Addendum_2.Exhibit_6_-_Warranty_Requirements.docx

*ADDENDUM #2*, EXHIBIT 6, WARRANTY REQUIREMENTS

1. Basic Provisions

1.1. Warranty Requirements

1.1.1. Contractor Warranty (M)

Warranties in this document are in addition to any statutory remedies or warranties imposed on the Contractor. Consistent with this requirement, the Contractor warrants and guarantees to the ordering agency, each complete bus and specific subsystems and components as follows. performance requirements based on design criteria shall not be deemed a warranty item.

Warranties in this contract are specifically agreed to and in addition to any remedies or warranties imposed on the Contractor by statute or otherwise by California law. It is understood that compliance within the warranty provisions, and the acceptance of the bus manufactured and assembled to these specifications does not waive any warranty either expressed or implied in Sections 2312 to 2315, inclusive, of the Commercial Code of the State of California, or any liability of the contractor as determined by any decision in a court of the State of California.

The Contractor will be responsible for all warranty-covered repair work on each complete bus, specific subsystems, components and spare parts. The Contractor shall insure in its procurement arrangements that the warranty requirements of this contract are enforceable through and against the Contractor's suppliers, vendors, and subcontractors. Any inconsistency or difference between the warranties extended to the ordering agency by the Contractor and those extended to the Contractor by its suppliers, vendors, and subcontractors shall be at the risk and expense of the Contractor. Such inconsistency or difference will not excuse the Contractor's full compliance with its obligations under the contract.

Upon request of the ordering agency, the Contractor promptly shall provide to the ordering agency complete copies of all written warranties or guarantees and documentation of any other arrangement relating to such warranties or guarantees extended by the Contractor's suppliers, sub suppliers, vendors, and subcontractors covering parts, components, and systems utilized in the bus.

The Contractor shall ensure that such suppliers, sub suppliers, vendors, and subcontractors satisfactorily perform warranty related work.

All warrantable repairs will include 100 percent of parts and labor costs. "Defects" defined herein are patent or latent malfunctions or failure in manufacture or design of any component or subsystem that causes the vehicle to cease operating or to operate in a degraded mode. "Related defects" defined herein are damages inflicted on any component or subsystem as a direct result of a defect.

Except where longer periods of warranty are specified by the Contractor, the Contractor warrants all buses furnished under this agreement, including all equipment and materials, and all labor performance, shall be in full accordance with the contract requirements, and shall be fit for their intended purpose, and shall be free in all material respects of all defects in the design, materials, and workmanship for the time periods and mileage set forth below. In addition, the Contractor expressly warrants each complete bus, individual part or system set forth herein. All warranties hereunder are deemed and acknowledged to explicitly extend to the future performance of the component or item warranted. The warranty shall apply regardless of whether the equipment, materials or labor were furnished or performed by the Contractor or by any of its subcontractors or suppliers of any tier.

1.1.2. Complete Bus (M)

The complete bus, propulsion system, components, major subsystems and body and chassis structure are warranted to be free from defects and related defects for two years or 100,000 miles, whichever comes first, beginning on the date of revenue service but not longer than 15 calendar days after final acceptance per Exhibit 9, New Bus Manufacturing Inspection Guidelines. The warranty is based on regular operation of the bus under the operating conditions prevailing in the ordering agency’s locale.

1.1.3. Body and Chassis Structure (M)

The body and body structure are warranted to be free from defects, related defects, and to maintain structural integrity for three years or 150,000 miles, whichever comes first. The body and body structure includes the components that are mechanically fastened or adhesively bonded or glued as part of the structure.

The chassis structure is warranted against corrosion failure and/or fatigue failure sufficient to cause a Class 1 failure for a period of 12 years or 500,000 miles, whichever comes first. The chassis structure includes all components that are welded together to form the main frame (skeleton) and body construction. Body structure is a three year warranty and the chassis structure is 12 years. These are the industry standard warranties.

1.1.4. Propulsion System (M)

Contractor warrants propulsion system components, specifically the traction motor, transmission, and drive and non-drive axles to be free from defects, fleet defects and related defects for six years or 300,000 miles whichever occurs first. An extended warranty to a maximum of 12 years or 500,000 miles, whichever comes first may be purchased at an additional cost.

1.1.5. Energy Storage System (ESS) (M)

The ESS, including the traction battery, battery containers, battery management system and any other ESS-related line replacement component, shall be warranted to be free from defects and related defects, and to operate without degradation of more than 20 percent of its original storage capacity for six years or 300,000 miles whichever comes first, beginning on the date of bus acceptance in accordance with Exhibit 9, New Bus Manufacturing Inspection Guidelines. All warranty replacements shall be with the latest technology at the time of replacement.

1.1.5.1 ESS Extended Warranty (NMS)

An optional extended warranty of 12 years or 500,000 miles, whichever comes first must, may be offered by the bus manufacturer.

1.1.6. Fuel Cell Stack (M)

The fuel cell stack shall be warranted to be free from defects and related defects and to operate without degradation of more than 20 percent of its original storage capacity for six years or 300,000 miles whichever comes first, beginning on the date of bus acceptance in accordance with Exhibit 9, New Bus Manufacturing Inspection Guidelines. All warranty replacements shall be with the latest technology at the time of replacement.

1.1.7. Major Subsystems (M)

Contractor warrants major subsystems, to be free from defects, fleet defects, and related defects as listed below.

Heating, Ventilating, and Air Conditioning system

1.1.8. Serial Numbers (M)

Upon delivery of each bus, the Contractor shall provide a complete electronic list of serialized units installed on each bus to facilitate warranty tracking. The list shall include, but is not limited to the following:

traction motor propulsion system controller/inverter A/C compressor and condenser/evaporator unit AC to DC Converter energy storage system modules drive axle power steering unit fuel cylinders (if applicable) air compressor wheelchair ramp (if applicable) The Contractor shall provide updated serial numbers resulting from warranty campaigns. The format of the list shall be approved by the ordering agency prior to delivery of the first production bus. * The ordering agency shall maintain their updated serial number records resulting from customer-performed warranty repairs after the bus is accepted.*

1.1.9. Extension of Warranty (M)

If, during the warranty period, repairs or modifications on any bus are made necessary by defective design, materials or workmanship but are not completed due to lack of material or inability to provide the proper repair for 30 calendar days, then the applicable warranty period shall be extended by the number of days equal to the delay period.

1.1.10. Voiding of Warranty (M)

The warranty shall not apply to the failure of any part or component of the bus that directly results from misuse, negligence, accident or repairs not conducted in accordance with the Contractor-provided maintenance manuals and with workmanship performed by adequately trained personnel in accordance with recognized standards of the industry. The warranty also shall be void if the ordering agency fails to conduct normal inspections and scheduled preventive maintenance procedures as recommended in the Contractor’s maintenance manuals and if that omission caused the part or component failure. The ordering agency shall maintain documentation, auditable by the Contractor, verifying service activities in conformance with the Contractor’s maintenance manuals. However, Contractor must reasonably demonstrate by adequate proof that the ordering agency did not make repairs in accordance with the Contractor’s then current maintenance manuals, which have been supplied to the ordering agency by Contractor, or the workmanship was not in accordance with recognized standards of the industry. If not so reasonably demonstrated, such a failure shall not be an ordering agency caused defect.

1.1.11. Exceptions and Additions to Warranty (M)

The warranty shall not apply to the following items:

scheduled maintenance items normal wear-out items items furnished by the ordering agency Should the ordering agency require the use of a specific product and has rejected the Contractor’s request for an alternate product, then the standard supplier warranty for that product shall be the only warranty provided to the ordering agency. This product will not be eligible under Section 1.2, Fleet Defects.

The Contractor shall not be required to provide warranty information for any warranty that is less than or equal to the warranty periods listed.

1.1.11.1. Pass-Through Warranty (M)

Should the Contractor elect to not administer warranty claims on certain components and wish to transfer this responsibility to the sub-suppliers, or to others, the Contractor shall request this waiver.

Contractor shall state in writing that the ordering agency’s warranty reimbursements will not be impacted. The Contractor also shall state in writing any exceptions and reimbursement including all costs incurred in transport of vehicles and/or components. At any time during the warranty period, the Contractor may request approval from the ordering agency to assign its warranty obligations to others, but only on a case-by-case basis approved in writing by the ordering agency. Otherwise, the Contractor shall be solely responsible for the administration of the warranty as specified. Warranty administration by others does not eliminate the warranty liability and responsibility of the Contractor.

1.1.11.2. Superior Warranty (M)

The Contractor shall pass on to the ordering agency any warranty offered by a component supplier that is superior to that required herein. The Contractor shall provide a list to the ordering agency noting the conditions and limitations of the Superior Warranty not later than the start of production. The Superior Warranty shall not be administered by the Contractor.

1.2. Fleet Defects

1.2.1. Occurrence and Remedy (M)

A fleet defect is defined as cumulative failures of the same components in the same or similar application where such items are covered by warranty. The definition of fleet defect shall apply as follows:

A fleet defect shall apply only to the base warranty period in Section 1.1.2, Complete Bus, Section 1.1.4, Propulsion System, and Section 1.1.7, Major Subsystems. When a fleet defect is declared, the remaining warranty on that item/component stops. The warranty period does not restart until the fleet defect is corrected.

For the purpose of fleet defects, each option order shall be treated as a separate bus fleet. In addition, should there be a change in a major component within either the base order or an option order, the buses containing the new major component shall become a separate bus fleet for the purposes of fleet defects.

The Contractor shall correct a fleet defect under the warranty provisions, Section 2, Repair Procedures. After correcting the defect, the ordering agency and the Contractor shall mutually agree to, and the Contractor shall promptly undertake and complete a work program reasonably designed to prevent the occurrence of the same defect in all other buses and spare parts purchased under this contract. Where the specific defect can be solely attributed to particular identifiable part(s), the work program shall include redesign and/or replacement of only the defectively designed and/or manufactured part(s). In all other cases, the work program shall include inspection and/or correction of all the buses in the fleet via a mutually agreed-to arrangement. The Contractor shall update, as necessary, technical support information (parts, service and operator’s manuals) due to changes resulting from warranty repairs. The ordering agency may immediately declare a defect in design resulting in a safety hazard to be a fleet defect. *A Safety Hazard as defined in the Code of Federal Regulations, Part 673, Public Transportation Agency Safety Plans.* The Contractor shall be responsible to furnish, install and replace all defective units.

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1.2.2. Notice of Fleet Defects (M)

The ordering agency shall promptly notify the Contractor whenever it determines that a fleet defect has occurred. The Contractor shall address and correct such fleet defect in accordance with these requirements.

1.2.3. Notice and Work Program (M)

Within seven calendar days after notice of a fleet defect, the Contractor shall submit to the ordering agency, a written work program and schedule for correcting the defect. The work program shall be reasonably designed to prevent the occurrence of the same defect in all other buses and parts purchased under the contract, and shall include, as applicable, redesign and/or replacement of defectively designed or manufactured parts, and inspection and repair of all buses purchased under the contract. The work program and schedule shall be subject to approval by the ordering agency. If the ordering agency determines the work program and schedule as submitted is unacceptable, the Contractor shall promptly submit a revised work program and schedule to address the ordering agency’s concerns with the initial submittal. The Contractor shall commence work under the work program according to the schedule agreed on by the parties.

1.2.4. Exceptions to Fleet Defect Provisions (M)

The fleet defect warranty provisions shall not apply to the ordering agency-supplied items such as radios, fare collection equipment, communication systems, and tires. In addition, fleet defects shall not apply to interior and exterior finishes, hoses, fittings, and fabric.

1.2.5. Applicability (M)

The Contractor shall make the repairs necessary to correct fleet defects on all the buses at its sole expense.

The fleet defect requirements apply during the warranty periods specified for Sections 1.1.2 Complete Bus, 1.1.4 Propulsion System, and 1.1.7 Major Subsystems in this exhibit.

1.3. Multiple Failure (M)

If a component provided fails to perform in accordance with technical specifications and functional descriptions contained or referenced in the awarded contract and is subject to warranty response three or more times during any 90 day period, the Contractor will, upon the ordering agency’s request, replace the component at no cost. The replacement component will be replaced/delivered no later than 15 working days after the ordering agency’s request is received by the Contractor. Replacement goods cannot be used, refurbished or recycled unless authorized by the ordering agency.

2. Repair Procedures

2.1. Repair Performance (M)

The Contractor is responsible for all warranty-covered repair work. To the extent practicable, the ordering agency will allow the Contractor or its designated representative to perform such work. At its discretion, the ordering agency may perform such work if it determines it needs to do so based on transit service or other requirements. Such work shall be reimbursed by the Contractor.

2.1.1. Scope of Warranty Repairs (M)

When warranty repairs are required, the ordering agency and the Contractor's representative shall attempt to agree within five working days after notification on the most appropriate course for the repairs and the exact scope of the repairs to be performed under the warranty. If no agreement is obtained within the five-day period, the ordering agency reserves the right to commence and undertake the repairs in accordance with the provisions of this exhibit.

2.1.2. Timing of Repairs (M)

The Contractor or its designated representative shall begin work on warranty-covered repairs to correct defects, fleet defects or related defects, within 10 working days after receiving notice of defect from ordering agency, unless the parties otherwise agree to an alternative schedule. Ordering agency shall make the bus available to complete repairs timely with the Contractor repair schedule.

2.1.3. Contractor Obligations (M)

The Contractor shall provide at its own expense all spare parts and tools, and labor, unless otherwise agreed upon by the ordering agency and Contractor, required to complete repairs and correct the defects, fleet defects or related defects covered under warranty. The Contractor shall provide a service technician on-site at the ordering agency to complete repairs and correct the defect, fleet defects or related defects. The ordering agency will make facilities available to the Contractor to complete the repairs. Notwithstanding the availability of the ordering agency’s facilities, the Contractor may, on occasion, be required to remove the bus from the ordering agency’s property while repairs are being affected. If the bus is removed from the ordering agency’s property, repair procedures must be diligently pursued by the Contractor.

2.2. Repairs by the Contractor (M)

If the ordering agency detects a defect within the warranty periods defined in this section, it shall, within 30 calendar days, notify the Contractor’s designated representative. The Contractor or its designated representative shall, if requested, begin work on warranty-covered repairs within five calendar days after receiving notification of a defect from the ordering agency. The ordering agency shall make the bus available to complete repairs timely with the Contractor’s repair schedule.

The Contractor shall provide at its own expense all spare parts, tools and labor required to complete repairs. At the ordering agency’s option, the Contractor may be required to remove the bus from the ordering agency’s property while repairs are being affected. If the bus is removed from the ordering agency’s property, then repair procedures must be diligently pursued by the Contractor’s representative.

2.3. Repairs by the Ordering Agency (M)

2.3.1. Parts Used (M)

If the ordering agency performs the warranty-covered repairs, then it shall correct or repair the defect and any Related defects utilizing parts supplied by the Contractor specifically for this repair. At its discretion, the ordering agency may use Contractor-specified parts available from its own stock if deemed in its best interests. Remanufactured parts *may be used if approved by the ordering agency*. The parts shall be shipped prepaid to the ordering agency from any source selected by the Contractor within 14 calendar days of receipt of the request for said parts and shall not be subject to an ordering agency handling charge.

2.3.2. Defective Component Return (M)

The Contractor may request that parts covered by the warranty be returned to the manufacturing plant. The freight costs for this action shall be paid by the Contractor. Materials should be returned in accordance with the procedures in Section 3, Warranty Processing Procedures.

2.3.3. Failure Analysis (M)

The Contractor shall, upon specific request of the ordering agency, provide a failure analysis of fleet defect or safety-related parts, or major components, removed from buses under the terms of the warranty that could affect fleet operation. Such reports shall be delivered within 45 calendar days of the receipt of failed parts.

2.3.4. Reimbursement of Labor and Other Related Costs (M)

The ordering agency shall be reimbursed by the Contractor for labor. The amount shall be determined by the ordering agency for a qualified mechanic at a straight time wage rate per hour, agreed to in writing upon bus acceptance and using the appropriate hours listed in the Contractor’s standard repair time manual. The cost of towing the bus, if such action was necessary and if the bus was in the normal service area, shall also be reimbursed during the complete bus warranty period. These wage and fringe benefit rates shall not exceed the rates in effect in the ordering agency’s service garage at the time the defect correction is made.

2.3.5. Reimbursement for Parts (M)

The ordering agency shall be reimbursed by the Contractor for defective parts and for parts that must be replaced to correct the Defect. The reimbursement shall be at the current price at the time of repair and shall include taxes where applicable, plus 15 percent handling costs. Handling costs shall not be paid if parts are supplied by the Contractor and shipped to the ordering agency.

2.3.6. Reimbursement Requirements (M)

The Contractor shall respond to the warranty claim with an accept/reject decision including necessary failure analysis no later than 30 calendar days after the ordering agency submits the claim and defective part(s), when requested. Reimbursement for all accepted claims shall occur no later than 30 calendar days from the date of acceptance of a valid claim. The ordering agency may dispute rejected claims or claims for which the Contractor did not reimburse the full amount. The parties agree to review disputed warranty claims during the following quarter to reach an equitable decision to permit the disputed claim to be resolved and closed. The parties also agree to review all claims at least once per quarter throughout the entire warranty period to ensure that open claims are being tracked and properly dispositioned.

2.4. Warranty After Replacement/Repairs

If any component, unit or subsystem is repaired, rebuilt or replaced by the Contractor or by the ordering agency with the concurrence of the Contractor, then the component, unit or subsystem shall have the unexpired warranty period of the original. Repairs shall not be warranted if Contractor-provided or authorized parts are not used for the repair, unless the Contractor has failed to respond within five working days, in accordance with Section 2.2, Repairs by the Contractor.

If an item is declared to be a fleet defect, then the warranty stops with the declaration of the fleet defect. Once the fleet defect is corrected, the item(s) shall have three months or remaining time and/or miles of the original warranty, whichever is greater. This remaining warranty period shall begin on the repair/replacement date for corrected items on each bus if the repairs are completed by the Contractor or on the date the Contractor provides all parts to the ordering agency.

3. Warranty Processing Procedures (M) The following list represents requirements by the Contractor to the ordering agency for processing warranty claims. One failure per bus per claim is allowed.

bus number and VIN total vehicle life mileage at time of repair date of failure/repair acceptance/in-service date Contractor part number and description component serial number description of failure all costs associated with each failure/repair (invoices may be required for third-party costs):

· towing

· road calls

· labor

· materials

· parts

· handling

· troubleshooting time

3.1. Forms (M)

The ordering agency’s forms will be accepted by the Contractor if all of the above information is included. Electronic submittal may be used if available between the Contractor and the ordering agency.

3.2. Return of Parts (M)

When returning defective parts to the Contractor, the ordering agency shall tag each part with the following:

bus number and VIN claim number part number serial number (if available)

3.3. Timeframe (M)

Each claim must be submitted no more than 30 calendar days from the date of failure and/or repair, whichever is later. All defective parts must be returned to the Contractor, when requested, no more than 45 calendar days from the date of repair.

3.4. Detection of Defects (M)

If the ordering agency detects a defect within a defined warranty period, it shall within 30 calendar days provide a notice of defect to the Contractor's representative. The Contractor shall provide contact information to receive notices of defect, during contract implementation.

Within five working days after receipt of a notice of defect, the Contractor's representative shall either agree that the defect is in fact covered by warranty, or promptly arrange to inspect the bus or component at the ordering agency’s property or at the Contractor's plant. At that time, the ordering agency and the Contractor shall attempt to resolve the status of warranty coverage on the bus or component. Work shall commence to correct the defect within 10 working days after receipt of notification, unless the parties otherwise agree to an alternative schedule, and shall be conducted in accordance with the provisions of this exhibit.

4. Reimbursements

4.1. Transportation (M)

The Contractor will reimburse the ordering agency for the actual cost of transporting a bus if such action was necessary and if the bus was in the normal service area. Should the Contractor request the ordering agency to transport vehicles to a vendor/subcontractor for repairs, the Contractor shall reimburse the ordering agency for all transportation expenses incurred by the ordering agency. The Contractor shall assume all liability for damage from the time the vehicle is released from the ordering agency’s property until it is returned to the ordering agency’s property.

4.2. Ordering Agency Repairs (M)

Contractor shall reimburse the ordering agency for any repairs commenced or undertaken by the ordering agency (or its service contractor) within 30 working days of receipt of a warranty claim or return of the returned part or component for review by the Contractor, as applicable. The ordering agency shall submit to the Contractor a warranty claim form for any repairs commenced or undertaken for reimbursement for the cost of repairs, including applicable and documented labor costs and the replacement of parts or components.