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Exhibit 10.38    
    

 
 

FIRST AMENDMENT TO AGREEMENT REGARDING
  ACQUISITION, CONVERSION AND SALE OF VEHICLES    
    

        This First Amendment to Agreement Regarding Acquisition, Conversion and Sale of Vehicles (the "Amendment") is made by and between Inland Kenworth, Inc., a
California corporation ("Inland"), Westport Innovations, Inc., an Alberta corporation, Westport Fuel Systems, Inc., a Delaware corporation ("WFSI" and collectively, "Westport"), and
Clean Energy Finance, LLC, a California limited liability company ("Clean Energy"). All of the foregoing will be collectively referred to herein as the "Parties." The "Effective Date" of this
Amendment is July 15, 2007, and it is entered into in Montebello, California. 

 
 

RECITALS    
    

	A.
	Any
and all capitalized terms or phrases in this Amendment shall have the same meaning as they are defined in the Agreement.

	B.
	The
Parties previously entered into a contract entitled Agreement Regarding Acquisition, Conversion and Sale of Vehicles dated July 21, 2006 (the "Agreement") which set forth
the terms and conditions upon which Inland would acquire and deliver to Westport up to 125 model year 2007 T800 diesel tractors (the "Vehicles") for conversion to Liquid Gas Technology ("LNG").

	C.
	Under
the terms of the Agreement, Clean Energy agreed to pay certain deposits towards an agreed upon Vehicle Purchase Price for each of the Vehicles and was required to purchase any of
the Vehicles which remained unsold by Inland after 180 days from delivery of those Vehicles to Inland for conversion by Westport to LNG operation.

	D.
	As
of the Effective Date of this Agreement, forty (40) of the Vehicles delivered to Inland have remained unsold for 180 days or more thereby obligating Clean Energy to
pay Inland the full remaining Vehicle Purchase Price for such Vehicles as that phrase is defined in the Agreement.

	E.
	The
Parties desire to modify the terms of the Agreement, in part, to provide for an extension of time before Clean Energy is required to satisfy its obligations to pay Inland the full
remaining Vehicle Purchase Price for each of the Vehicles which have been delivered to Inland but remain unsold for more than 180 days. 

 
 

AGREEMENT    
    

        In consideration of the foregoing Recitals, and of the covenants and conditions set forth below, the Parties agree as follows: 

        1.     Recitals.    The recitals set forth above are incorporated by this reference as a part of the Agreement between
the Parties. 

        2.     Modification to Paragraph 11 of the Agreement.    Paragraph 11 of the Agreement is hereby modified
to provide for the following: 

        a)    Clean
Energy hereby agrees to and shall pay Inland the sum of Sixty Thousand Dollars ($60,000.00 U.S.) as an additional deposit for each of the Vehicles which have been
delivered to Inland or which may be delivered to Inland in the future and which remain unsold for a period of one hundred eighty (180) days from the date of delivery of such Vehicles to Inland.
Currently, forty-eight (48) of such Vehicles exist. Concurrently with its delivery of an executed counterpart of this Amendment to Inland, Clean Energy shall pay Inland additional deposits
towards the Vehicle Purchase Price for each of the forty-eight (48) Vehicles currently remaining unsold for more than one hundred and eighty (180) days in the sum of Two Million, Eight
Hundred and Eighty Thousand Dollars ($2,880,000.00 U.S.); 

 

        b)    As
additional Vehicles are delivered to Inland and remain unsold for a period of one hundred eighty (180) days, Clean Energy shall pay Inland an additional deposit
for each such delivered Vehicle equal to Sixty Thousand Dollars ($60,000.00 U.S.) per vehicle within five (5) business days of Clean Energy's receipt of a request for such payment from Inland; 

        c)     Clean
Energy shall continue to make interest payments to Inland on the first day of each calendar month on any remaining portion of the Vehicle Purchase Price of the
Vehicles after application of the above-described additional deposits in accordance with paragraph 11(b) of the Agreement; and, 

        d)    To
the extent that any of the Vehicles still remain unsold at 365 days after their delivery to Inland and the full Vehicle Purchase Price for such vehicles has not
been previously paid to Inland, within five (5) business days of receipt of an invoice from Inland for the full remaining Vehicle Purchase Price, Clean Energy shall pay Inland that sum. In the
event that Clean Energy fails to pay Inland the full remaining balance of the Vehicle Purchase Price for each such vehicle remaining unsold after 365 days from their delivery to Inland and
fails to pay in response to the foregoing invoices, Inland shall be entitled to immediately apply any and all deposit funds it has received from Clean Energy to the Vehicle Purchase Price and to then
offer any remaining unsold vehicles for sale in the open market. In such case, all proceeds from the sale of the Vehicles at that time shall belong to Inland. Any excess amounts received by Inland
that exceed the Vehicle Purchase Amount shall be paid to Clean Energy within 5 business days of receipt by Inland. 

        3.     Incorporation of Remaining Terms.    Except as provided for above, all of the remaining terms and provisions of
the Agreement shall remain in full force and effect and apply equally to this Amendment. 

        4.     Counterparts and Facsimile Execution.    This Amendment may be executed in any number of counterparts, each of
which, when so executed and delivered, shall be deemed an original, and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of this
Amendment by facsimile shall be equally as effective as delivery of a manually executed counterpart. Any party hereto delivering an executed counterpart of this Amendment by facsimile shall also
deliver a manually executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of the counterpart executed and delivered by facsimile. 

 
 

SIGNATURES    
    

        IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the Effective Date first noted above. 

	WESTPORT INNOVATIONS, INC.	 	WESTPORT FUEL SYSTEMS, INC.
	

By:	

/s/  J. MICHAEL GALLAGHER      
	
 	

By:	

/s/  J. MICHAEL GALLAGHER      

	

Name:	

J. Michael Gallagher
	
 	

Name:	

J. Michael Gallagher

	

Title:	

President & COO
	
 	

Title:	

President & COO

	

 	

 	
 	

 	

 
	

By:	

/s/  G. WILLIAMS      
	
 	

By:	

/s/  G. WILLIAMS      

	

Name:	

G. Williams
	
 	

Name:	

G. Williams

	

Title:	

Senior Director
	
 	

Title:	

Senior Director

2

 

	
SIGNATURES CONTINUED
	

CLEAN ENERGY FINANCE, LLC	
 	

INLAND KENWORTH, INC.
	

Its Managing Member	
 	

 	

 
	

By:	

/s/  RICHARD WHEELER      
	
 	

By:	

/s/  LES ZIEGLER      

	

Name:	

Richard Wheeler
	
 	

Name:	

Les Ziegler

	

Title:	

CFO
	
 	

Title:	

CFO

3

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Exhibit 10.38

FIRST AMENDMENT TO AGREEMENT REGARDING ACQUISITION, CONVERSION AND SALE OF VEHICLES

RECITALS

AGREEMENT

SIGNATURESQuickLinks
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Exhibit 10.39    
    

 
 

DEPOSIT AGREEMENT NO. 1    
    

        This Deposit Agreement ("Agreement") is made as of November 30, 2007 (the "Effective Date") by and between WESTPORT FUEL
SYSTEMS INC., a Delaware corporation having an office at Suite 101 - 1750 West 75th Avenue, Vancouver, British
Columbia V6P 6G2 ("Westport"), and CLEAN ENERGY FINANCE, L.L.C., a California limited liability
company having an office at Suite 200 - 3020 Old Ranch Parkway, Seal Beach, California 90704 ("CEF"). 

        WHEREAS
Westport and CEF are parties to a certain Agreement Regarding Acquisition, Conversion and Sale of Vehicles dated July 21, 2006, as amended on July 15, 2007 (the
"Vehicle Agreement"); 

        AND
WHEREAS, pursuant to the Vehicle Agreement, Westport is to convert to liquefied natural gas, or LNG, operation the model year 2007 T800 diesel tractors listed on the Release
Authorization Form in Schedule "A", attached hereto and incorporated herein by this reference (the "Vehicles"), and Westport, CEF and Inland
Kenworth, Inc. ("Inland") are to use commercially reasonable efforts to sell the converted Vehicles to third party end user customers
("Customers"); 

        AND
WHEREAS Westport will separately invoice Customers for the LNG fuel systems (the "LNG Systems") installed in the Vehicles; 

        AND
WHEREAS the parties to the Vehicle Agreement desire that Westport establish and maintain an inventory of LNG Systems for subsequent installation in the Vehicles (the
"Inventory"); 

        AND
WHEREAS CEF wishes to provide Westport an advance deposit for the purpose of financing the establishment and maintenance of the Inventory and the subsequent upfit and sale of the
Vehicles (the "Stated Purpose") upon and subject to the terms and conditions of this Agreement; 

        NOW,
THEREFORE, in consideration of the covenants and agreements contained herein and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows: 

	1.
	DEPOSIT

	1.1.
	Advance of Deposit. Subject to the terms and conditions of this Agreement, CEF will advance to Westport, in the form of a
non-interest bearing, limited recourse (in accordance with the provisions of Section 1.4) loan, the sum of four million United States Dollars (USD $4,000,000) (the
"Deposit").

	1.2.
	Payment. CEF will pay Westport the Deposit within three (3) business days of the Effective Date by means of a wire transfer of
immediately available funds as follows: 

Silicon
Valley Bank

3003 Tasman Drive HF195

Santa Clara, California 95054

ABA Routing #: 121140399

Beneficiary Account #: 3300266291

Beneficiary Name: Westport Fuel Systems Inc. 

	1.3.
	Limitation of Use of Deposit Amount by Westport. Westport will use the Deposit solely for the Stated Purpose. 

1

 

	1.4.
	Repayment.

	(a)
	Subject
to paragraphs (c) and (d) below, upon the sale to a Customer of each LNG System incorporated into a Vehicle, Westport will repay to CEF that portion of the
Deposit specified as the "LNG System Deposit Price" in Schedule "B", attached hereto and incorporated herein by this reference, for the relevant sold Vehicle (the
"Repayment Amount").

	(b)
	Westport
will, within three (3) business days of receipt by Westport of immediately available funds from Customer for the sale of the LNG System, pay CEF the Repayment Amount
by bank draft, certified cheque or wire transfer of immediately available funds.

	(c)
	In
the event CEF receives the Repayment Amount with respect to the sale of an LNG System directly from Inland or another third party agreed to by the parties, on behalf of Westport,
such receipt from Inland will constitute repayment of the Repayment Amount by Westport with respect to such LNG System, and Westport will have no further repayment obligation under
paragraph (a) above with respect to such LNG System.

	(d)
	In
the event that any of the LNG Systems incorporated into the Vehicles remain unsold to Customers after twenty-four (24) months from the Effective Date, or such
other time period as is agreed to in writing by both CEF and Westport, Westport will have no further obligation to pay CEF the Repayment Amount with respect to such LNG Systems.

 

	2.
	REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY

	2.1.
	Representations and Warranties. Westport represents and warrants to CEF that it is the owner of the LNG Systems, with a good and
marketable title, free and clear of all liens, charges, encumbrances and any other rights of others, and has the right, power and lawful authority to sell or otherwise convey such LNG Systems to
Customers.

	2.2.
	Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE OR OBLIGATED TO THE OTHER
IN ANY MANNER WHATSOEVER FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF CAUSED BY GROSS NEGLIGENCE OR WILFUL MISCONDUCT AND EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

	3.
	DEFAULT

	3.1.
	Events of Default. The following events will be considered to be events of default (an "Event of
Default"):

	(a)
	Westport
fails to make any of the payments in the amounts and at the times specified in this Agreement;

	(b)
	any
representation or warranty made by Westport in this Agreement proves to be incorrect at any time in any material respect;

	(c)
	Westport
makes any assignment for the general benefit of creditors or is adjudged insolvent or bankrupt;

	(d)
	Westport
ceases or threatens to cease to carry on its business or makes or proposes to make any sale of the whole or substantial portion of its assets outside of the ordinary course
of its business; 

2

 

	(e)
	any
proposal is made or petition filed by Westport under any law having for its purpose the extension of time for payment, composition or compromise of the liabilities of Westport;

	(f)
	any
order is made by any court of competent jurisdiction for the dissolution, winding-up or liquidation of Westport; or

	(g)
	any
receiver, administrator, or manager of the property, assets or undertaking of Westport is appointed under any law or other debt instrument issued by Westport.

	3.2.
	Remedy on Default. On the happening of an Event of Default, CEF will have the right, without any further demand or notice whatsoever,
to payment of all amounts whatsoever then outstanding and owing or to become owing by Westport to CEF under this Agreement or to pursue any remedy available at law or in equity.

 

	4.
	TERM AND TERMINATION

	4.1.
	Term and Termination. This Agreement will come into force on the Effective Date and will terminate upon the earlier of full repayment
by Westport of the Deposit and the expiry of the period set out in Section 1.4(d).

 

	5.
	GENERAL PROVISIONS

	5.1.
	Interpretation. Wherever in this Agreement the context so requires, the singular number will include the plural number and vice versa
and any gender herein used will be deemed to include the feminine, masculine or neuter gender. The division of this Agreement into articles, sections and subsections, and the insertion of the recitals
and headings, are for convenience of reference only and will not affect the construction or interpretation of this Agreement. The terms "hereof", "hereto", "herein", "hereunder" and similar
expressions refer to this Agreement and not to any particular Article or other portion hereof and include any agreement supplemental hereto.

	5.2.
	Notices. All notices, consents or other communications, other than day to day communications, provided for under this Agreement will
be in writing and will be deemed to be sufficiently given if delivered by courier or by hand to a representative of such party, and the notice will be deemed to have been received on the date of
actual delivery thereof. Until notice of change of address has been given in the manner provided in this section, notices will be addressed to the addresses set forth above.

	5.3.
	Governing Law and Jurisdiction. This Agreement will be governed by the laws of the State of California, excluding its conflict of law
provisions. Each party irrevocably submits to the non-exclusive jurisdiction of the Courts of the State of California.

	5.4.
	Severability. It is the intention and agreement of the parties that if any provision of this Agreement is held to be illegal, invalid
or unenforceable, in whole or in part, under present or future laws, the parties will substitute for such provision another provision that is legal, valid and enforceable and that achieves the same or
similar objectives. If this is not possible, the parties agree that should any provision of this Agreement be held to be illegal, invalid or unenforceable, such provision will be ineffective to the
extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

	5.5.
	Entire Agreement; Amendments. This Agreement, together with the Vehicle Agreement, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, whether oral or written, with respect to the subject matter hereof. No provision of this
Agreement may be changed, 

3

 

modified
or amended without the express written agreement of the parties executed by their authorized representatives. 

	5.6.
	Waivers. No indulgence or forbearance by any party hereunder will be deemed to constitute a waiver of its rights to insist on
performance in full and in a timely manner of all covenants of the other party hereunder and any such waiver, in order to be binding upon a party, must be express and in writing and signed by such
party and then such waiver will be effective only in the specific instance and for the purpose for which it is given. No waiver of any term, condition or covenant by any party will be deemed to be a
waiver by such party of its rights to require full and timely compliance with the same term, condition or covenant thereafter, or with any other term, covenant or condition of this Agreement at any
time.

	5.7.
	Binding Agreement; Assignment. This Agreement is binding on the parties and their respective successors and permitted assigns. CEF may
assign this Agreement or its interest herein or any part thereof to any person or entity. CEF must notify Westport within fifteen (15) days of the assignment.

	5.8.
	Survival. The terms of this Agreement which, by their nature, extend beyond the term of this Agreement will survive any termination or
expiration of this Agreement, including, without limitation, Article 2.

	5.9.
	Execution. This Agreement may be executed in two or more original, facsimile or.pdf counterparts, each of which, when so executed,
will be deemed to be an original copy hereof, and all such counterparts together will constitute but one single agreement. 

4

 

        AGREED
to by the parties as of the Effective Date. 

	WESTPORT FUEL SYSTEMS INC.	 	CLEAN ENERGY FINANCE, L.L.C.
	

/s/  J. MICHAEL GALLAGHER      
 Signature	
 	

/s/  PETER J. GRACE      
 Signature
	

J. Michael Gallagher
 Name	
 	

Peter J. Grace
 Name
	

President and COO
 Title	
 	

Vice President
 Title
	

Nov. 30, 2007
 Date	
 	

Dec. 6, 2007
 Date
	

 WESTPORT FUEL SYSTEMS INC.	

 	

 
	

/s/  ELAINE WONG      
 Signature	

 	

 
	

Elaine Wong
 Name	
 	

 
	

CFO
 Title	
 	

 
	

Nov. 30, 2007
 Date	
 	

 

5

 
 
 

SCHEDULE "A"
  
    RELEASE AUTHORIZATION FORM    
    

6

 
 
 

SCHEDULE "B"
  
    LNG SYSTEM DEPOSIT PRICE    
    

	#
	 	Vehicle Number
	 	LNG System

Deposit Price

	1	 	1XKDD49XX7R197055	 	 	80,000.00
	2	 	1XKDD49X17R197056	 	 	80,000.00
	3	 	1XKDD49X37R197057	 	 	80,000.00
	4	 	1XKDD49X57R197058	 	 	80,000.00
	5	 	1XKDD49X77R197059	 	 	80,000.00
	6	 	1XKDD49X47R197035	 	 	80,000.00
	7	 	1XKDD49X67R197036	 	 	80,000.00
	8	 	1XKDD49X97R197037	 	 	80,000.00
	9	 	1XKDD49XX7R197038	 	 	80,000.00
	10	 	1XKDD49X17R197039	 	 	80,000.00
	11	 	1XKDD49X87R197040	 	 	80,000.00
	12	 	1XKDD49XX7R197041	 	 	80,000.00
	13	 	1XKDD49X17R197042	 	 	80,000.00
	14	 	1XKDD49X37R197043	 	 	80,000.00
	15	 	1XKDD49X57R197044	 	 	80,000.00
	16	 	1XKDD49X77R197045	 	 	80,000.00
	17	 	1XKDD49X97R197046	 	 	80,000.00
	18	 	1XKDD49X07R197047	 	 	80,000.00
	19	 	1XKDD49X27R197048	 	 	80,000.00
	20	 	1XKDD49X47R197049	 	 	80,000.00
	21	 	1XKDD49X07R197050	 	 	80,000.00
	22	 	1XKDD49X27R197051	 	 	80,000.00
	23	 	1XKDD49X47R197052	 	 	80,000.00
	24	 	1XKDD49X67R197053	 	 	80,000.00
	25	 	1XKDD49X87R197054	 	 	80,000.00
	26	 	1XKDD49X37R19760	 	 	80,000.00
	27	 	1XKDD49X57R197061	 	 	80,000.00
	28	 	1XKDD49X77R197062	 	 	80,000.00
	29	 	1XKDD49X97R197063	 	 	80,000.00
	30	 	1XKDD49X07R197064	 	 	80,000.00
	31	 	1XKDD49X27R197065	 	 	80,000.00
	32	 	1XKDD49X47R197066	 	 	80,000.00
	33	 	1XKDD49X67R197067	 	 	80,000.00
	34	 	1XKDD49X87R197068	 	 	80,000.00
	35	 	1XKDD49XX7R197069	 	 	80,000.00
	36	 	1XKDD49X67R197070	 	 	80,000.00
	37	 	1XKDD49X87R197071	 	 	80,000.00
	38	 	1XKDD49XX7R197072	 	 	80,000.00
	39	 	1XKDD49X17R197073	 	 	80,000.00
	40	 	1XKDD49X37R197074	 	 	80,000.00
	41	 	1XKDD49X57R197075	 	 	80,000.00
	42	 	1XKDD49X77R197076	 	 	80,000.00
	43	 	1XKDD49X97R197077	 	 	80,000.00
	44	 	1XKDD49X07R197078	 	 	80,000.00
	45	 	1XKDD49X27R197079	 	 	80,000.00
	46	 	1XKDD49X97R197080	 	 	80,000.00
	47	 	1XKDD49X07R197081	 	 	80,000.00
	48	 	1XKDD49X27R197082	 	 	80,000.00
	49	 	1XKDD49X47R197083	 	 	80,000.00
	50	 	1XKDD49X67R197084	 	 	80,000.00
	 	 	 	 	

	 	 	 	 	$	4,000,000.00
	 	 	 	 	

7

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Exhibit 10.39

DEPOSIT AGREEMENT NO. 1

SCHEDULE "A" RELEASE AUTHORIZATION FORM

SCHEDULE "B" LNG SYSTEM DEPOSIT PRICE

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