Exhibit 10.87

 

MARKETING AGREEMENT
BETWEEN
WESTPORT AND CLEAN ENERGY

 

This Agreement (“Agreement”) is a non-transferable Marketing Agreement effective
as of June 28, 2013 (“Effective Date”) by and among Clean Energy, a California
corporation located at 4675 MacArthur Court, Suite 800, Newport Beach,
California 92660 (“CE”), Westport Power Inc., a British Columbia company located
at Suite 101, 1750 West 75th Avenue, Vancouver, British Columbia, Canada V6P 6G2
(“Westport Power”), and Westport Fuel Systems Inc., a Delaware company located
at Suite 101, 1750 West 75th Avenue, Vancouver, British Columbia, Canada V6P 6G2
(“Westport Fuel” and, together with Westport Power, “Westport”).  CE, Westport
Power and Westport Fuel are sometimes referred to in this Agreement individually
as a “Party” or jointly as “Parties”.

 

Whereas, Westport is a leading global supplier of proprietary solutions that
allow engines to operate on clean-burning fuels such as compressed natural gas
(“CNG”);

 

Whereas, CE is the largest provider of natural gas fuel for transportation in
North America and a global leader in the expanding natural gas vehicle fueling
market. CE has operations in CNG and liquefied natural gas vehicle fueling and
construction and operation of natural gas fueling stations;

 

Whereas, on or before the Effective Date, CE and certain affiliates of Westport
consummated a Stock Purchase Agreement (“Stock Purchase Agreement”) wherein an
affiliate of Westport acquired from CE all of the stock of BAF
Technologies, Inc. (“BAF”), a Kentucky corporation that provides natural gas
vehicle systems and conversions for light and medium duty vehicles (collectively
“BAF Products”);

 

Whereas, CE and Westport desire to cooperate to encourage sales of all BAF
Products offered as of the Effective Date and any new natural gas vehicle
systems and conversions for light and medium duty vehicles offered by Westport
during the Term (collectively, the “Products”).  The Parties also desire to
collaborate with respect to, among other things, developing strategies for
natural gas and natural gas vehicle sales, exchange of market intelligence,
coordinated promotional activity at CE stations and co-marketing of Westport and
CE brands; and

 

Whereas, entry into this Agreement was a substantial consideration for CE and
the affiliates of Westport entering the above-referenced Stock Purchase
Agreement.

 

Now therefore, in consideration of the mutual promises, covenants, and
agreements herein contained, the sufficiency of which is hereby agreed to by the
Parties, the Parties hereto agree as follows:

 

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ARTICLE 1
TERM OF AGREEMENT

 

1.1                               The term (“Term”) of this Agreement shall
commence on the Effective Date and end on the two (2) year anniversary of the
Effective Date, unless earlier terminated according to the provisions of
Article 2.

 

ARTICLE 2
TERMINATION

 

2.1                               Either Party shall have the right to terminate
this Agreement upon a material breach of this Agreement by the other Party;
provided, that such terminating Party shall have provided thirty (30) days’
written notice of such intent to terminate and the other Party shall have thirty
(30) days from the receipt of such notice to cure the alleged breach and to
notify the non-breaching Party in writing that cure has been effected.  If the
breach is not cured within the thirty (30) day period, the non-breaching Party
shall have the right to terminate this Agreement without further notice,
provided, however, that where it is not commercially reasonable to fully effect
a cure of such breach within the thirty (30) day period set forth above, the
Party in breach shall not be deemed to be in default of this Agreement and
subject to termination for cause where it commences implementation of the cure
within such thirty (30) day period and thereafter proceeds diligently to cure
the breach.

 

2.2                               Upon expiration or termination of this
Agreement, each Party shall return all materials received from the other Party
in connection with this Agreement, except for non-confidential literature or
other publicly available materials.

 

ARTICLE 3
UNDERTAKINGS OF CE AND WESTPORT

 

3.1                               CE shall use commercially reasonable efforts
to promote sales of the Products.  Such efforts shall include, but not be
limited to, the following activities:

 

(a)                                 coordinating meetings or sales calls between
CE, Westport and customers;

 

(b)                                 exchanging market intelligence;

 

(c)                                  where appropriate, coordinating promotional
activities for the Products at CE owned and operated CNG fueling stations
(collectively, “CE Fueling Stations”), including featuring the Products at CE
Fueling Station openings and other customer events;

 

(d)                                 where appropriate, facilitating the
co-branding of the Westport and CE brands;

 

(e)                                  attending trade shows and sharing
promotional booths;

 

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(f)                                   educating customers about CE Fueling
Station locations through press releases, customer case studies, speaking
engagements, webinars, and other similar activities;

 

(g)                                  where appropriate, providing advertising
space for the Products at current and future CE Fueling Stations;

 

(h)                                 where appropriate, engaging in
joint-advertising in any medium;

 

(i)                                     encouraging field sales personnel to
demonstrate the Products;

 

(j)                                    where appropriate, permitting Westport to
advertise at conferences, tradeshows, associations or similar gatherings
sponsored by CE;

 

(k)                                 assisting Westport in maintaining and
developing existing customers of BAF as of the Effective Date, including, but
not limited to, AT&T Services, Inc.; and

 

(l)                                     continuing government lobbying efforts
in support of the natural gas vehicle industry and periodically providing
Westport with (i) copies of regularly prepared reports or other communications
and (ii) updates on material developments in respect of such lobbying efforts
and related activities.

 

In addition to the foregoing, CE will offer vehicle financing for the Products
to customers who meet CE’s credit standards, which shall be determined in CE’s
sole judgment.

 

3.2                               CE’s sales force shall promote BAF and
Westport as a preferred partner for light duty and medium duty vehicle
conversions and use commercially reasonable efforts to promote the Products.

 

3.3                               To the extent CE purchases vehicles that are
included within the Product offerings during the Term, CE shall purchase at
least fifty percent (50%) of such vehicles from Westport; provided, that
Westport sells the Product(s) to CE at a price that is equal to the lowest price
offered by Westport for such Product(s) to any other purchaser.

 

3.4                               CE shall issue credits to Westport for 750,000
GGEs (defined below) of CNG (“CNG Credits”), which may be used at any public
access CE Fueling Station in the United States through which CE retails CNG. 
Westport shall provide the CNG Credits to potential customers to incentivize
them to purchase the Products.  The CNG Credits (i) must be distributed by
Westport to customers on or before December 31, 2014, (ii) to the extent unused,
will expire on December 31, 2015, (iii) shall not be subject to minimum
denominations, and (iv) shall not be limited in method of distribution. A “GGE”
means a gasoline gallon equivalent equal to 5.66 pounds of CNG or such other
number or units of measure as may now or in the future be prescribed by the
federal government of the United States.

 

3.5                               For the avoidance of doubt, the Parties to
this Agreement expressly represent and understand that neither Party hereto is
authorized to independently sell, license or otherwise distribute any product or
service of the other Party, or use, reproduce or display

 

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the name, logo, product, and/or service of the other Party (jointly or
individually) without the express, prior written approval of the other Party,
such approval to be given or withheld in the absolute discretion of the
approving Party.

 

3.6                               Westport shall (i) provide CE with (a) current
promotional information and/or literature for the Products and (b) training
and/or other information necessary to properly describe the Products, and
(ii) promote CE as  a preferred CNG fuel provider.

 

3.7                               CE and Westport shall, during the Term of this
Agreement and subject to the terms and conditions of this Agreement:

 

(a)                                 develop an operating committee (the
“Operating Committee”), consisting of (i) two (2) designees of CE, including at
least (w) one (1) Executive Officer of CE and (x) one (1) Senior Marketing
Officer (as defined below) of CE and (ii) two (2) designees of Westport,
including at least (y) one (1) Executive Officer of Westport and (z) one
(1) Senior Marketing Officer of Westport.  The Operating Committee shall create
a sales and marketing strategy with defined roles, responsibilities and
obligations.  The Operating Committee shall conduct quarterly meetings to review
prior sales and marketing efforts/results and to prepare and plan for future
sales and marketing efforts; and

 

(b)                                 assign an executive liaison responsible for
the overall success of the joint marketing efforts.  The executive liaison,
along with at least two members of the Operating Committee from each entity,
shall comprise the steering committee (the “Steering Committee”), which shall
meet on a quarterly basis to review performance hereunder and discuss issues
relating to the relationship between the parties.

 

For purposes of this Agreement, “Senior Marketing Officer” shall mean any
individual holding the title of Vice President in charge of marketing or
fulfilling a similar or more senior marketing role within the designated
organization.

 

For purposes of this Agreement, “Executive Officer” shall mean any individual
holding the title of Vice President within the designated organization.

 

3.8                               CE will maintain a product line manager for
BAF Products to serve as a single point of contact for CE’s sales teams as well
as a primary interface to Westport.

 

3.9                               Neither CE, nor Westport shall:

 

(a)                                 represent itself as being empowered to enter
into contracts or incur any obligation or liability on behalf of the other
Party, or purport to do so; or

 

(b)                                 assign or otherwise transfer any rights or
obligations under this Agreement in whole or part without the other Party’s
written consent.

 

3.10                        Each Party is solely liable for its own costs of
performance of this Agreement and not entitled to reimbursement of costs by the
other Party.

 

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ARTICLE 4
INDEMNIFICATION

 

4.1                               CE hereby agrees to indemnify and hold
Westport and its officers, directors, employees and agents harmless from and
against any claims, judgments, demands, loss, costs or liabilities, including
reasonable attorneys’ fees, arising out of: (i) the infringement of any
trademark, service mark, copyright, trade secret or other intellectual property
right by CE; (ii) the breach of this Agreement by CE; and (iii) negligence or
willful misconduct by CE.

 

4.2                               Westport hereby agrees to indemnify and hold
CE and its officers, directors, employees and agents harmless from and against
any claims, judgments, demands, loss, costs or liabilities, including reasonable
attorneys’ fees, arising out of: (i) the infringement of any trademark, service
mark, copyright, trade secret or other intellectual property right by Westport;
(ii) the use or performance of or defects of any nature in the Products;
(iii) the breach of this Agreement by Westport; and (iv) negligence or willful
misconduct by Westport.

 

4.3                               Neither Party shall have any liability to the
other Party for special, consequential, or incidental damages, except however in
connection with a claim made against either party by a third party, provided
that such claim arises out of or results from a claim within the scope of the
indemnity obligation of CE or Westport, as applicable, under this Agreement.

 

ARTICLE 5
CONFIDENTIALITY

 

5.1                               The Parties shall abide by the terms of the
Mutual Non-Disclosure Agreement by and among Westport Power Inc., a British
Columbia company, Westport Fuel Systems Inc., a Delaware company and CE, dated
as of April 1, 2013, and attached hereto as Exhibit A.

 

ARTICLE 6
ENTIRE AGREEMENT

 

6.1                               Westport and CE agree that:

 

(a)                                 this Agreement and the Stock Purchase
Agreement constitute the entire agreement between CE and Westport and shall
supersede and override all prior discussions and agreements regarding the
subject matter hereof between the Parties, their employees and agents;

 

(b)                                 no modification or amendment to this
Agreement shall have any effect unless made in writing and signed by an
authorized officer of CE and an authorized officer of Westport;

 

(c)                                  any express waiver or failure to exercise
promptly any right under this Agreement will not create a continuing waiver or
any expectation of non-enforcement;

 

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(d)                                 if any term or provision of this Agreement
is found to be invalid under any applicable statute or rule of law, then that
provision notwithstanding, this Agreement shall remain in full force and effect
and such provision shall be deleted; and

 

(e)                                  the Parties are and shall be independent
contractors to one another and nothing herein shall be deemed to cause this
Agreement to create any agency, partnership or joint venture between the
Parties.  Nothing in this Agreement shall be interpreted or construed as
creating or establishing the relationship of employer and employee between the
Parties or any employee, contractor or agent of the Parties.  In addition, no
debts or obligations shall be incurred by either Party in the other Party’s name
or on its behalf, and neither Party shall be responsible for the debts and
obligations of the other Party.

 

6.2                               Miscellaneous Provisions.  All rights, powers
and privileges conferred hereunder shall be cumulative and in addition to or not
to the exclusion of those provided by law or equity.  Time is of the essence
with respect to the terms and conditions of this Agreement. Facsimile and other
electronic signatures shall be deemed original signatures and shall have the
same force and effect as originals.  This Agreement may be executed in multiple
counterparts, each of which shall constitute part of a single agreement.   If
any action at law or equity is commenced concerning this Agreement or to enforce
its terms, the prevailing Party in such matter shall be entitled to the payment
of reasonable attorneys’ fees and costs as determined by the Court, in addition
to any other relief which may be awarded to that Party.

 

6.3                               Notices.  Notices pertaining to this Agreement
shall be in writing and shall be transmitted either by personal delivery,
e-mail, facsimile, or by overnight delivery carrier and shall be deemed to be
delivered up receipt.  The addresses set forth below shall be the addresses used
for notice purposes, unless written notice of a change of address is given:

 

CE:

Clean Energy

 

4675 MacArthur Court

 

Suite 800

 

Newport Beach, California 92660

 

Attn: Andrew J. Littlefair, President and Chief Executive Officer

 

Fax: (949) 724-1361

 

With a copy to the same address, Attn.: J. Nathan Jensen, Vice President and
General Counsel

 

 

WESTPORT:

Westport Innovations Inc.

 

Suite 101, 1750 West 75th Avenue

 

Vancouver, BC Canada V6P 6G2

 

Attn: Corporate Counsel

 

Fax: (604) 718-2001

 

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6.4                               Governing Law.  This Agreement shall be
subject to and construed in accordance with the laws of the State of New York.

 

6.5                               Survival.  The provisions of Article 4,
Article 5 and Section 6.1 and Section 6.3 hereof shall survive the termination
or expiration of this Agreement.

 

[Signature Page(s) to Follow.]

 

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IN WITNESS WHEREOF, both Parties have caused this Agreement to be executed by
their duly authorized representatives who personally warrant their authority to
so act of this date first written above.

 

 

Westport Power Inc.

 

 

 

 

 

 

Signed:

/s/ David Demers

 

 

David Demers

 

 

Chief Executive Officer

 

 

 

 

 

 

 

Date: June 28, 2013

 

 

 

 

 

Westport Fuel Systems Inc.

 

 

 

 

 

 

 

Signed:

/s/ David Demers

 

 

David Demers

 

 

Chief Executive Officer

 

 

 

 

 

 

 

Date: June 28, 2013

 

 

 

 

 

Clean Energy

 

 

 

 

 

 

 

Signed:

/s/ Richard R. Wheeler

 

 

Richard R. Wheeler

 

 

Chief Financial Officer

 

 

 

 

 

 

 

Date: June 28, 2013

 

 

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EXHIBIT A

 

Mutual Non-Disclosure Agreement

 

(See Attached.)

 

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