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Swift First Amended Complaint vs. dHybrid

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Swift First Amended Complaint vs. dHybrid filed August 2nd 2013

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Swift First Amended Complaint vs. dHybrid

  1. 1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 Patricia Lee Refo (#017032) Anthony Tom King (#027459) SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren, Suite 1900 Phoenix, Arizona 85004-2202 Telephone: 602.382.6000 Facsimile: 602.382.6070 E-Mail: prefo@swlaw.com aking@swlaw.com Attorneys for Swift Transportation Co. of Arizona, LLC, Swift Transportation Company, and Jerry and Vickie Moyes IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF MARICOPA SWIFT TRANSPORTATION CO. OF ARIZONA, LLC, Plaintiff, v. DHYBRID, INC., Defendant. No. CV2012-009630 FIRST AMENDED COMPLAINT DHYBRID, INC., a Nevada corporation, Counterclaimant, v. SWIFT TRANSPORTATION COMPANY, a Delaware corporation; SWIFT TRANSPORTATION CO. OF ARIZONA, LLC, a Delaware limited liability company; and JERRY MOYES, individually and as husband with VICKIE MOYES; JOHN DOES 1-50; ABC CORPORATIONS 1-5; DEF PARTNERSHIPS 1-5; GHI LIMITED PARTNERSHIPS 1-5; and JKL LIMITED LIABILITY COMPANIES 1-5, Counterdefendants. Michael K Jeanes, Clerk of Court *** Electronically Filed *** E. Hailes, Deputy 8/2/2013 1:28:00 PM Filing ID 5374469
  2. 2. - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 Plaintiff Swift Transportation Co. of Arizona, LLC (“Swift”), for its First Amended Complaint against dHybrid, Inc. (“dHybrid”), alleges as follows: PARTIES, JURISDICTION, AND VENUE 1. Swift is a Delaware limited liability company with its principal place of business in Maricopa County, Arizona. 2. dHybrid is a Nevada corporation doing business in Maricopa County, Arizona. 3. The amount in controversy exceeds this Court’s jurisdictional minimum. 4. All acts material to this litigation occurred in Maricopa County, Arizona. 5. This Court has jurisdiction over the subject matter and the parties because, among other things, dHybrid expressly submitted to personal and subject matter jurisdiction of Arizona. 6. Venue in this Court is proper because, among other things, dHybrid contracted in writing to perform an obligation in Maricopa County, Arizona. SWIFT AND DHYBRID ENTER INTO THE FUEL AGREEMENT 7. Swift is one of the largest truckload motor shipping carriers in the United States. Based in Phoenix, Arizona, Swift operates thousands of vehicles, many of which are diesel-powered. 8. dHybrid represented to Swift that it owns the rights to certain patent- pending technology which allows diesel-powered vehicles to operate more efficiently by using a mixture of compressed natural gas (“CNG”) and diesel fuel (collectively, the “Technology”). 9. dHybrid represented to Swift that it manufactures components based on the Technology that can be installed as an aftermarket system in a diesel-powered vehicle (the “dHybrid System”). 10. On or about May 21, 2010, Swift and dHybrid entered into a Fuel Technology Purchase Agreement (the “Fuel Agreement”). A true and correct copy of the Fuel Agreement is attached as Exhibit A.
  3. 3. - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 11. Pursuant to the Fuel Agreement, dHybrid was required to install ten (10) dHybrid Systems on Swift’s vehicles for testing. 12. Upon completion of the testing of the ten vehicles and Swift not experiencing engine issues with the operation of the dHybrid systems, dHybrid agreed to sell, and Swift agreed to purchase and install on its diesel-powered vehicles, 800 dHybrid Systems at a price of $20,000.00 per vehicle for an eventual total price of $16,000,000.00. 13. Swift also agreed to provide dHybrid an advance payment of $2,000,000.00 (the “$2,000,000.00 Advanced Payment”). 14. dHybrid represented and agreed that it would apply the “$2,000,000.00 Advanced Payment towards further research, installation, and development” of the Technology, as well as payment for the first 100 dHybrid Systems delivered to Swift. 15. Swift promptly made the $2,000,000.00 Advance Payment to dHybrid after execution of the Fuel Agreement. DHYBRID BREACHES THE FUEL AGREEMENT 16. After the parties executed the Fuel Agreement, dHybrid failed to meet its obligations under the Agreement. 17. Pursuant to Section 4 of the Fuel Agreement, dHybrid was to install ten dHybrid Systems for testing on Swift’s vehicles. 18. Contrary to the express terms of the Fuel Agreement, dHybrid provided and installed only five dHybrid Systems for testing on Swift’s vehicles. 19. After dHybrid provided and installed the five dHybrid Systems on Swift’s vehicles, Swift operated said vehicles for ninety (90) days as a testing period. 20. During the testing period, Swift experienced engine issues with the dHybrid Systems and discovered that the dHybrid Systems did not in fact possess the technical efficiencies or capabilities as represented by dHybrid. 21. Further, despite representing that it would apply the Advance Payment towards “research, installation, and development of the Technology,” upon information or
  4. 4. - 4 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 belief, dHybrid did not use all of the $2,000,000.00 Advance Payment for “research, installation, and development of the Technology.” 22. Upon information and belief, dHybrid applied portions of the $2,000,000.00 Advance Payment for its and/or its officers’ or directors’ personal use and/or other purposes unrelated to the Technology, the dHybrid Systems, or the Fuel Agreement. DHYBRID RECEIVES, AND FAILS TO REPAY, A LOAN FROM SWIFT 23. On or about January 25, 2012, Swift and dHybrid entered into the Third Amended and Restated Unsecured Promissory Note (the “Note”), which amended and replaced prior promissory notes entered into between Swift and dHybrid. A true and correct copy of the Third Amended and Restated Unsecured Promissory Note is attached hereto as Exhibit B and incorporated herein. 24. Pursuant to the Note, Swift made and provided to dHybrid a loan in the principal amount of $322,000.00. dHybrid agreed to, among other things, pay Swift the principal amount of $322,000.00 by the earlier of (i) February 24, 2012, or (ii) immediately upon receipt by dHybrid of any third party funding in the form of either equity or debt. 25. On or about June 13, 2012, due to dHybrid’s defaults, Swift made a written demand to dHybrid (the “Notice of Default”) for the full payment due under the Note. A true and correct copy of the Notice of Default is attached hereto as Exhibit C and incorporated herein. 26. In the Notice of Default, dHybrid was notified of its default of its obligations under the Note for, among other things, failing to make any payments when due. 27. To date, dHybrid has not cured any of the events of default described in the Notice of Default and still has not made any payments under the Note. COUNT I BREACH OF CONTRACT (FUEL AGREEMENT) 28. Swift realleges each and every allegation as if fully set forth herein.
  5. 5. - 5 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 29. Swift and dHybrid entered into a valid contract, as evidenced by the Fuel Agreement. 30. Swift has performed its obligations under the Fuel Agreement. 31. dHybrid materially breached the Fuel Agreement by failing to perform multiple material terms of the Agreement, as evidenced by, among other things, its failure to provide and install ten dHybrid Systems for testing and use the $2,000,000.00 Advance Payment for purposes other than for research, installation, and development of the Technology. 32. As a direct and proximate result of dHybrid’s material breaches, Swift has suffered damages and is entitled to recover such damages. 33. Swift also seeks reimbursement of its attorneys’ fees and costs from dHybrid pursuant to Section 28 of the Fuel Agreement. COUNT II BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (FUEL AGREEMENT) 34. Swift realleges each and every allegation as if fully set forth herein. 35. The covenant of good faith and fair dealing is implied as a matter of law in every contract. The covenant imposes on dHybrid a duty to act in good faith and deal fairly with Swift at all times, and to refrain undertaking actions designed to deprive them of the benefits of their bargain under the Fuel Agreement. 36. dHybrid breached the covenant of good faith by, among other things, failing to provide and install ten dHybrid Systems for testing and using the $2,000.000.00 Advance Payment for purposes other than for research, installation, and development of the Technology. 37. dHybrid’s actions have been conducted in bad faith, are without legal justification, and have deprived Swift of the benefit of its bargain under the Fuel Agreement. dHybrid’s conduct constitutes a material breach of the implied covenant of good faith and fair dealing.
  6. 6. - 6 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 38. As a direct and proximate result of dHybrid’s material breaches, Swift has suffered damages and is entitled to recover such damages. COUNT III DECLARATORY RELIEF 39. Swift realleges each and every allegation as if fully set forth herein. 40. Swift has performed its obligations under the Fuel Agreement. 41. Swift asserts that dHybrid has breached multiple material terms of the Fuel Agreement. 42. Despite dHybrid’s failure to uphold its obligations under the Fuel Agreement, dHybrid has asserted that it is not in breach of the Fuel Agreement. 43. An actual case or controversy exists between Swift and dHybrid as to whether dHybrid breached any material term of the Fuel Agreement, and therefore the Fuel Agreement is terminated. 44. Accordingly, Swift seeks a judicial declaration that dHybrid breached a material term of the Fuel Agreement and that the Fuel Agreement is terminated through no fault of Swift, thereby relieving Swift of any obligations it may have had under the Fuel Agreement. 45. Swift also seeks reimbursement of its attorneys’ fees and costs from dHybrid pursuant to Section 28 of the Fuel Agreement. COUNT IV BREACH OF CONTRACT (PROMISSORY NOTE) 46. Swift realleges each and every allegation as if fully set forth herein. 47. Swift and dHybrid entered into a valid and binding contract, as evidenced by the Note. 48. Swift has performed its obligations under the Note. 49. By contrast, dHybrid has materially breached the terms and conditions of the Note by, among other things, failing to make any payments when due.
  7. 7. - 7 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 50. As a result of dHybrid’s breaches, Swift has suffered damages and is entitled to recover such damages. WHEREFORE, Swift prays for judgment against dHybrid as follows: A. For judgment against dHybrid, and in favor of Swift, in an amount to be determined at trial; B. A determination and adjudication of the rights and liabilities of the parties with regard to the Fuel Agreement; C. A declaration that dHybrid breached a material term of the Fuel Agreement and that the Fuel Agreement is terminated through no fault of Swift; D. A declaration that Swift is relieved of any and all obligations it may have had under the Fuel Agreement; E. For pre- and post-judgment interest to the maximum extent allowed under applicable law; F. For any and all attorneys’ fees and costs incurred by Swift in connection with dHybrid’s breach of the Fuel Agreement and the enforcement and collection of the Note, pursuant to the express terms of the Fuel Agreement and A.R.S. §§ 12-341 and 12- 341.01; and G. For such other and further relief as this Court may deem just and proper. DATED this 2nd day of August, 2012. SNELL & WILMER L.L.P. By: /s/ Anthony Tom King Patricia Lee Refo (#017032) Anthony Tom King (#027459) One Arizona Center 400 E. Van Buren, Suite 1900 Phoenix, Arizona 85004-2202 Attorneys for Swift Transportation Co. of Arizona, LLC, Swift Transportation Company, and Jerry and Vickie Moyes
  8. 8. - 8 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Snell&Wilmer___________ L.L.P. ___________ LAWOFFICES OneArizonaCenter,400E.VanBuren,Suite1900 Phoenix,Arizona85004-2202 602.382.6000 ORIGINAL OF THE FOREGOING e-filed and COPY mailed this 2nd day of August, 2013, to: Leo R. Beus Britton M. Worthen Abigail M. Terhune BEUS GILBERT PLLC 701 North 44th Street Phoenix, AZ 85008 Attorneys for dHybrid, Inc. /s/ Becky Kinningham 17650134
  9. 9. EXHIBIT A
  10. 10. FUEL TECIINOLOGY PURCHASE AGRDEMENT This FUEL TECHNOLOGY PURCHASE AGREEMENT (this "Agreemenf') is made and entered into effective as of tn" 2l day of May,2010 (the"Effectivebate"), by and between d}IYBRID,INC., a Nevada corporation ("Selley''), and SWIFT TRANSPORTATION CO., INC., an Arizona corporation ("Buyer") (each a "Pafi" and collectively, the "Parties"). RECITALS V/HEREAS, Seller owns the rights to cefain patent-pending technology which allows diesel-powered vehicles to operate more efficiently by using a mixture of Compressed Natural Gas ("CNG") and diesel fuel(the "Technology"); WHEREAS, Seller manufactures components based on the Technology that can be installed as an aftermarket system in a diesel-powered vehicle (the "dHybrid System"); WHEREAS, Buyer is a transportation company that operates thousands of diesel-powered vehicles; WHEREAS, Buyer wishes to benefit from the use of the dHybrid System in its vehicles; WHEREAS, the Parties intend that Buyer shall purchase the dHybrid System from Seller; and ÌüHEREAS, Buyer shall install the dHybrid System in its diesel-powered vehicles. NOW, TIIEREFORE, in consideration of the mutual covenants and agreements herein set forth and each act done and to be done pursuant hereto, and for other good ¿ild valuable consideration, the reoeipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby represent, warrant, covenant and agree as follows: AGREEMENT l. Purcbase Price: AdJance Paymenl. The above recitals are hereby incorporated by reference. Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell and Buyer agrees to purchase and install, the dHybrid System on Eight Hundred (S00) of Buyer's diesel-powered vehicles at a price of Twenty Thousand and No/100 Dollars ($20,000.00) per vehicle for a total price of Sixteen Million and No/100 Dollars ($16,000,000.00) (the "Purchase Price"). Each tuck shall be outfitted with up to one hundred (100) Gas Gallon Equivalent CNG storage per vehicle. Immediately upon execution of this Agreement by the Pafies hereto, Buyer shall pay to Seller a non-reñ¡ndable payment of Two Million and No/100 Dolla¡s ($2,000,000.00), in commercially available funds (the "Advance Paymenf'). The Advance Payment shall be applied toward the Purchase Price. Buyer acknowledges that the Advance Payment shall be used for research, installation, and development of the Technology, third party agreements and deposits, and is therefore non-refi¡ndable. The remaining amount of the Purchase Price shall be paid by Buyer as specified in Section 6 below. In the event that Seller offers dHybrid Systems for sale to any other person or entity during the term of this Agreement for a price lower than the Purchase Price, then the Purchase Price as defined herein shall automatically be amended to equal that lower price for purchases by Buyer hereunder. 2. Transfer of Shares of Seller to Bu]¡er. Upon payment of the Advance Pa¡rment by Buyer to Seller, and as consideration for the Advance Payment, Seller shall transfer to Buyer a number of Preferred Shares of Seller, which shall be equal to nine percent (9%) of the total issued and outstanding I
  11. 11. preferred and common stock across all classes (the "dHybrid Shares"). Upon the issuance of additional shares by Seller at any time, in any class of stock, Seller shall automatically issue to Buyer the requisito number of Shares of Preferred Stock to ensure that Buyer maintains its nine percent (9%) overall equity stake in Seller. No additional oonsideration shall be required from Buyer in order to maintain its nine percent (9%) stake in Seller. The dHybrid Sha¡es shall be issued with customary terms and conditions regarding registation righb, co-sale rights and rights of conversion into the common stock of Seller. 3. Taxes. Unless exempt therefrom, all duties and taxes which Seller is required by law to collect from Buyer are included in the price stated herein; any such items included in the prices or otherwise payable by Buyer shall be separately identified on Seller's invoice. Eacb Party shall otherwise be liable for any taxes assessed against them in conjunction with this Agreement. 4. Schedule: Testing Period: Term. Seller shall have one hundred twenty (120) days to begin installation of ten (10) dHybrid Systems ready for testing. Buyer's Advance Payment includes cost of equipment and installation of all ten ( l0) test vehicles. Buyer shall operate said vehicles for ninety (90) days as a testing period (the "Testing Period"). Upon completion of the Testing Period, provided Buyer's vehicles do not experience any insurmountable engine problems (see Section l3) and that the ratio of wellhead prices between diesel fuel and CNG is no greater tha¡l a 2-to- I ratio during the Testing Period and at all relevant times during this Agreement, Seller shall begin delivery of the dHybrid Systems to Buyer as follows: (i) Year one (commencing at the end of the Testing Period and concluding 365 days thereafter): 800 dHybrid Systems. The foregoing schedule shall be subject to fuel station availability. To the €xtent that a reasonable number of fuel stations are not available to adequately service the vehicles required to be delivered and purchased in accordance with the foregoing schedule, the Parties shall adjust the above schedule accordingly. To the extent that a reasonable number of fuel stations are available to adequately service the vehicles required to be delivered and purchased in accordance with the above schedule, such schedule shall be adhered to accordingly. 5. Installatio0. Buyer agrees to install the dHybrid System on its vehicles at its own cost. Buyer assumes all responsibility for installation and hereby releases Seller from any and all responsibility related to the installation of the dHybrid System. Buyer shall allow Seller to perform periodic inspections of the installation process to ensure all components are installed properly, are in working order, and to ensure the installation of the components meets the satisfaction of Seller. Until the terms of this Agreement shall be completed, Seller agrees to keep Buyer stocked with at least fifty (50) complete dHybrid Systems at all times to ensure quick and efficient installation of the dHybrid System. In order for Seller to meet the shipping and installation deadlines set forth in this Agreemen! at all relevant times, Buyer agrees to provide Seller with at least two (2) vehicles of each make and model of its fleet to be outfitted with the dHybrid System by Seller (one (l) such vehicle is intended to be used for fabrication specifications of the dHybrid System and the other is intended to be used for the fine tuning of the dHybrid softwa¡e and components for that specific model). 6. Payments: Option to Purchase: CumminsJoint VeIture. (a) Pa)¡ment of Balance of Purchase Prige. Upon delivery of the dHybrid Systems to Buyer, Seller shall transmit an invoice to Buyer. Buyer shall be required to pay the full amount of the invoice.for each dHybrid System within sixty (ó0) days of receipt of such dHybrid System by Buyer. Notwithstanding the foregoing, payment for the first one hundred (100) dHybrid Systems delivereá to Buyer (including the initial ten (10) to be installed for the Testing Period) shall be deemed paid for by the -2-
  12. 12. Advance Payment (the "Advance Pavment Credit"). Buyer's tender of payment by check is sufücient, provided such check is honored, upon presentment by the "Payor Bank." (b) Additional Sales and Purchases. Subject to the terms and conditions set forth in this Agreement Seller agrees to sell to Buyer and Buyer shall have the right to purchase, at Buyer's option (the "Option') to be exercised within six (6) years of the Effective Date of this Agreement (the "Option Exercise Period") , up to an additional Eleven Thousand Seven Hundred (l1,700) dHybrid Systems for installation on the Vehicles, in accordance with the following schedule: (Ð during the period between the Effective Date and tl¡e first anniversary of the Effective Date: up to One Thousand Seven Hundred (1,700) dHybrid Systems; (ii) during the period between the first and second anniversaries of the Effective Date: up to Five Thousand (5,000) dHybrid Systems plus any amount described in subsecrion (b[i) above not already purchased; and (iii) during the period between the second and sixth anniversaries of the Effective Date: up to Five Thousand (5,000) dHybrid Systems plus any amount described in subsections (b)(i) and (b)(ii) above not already purchased. The purchase price per Vehicle for such additional purchases shall be Twenty Thousand and No/100 Dolla¡s ($20,000.00) per Vehicle (the "Option Purchase Price"). The Option Purchase Price for any such purchase orders issued by Buyer shall be paid by Buyer as specified in Section 6(a) above. Upon the exercise of all or part of the Oplion, Seller shall be under a continuing obligation during the Option Exercise Period to transfer to Buyer the number of Preferred Shares of Seller, which shall be issued pro rata based on the ratio of the number of additional dHybrid Systems purchased, divided by Eleven Thousand Seven Hundred (11,700), and multiplied by thirty-six percent (36%) of the toral issued and outstanding preferred and common stock across all classes (the "Option dHybrid Shares"). The Option dHybrid Shares shall be in addition to the dHybrid Shares described in Section 2. Upon exercise of the Option and the issuance of additional shares by Seller at any time, in any class of stock, Seller shall automatically issue to Buyer the requisite number of Shares of Preferred Stock to ensure that Buyer maintains its combined overall equity stake in Seller, not to exceed fo4y-five percent (45%) of the toøl issued and outstanding shares. No additional consideration shall be required from Buyer in order to maintain its overall stake in Seller as a result of the exercise of the Option by Buyer. (c) Cummins Joint Venture. Upon Buyer obtaining the agreement of Cummins lnc. ("Cummins") to enter into a joint venture regarding the manufacturing of engines utilizing the dHybrid System in Buyer's vehicles, the terms of which must be mutually agreeable to Seller and Buyer, assuming the Option dHybrid Sha¡es have not yet been issued to Buyer, Seller shall imrnediately deliver eleven percent (ll%) of the total issued and outstanding prefened and common stock across all classes to Buyer. In such event, the number of Option dHybrid Shares then available for issuance to Buyer shall be reduced to twenty-five percent (25%) of the total issued and outstanding preferred and common stock across all classes upon Buyer's exercise of the Option, as set fofh in Section 6(b) above. If Buyer obtains the agreement of Cummins to enter into such a joint venture after the Option dHybrid Shares have already been issued, Seller shall not be required to issue any more of its shares to Buyer pursuant to this Section 6(c). 7. Term. This Agreement shall enter into force on the Effective Date hereof and shall remain in effect until Seller's obligations under Section 4 are complete and Buyer has made all payments required under Section 6. - 3-
  13. 13. 8. Good Failh Promotion by Buyer. Once Buyer has completed the Testing Period and is satisfied with the operation of the dHybrid System on its vehicles, Buyer shall make a good faith effon to promote the dHybrid System to other companies in the transportation, education and distribution industries. 9. Fueling Station Joint Venture. In order to ensure that Buyer's vehicles have ready access to CNG for its vehicles, Buyer and Seller agre€ to work together to create a network of CNG fueling stations across the counFy. Buyer and Seller shall use their best eflons to form joint venture agre€ments with truck-stop operators from one or many truck stops, whereby Buyer, Seller and the truck-stop operator shall each ¡ealize one-third (33.33o/o) of the profit from the sale of CNG at the frreling locations. Buyer, Seller, and Truck Stop operators shall split evenly the cost of outfitting each station with CNG. If Buyer chooses not to participate in such joint venture agreements, Buyer acknowledges hereby that Seller may enter into such agreements directly with truck-stop operators whereby each shall realize fifty percent (50%) of the profit from the sale of CNG at the fueling locations. Seller shall also provide, pay for, and install the dHybrid technology in all CNG compressors if needed. 10. Excusable Delays. Because the Technology is new and Seller is creating a new manufacturing and distribution network to build the dHybrid Systems, Seller shall not be deemed to be in default on account of delays in tle delivery of the dHybrid Systems to the extent it is beyond Seller's contol and not occasioned by Seller's fault or negligence, provided that promptly upon the occurrence of any event which may result in a delay, Seller shall give notice thereof to Buyer, which notice shall identiff such occurrence and speci! the period of delay which may be reasonably expected lo result therefrom, whereupon the term of this Agreement shall be extended accordingly. I I WananB. Seller warrants to Buyer and its successors and assigns that all goods and services provided hereunder shall be: (i) merchantable; (ii) new; (iii) free from defects in material and workmanship; (iv) with regard to goods designed by Seller, free from defects in design; (v) in compliance with all applicable specifications, drawings, and performance requirements; (vi) fit for the purpose intended; and (vii) free from liens and encumbrances on title. Delivery, inspection, test, acceptance or use of or payment for the goods fumished hereunder shall not affect Seller's obligation under this warranty, a¡d such warranties, and all other warranties, express or implied, shall survive delivery, inspection, test acceptance, paymenl, and use. Seller agrees to correct defects in, or replace any goods not conforming to the foregoing warranty promptly, for a period of six (6) years following sale of the dHybrid System by Seller to Buyer, regardless of when said system is installed on a vehicle. Seller acknowledges that the useñ¡l life of Buyer's vehicles is approximately three (3) years and therefore, Seller shall allow Buyer to remove the dHybrid System from the original vehicle it was installed on and reinstall it onto a second vehicle without voiding Seller's warranty. During the period of such ìilaranty applicability, Seller shall be liable for the costs of parts and labor to repair or replace the dHybrid System on Buyer's vehicle, but shall not be liable for any other repairs to the vehicle or for transportation of the vehicle to a repair facility. All warranty work performed by Buyer's employees shall be billed to Seller at exact wages of Buyer's installation technicians. Seller shall promptly reimburse Buyer for any exp€nses or damages incuned by Buyer regardless of the nature of such expenses or damages as a result of or relating to Seller's failure to oomply with (i) - (vii) above, including, but not limited to repair, replacement, rework, removal and reinstallation costs, shipping costs, production delays, payment withholds, field service costs, recall costs, and costs of filing and complying with legal and regulatory requirements. If services ortechnical data are to be provided by Seller hereunde¡ Seller wa¡rants to Buyer that such services and/or technical data have been performed or prepared in a professional and workmanlike manner and in compliance with Buyer's instructions or other requirements. 12. Intellectual hoperty. Seller warrants that the dHybrid System fumished hereunder shall be delivered free of any rightful claim of any third party for infringement of any United States patenÇ 4
  14. 14. copyright, trademark, trade secret or other intellectual property right. Seller shall, at its own expense, indemni$ and hold harmless Buyer against any suits, claims, actions, losses, damages, expense (including attorney's fees and costs) or liabilities that may result from any allegations that any intellectual property embodied in the dHybrid System constitutes an infringement, misappropriation or misuse of any United States patent, copyright, trademark, trade secret or other intellectual property right. In the event of any claim, nolice, suit or action alleging such infringement of any United States patent, copyrigh! trademark, tade særet or other intellectual property right, Seller shall at its expense procure for Buyer the right to continue using the dHybrid System, or modiS the dHybrid System to render it non-infringìng, or replace the dHybrid System with a substantially equivalent non-infringing system. If Seller is unable to remedy the infringement as provided in the previous sentence, Seller shall accept the return of the dHybrid Systems and reñ¡nd to Buyer the amounts paid by Buyer hereunder, less a reasonable charge for depreciation. l3 following: Termination. This Agreement may be terminated upon the occurrence of any the Insurmountable Engine Problems. If, after installation of the dHybrid Systems, Buyer's vehicles experience engine problems attributable to the use of the dHybrid System, Buyer shall provide written notice to Seller of the engine problems and allow seller a minimum of ninety (90) days to determine the source of the problem and engineer a method to prevent the problan from occurring in the future. If Seller is able to develop and provide a satisfactory method to prevent the engine problem, this Agreement shall continue unintemrpted. If, however, seller is unable to develop and provide a satisfaclory method of preventing tlre engine problem, the problem shall be deemed insurmountable and Buyer shall then have the option of terminating this Agreement by writtør notice to Seller. (b) Voided Warranty. Buyer shall make every effort to obtain written assurances from the original manufacturers of its various engines and vehicles, stating that said manufacturers shall continue to honor their factory warranties on Buyer's vehicles after the installation of the dHybrid System. Seller acknowledges that it may take a sigrificant period of time and testing for Buyer to obtain such assurances from its vehicle and engine manufacfurers. If, however, Buyer is unable to obtain such assurances, after a good faith effor! Buyer shall provide written notice to Seller that Buyer was unable to obtain the necessary assurances. Seller shall then have ninety (90) days to provide a satisfactory alternative warranty solution to Buyer. The alternative warranty solution may include, but is not limited to, Seller conmctìng with a third-party warranty provider or Seller agreeing to pay for warranty repairs itself. If, after ninety (90) days, selter is unable to present an alternative warranty solution that is satisfactory to Buyer, Buyer shall then have the option of terminating this Agreement by written notice to seller. (c) Acceptance and Payment. Buyer shall refuse delivery of the dHybrid systems when delivered pursuant to the schedule outlined in Seotion 4 above or shall fail to make payment to Seller pursuant to the terms of Section 6 above. cofirBletion of. P-.erformances. The completion of all material performances by the Parties to this Agreement. (a) (d) 5
  15. 15. (e) Expiration. The expiration of this Agreement by its own terms. 14. Indemnificæion. (a) By Seller. Seller covenants and ag¡ees at all times to protec! hold harmless and indemniff Buyer, its affiliated companies, and their respective directors, oflicers, employees, successors and assigns fro¡n and against any and all losses, costs and expens€s arising from a breach of this agreement by Seller, and from and against any and all claims for loss, damage or injury and ftom and against any suits, actions, or legal proceedings ofany kind brought against Buyer, or by such other parties by or on account ofany p€rson, persons, or entities, or on account ofany injuries received or sustained by any person, persons, or entities in any manner (howsoever arising, including without limitation, by reason of negligence, breach of warrant¡r, defect in design, material or workmanship or otherwise, and even though strict liability be claimed), directly or indireotly caused by, incident to, or growing out of a breach of this Agreement, defects in the desigr, manufacture, or materials used in the goods, negligence in the manufacture, or provision of the goods supplied, or performance of the services hereunder. If directed by Buyer, Seller shall take upon itself the defense and/or settlernent of all such claims and the defense ofany suit, suits or legal proceedings ofany kind brought to enforce such claim or claims, and to pay all judgmcnts entered in such suit, suits or legal proceedings, and all attomeys' fees and other expenses. Seller agrees that in any instance where such claims in any way affect Buyer's interest under this Agreement or otherrvise, Seller shall not consummate any settlement without Buyer's prior written consent. Seller's covenants of indemnity herein shall continue in full force and effect notwithstanding the termination or expiration of this Agreement. (b) B), Buyer. Buyer covenants and agrees at all times to protect, hold harmless and indemnifi Seller, its afliliated companies, and their respective directors, officers, employees, successors and assigns from and against any and all losses, costs and expenses arising from a breach of this agreement by Buyer, and from and against any and all claims for loss, damage or injury and from and against any suits, actions, or legal proceedings ofany kind brought against Seller, or by such other parties by or on account ofany person, persons, or entities, or on account ofany injuries received or sustained by any person, persons, or entities in any manner, directly or indirectly caused by, incident to, or growing out of a breach of this Agreement. If directed by Seller, Buyer shall take upon itself the defense and/or settlement of all such claims and the defense of any suit, suits or tegal proceedings of any kind brought to enforce such claim or claims, and to pay all judgments entered in such suiÇ suits or legal proceedings, and all attomeys' fees and other expenses. Buyer agrees that in any instance where such claims in any way affect Seller's interest under this Agreement or otherwise, Buyer shall not consummate any settlement without Seller's prior written consent. Buyer's covenants of indemnity herein shall continue in fr¡ll force and effect notwithstanding the termination or expiration of this Agreement. - 6-
  16. 16. 15. RepresentationsandWarranties. Seller's Rqpresentations and Warranties. Seller hereby represents and warrants to Buyer as follows: (Ð Organization and Oualification. Seller is an entity duly organized, validly existing and in good standing underthe laws of the jurisdiction of its organization with the requisite power and autlrority to enter into and to consummate the fansactions contemplaæd in this Agreement and otherwise to carry out its obligations hereunder and thereunder, This Agreement has been duly executed by Seller, and constitutes the valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms. (ii) No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Seller of the transactions contemplated hereby, shall not: (i) result in a violation of Seller's Certificate of Incorporation or Bylaws; (ii) conflict with, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenfure or instrument to which Seller is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and rules or regulations of any self-regulatory organizations to which either Seller or its securities are subject) applicable to Seller or by which any propenty or asset of Seller is bound or affected; or (iii) require any consent or authorization of Seller's stockholders. (iii) OWne¡shjp of tlre Shares. Seller is the sole oryner of the Shares, free and clear of any and all liens, claims and encumbrances of any kind. (iv) Brokers a¡d Finders. Seller has no knowledge of any person who shall be entitled to or make a claim for payment of any fïnder fee or other compensation as a result of the consummation of the transactions contemplatod by this Agreement. Seller's breach of any of the representations or warranties contained in this Section l5(a) shall constitute grounds for termination of this Agreement by Buyer. (b) Buyer Representations and warranties. Buyer hereby represents and wa¡rants to Seller as follows: (i) Organization and Oualification. Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated in this Agreement and otherwise to carry out its obligations hereunder and thereunder. This Agreement has been duly executed by Buyer, and constitutes the valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms. (iÐ No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Buyer of the transactions contemplated (a) -7-
  17. 17. hereby, shall not; (i) result in a violation of Buyer's Certificate of Incorporation or Bylaws; (ii) conflict with, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which Buyer is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and rules or regulations of any self-regulatory organizations to which either Buyer or its securities are subject) applicable to Buyer or by which any property or asset of Buyer is bound or affected; or (iii) reguire any consent or authorization of Buyer's stockholders. (iii) Broken and Finden. Buyer has no knowledge of any person who shall be entitled to or make a claim for payment of any finder fee or other compensation as a result of the consumrnation of the transactions contemplated by this Agreement. Buyer's breach of any of the representations or warranties contained in this Section l5(b) shall constitute grounds for termination of this Agreement by Seller. 16. RestrictiveCovenants. (a) Non-circumyention. Buyer shall not at any time during the term of this Agreement, and for a period of two (2) years thereafter, in any fashion, form, or manner, either directly or indirectly, circumvent or attempt to circumvent, avoid, by-pass, or obviate this Agreement by seeking alternative suppliers or installers of the Technology. The Parties hereby stipulate that, a.s between them, the foregoing matt€rs are importan! material, and gravely affect the effective and successñ¡l conduot of the business of Sellel and its good shall, and that any breach of the terms of this section is a material breach of this Agreement. (b) confidentiali¡L and Non-Disclosure. "confidential Informatim" andlor "Proprietary Information" ("Proprietary Information') shall, for the purpose of this Agreement, mean: (i) information, knowledge or data disclosed by Seller to Buyer, including the Technology, regardless of whether disclosed in written, tangible, oral, visual or other form, which is related to the subject of this Agreement; (ii) information, knowledge or data which was obtained from facility visits; and (iii) information, knowledge or data not specitically related to the subject of tbis Agreement but which is in written or other tangible form bearing a suitable legend identi$ing its proprietary or confidential nature or is otherwise identified as confidential or proprietary. In the event Seller ñ¡mishes sample products, equipment, documentation, or other objects or material, to Buyer, the items so received and any information contained therein shall be feated as Proprietary Information disclosed to Buyer under this Agreement. Furthermore, any and all infonnation obtained or derived from said items, including results from testing, shall be treated as if they were Proprietary Information disclosed pursuant to this Agreement. All Proprietary Information disclosed in any documentary or tangible form, whether in written or elecfonic form may be marked "Proprietary" or "Confidential" and if the Information is not so identified, it shall be considered Proprietary if by its very nature or the circumstances under which it is disclosed one would reasonably consider it to be - 8-
  18. 18. Proprietary. Buyer shall use Seller's hoprietary Information solely for the purposes of suppoling the current business relationship with Seller and not for any other purpose. Buyer shall not disclose Seller's Proprietary Information to any third party without Seller's express written consent. Buyer may disclose Seller's Proprietary Information to employees, contact workers, manufacturen, consuhants and agents of Buyer who have a need to know and who have executed agÍeements with Buyer obligating them to treat such information in a manner consistent with the terms of this Agreement. Buyer shall not at any time during the term of this Agrcement, and for a period of two (2) years thereafter, in any fashion, form, or manner, either directly or indirectly, divulge, disclose, or communiçate to any person, firm, or corporation in any manner whatsoever any Proprietary Information. Buyer further agrees that during such period it shall not tamper with, revers¡e engineer or otherwise materially alter the Technology unless permitted in writing by Seller. The Pafies hereby stipulate that, as between them, the foregoing matters are important, material, and confidential, and gravely affect the effective and successful conduct of the business of Seller, and its goodwill, and that any breach of the terms of this section is a material breach of this Agreement. Notwithstanding the foregoing provisions, this Agreement shall not restrict or affect Buyer's rights to use or disclose information: (l) which is or may hereafter be in the public domain through no fault of Buyer; or (2) which Buyer can show, as reflected by its written documents, that it was known to it prior to the disclosure by Seller; or (3) which is disclosed to Buyer by a third party, without reshictjons similar to those herein imposed, subsequent to disclosure by Seller; or (4) which Buyer can show, as reflected by its documents, was independently developed by Buyer without the use of the Proprietary Information. (c) Non-Competition. Buyer expressly agrees that during the term of this Agreement, and for a period of two (2) years thereafter, Buyer shall not be interested, directly or indirectly, in any form, fashion, or manner, as partner, officer, director, slockholder, advisor, employee, contractor, or in any other form or capacity, in any other business or any allied trade engaged in sale of hybrid fuel, hybrid fuel technoloff, and/or hybrid ñrel parts and manufacturing in any city or metropolitan area within the United States where Seller is conducting business operations át the time of the signing of this Agreement, or in any city or metropolitan area within the United States where Seller is conducting business operations at the date of termination of this Agreement, except that nothing herein contained shall be deemed to prevent or limit the right of Buyer to invest any of Buyer's surplus funds in the capital stock or other securities of any corporation whose stock or securities are publicly owned or are regularly fiaded on any public exchange. It is tl¡e intention of the Parties hereto that this Agreement be enforced to the fullest extent permitted by applicable law and, therefore, in the event that any provision of this Agreement or the application thereofis held to be unenforceable in anyjurisdiction because ofthe duration or scope thereoi the Parties hereto agree that the court or panel or arbitrators making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that this Agreement in its reduced form shall be valid and enforceable to the ñ¡ll extent permitted by law, but no such reduction shall affect the enforceability of the express terms hereofin any otherjurisdiction. The foregoing Section l6(c) shall -9-
  19. 19. not apply to Buyer in the event that this Agreement is terminated through no fault of Buyer or through Seller's breach of any material term qf this Agreement. (d) Non-Solicitation and Non-Hire, Buyer hereby covenants and agrees that for a period of two (2) years following termination of this Agreement for any reason, it shall not: (a) hire any employee of Seller; (b) solicit, entice, persuade or induce any employee or business affrliate of Seller to terminate his or her employment or business relationship with Seller; (c) solicit the employment of any such individual or solicit the business ofany such business affiliate; (d) approach any such individual or business afliliate for any of the foregoing purposes; or (e) assist in taking such actions by any third party, in each case, without the prior written consent of Seller. (e) Acknowledgment. Buyer acknowledges that the resfictions on Buyer's activities under this Agreement are necessary for the reasonable protection of Seller and constitute a material inducement to Buyer's business relationship with Seller. Buyer further acknowledges, stipulates and agrees that a breach of any of such obligations and agreements shall result in irreparable harm and continuing damage to Seller for which there shall be no adequate remedy at law and fr¡rther agtees that in the event of any breach of said obligations and agreements, Seller and its successors and assigns shall be entitled to immediate injunctive relief and to such other relief as is proper under the circumstances. l7. License: Inventions. The Proprietary Informatiø shall remain the sole property of Seller. No license or other ownership right is granted to Buyer under any patents, copyrights, mask work rights, or other proprietary rights by the disclosure of any information or by the use of the Technology hereunder, nor is any warranty made as to such information. 18. Goyçrning Law. This Agreement shall be governed by and construed in accordance with the laws of the Søte of Nevada applicable to contracts made and to be performed in the State of Nevada. Each party to this Agreement irrevocably consents to the jurisdiction of the courts of Clark County, Nevada, to interpret or enforce any provision of this Agreement. 19. Counterpafs. This Agleement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each parly and delivered to the other parties hereto. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile tansmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. 20. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction. 21. Entire Agreement Amendments. This Agreement contains the entire undersknding of the Parties, their afTiliates and persons acting on their behalf, with respect to the matters cove¡ed herein and supersedes all prior and contemporaneor¡s agreements and understandings, oral or written, with respect to such matt€rs. There are no restictions, promises, warr¿nties or undertakings relating to such matters, other than those set forth or referred to herein and therein. No provision of this Agreement may be waived other than by an instrument in writing signed by the Parg to be charged with enforcement, and no provision of this Agreement may be amended other than by an instrument in writing signed by the Parties. - l0-
  20. 20. 22. Notices. Any notices required or permitted 1o be given underthe terms of this Agreement shall be in writing and sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile transmission, and shall be effective three (3) days after being placed in the mail, if mailed, or upon receipt or refi¡sal of receip! if delivered personally or by nationally recognized ovemight carrier or confirmed facsimile transmission, in each case addressed to a party as provided herein. The initial addresses for such communications shall be as follows, and each party shall provide notice to the other Parties of any change in such party's address: (i) If to Seller: dHYBRID,INC. l07l East 100 South, Suite D-l St. George, Utø,h84770 Facsimile: (435) 652-083 I Attention: Trevor Milton With a copy to: WALLIN}IARRISON, PLC 1425 South Higley Road, Suite 104 Gilbert, A¡izona85296 Telephone: (480) 24041 50 Facsimile: (480) 240-41 5 I Attention: Troy A. Wallin, Esq. (iÐ If to Buyer: SWIFT TRANSPORTATION CO., INC 2200 South 75th Avenue Phoenix, Arizona 85043 Facsimile:C_J Attention: rWith a copy to: Facsimile: (_-) Attention: 23. Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 24. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their succ€ssors and permitted assigns. Except as provided herein, neither Pa¡ty shall assign this Agreement or any rights or obligations hereunder without the written consent of the other Parg. 25. No Third-Party Beneficiarie.s- This Agreement is intended for the benefit of the Pa¡ties hereto and their respective successors and permited assigrrs and is not for the benefit of, nor may any provision hereof be enforced b¡ any other person or entþ. 26. Survival. The representations and wan'anties contained herein shall survive termination of this Agreement for six (ó) months. The covenants of the parties as set forth in this Agreement, shall survive the termination hereof. - tl-
  21. 21. 27. Fees and Expenses. Each of the Parties shall pay its fees and all other associated expenses incurred by such Parfy in connection with the negot¡ation, execution, delivery and performance of this Agreement. 28, Attomeys' Fees. If either Parg to this Agreement shall bring any action, sui! aounterclaim, appeal, arbitation, or mediation for any relief against the other, declaratory or otherwise, to enforce the terms hereof or to declare rights hereunder, the losing party shall pay the prevailing party's reasonable attorneys' fees and costs incurred in bringing and prosecuting such action and/orenforcing any judgment, order, ruling or award. 29. Forcg. Majeure. Neither Party shall be liable for its failure to perform any of its obligations hereunder during any period in which performance is delayed by fire, flood, war, embargo, riot or an unforeseeable intervention of any government authority that causes complete business intemrption ("Force Majeure"), provided that the Party suffering such delay immediately notifies the other Party of the delay. 30. Remedies Cum.ulative. Each Paffy's remedies shall be cumulative and remedies herein specified do not exclude any remedies allowed by law or equity. Waiver of any breach shall not constitute waiver of any otler breach of tle same of any other provision, Acceptance of any goods or services or payment thereof shall not waive any breach. 31. Further Assurances. Subject to the terms and conditions of this Agreemen! each of the Parties hereto shall use all reasonable efforts to take, or cause to be taken, all action, and to do, or caus€ to be done, all things necessary, reasonable, proper or advisable under applicable laws and regulations to consummate and make effætive the purposes and intent of this Agreement. IN WITNESS WHEREOF, the Parties have duly executed this Agreement effective as of the Effective Date. ..sELLER" .BITYER" dITYBRID,INC., a Nevada corporation By: Its: President î'z/- /o swIFT TRANSPORTATION CO., INC., an Arizona corporation Its: - 12-
  22. 22. EXHIBIT B
  23. 23. $32a(no.0o TIIIRD AMENDED A¡ID RESTATEI) UNSECURED PROII{ISSORY NOTE Phosoix, A¡izon¡ Jrunary 25,2012 AMENDMENT NO. 3 ùo the U¡securcd Promissory Not! dslÊd Dccembcr 12, 201 I (ùís "Scc¡nd Amødcd Noæ') betweon dHyMd' Inc. a Ncvad-¿ corporation' {te$p1 .r";f;r"r-), l*urø ¿ St Gcorgp, UT, and Sriß f.-rp"tt úl,n Co. of A liabitity eomPany (bersirsftcr ï-ondcr'), locatod aI 2200 .fhis Third Amendcd and Rcstatcd Unsecr¡red homissory Note shall ama¡d and rEPlace rbe unsrned Promissory Notc bchvecn the puties hercto dslcd octob€r 28' 201 I aDd 6Ê First G;drd anrt Rcsrtr¡,¿ Únsecr¡re¿ rruuissory Notc dsted Novqnber 22,2011, and tbc Sccoud Aildrd a¡d Resuted Unsecr¡¡sd Promissory Noto daæd Decei¡rbcr l2r20l liu tb€ sg8FÊgatc -ro*t of n* Hunùçd Foru Thousûnd Doilars ($204'000'00)' A,Thpcntirel4âidprincipalbal¡¡cepayabloberuundorsb¡llbcd¡æ and poyable on thc ca¡lter ïf ó feUruary 24, 2912: or (li) .lmncdiaþlv t¡pon rÊc€ipt Uy aonoú of*y Oitd i*y n-,ír¡g h thc form of oitbcr cquity or debt (the "lvl¿tr¡¡itY Datc"). Time is of tbe the balance shall bccomc able ducanygumducand thc Default: EvenE of Defaulr. The occr¡¡rencc-of any of tho following cvcnts or conditio¡s sball *k--nr" an "Event of Defarùf'uudq thisNoæ: (")AnyfailrrretopaytheprínoipalsfÛorutduoattheMatrxityDaÞ; (b) ArY ¡c'Preser¡t¿tion o or on be¡aif of Borrouter Û¡r sball be or misleadiog as of the time made or fuinished;
  24. 24. (c) The ñling fcdÊrÀ¡ U""¡-¡P-tcV l¿ws now or now ol bcrçEftcr in cdecq or thc rüePcct to Borrowcr. pn)c€dísg described in Subparagraph (c) icê by Bormww to such ¡roccrdings; or custodisn or cons€rv¡tor for all or any part of the assets ofBorrowu; thc pltcculion bY Bonourer of un for thc bcuefit of cre*litsrs; or the lu crËdilors, or any slass therçû[, for exlcnaioo or com¡rorition of itc dsbl,sl its Estorial debts as thoy mnûro; or if Borowe¡isgorrøallynotpoyinÈanyofitsfDsbialdcbtsasthøymatufe; (ÐTholiquirbrion'dc€Îh'inoompctency'tÊrüin¡lioDordissolutÍouof Bo¡mr¡¡er; G)Tbcabo¡doDmcntbyBorrowerofalloranyrnatcrialpartofits PoPGrtY ol sssots; or pohibiting whic,h ofdtr Far'lurc of t'codcr cqDstiù¡t€ a mivcr of th¡ riÊül to exercise lbo same thç event of contiurnncc of añy existingdsf¡ultaflpr bercot' díminish the liability of any person this Not6 shÂu bc bindÍ¡g upon Bonowor and its st¡cccssors md assips and sh¡u inure ø t¡" U"o"ftt oflsnder a¡d tbeir sucoea:¡orc and assigns' All noticcs required or pcrmitted in oonnætion with thi¡ Noæ shall be givco at the locstion of each party as designaied h iba first pamerapb of this Notc' bcreby acknowledge ond agrcc fhat - he/sJÎ is a duly autborized B;;;r, and Lc,ndcr and thar as sr¡ch hss fu¡ powcr and autbríty to this PromissorY Notc.
  25. 25. Thi¡ Notc sbåil bc goveraed by aod construcd æcordùU to tbc L¡ws of tbe Stats of Ariæn¡ Ed tbs Borrow UcrcUy n¡hniis to öe personsl and $¡bicç1 naftcr jurisdíotioo of tln Staæ ofA¡izons, IN WITNES S 'WHEREOF, theæ pncsents are €r(ÊûúÊd a3 of thc da¡o first wriusn abovc. BORRO}YER dEybrid, Iuc', a Nevada corPoratiou By &) Its I.EÑI}DR Stün Co. of Arko¡¡r IJ,C, aDelaware limiþd lisbílity coqPs¡ry By Itg
  26. 26. EXHIBIT C
  27. 27. rRA'VSPORTATION CO. OF ARIZONA, LLC VIA FEDERAL EXPRESS AND EMAILJune 13,2012 dHybrid,lnc. Attn. Trevor Milton 912 West 1600 South Suitc Bl04 St. George, UT 84770 Dear Mr. Milton: James Fry General Counsel Reference is made to that certain Third Amended and Restated Unseoured Promissory Note, aat"A ¡a"uuty 25,2}l2in t}e origin 00 (the "Prcrmissory Note")' As set forth in the Promissory Note, nole was due and payable rid, Inc. under the t under subsection (a) aooordingly, an Event of occu¡red and is continuing. You have also made ons to Swift Transportation Co. of Arizona, LLC as defined in the Promissory Note' swift hereby demands the immediate repayment in full of the entire principal balance of $322,000.00 on the Promissory Note' If swifr does not reÇeive payment in full of the Promissory Note by noon on Friday, June22, 2012, itwill pursue all legal remedies available to it under law. o comply will remove any and all of its locations from the FEV,Inc' facility in that Swifr

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