EXHIBIT 10.1
SUPPLEMENTAL
AGREEMENT
THIS SUPPLEMENTAL AGREEMENT (this
“Agreement” or the “Supplemental
Agreement”) is dated October 6, 2009 (the “Effective
Date”) by and between Autocar, LLC, a Delaware limited
liability company (“Autocar”) and Balqon Corporation, a
California corporation (“Balqon”).
R E C I T A L S
WHEREAS, Autocar manufactures, assembles and
sells chassis for low-cab-over-engine heavy-duty vehicles (the
“Chassis”);
WHEREAS, Balqon designs, develops and
distributes heavy-duty electric and hybrid drive systems for
industrial and commercial applications;
WHEREAS, Balqon will install zero-emission
heavy-duty electric drive systems and batteries
(the “Drive System”) into the Chassis for
heavy-duty class 7 and class 8 electric trucks (the
“Trucks”);
WHEREAS, Autocar and Balqon will market and
promote the sale of the Trucks, which will then be ordered and
purchased by Balqon or end-users through an authorized Autocar
dealer (the “Dealer”); and
WHEREAS, certain aspects of the
relationship of the parties and the design, assembly, marketing and
sale of the Trucks are governed by that certain Converter Agreement
dated June 9, 2009 entered into by the parties (the
“Converter Agreement”); and
WHEREAS, the parties desire to supplement
certain aspects of the relationship contemplated by the Converter
Agreement by agreeing to the supplemental matters hereinafter set
forth.
NOW, THEREFORE, in consideration of
the Recitals set forth above, which are hereby incorporated into
this Agreement, the mutual covenants and agreements set forth
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
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PURCHASE AND
SALE OF THE TRUCKS
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Sales
Leads . Autocar and Balqon and their
respective sales outlets will develop and appropriately direct
sales leads among the companies and such sales
outlets. The parties will use their best efforts to
combine and coordinate sales facilities and to train each
others’ sales forces in the operation and sale or lease of
the other party’s products, thereby expanding both
parties’ sales networks.
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Funding . Autocar and Balqon will work
together in good faith and use commercially reasonable efforts to
identify and pursue all government tax incentives, public and
private grants and initiatives and other sources of funding
available for the research, development and sale of the
Trucks.
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Orders for
the Trucks . All orders for the Trucks (the
“Orders”) will be placed through a
Dealer. Autocar and Balqon will work together in good
faith to assist the Dealer with placing the Orders on behalf of
Balqon. All Orders will be subject to the Dealer’s
standard terms and conditions. The specifications for the Chassis
(including excluded items) will be as determined by both Autocar
and Balqon.
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Pricing of
the Chassis . Prices and destination charges
applicable to Balqon’s purchase of Chassis during the first
contract year shall be at prices negotiated by Autocar and
Balqon. For each contract year thereafter, the price may
be adjusted to reflect Autocar’s standard model year pricing,
provided that the price for Chassis may be increased or decreased
(i) to reflect increases in Autocar’s cost of materials as
indicated by Autocar’s standard Temporary Inflation
Adjustment (TIA), copies of which will be made available upon
request, or (ii) based upon changes (additions or deletions) to the
Chassis specification requested by Balqon.
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Installation
of the Drive System . Autocar will ship the Chassis to
Balqon for installation of the Drive Systems.
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1.5.1.
Receipt and Inspection of the Chassis . Upon
receipt of the Chassis, Balqon will inspect the Chassis for damage
or shortage and will take custody of and execute a proper
carrier’s receipt for the Chassis. Damage
sustained in transit will be repaired, at Autocar’s
discretion and authorization, either (a) by Balqon at
Balqon’s expense, (b) by Autocar’s on-site
technician(s) at Autocar’s cost, or (c) by the Dealer in
accordance with the Autocar Service Policies and Procedures then in
effect for the Dealer and Autocar (the “Dealer
P&P”). The parties will provide reasonable
assistance to each other in connection with claims against the
carrier to recover costs to repair and other damages.
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1.5.2.
Installation . Balqon will install the Drive
System in the Chassis upon receipt of the Chassis, in accordance
with any specific written instructions provided by Autocar for the
installation (the “Installation
Instructions”).
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Assumption
of Warranty Obligations .
If Balqon alters the Chassis in any way (a) not in accordance with
the Installation Instructions, or (b) not otherwise authorized in
writing by Autocar, including but not limited to cutting, welding,
stretching, disconnecting, shrinking or otherwise altering the
Chassis’ wheelbase, suspension, frame rails, driveline, axle
or electrical system, then Autocar’s warranty will no longer
cover any portion of the Chassis that has been so altered, and
Balqon assumes warranty coverage of any such portion of the Chassis
that has been so altered. Balqon will be responsible for
the cost of any repairs that may be required on the altered portion
of the Chassis or on any portion of the Chassis affected by the
alterations, which repairs would otherwise have been covered by
Autocar’s warranty, and will reimburse Autocar for any costs
incurred or warranty claims paid for such repairs.
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Certification and Pre-Delivery
Inspection . Completion by Autocar or the Dealer
of the Federal Motor Vehicle Safety Standards Certification of the
completed Truck (the “Certification”) or the final
inspection of the Truck upon completion of the installation of the
Drive System (the “Pre-Delivery Inspection”) will not
be construed as a waiver by Autocar, nor will it limit
Autocar’s right to assert any contractual, legal or equitable
remedy, or relieve Balqon of its warranty or other responsibilities
under this Agreement. Balqon will promptly perform any
adjustments, repairs or replacements necessary to remedy any
problems with the Drive Systems or their installation which are
discovered during the Certification or the Pre-Delivery
Inspection.
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Delivery of
the Truck . After completion of the
Certification, the Pre-Delivery Inspection and any necessary
repairs and re-inspection, Balqon will tender the Truck, along with
the information needed to prepare the documentation to transfer
title to the Truck to the end-user on the scheduled date (the
“Delivery”). Balqon will ensure that all
product information intended for the end-user is contained in the
Truck prior to the shipment.
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Sale of the
Trucks and Lease of the Drive System to End-Users
. Balqon will sell the
Trucks to the end-users and register and prepare the paperwork for
the Trucks as required by law and as appropriate for the
end-user. Autocar, Balqon and the Dealer will negotiate
a reasonable fee for the Dealer’s services with regard to the
sale of the Trucks.
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QUALITY,
SERVICE , WARRANTY AND SERVICE PARTS
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Quality . Autocar’s reputation may be
affected by the quality, performance, reliability and durability of
the Drive Systems and Balqon’s conduct in the
marketplace. If Autocar reasonably determines
that during the term of this Agreement the Drive Systems or
the Trucks in the field demonstrate such poor quality, performance,
reliability or durability that Autocar’s reputation is or may
be harmed, then Autocar shall provide Balqon with written notice of
the quality, performance, reliability and/or durability issue and
shall cooperate and provide reasonable assistance to Balqon in
connection with Balqon’s efforts to take corrective action to
resolve the issue and Autocar may suspend delivery of additional
Chassis to Balqon during such period. In the event such
breach, failure or condition continues unremedied for 60 days after
notice to Balqon describing such breach, failure or condition in
reasonable detail, Autocar may terminate this Agreement and the
Converter Agreement; provided , however , that if
such breach, failure or condition is not capable of being cured
within said 60-day period, than Balqon shall have such
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