 
    
	
Year 8 onwards
    	
 
    	
[***] surcharge
    	
 
    

 

Additional Charges:

 

	
Provider 
    	
 
    	
Time Period
    	
 
    	
Labour Rate
    	
 
    	
Transport Rate
    
	
Company
    	
 
    	
7am to 5pm Weekdays
    	
 
    	
[***] per hour
    	
 
    	
[***] per mile
    
	
Company
    	
 
    	
5pm   to 7am Weekdays
    	
 
    	
[***]   per hour
    	
 
    	
[***]   per mile
    
	
Company
    	
 
    	
Saturday
    	
 
    	
[***]   per hour
    	
 
    	
[***]   per mile
    
	
Company
    	
 
    	
Sunday &   Bank Holidays
    	
 
    	
[***]   per hour
    	
 
    	
[***]   per mile
    

 

	
Provider
    	
 
    	
Invoice Value Plus
    	
 
    	
Min Mark-up
    	
 
    	
Max Mark-up
    
	
Sub-contractor
    	
 
    	
7.5%
    	
 
    	
[***]
    	
 
    	
[***]
    

 

	
Authority   Level
    	
 
    	
[***]
    	
 
    	
Without   prior authorisation
    

 

29

 

***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 TWO

 

Transferring Employees

 

 

***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.

 

Redundancy Cap

 

The parties agree that the Redundancy Cap referred to in Clause 11.7 is [***]

[***]

 

 

***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

 

Code of Practice on Acceptable Standards of Maintenance

 

The Department of Transport accepts that many operators, particularly those new to the profession, are unaware of what is needed to meet the required standards, and have issued, in consultation with representatives of the industry a Code of Practice to provide guidance for operators on what is needed for good maintenance. The Code is entitled Guide to Maintaining Roadworthiness, and is published by HMSO.

 

The Preface to the Code repeats the caveat in the Department’s Guide to Operator Licensing that the ultimate test of an operator’s maintenance system is the condition of his vehicles on the road.

 

It assures operators that if their maintenance systems accord with the Code they will be acceptable to Traffic Commissioners, providing the resulting condition of their vehicles is satisfactory. However, it adds a rider that Traffic Commissioners remain free to require more stringent arrangements than those which the operator proposes.

 

Advice contained in the code

 

The Code offers much sensible advice on what is acceptable. It thus fills the gap which previously existed between the legal requirement for safe operation and the means by which this can be fulfilled. The Vehicle and Operator Services Agency (VOSA) is now much more specific than hitherto about these means.

 

VOSA examiners have always been prepared to visit operators and advise them on their maintenance. The VOSA is now an Executive Agency with a commercial remit, self funded by the fees it charges for inspections it provides for a commercial fee, courses for goods vehicle operators’ staffs responsible for inspecting vehicles.

 

The Code places considerable emphasis on regular inspections of vehicles, including a daily “walkround check”, the keeping of records of inspections (Croners’ Road Transport Operation: Records and Procedures gives valuable information on the types of records to be kept), and the importance of driver defect reports (including the making of NIL Defects reports where appropriate).

 

The practice of keeping defect reports and records of inspection for 15 months is confirmed in the Code.

 

A clear indication is given that safety inspections should follow a pattern based on time, and that the interval of time between inspections should be determined by operating conditions.

 

Operators are advised to own or have access to means of measuring braking efficiency. The VOSA is currently offering, on an experimental basis, this facility to operators at some goods vehicle testing stations.

 

32

 

***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.

 

Maintenance Staff

 

Vehicle maintenance must be carried out by qualified maintenance staff so that the driver is well supported in  his operational duties thus enabling him to give maximum productivity during his working hours.

 

Fleet maintenance should be planned, with regular vehicle testing and inspection, to minimise breakdowns on the road and to  assist maximum vehicle utilisation.

 

The Driver’s Responsibilities

 

The driver is the operator’s representative and as such is responsible — with his employer — for any infringement of the law and he should therefore have a working knowledge of the appropriate regulations.

 

Whatever the standards laid down by vehicle operators for maintenance and servicing, ultimately it is the driver who is responsible for reporting on performances He, more than anyone else, handles the vehicle under load, which is the only time when a true test of vehicle performance can be obtained. The driver, therefore, must ensure that he reports in good time, to the maintenance staff, any defects likely to infringe the law or affect the safety requirements. For such purposes a  Vehicle Defects Report Sheet should be supplied by the operator to his driver so that any abnormalities can be recorded and dealt with as soon as possible.

 

The items for checking and reporting on the Defects Report Sheet are:

 

(a)          fuel, oil and water

 

(b)         brakes

 

(c)          tyre condition and inflation pressures, spare wheel and jack

 

(d)         wheel security, making sure that:

 

(i)                       all nuts and studs are tight

 

(ii)                    no nuts or studs are missing

 

(iii)                 no cracks are evident around wheel holes and where the centre joins the rim

 

(iv)                where a wheel has been replaced recently the nuts are tight (these should be checked again after 30 minutes of the work being carried out)

 

Note: A vehicle should not be moved if any problems are found which should be reported immediately.

 

(e)          driving mirrors, windscreen wipers and washers

 

(f)            lights and reflectors

 

(g)         stop-lights and direction indicators 

 

(h)         steering

 

33

***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.

 

(i)    the tachograph instrument

 

(j)    care and attention of batteries

 

(k)   all controls within the cab (lighting controls and connections)

 

(l)    water-cooling system and the use of anti-freeze

 

(m)  fuel supply, checking and clearing air-locks (diesel fuel system)

 

(n)   spray suppression equipment-around wheels

 

(o)   sideguards and rear under-run guards

 

(p)   cold starting procedure

 

(q)   brake and light coupling systems (trailer and articulated vehicles)

 

(r)    special equipment and controls used with tankers, tail-lifts, autocranes, etc.

 

(s)   refrigeration systems and controls

 

(t)    speed limiters.

 

Note. Headlamps, front and rear fog lamps, reversing lamps (if fitted) must be set so they do not cause dazzle to other road users Also, all obligatory lamps and reflectors (including rear reflective markings) must be kept clean and in good working order.

 

34

 

***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.

 

	
SIGNED by MARK ARLEN
    	
)
    	
 
    
	
duly authorised for and on behalf of
    	
)
    	
/s/   Mark Arlen
    
	
DAIRY CREST LIMITED
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED by STEPHEN   FISHER
    	
)
    	
 
    
	
duly authorised for and on behalf of
    	
)
    	
/s/   S. Fisher
    
	
SEV GROUP LIMITED
    	
)
    	
 
    

 

35

 

***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.

 

ADDENDUM TO

 

FLEET MAINTENANCE AGREEMENT

 

	
DATED
    	
 
    	
13   OCTOBER 2005
    
	
 
    	
 
    	
 
    
	
DCL
    	
 
    	
DAIRY   CREST LIMITED (Company no 2085882) whose registered office is   at Claygate House, Littleworth Road, Esher, Surrey KT10 9PN
    
	
 
    	
 
    	
 
    
	
SEV
    	
 
    	
SEV   GROUP LIMITED (company no 4463640) whose registered office is   at Unit 95/2, Tanfield Lea Industrial Estate North, Stanley, Co Durham, DH9   9NX
    

 

Insert Additional Clause:

 

3.7                 Notwithstanding Clause 6, SEV agrees that DCL may withhold the final monthly payment due to SEV in respect of a vehicle on hire from Lex Vehicle Leasing t/a Business Partner (the “Hirer”) at the end of its contracted hire period to cover the cost of repairs or replacement that should have been completed under the terms of this Fleet Maintenance Agreement so that it can be returned to the Hirer in good condition. For the purposes of this Fleet Maintenance Agreement good condition means free from exterior or interior damage including dents, scratches, damaged paintwork caused by any reason other than normal wear and tear.

 

 

	
SIGNED by [NAME] RJR BETHAM
    	
)
    	
 
    
	
duly   authorised for and on behalf of
    	
)
    	
/s/   R.J.R. Betham
    
	
DAIRY   CREST LIMITED
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
DATE 19-1-06
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED by [NAME] S   FISHER
    	
)
    	
 
    
	
duly authorised for and on behalf of
    	
)
    	
/s/ S. Fisher
    
	
SEV GROUP LIMITED
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
DATE 19-1-06Exhibit 10.27

 

SMITH ELECTRIC VEHICLES CORP.

 

SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

This SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of January 30, 2012, by and among Smith Electric Vehicles Corp., a Delaware corporation (the “Company”), the holders of the Company’s Series D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”), listed on Exhibit A hereto (the “Series D Holders”), the holders of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), listed on the signature pages hereto (the “Series C Holders”), the holders of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), listed on the signature pages hereto (the “Series B Holders”), and the holders of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), listed on signature pages hereto (the “Common Holders”).

 

RECITALS:

 

WHEREAS, the Company, the Series C Holders, the Series B Holders and the Common Holders entered into an Amended and Restated Investor Rights Agreement, dated as of November 3, 2011 (the “Original Agreement”);

 

WHEREAS, the Company and the Series D Holders have entered into separate subscription agreements (the “Series D Subscription Agreements”), which provide for, among other things, the purchase by the Series D Holders of the Series D Preferred Stock;

 

WHEREAS, the Series D Subscription Agreements contemplate that the Series D Holders would enter into this Agreement; and

 

WHEREAS, the parties hereto desire to amend and restate the Original Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                      Definitions.

 

1.1                               Certain Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

(a)                                 “Affiliate” means any Person directly or indirectly controlling, controlled by or under common control with another Person.

 

(b)                                 “Affiliated Fund” shall have the meaning set forth in Section 2.8(a)(iii) hereof.

 

(c)                                  “Agreement” shall have the meaning set forth in the preamble hereto.

 

 

(d)                                 “Certificate of Incorporation” means the Fourth Amended and Restated Certificate of Incorporation of the Company, as amended or amended and restated from time to time after the date hereof.

 

(e)                                  “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)                                   “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act (as defined herein).

 

(g)                                  “Common Holders” shall have the meaning set forth in the preamble hereto.

 

(h)                                 “Common Stock” shall have the meaning set forth in the preamble hereto.

 

(i)                                     “Control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly through one or more intermediaries, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

(j)                                    “Company” shall have the meaning set forth in the first paragraph hereto.

 

(k)                                 “Conversion” shall have the meaning set forth in the recitals hereto.

 

(l)                                     “Co-Sale Agreement” shall mean the Second Amended and Restated Right of First Refusal and Co-Sale Agreement to which the Company is a party.

 

(m)                             “Deemed Liquidation Event” shall have the meaning set forth in the Certificate of Incorporation.

 

(n)                                 “Election Period” shall have the meaning set forth in Section 4.1(c) hereof.

 

(o)                                 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(p)                                 “Holder” shall mean (i) any Series B Holder, Series C Holder or Series D Holder that holds Registrable Securities (as defined herein) and (ii) any holder of Registrable Securities to whom the registration rights conferred by this Agreement shall have been duly and validly transferred in accordance with Section 2.12 of this Agreement.

 

(q)                                 “Indemnified Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

(r)                                    “Indemnifying Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

2

 

(s)                                   “Initial Public Offering” shall mean the closing of the Company’s first firm commitment underwritten public offering of Common Stock registered under the Securities Act.

 

(t)                                    “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than thirty percent (30%) of the outstanding Registrable Securities; provided, that, for the purpose of Section 2.3 of this Agreement, the term “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than ten percent (10%) of the outstanding Registrable Securities.

 

(u)                                 “Major Holder” shall mean a Series B Holder, a Series C Holder or a Series D Holder that holds, together with its Affiliates, at least 1,000,000 shares (as adjusted for stock splits, stock dividends, reverse stock splits and the like) of Common Stock (including Common Stock issuable upon conversion of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock).

 

(v)                                 “New Securities” shall have the meaning set forth in Section 4.1(a) hereof.

 

(w)                               “Notes” shall have the meaning set forth in the recitals hereto.

 

(x)                                 “Offering Documents” shall have the meaning set forth in Section 2.6(a).

 

(y)                                 “Original Agreement” shall have the meaning set forth in the recitals hereto.

 

(z)                                  “Person” shall means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other entity.

 

(aa)                          “Registrable Securities” shall mean: (i) shares of Common Stock owned as of the date hereof by the Common Holders; (ii) shares of Series B Preferred Conversion Stock; (iii) shares of Series C Preferred Conversion Stock; (iv) shares of Series D Preferred Conversion Stock; (v) shares of Common Stock hereafter acquired or issued pursuant to the exercise or conversion of any securities hereafter acquired by the Series B Holders, Series C Holders or Series D Holders pursuant to the right of first refusal set forth in Section 2.4 of the Co-Sale Agreement and/or pursuant to the right of first refusal set forth in Section 4 of this Agreement; and (vi) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in the foregoing clauses (i), (ii), (iii), (iv) or (v) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described above which have previously been registered (as defined below) or which have been sold to the public either pursuant to a registration statement under the Securities Act or Rule 144.

 

(bb)                          The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

3

 

(cc)                            “Registration Expenses” shall mean all expenses incurred by the Company in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, filing fees, printing expenses, accounting fees, escrow fees, fees and disbursements of counsel for the Company, fees and disbursements of one special counsel for the Holders (selected by a majority-in-interest of the Holders), provided such fees and disbursements of counsel are limited in amount to $50,000, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for the Holders and the compensation of regular employees of the Company, which employee compensation shall be paid in any event by the Company.

 

(dd)                          “Restricted Securities” shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b) hereof.

 

(ee)                            “Rights Holder” shall have the meaning set forth in Section 4.1.

 

(ff)                              “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(gg)                            “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(hh)                          “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(ii)                                  “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special counsel to the Holders included in Registration Expenses).

 

(jj)                                “Series B Holders” shall have the meaning set forth in the preamble hereto.

 

(kk)                          “Series B Preferred Conversion Stock” shall mean the shares of Common Stock issuable upon conversion of the Series B Preferred Stock.

 

(ll)                                  “Series B Preferred Stock” shall have the meaning set forth in the preamble hereto.

 

(mm)                  “Series C Holders” shall have the meaning set forth in the preamble hereto.

 

(nn)                          “Series C Preferred Conversion Stock” shall mean the shares of Common Stock issuable upon conversion of the Series C Preferred Stock.

 

4

 

(oo)                          “Series C Preferred Stock” shall have the meaning set forth in the preamble hereto.

 

(pp)                          “Series D Holders” shall have the meaning set forth in the preamble hereto.

 

(qq)                          “Series D Preferred Conversion Stock” shall mean the shares of Common Stock issuable upon conversion of the Series D Preferred Stock.

 

(rr)                                “Series D Preferred Stock” shall have the meaning set forth in the preamble hereto.

 

(ss)                              “Subject Securities” shall mean all Registrable Securities held by the Series B Holders, Series C Holders and Series D Holders and the shares of Common Stock held at any time by the Common Holders; provided, however, that Subject Securities shall not include any shares of Common Stock described above which have been previously registered or which have been sold to the public either pursuant to a registration statement under the Securities Act or Rule 144.

 

(tt)                                “Tanfield” means Tanfield Group PLC.

 

2.                                      Registration Rights: Restrictions on Transfer.

 

2.1                               Demand Registration.

 

(a)                                 Request for Registration.  Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration of the Registrable Securities of the Company with an aggregate offering price to the public (net of underwriting discounts and commissions) of not less than Five Million Dollars ($5,000,000) (such request shall state the number of shares of Registrable Securities requested to be disposed of by such Initiating Holders), the Company will promptly give written notice of the proposed registration to all other Holders whereupon such other Holders shall give written notice to the Company within 20 days after the date of the Company’s notice (the “Notice Period”) if they propose to dispose of any shares of Registrable Securities pursuant to such registration, stating the number of shares of Registrable Securities to be disposed of by such Holder or Holders and whether such Holder or Holders desire for such disposition to be underwritten.

 

(b)                                 The Common Holders may register securities for sale for their own account in any registration requested pursuant to this Section 2.1, subject to limitations on the number of shares which may be imposed by the underwriter as set forth in Section 2.1(f) below.  At the time the Company shall give the notice to Holders required by Section 2.1(a), it shall also give the same notice to the Common Holders whereupon each Common Holder shall give written notice to the Company within the Notice Period if it proposes to dispose of any shares of Common Stock held by it pursuant to such registration, stating the number of shares of Common Stock to be disposed of by such Common Holder and whether such Common Holder desires for such disposition to be underwritten.

 

5

 

(c)                                  The Company shall, as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Subject Securities of any Holder or Holders or the Common Holders joining in such request as are specified in a written request received by the Company within the Notice Period; provided that unless a registration pursuant to this Section 2.1 is the Company’s Initial Public Offering, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

(d)                                 Limitations on Requested Registration.  The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:

 

(i)                                     prior to the earlier of (A) February 10, 2016 or (B) six (6) months following the effective date of the Company’s Initial Public Offering;

 

(ii)                                  in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(iii)                               after the Company has initiated two (2) such registrations pursuant to this Section 2.1 (counting for these purposes only (x) registrations where at least 75% of the Registrable Securities requested to be registered are in fact registered and which have been declared or ordered effective and pursuant to which securities have been sold, and (y) registrations that closed, or were withdrawn at the request of the Holders (other than as a result of a material adverse change to the Company)); or

 

(iv)                              during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days (or in the case of the Company’s Initial Public Offering, one hundred eighty (180) days) after the effective date of, a Company-initiated registration (other than a registration relating solely to employee benefit plans); provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

 

(e)                                  Deferral.  If (i) in the good faith judgment of the Board of Directors of the Company, the filing of a registration statement covering the Registrable Securities would be materially detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set

 

6

 

forth in Section 2.1(d)(iv) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided  that the Company shall not defer its obligation in this manner more than twice in any twelve-month period.

 

(f)                                   Underwriting.  If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the Company shall include such information in the written notices referred to in Sections 2.1(a) and 2.1(b).  In such event, the right of any Holder or the Common Holders to include all or any portion of their Subject Securities in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder’s or such Common Holder’s participation in such underwriting and the inclusion of such Holder’s or such Common Holder’s Subject Securities to the extent provided herein.  If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to Section 2.1, the Initiating Holders shall, on behalf of all Holders and the Common Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons in such underwriting and the inclusion of the Company’s and such other person’s securities of the Company and their acceptance of the further applicable provisions of this Section 2 (including Section 2.10).  The Company (together with all Holders and the Common Holders proposing to distribute their securities through such underwriting) shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Company, which managing underwriter(s) shall be reasonably acceptable to Initiating Holders holding at least a majority of the Registrable Securities held by such Initiating Holders.

 

Notwithstanding any other provision of this Section 2.1, if the managing underwriter(s) advise the Company in writing that (i) marketing factors require a limitation on the number of shares to be underwritten, or (ii) the number of shares proposed to be included in the registration would reduce the offering price per share, then the number of shares to be included in the registration and underwriting shall be allocated first among all Holders who indicated to the Company their decision to distribute any of their Registrable Securities through such underwriting, in proportion, as nearly as practicable, to the respective numbers of shares of Registrable Securities owned by such Holders at the time of filing the registration statement, then, if all such Registrable Securities have been included in the underwriting, to the Common Holders who have indicated to the Company their decision to distribute any of their Subject Securities (not otherwise constituting Registrable Securities) through such underwriting, in proportion, as nearly as practicable, to the number of shares of Subject Securities owned by the Common Holders at the time of filing the registration statement, and the remainder, if any, to the Company.  No stock excluded from the underwriting by reason of managing underwriter(s)’ marketing limitation shall be included in such registration.  In no event shall Registrable Securities be excluded from such registration unless all other stockholders’ securities and securities for the account of the Company have been first excluded.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the managing underwriter(s) or the Initiating Holders.  The securities

 

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so excluded shall also be withdrawn from registration.  Any Subject Securities or other Securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration.  If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.1(f), then the Company shall then offer to all Holders, and thereafter to the Common Holders who have retained rights to include securities in the registration, the right to include additional Subject Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated first among such Holders requesting additional inclusion, as set forth above, and thereafter to the Common Holders, as set forth above.

 

2.2                               Piggyback Registration.

 

(a)                                 Piggyback Registration.  If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, a registration on any registration form that does not permit secondary sales or a registration relating to the Company’s Initial Public Offering, the Company will:

 

(i)                                     promptly give written notice of the proposed registration to all Holders and the Common Holders; and

 

(ii)                                  use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Subject Securities as are specified in a written request or requests made by any Holder or Holders or the Common Holders received by the Company within twenty (20) days after the date of such written notice from the Company.  Such written request may specify all or a part of a Holder’s or Common Holder’s Subject Securities.

 

(b)                                 Underwriting.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders and the Common Holders as a part of the written notice given pursuant to Section 2.2(a)(i).  In such event, the right of any Holder or the Common Holders to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s or the Common Holder’s participation in such underwriting and the inclusion of such Holder’s or the Common Holder’s Subject Securities in the underwriting to the extent provided herein.  All Holders and the Common Holders proposing to distribute their securities through such underwriting (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) shall enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

 

Notwithstanding any other provision of this Section 2.2, if the managing underwriter(s) advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten or the number of shares proposed to be included in the registration

 

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would reduce the offering price per share, the managing underwriter(s) may (subject to the limitations set forth below) limit the number of Subject Securities to be included in the registration and underwriting.  In such event, the number of shares to be included in the registration and underwriting shall be allocated first to the Company (for up to the full number of shares it desires to sell in such registration and underwriting), second to all Holders who indicated to the Company their decision to distribute any of their Registrable Securities through such underwriting, in proportion, as nearly as practicable, to the respective numbers of shares of Registrable Securities owned by such Holders at the time of filing the registration statement (or in such other proportions as shall mutually be agreed to by all such selling Holders), and third to the Common Holders who have indicated to the Company their decision to distribute any of their Subject Securities (not otherwise constituting Registrable Securities) through such underwriting, in proportion, as nearly as practicable, to the number of shares of Subject Securities owned by the Common Holders at the time of filing the registration statement (or in such other proportions as shall mutually be agreed to by all such selling Common Holders).  In no event shall any Registrable Securities be excluded from such registration and underwriting unless all other stockholders’ securities have been first excluded.  Notwithstanding the foregoing, in no event shall the amount of Securities of the selling Holders included in the registration and underwriting be reduced below thirty percent (30%) of the total amount of securities included in such registration and underwriting.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the managing underwriter(s).  The securities so excluded shall also be withdrawn from such registration.  Any Subject Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

 

(c)                                  Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder or the Common Holders have elected to include securities in such registration.

 

2.3                               Registration on Form S-3.

 

(a)                                 Request for Form S-3 Registration.  If the Company is then qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set forth in this Section 2.3, and shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect a registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities requested to be disposed of and whether such Holder or Holders desire for such disposition to be underwritten), the Company will take all such actions with respect to such Registrable Securities as required by Section 2.1(a), (b) and (c); provided that in the case of a registration pursuant to this Section 2.3, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

(b)                                 Limitations on Form S-3 Registration.  The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:

 

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(i)                                     in the circumstances described in either Sections 2.1(d)(ii) or 2.1(d)(iv);

 

(ii)                                  if the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public (net of any underwriters’ discounts and commissions) of less than Three Million Dollars ($3,000,000); or

 

(iii)                               if, in the prior six-month period, the Company has effected one (1) registration pursuant to this Section 2.3 in such period.

 

(c)                                  Deferral.  The provisions of Section 2.1(e) shall apply to any registration pursuant to this Section 2.3.

 

(d)                                 Underwriting.  If the Initiating Holders requesting registration under this Section 2.3 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Sections 2.1(f) shall apply to such registration.  Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to Section 2.1.

 

2.4                               Expenses of Registration.  All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 hereof shall be borne by the Company; provided  that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of the holders of a majority of the Subject Securities to be registered (in which case all participating Holders and Common Holders shall bear such expenses pro rata among each other based on the number of Subject Securities requested to be so registered), unless the holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 2.1 (provided that such option shall not be available if the Company already has effected two demand registrations pursuant to Section 2.1); and provided, further, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of, or their learning of, such material adverse change, then the Holders and Common Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 2.1 or 2.3, as the case may be.  All Selling Expenses shall be borne pro rata by the selling Holders and Common Holders based on the number of Subject Securities requested to be so registered.

 

2.5                               Registration Procedures.  In the case of each registration effected by the Company pursuant to Section 2, the Company will keep each seller of Subject Securities in such registration advised in writing as to the initiation of each registration and as to the completion thereof.  At its expense, the Company will use its commercially reasonable efforts to:

 

(a)                                 keep such registration effective for a period ending on the earlier of the date which is nine (9) months from the effective date of the registration statement or such time as

 

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the sellers of Subject Securities in such registration have completed the distribution described in the registration statement relating thereto;

 

(b)                                 prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;

 

(c)                                  furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a seller of Subject Securities in such registration from time to time may reasonably request;

 

(d)                                 use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions;

 

(e)                                  notify each seller of Subject Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and following such notification promptly prepare and furnish to such sellers a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(f)                                   provide a transfer agent and registrar for all Subject Securities registered pursuant to such registration statement and a CUSIP number for all such Subject Securities, in each case not later than the effective date of such registration;

 

(g)                                  cause all such Subject Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

(h)                                 otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(i)                                     in connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions; provided further that each Holder and Common Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement; and

 

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(j)                                    use its commercially reasonable efforts to furnish, at the request of any Holder or the Common Holders requesting registration of Subject Securities pursuant to this Section 2, on the date that such Subject Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

 

2.6                               Indemnification.

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each Common Holder and each of their respective officers, directors and partners, and each person controlling such Holder or Common Holder within the meaning of Section 15 of the Securities Act, with respect to which a registration has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any free writing prospectus related thereto filed with the Commission in connection with such registration (together, the “Offering Documents”); (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any violation (or alleged violation) by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, and the Company will reimburse each such Holder, Common Holder and each of their respective officers, directors and partners, and each person controlling such Holder or Common Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action as they are incurred; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder, Common Holder or any of their respective officers, directors and partners, and any person controlling such Holder or Common Holder, as the case may be, such underwriter or any person who controls any such underwriter, and stated to be specifically for use in any Offering Document; and provided, further, that the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

 

(b)                                 To the extent permitted by law, each Holder and each Common Holder will, if Subject Securities held by such Holder or Common Holder, as the case may be, are included in the securities as to which such registration is being effected, indemnify and hold

 

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harmless the Company, each of its directors, officers and partners, and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder or Common Holder, and each of their respective officers, directors and partners, and each person controlling such Holder or Common Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any Offering Document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, Common Holders, directors, officers, partners, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action as they are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Offering Document in reliance upon and in conformity with written information furnished to the Company by such Holder or Common Holder, as the case may be, and stated to be specifically for use therein; provided that the obligations of such Holder or Common Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder or Common Holder, as the case may be (which consent shall not be unreasonably withheld); and provided, further, that in no event shall any indemnity under this Section 2.6(b) exceed the net proceeds from the offering received by such Holder or Common Holder, as the case may be.

 

(c)                                  Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; provided, further, that an Indemnified Party (together with all other Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding; and provided, further,  that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent the Indemnifying Party is not prejudiced thereby.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

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(d)                                 If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense, as well as any other relevant equitable considerations; provided that no contribution by any Holder or Common Holder, when combined with any amounts paid by such Holder or Common Holder pursuant to Section 2.6(b), shall exceed the net proceeds from the offering received by such Holder or Common Holder, as the case may be. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(e)                                  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.

 

2.7                               Information by Holder and the Common Holders.  Each Holder of Registrable Securities and Common Holder owning Subject Securities shall furnish to the Company such information regarding such Holder or such Common Holder, as the case may be, and the distribution proposed by such Holder or such Common Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.

 

2.8                               Securities Laws Restrictions on Transfer.  (a) Each Holder and Common Holder, in addition to any other restrictions to which he, she or it may be subject (including, without limitation, under the Co-Sale Agreement), agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the equity securities of the Company owned by it, or any beneficial interest therein, unless and until (x) the transferee thereof has agreed in writing for the benefit of the Company to take and hold such equity securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, and (y):

 

(i)                                     There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii)                                  Such Holder or such Common Holder shall have given prior written notice to the Company of such Holder’s or such Common Holder’s, as the case may be, intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, such Holder or such Common Holder shall have furnished the Company, at such

 

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Holder’s or such Common Holder’s, as the case may be, expense, with (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such equity securities under the Securities Act or (B) a “no action” letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such equity securities shall be entitled to transfer such equity securities in accordance with the terms of the notice delivered by the Holder or the Common Holder to the Company.  It is agreed that the Company will not require opinions of counsel or “no action” letters for transactions made pursuant to Rule 144, except in unusual circumstances.

 

(iii)                               Notwithstanding the provisions of subsections (a)(i) and (a)(ii) above, no such registration statement or opinion of counsel or “no action” letter shall be necessary for: (A) a transfer by a Holder to any of its Affiliates (including an Affiliated fund managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company, each an “Affiliated Fund”); (B) a transfer by a Holder that is a partnership, limited liability company or corporation to a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of a Holder; (C) the transfer by a Holder or a Common Holder by gift, will or intestate succession of such Holder or Common Holder to his or her spouse or to the siblings, lineal descendants or ancestors of such Holder or Common Holder or his or her spouse; or (D) the transfer by a Holder or Common Holder pursuant to Section 2.5, Section 3 or Section 4.1 of the Co-Sale Agreement, if in each transfer under clauses (A), (B), (C) or (D) the prospective transferee agrees in all such instances in writing to be subject to the terms hereof to the same extent as if he or she were an original party hereunder.

 

(b)                                 Each certificate representing equity securities of the Company shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.  THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN AN INVESTOR RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN A VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

The Holders and the Common Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the equity securities in order to implement the restrictions on transfer established in this Section 2.8.

 

(c)                                  The first legend referring to federal and state securities laws identified in Section 2.8(b) hereof stamped on a certificate evidencing the equity securities and the stock transfer instructions and record notations with respect to such equity securities shall be removed and the Company shall issue a certificate without such legend to the holder of such equity securities if (i) such securities are registered under the Securities Act; or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act; or (iii) such holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel reasonably satisfactory to the Company, that such securities can be sold pursuant to Section (b) of Rule 144 under the Securities Act.

 

2.9                               Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Subject Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

 

(a)                                 make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

 

(b)                                 file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

 

(c)                                  so long as a Holder or a Common Holder owns any Restricted Securities, furnish to the Holder or such Common Holder, as the case may be, forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company,

 

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and such other reports and documents so filed as a Holder or a Common Holder, as the case may be, may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder or a Common Holder to sell any such securities without registration.

 

2.10                        Market Stand-Off Agreement.  If requested by the Company and an underwriter of Common Stock (or other securities) of the Company, each Holder and Common Holder hereby agrees that such Holder or Common Holder, as the case may be, shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Common Stock (or other securities) of the Company held by such Holder or Common Holder, as the case may be (other than those included in the registration), during the one hundred eighty (180) day period following the effective date of the Company’s Initial Public Offering. The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop- transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(b) hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day period.  Each Holder and Common Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.10.

 

2.11                        Delay of Registration.  No Holder or Common Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.12                        Transfer or Assignment of Registration Rights.  The rights to cause the Company to register securities granted to a Holder or a Common Holder by the Company under this Section 2 may be transferred or assigned by a Holder or a Common Holder only to: (a) a transferee or assignee of not less than 250,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); (b) an Affiliate of a Holder or a Common Holder (including an Affiliated Fund); (c) if a Holder or a Common Holder is a partnership, limited liability company or corporation, then to a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of such Holder or Common Holder; or (d) a Holder’s or a Common Holder’s ancestors, descendants, siblings or spouse, or a trust or family limited partnership for the benefit of such Persons or the Holder or the Common Holder, either during his or her lifetime or on death by will or intestacy; provided that (i) any such transfer or assignment of Registrable Securities is effected in accordance with the terms of Section 2.8 hereof, and applicable securities laws; (ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the Securities with respect to which such registration rights are intended to be transferred or assigned; (iii) the transferee or assignee of such rights assumes in writing the obligations of such Holder or Common Holder under this Agreement, including without limitation the obligations set forth in Section 2.10; and (iv) any such transferee is not engaged in direct competition with the Company as reasonably determined by the Board of Directors of the Company.

 

17

 

2.13                        Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders holding a majority of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are pari passu with or senior to, equal to or more favorable than the registration rights granted to the Holders hereunder.

 

2.14                        Termination of Registration Rights.  The right of any Holder or Common Holder to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) the date on which such Holder or Common Holder holds no Subject Securities; and (ii) five (5) years after the closing of the Company’s Initial Public Offering.

 

3.                                      Covenants.

 

3.1                               Basic Financial Information.  The Company shall deliver to each Major Holder the following financial information:

 

(a)                                 as soon as practicable, but in any event within 90 days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), setting forth in each case comparisons to the corresponding period in the preceding fiscal year, and audited and certified by an independent public accounting firm of nationally recognized standing selected by the Company;

 

(b)                                 as soon as practicable, but in any event within 30 days after the end of each of the first three quarters of each fiscal year of the Company, an unaudited profit or loss statement, a statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and which shall fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment, setting forth in each case comparisons to the Company’s annual budget and to the corresponding period in the preceding fiscal year;

 

(c)                                  as soon as practicable, but in any event within 30 days prior to the commencement of each new fiscal year of the Company, an annual comprehensive operating budget forecasting the Company’s revenues, expenses, and cash positions on a month-to-month basis for the upcoming fiscal year;

 

(d)                                 promptly following the end of each quarter, an up-to-date capitalization table, certified by the Chief Financial Officer of the Company; and

 

(e)                                  (i) within thirty (30) days after filings, copies of all material reports, statements and/or documents filed by the Company with government authorities, including but not limited to, those filed with the Internal Revenue Service and the Commission; (ii) within thirty (30) days after receipt or filings, copies of pleadings of any material lawsuits filed by or

 

18

 

against the Company; and (iii) within ten (10) days after receipt, a copy of any notifications received by the Company regarding any defaults on any indebtedness for borrowed money or leases to which the Company is a party.

 

3.2                               Inspection Rights.  The Company will afford to each Major Holder and any authorized representative of such Major Holder reasonable access during normal business hours to all of the Company’s properties, books and personnel records.  Major Holders may exercise their rights under this Section 3.2 only for purposes reasonably related to their interests as a stockholder.  The rights granted pursuant to this Section 3.2 may not be assigned or otherwise conveyed by any Major Holder.

 

3.3                               Confidentiality.  Anything in this Agreement to the contrary notwithstanding, no Holder or Common Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company.  The Company shall not be required to comply with any information rights or inspection rights pursuant to this Section 3 in respect of any Holder or Common Holder whom the Board of Directors of the Company reasonably determines to be a competitor of the Company.  The Company shall not be obligated to disclose details of contracts with, or work performed for, specific customers and other business partners where to do so would violate confidentiality obligations to those parties.  Each Holder and Common Holder agrees that it will not use any information received by it pursuant to this Agreement in violation of the Securities Act or the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees, agents or partners having a need to know the contents of such information), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally.

 

3.4                               Termination of Covenants.  The covenants set forth in this Section 3 shall terminate and be of no further force and effect upon (a) the closing of the Company’s Initial Public Offering or (b) the closing of an acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is a party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Company held by such holders prior to such transaction, more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such transaction or series of transactions; or (c) the closing of a sale, lease or other conveyance of all or substantially all or of the assets of the Company.

 

4.                                      Right of First Refusal.

 

4.1                               Right of First Refusal.  The Company hereby grants to each Series B Holder, Series C Holder, Series D Holder and Tanfield (each, a “Rights Holder”) the right of first refusal to purchase its pro rata share of New Securities (as defined in Section 4.1(a)), which the Company may, from time to time, propose to sell and issue after the date of this Agreement.

 

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A Rights Holder’s pro rata share, for purposes of this right of first refusal, is equal to the ratio of (A) the number of shares of Common Stock owned by such Rights Holder on the date hereof (assuming full conversion of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and the exercise by such Rights Holder of all outstanding convertible securities, rights, options and warrants held by it, directly or indirectly, into Common Stock) to (B) the total number of shares of Common Stock outstanding on the date hereof (assuming full conversion of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and exercise of all outstanding convertible securities, rights, options and warrants issued by the Company, directly or indirectly, into Common Stock).  For purposes of the immediately preceding sentence of this Section 4.1, a Rights Holder includes any general partner, managing member and Affiliates (including Affiliated Funds) of a Series B Holder, Series C Holder or Series D Holder, respectively.  A Series B Holder, Series C Holder or Series D Holder who chooses to exercise the right of first refusal may designate as purchasers under such right itself and/or its partners or Affiliates (including Affiliated Funds), in such proportions as it deems appropriate.

 

(a)                                 “New Securities” shall mean any capital stock (including, without limitation, Common Stock, Series B Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that the term “New Securities” does not include:

 

(i)                                     the Series B Preferred Conversion Stock;

 

(ii)                                  the Series C Preferred Conversion Stock;

 

(iii)                               the Series D Preferred Conversion Stock;

 

(iv)                              securities issued or issuable to employees, officers or directors of, or consultants or advisors to, the Company or any subsidiary pursuant to stock grants, option plans or similar arrangements approved by the Board of Directors of the Company;

 

(v)                                 securities issued upon the conversion or exercise of any outstanding convertible or exercisable securities as of this date of this Agreement;

 

(vi)                              securities issued or issuable as a dividend or distribution on Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock or pursuant to any event for which adjustment is made pursuant to Subsection 4(e), (f) or (g) of Article FOURTH, Section C of the Certificate of Incorporation;

 

(vii)                           securities offered pursuant to a registered public offering under the Securities Act in connection with which all outstanding shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are converted into Common Stock;

 

(viii)                        securities issued or issuable pursuant to the bona fide acquisition of another entity by the Company by merger, purchase of substantially all of the assets or other· reorganization, which acquisition is approved by the Board of Directors of the Company;

 

20

 

(ix)                              securities issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing, equipment lease, bank credit arrangement or commercial leasing transaction entered into for primarily non-equity financing purposes and approved by the Board of Directors of the Company;

 

(x)                                 securities of the Company which the Board of Directors of the Company unanimously determines shall be excluded from the definition of New Securities and which are not offered to any existing stockholder of the Company;

 

(xi)                              securities issued in connection with sponsored research, connection, technology license, development, distribution, marketing or other similar agreements or strategic partnerships entered into for primarily non-equity financing purposes and approved by the Board of Directors of the Company;

 

(xii)                           securities issued to suppliers or third party service providers in collection with the provision of goods or services pursuant to transactions approved by the Board of Directors of the Company;

 

(xiii)                        securities issued with the prior written waiver of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock (voting together as a single class on an as-converted to Common Stock basis);

 

(xiv)                       rights or securities issued pursuant to any stockholder rights plan adopted by the Board of Directors of the Company; and

 

(xv)                          securities issued or issuable upon conversion or exercise of any of the foregoing.

 

(b)                                 In the event the Company proposes to undertake an issuance of New Securities, it shall give each Rights Holder written notice of its intention, describing the type of New Securities, their price and the general terms upon which the Company proposes to issue the same.  Each Rights Holder shall have twenty (20) days after receipt of such notice to agree to purchase such Rights Holder’s pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased, provided that, if a Rights Holder elects not to purchase its pro rata share of the New Securities pursuant to this Section 4.1, the Company shall promptly notify, in writing, the Rights Holders that have notified the Company they intend to purchase their respective pro rata shares of such New Securities and offer each such Rights Holder the right to acquire its pro rata share of such unsubscribed New Securities.  Such Rights Holders shall have ten (10) days following receipt of such notice from the Company to notify the Company of their election to purchase their pro rata share of all or a portion of the unsubscribed New Securities.

 

(c)                                  In the event the Rights Holders fail to exercise fully the right of first refusal within said twenty (20) day period and, if applicable, said ten (10) day period (the “Election Period”), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, 

 

21

 

within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Rights Holders’ right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to the Rights Holders delivered pursuant to the first sentence of Section 4.1(b).  In the event the Company has not sold such New Securities within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities without first again offering such New Securities to the Rights Holders in the manner provided in this Section 4.1.

 

(d)                                 The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the Company’s Initial Public Offering.

 

5.                                      Miscellaneous.

 

5.1                               Amendment.  Except as otherwise expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Holders and Common Holders holding a majority of the Registrable Securities (excluding any of such shares that have been sold pursuant to a registration statement or pursuant to Rule 144).  Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and Common Holder and each future holder of any securities of such Holder or Common Holder (to the extent such future holder becomes a party hereto pursuant to the terms hereof).  Each Holder and Common Holder acknowledges that by the operation of this paragraph, the Holders and Common Holders of a majority of the Registrable Securities (excluding any of such shares that have been sold pursuant to a registration statement or pursuant to Rule 144) will have the right and power to diminish or eliminate all rights of such Holder or Common Holder under this Agreement, but only in a manner effecting all such Holders and, in the case of Section 2, the Common Holders, equally.

 

5.2                               Notices.  All notices and other communications required or permitted hereunder shall be in writing and shalt be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:

 

(a)                                 if to a Series B Holder, Series C Holder or Series D Holder, at the Series B Holder’s, Series C Holder’s or Series D Holder’s address, facsimile number or electronic mail address as shown in the Company’s records, as the same may be updated in accordance with the provisions hereof;

 

(b)                                 if to any Holder or Common Holder, at such address, facsimile number or electronic mail address as shown in the Company’s records, or, until any such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address of the last holder of such shares for which the Company has contact information in its records; or

 

(c)                                  if to the Company, one copy should be sent to Smith Electric Vehicles Corp., 12200 N.W. Ambassador Drive, Suite 326, Kansas City, Missouri 64163, Attention: 

 

22

 

Bryan Hansel, Chief Executive Officer, or at such other address as the Company shall have furnished to the Holders, with a copy to Covington & Burling LLP, 1201 Pennsylvania Avenue, NW, Washington, DC 20004, Attention: W. Andrew Jack.

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address set forth in the records of the Company.

 

5.3                               Governing Law.  This Agreement shall be governed in all respects by the internal laws of the State of Delaware, without regard to principles of conflicts of law that would refer any dispute under this Agreement to the substantive laws of another jurisdiction.

 

5.4                               Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.

 

5.5                               Entire Agreement.  This Agreement and the exhibits hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and supersedes all prior written or oral agreements and understandings relating to such subject matter. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein,

 

5.6                               Delays or Omissions.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

 

23

 

5.7                               Severability.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision.  The balance of this Agreement shall be enforceable in accordance with its terms.

 

5.8                               Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

5.9                               Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.

 

5.10                        Telecopy Execution and Delivery.  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes, At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

5.11                        Further Assurances.  Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

 

5.12                        Affiliated Funds or Aggregation of Stock.  All shares of Common Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock held or acquired by Affiliated Funds or Affiliated Persons or Persons under common investment management or control shall be aggregated together for the purpose of determining the availability of any rights or obligations under this Agreement.  Additionally, for any Holder or Common Holder that is a partnership, corporation or limited liability company, the general partner, limited partners, retired partners, shareholders, members, retired members and Affiliates of such Holder or Common Holder, or the members or retired members of the foregoing, as applicable, or the estates, beneficiaries and family members of any such general partner, limited partners, retired partners, shareholders, members, and retired members and any trusts for the benefit of any of the foregoing Persons shall be deemed to be a single “Holder” or “Common Holder,” as the case may be, and any pro rata reductions pursuant to Section 2.1 or 2.3 with respect to such Holder or Common Holder shall be based upon the aggregate amount of Registrable Securities owned by all Persons included in such “Holder” or “Common Holder,” as the case may be, as defined in this Section 5.12.

 

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, each of the undersigned holders of common stock, par value $0.001 per share, of Smith Electric Vehicle Corp. (the “Company”) has executed this signature page as of the date set forth below; and, by execution and delivery hereof, such holder hereby agrees to join in and be bound by the terms and conditions of (i) the Second Amended and Restated Voting and Drag-Along Agreement as a “Common Holder” thereunder, (ii) the Second Amended and Restated Investor Rights Agreement as a “Common Holder” thereunder and (iii) the Second Amended and Restated Right of First Refusal and Co-Sale Agreement as a “Common Holder” thereunder, each in the form delivered to the undersigned by the Company, and authorizes this signature page to be attached to the Second Amended and Restated Voting and Drag-Along Agreement, the Second Amended and Restated Investor Rights Agreement and the Second Amended and Restated Right of First Refusal and Co-Sale Agreement, or counterparts thereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

	
 
    	
SMITH ELECTRIC VEHICLES CORP.,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: /s/ Bryan Hansel
    
	
 
    	
Bryan Hansel, President and
    
	
 
    	
Chief Executive Officer
    

 

25

 

IN WITNESS WHEREOF, each of the undersigned holders of common stock, par value $0.001 per share, of Smith Electric Vehicle Corp. (the “Company”) has executed this signature page as of the date set forth below; and, by execution and delivery hereof, such holder hereby agrees to join in and be bound by the terms and conditions of (i) the Second Amended and Restated Voting and Drag-Along Agreement as a “Common Holder” thereunder, (ii) the Second Amended and Restated Investor Rights Agreement as a “Common Holder” thereunder and (iii) the Second Amended and Restated Right of First Refusal and Co-Sale Agreement as a “Common Holder” thereunder, each in the form delivered to the undersigned by the Company, and authorizes this signature page to be attached to the Second Amended and Restated Voting and Drag-Along Agreement, the Second Amended and Restated Investor Rights Agreement and the Second Amended and Restated Right of First Refusal and Co-Sale Agreement, or counterparts thereof.

 

	
STORM FINANCE GROUP INCORPORATED  
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
    /s/ Roy Stanley  
    	
 
    	
Date: 
    	
    1/18/2012
    
	
 
    	
Roy Stanley
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TANFIELD GROUP PLC  
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
    /s/ Charles Brooks  
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name: Charles Brooks  
    	
 
    	
 
    
	
 
    	
Title: Finance Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WYNSTON HILL CAPITAL, LLC  
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:  
    	
 
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name:  
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
      /s/   Bryan Hansel  
    	
 
    	
Date: 
    	
 
    
	
Bryan Hansel
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HANSEL (1997) FAMILY TRUST  
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
    /s/ Bryan Hansel  
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name: Bryan Hansel  
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
    /s/ Robin Mackie  
    	
 
    	
Date: 
    	
 
    
	
Robin Mackie
    	
 
    	
 
    

 

26

 

IN WITNESS WHEREOF, each of the undersigned holders of Series B Convertible Preferred Stock, par value $0.001 per share, of the Company has executed this signature page as of the date set forth below; and, by execution and delivery hereof, such holder hereby agrees to join in and be bound by the terms and conditions of (i) the Second Amended and Restated Voting and Drag-Along Agreement as a “Series B Holder” thereunder, (ii) the Second Amended and Restated Investor Rights Agreement as a “Series B Holder” thereunder and (iii) the Second Amended and Restated Right of First Refusal and Co-Sale Agreement as a “Series B Holder” thereunder, each in the form delivered to the undersigned by the Company, and authorizes this signature page to be attached to the Second Amended and Restated Voting and Drag-Along Agreement, the Second Amended and Restated Investor Rights Agreement and the Second Amended and Restated Right of First Refusal and Co-Sale Agreement, or counterparts thereof.

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Reudi Baer
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date: 
    	
 
    
	
Ian David Bower
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date: 
    	
 
    
	
Ellen B. Brown and Brent S. Franzel
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date: 
    	
 
    
	
Frank Buck
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
CAPTIVEVISION CAPITAL LTD  
    	
 
    	
 
    	
 
    
	
By:
    	
    /s/ R J Chatfield  
    	
 
    	
Date: 
    	
  1/24/2012
    
	
 
    	
Name: R J Chatfield  
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
CRAMER INVEST AP  
    	
 
    	
 
    	
 
    
	
By:
    	
      /s/   Peter W Christensen  
    	
 
    	
Date: 
    	
    1/14/2012
    
	
 
    	
Name: Peter W Christensen  
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Gareth Derbyshire
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
     /s/ Peter   Dunlavey
    	
 
    	
Date: 
    	
    1/12/2012
    
	
Peter Dunlavey
    	
 
    	
 
    	
 
    

 

27

 

	
JON D. ELLIS AND JULIA M. ELLIS JT  
    	
 
    	
 
    	
 
    
	
By:  
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name:  
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
EPSOM ASSETS  
    	
 
    	
 
    	
 
    
	
By:
    	
     /s/ R J Chatfield  
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: R J Chatfield  
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
EUROPANEL AB  
    	
 
    	
 
    	
 
    
	
By:
    	
    /s/ Jan Lindblad  
    	
 
    	
Date: 
    	
    1/13/2012
    
	
 
    	
Name: Jan Lindblad  
    	
 
    	
 
    	
 
    
	
 
    	
Title: President and CEO
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
FRENCHMANS INVESTMENTS P/L
    	
 
    	
 
    	
 
    
	
By:  
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name:  
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
   /s/ Gerry Harrison  
    	
 
    	
Date: 
    	
    1/13/2012
    
	
Gerry Harrison
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Patrick Head
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
     /s/ Ji Jun   Hong  
    	
 
    	
Date: 
    	
    1/13/2012
    
	
Ji Jun Hong
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
IMBUDECO SA  
    	
 
    	
 
    	
 
    
	
By:  
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name:  
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Roy Isbell
    	
 
    	
 
    	
 
    

 

28

 

	
  /s/ Joon Kim  
    	
 
    	
Date: 
    	
  1/12/2012
    
	
Joon Kim
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Jeffrey Kostos
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Isabel Large
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
LAUSAR SETTLEMENT  
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BY: EQUIOM TRUST COMPANY LIMITED  
    	
 
    	
 
    	
 
    
	
By:  
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name:  
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
     /s/ Kevin   Martin  
    	
 
    	
Date: 
    	
    1/13/2012
    
	
Kevin Martin
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
        /s/   Nicholas Martin  
    	
 
    	
Date: 
    	
      1/14/2012
    
	
Nicholas Martin
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
MORENO FINANCE LTD.  
    	
 
    	
 
    	
 
    
	
By:
    	
    /s/ Frederique Meyer  
    	
 
    	
Date: 
    	
      1/13/2012
    
	
 
    	
Name: Frederique Meyer  
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Don Nissanka
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Michael Pringle
    	
 
    	
 
    	
 
    

 

29

 

	
    /s/ Peter Brian   Quigley  
    	
 
    	
Date: 
    	
      1/12/2012
    
	
Peter Brian Quigley
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Peter Shaw
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Graham Sizer
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Keith Sprules
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
   /s/ Henri Teysseyre  
    	
 
    	
Date: 
    	
      1/13/2012
    
	
Henri Teysseyre
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Jurgen Toorneman
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
  /s/ James Ure  
    	
 
    	
Date: 
    	
  1/18/2012
    
	
James Ure
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Marc Wolff
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
      /s/   Donald Wright  
    	
 
    	
Date: 
    	
  1/18/2012
    
	
Donald Wright
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
1998 CHRISTOPHER MULKEY IRREVOCABLE TRUST  
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
    /s/ Christopher   Mulkey  
    	
 
    	
Date: 
    	
  1/13/2012
    
	
 
    	
Name: Christopher Mulkey  
    	
 
    	
 
    	
 
    
	
 
    	
Title: Trustee
    	
 
    	
 
    	
 
    

 

30

 

	
 
    	
 
    	
Date:
    	
 
    
	
Jalal Bagherli
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date:
    	
 
    
	
Sonke Bandixen
    	
 
    	
 
    

 

 

	
THE BELEM SETTLEMENT
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Consilium   Treuhand AG
    	
 
    	
Date: 
    	
1/23/2012
    
	
 
    	
Name: Consilium Treuhand AG
    	
 
    	
 
    	
 
    
	
 
    	
Title: Trustee
    	
 
    	
 
    	
 
    

 

 

	
BURSHA HOLDINGS
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Daniel Shamoon
    	
 
    	
Date: 
    	
1/13/2012
    
	
 
    	
Name: Daniel Shamoon
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    
						

 

 

	
/s/ Jens Erik Christensen
    	
 
    	
Date: 
    	
1/13/2012
    
	
Jens Erik   Christensen
    	
 
    	
 
    	
 
    
					

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Marisa Chung
    	
 
    	
 
    	
 
    

 

 

	
CONTINENTAL CASUALTY COMPANY
    	
 
    
	
 
    	
 
    	
 
    	
Date: 
    	
1/12/2012
    
	
By:
    	
/s/ Albert   Miralles, Jr.
    	
 
    	
 
    	
 
    
	
 
    	
Name: Albert Miralles, Jr.
    	
 
    	
 
    	
 
    
	
 
    	
Title: Senior Vice President and Treasurer
    	
 
    	
 
    	
 
    
						

 

 

	
/s/ Louis D’Avanzo
    	
 
    	
Date: 
    	
1/13/2012
    
	
Louis D’Avanzo
    	
 
    	
 
    	
 
    

 

 

	
/s/ Sarah Drnec
    	
 
    	
Date: 
    	
1/13/2012
    
	
Sarah Drnec
    	
 
    	
 
    	
 
    

 

31

 

 

	
/s/ Jon D. and   Julia M. Ellis
    	
 
    	
Date: 
    	
1/13/2012
    
	
Jon D. and Julia   M. Ellis
    	
 
    	
 
    	
 
    

 

 

	
/s/ Michael and   Anne Gold
    	
 
    	
Date: 
    	
1/13/2012
    
	
Michael and Anne   Gold
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Thomas W. Hallagan
    	
 
    	
 
    	
 
    

 

 

	
/s/ Max Heckl
    	
 
    	
Date: 
    	
1/13/2012
    
	
Max Heckl
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
John Herschel
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Antony John   Hitchen
    	
 
    	
 
    	
 
    

 

 

	
/s/ Peter J.   Hofbauer
    	
 
    	
Date: 
    	
1/11/2012
    
	
Peter J. Hofbauer
    	
 
    	
 
    	
 
    

 

 

	
JASADI INVESTMENTS LTD.
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
/s/ Ulf Kasshag
    	
 
    	
Date: 
    	
1/12/2012
    
	
Ulf Kasshag
    	
 
    	
 
    	
 
    

 

 

	
/s/ Randle   Kenilworth
    	
 
    	
Date: 
    	
1/13/2012
    
	
Randle Kenilworth
    	
 
    	
 
    	
 
    

 

32

 

	
 
    	
 
    	
Date: 
    	
 
    
	
John D. Mulkey
    	
 
    	
 
    	
 
    

 

 

	
JOHN MULKEY 1998   IRREVOCABLE TRUST
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
ORKHIS GMBH
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Muller Anton
    	
 
    	
Date: 
    	
1/13/2012
    
	
 
    	
Name: Muller Anton
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
/s/ M. J. Peagram
    	
 
    	
Date: 
    	
1/12/2012
    
	
M. J. Peagram
    	
 
    	
 
    	
 
    

 

 

POTOMAC ENERGY FUND, L.P.

 

	
By:
    	
POTOMAC ENERGY GP, LLC, GENERAL PARTNER
    

 

	
By:
    	
/s/ Daniel Nadash
    	
 
    	
Date: 
    	
 
    
	
 
    	
Name: Daniel Nadash
    	
 
    	
 
    	
 
    
	
 
    	
Title: Managing Director
    	
 
    	
 
    	
 
    

 

 

	
ROBIN WAY PARTNERSHIP
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
/s/ Michael Romanoff
    	
 
    	
Date: 
    	
1/12/2012
    
	
Michael Romanoff
    	
 
    	
 
    	
 
    

 

 

	
/s/ Stuart   Romanoff
    	
 
    	
Date: 
    	
1/12/2012
    
	
Stuart Romanoff
    	
 
    	
 
    	
 
    

 

33

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Clive Rumens
    	
 
    	
 
    	
 
    

 

 

	
/s/ AC Russell
    	
 
    	
Date: 
    	
1/13/2012
    
	
Angus Charles Russell
    	
 
    	
 
    	
 
    

 

 

	
ST CAPITAL AG
    	
 
    
	
By:
    	
/s/ Teemu   Vasanuarti
    	
 
    	
Date:
    	
1/30/2012
    
	
 
    	
Name: Teemu Vasanuarti
    	
 
    	
 
    	
 
    
	
 
    	
Title: CEO
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    
	
STEFFENSEN ASSET   MANAGEMENT S.A.M. APS
    	
 
    	
Date:
    	
1/13/2012
    
	
By:
    	
/s/ Ole Steffensen
    	
 
    	
 
    	
 
    
	
 
    	
Name: Ole Steffensen
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
/s/ Todd Sycoff
    	
 
    	
Date: 
    	
 
    
	
Todd Sycoff
    	
 
    	
 
    	
 
    

 

 

	
TISU INVESTMENT LTD.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Tis Prager
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: Tis Prager
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Anthony J. Vespa
    	
 
    	
 
    	
 
    

 

 

	
/s/ Pascal Voltzenlugel
    	
 
    	
Date: 
    	
1/12/2012
    
	
Pascal Voltzenlugel
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Marc Waeterschoot
    	
 
    	
 
    	
 
    

 

34

 

	
/s/ Greg & Maxine Wetanson
    	
 
    	
Date: 
    	
1/12/2012
    
	
Greg & Maxine Wetanson
    	
 
    	
 
    	
 
    

 

 

	
/s/ Anita Tishman Winkler
    	
 
    	
Date: 
    	
1/12/2012
    
	
Anita Tishman Winkler
    	
 
    	
 
    	
 
    

 

 

	
/s/ Jean-Pierre Wyss
    	
 
    	
Date: 
    	
1/12/2012
    
	
Jean-Pierre Wyss
    	
 
    	
 
    	
 
    

 

 

	
ZOAR INVEST APS
    	
 
    
	
By:
    	
/s/ Ib Sonderby
    	
 
    	
Date:
    	
1/12/2012
    
	
 
    	
Name: Ib Sonderby
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

35

 

IN WITNESS WHEREOF, each of the undersigned holders of Series C Convertible Preferred Stock, par value $0.001 per share, of the Company has executed this signature page as of the date set forth below; and, by execution and delivery hereof, such holder hereby agrees to join in and be bound by the terms and conditions of (i) the Second Amended and Restated Voting and Drag-Along Agreement as a “Series C Holder” thereunder, (ii) the Second Amended and Restated Investor Rights Agreement as a “Series C Holder” thereunder and (iii) the Second Amended and Restated Right of First Refusal and Co-Sale Agreement as a “Series C Holder” thereunder, each in the form delivered to the undersigned by the Company, and authorizes this signature page to be attached to the Second Amended and Restated Voting and Drag-Along Agreement, the Second Amended and Restated Investor Rights Agreement and the Second Amended and Restated Right of First Refusal and Co-Sale Agreement, or counterparts thereof.

 

36

 

	
THE LAUSAR SETTLEMENT
    	
 
    
	
 
    	
 
    
	
By:
    	
EQUIOM TRUST COMPANY LIMITED
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Jalal Bagherli
    	
 
    	
 
    	
 
    

 

 

	
THE BELEM SETTLEMENT
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Consilium   Treuhand AG
    	
 
    	
Date:
    	
1/23/2012
    
	
 
    	
Name: Consilium Treuhand AG
    	
 
    	
 
    	
 
    
	
 
    	
Title: Trustee
    	
 
    	
 
    	
 
    

 

 

	
CONTINENTAL CASUALTY COMPANY
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Albert J.   Miralles, Jr.
    	
 
    	
Date:
    	
1/12/2012
    
	
 
    	
Name: Albert J. Miralles
    	
 
    	
 
    	
 
    
	
 
    	
Title: Senior Vice President and Treasurer
    	
 
    	
 
    	
 
    

 

 

	
CRAMER INVEST APS
    	
 
    
	
By:
    	
/s/ Peter W   Christensen
    	
 
    	
Date:
    	
1/14/2012
    
	
 
    	
Name: Peter W Christensen
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
/s/ Sarah Drnec
    	
 
    	
Date: 
    	
1/13/2012
    
	
Sarah Drnec
    	
 
    	
 
    	
 
    

 

 

	
FRENCHMANS INVESTMENTS P/L
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

37

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Michael and Anne Gold
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Patrick Michael Head
    	
 
    	
 
    	
 
    

 

 

	
/s/ Max Heckl
    	
 
    	
Date: 
    	
1/13/2012
    
	
Max Heckl
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
John Hershcel
    	
 
    	
 
    	
 
    

 

 

	
/s/ Antony John Hitchen
    	
 
    	
Date: 
    	
1/11/2012
    
	
Antony John Hitchen
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Roy Isbell
    	
 
    	
 
    	
 
    

 

 

	
JASADI INVESTMENTS LTD.
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
/s/ Ulf Kasshag
    	
 
    	
Date: 
    	
1/12/2012
    
	
Ulf Kasshag
    	
 
    	
 
    	
 
    

 

 

	
/s/ Nicholas Martin
    	
 
    	
Date: 
    	
1/14/2012
    
	
Nicholas Martin
    	
 
    	
 
    	
 
    

 

 

	
POTOMAC ENERGY FUND, L.P.
    	
 
    

 

	
By:
    	
POTOMAC ENERGY GP, LLC, GENERAL PARTNER
    

 

	
By:
    	
/s/ Daniel Nadash
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: Daniel Nadash
    	
 
    	
 
    	
 
    
	
 
    	
Title:Managing Director
    	
 
    	
 
    	
 
    

 

38

 

	
 
    	
 
    	
Date: 
    	
 
    
	
Michael Romanoff
    	
 
    	
 
    	
 
    

 

 

	
/s/ Stuart Romanoff
    	
 
    	
Date: 
    	
1/12/2012
    
	
Stuart Romanoff
    	
 
    	
 
    	
 
    

 

 

	
/s/ Angus Charles Russell
    	
 
    	
Date: 
    	
1/13/2012
    
	
Angus Charles Russell
    	
 
    	
 
    	
 
    

 

 

	
STEFFENSEN ASSET   MANAGEMENT S.A.M. APS
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ole Steffensen
    	
 
    	
Date:
    	
1/13/2012
    
	
 
    	
Name: Ole Steffensen
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
TISU INVESTMENT   LTD.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Tis Prager
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: Tis Prager
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
/s/ Greg & Maxine Wetanson
    	
 
    	
Date: 
    	
1/12/2012
    
	
Greg & Maxine Wetanson
    	
 
    	
 
    	
 
    

 

 

	
/s/ Donald J. Wright
    	
 
    	
Date: 
    	
1/12/2012
    
	
Donald J. Wright
    	
 
    	
 
    	
 
    

 

 

	
/s/ Jean-Pierre Wyss
    	
 
    	
Date: 
    	
1/11/2012
    
	
Jean-Pierre Wyss
    	
 
    	
 
    	
 
    

 

39

 

	
ZOAR INVEST APS
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ib Sonderby
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: Ib Sonderby
    	
 
    	
 
    	
 
    
	
 
    	
Title: Director
    	
 
    	
 
    	
 
    

 

 

	
/s/ Robert MacArthur
    	
 
    	
Date: 
    	
1/12/2012
    
	
Robert MacArthur
    	
 
    	
 
    	
 
    

 

 

	
WANXIANG AMERICA   CORPORATION
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
THE LONDON TRUST
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Justin Callen
    	
 
    	
Date:
    	
1/12/2012
    
	
 
    	
Name: Justin Callen
    	
 
    	
 
    	
 
    
	
 
    	
Title: Trustee
    	
 
    	
 
    	
 
    

 

 

	
INVESTRU APS
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: 
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
 
    	
 
    	
 
    

 

 

	
TANFIELD GROUP PLC
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Charles Brooks
    	
 
    	
Date:
    	
 
    
	
 
    	
Name: Charles Brooks
    	
 
    	
 
    	
 
    
	
 
    	
Title: Finance Director
    	
 
    	
 
    	
 
    

 

40

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}]]