Exhibit 10.11
SPECIAL VEHICLE MANUFACTURER
CONVERTERS AGREEMENT
THIS AGREEMENT is executed by and
between General Motors Corporation, a Delaware corporation whose
business office is located in Detroit, Michigan (hereinafter
“GM)”, and Supreme Corporation, located at Goshen, IN
(hereinafter “Manufacturer”), effective
February 29, 2008.
WHEREAS, GM is engaged in the
business of assembling and marketing complete and incomplete motor
vehicles, including trucks, truck chassis and cars (hereinafter
“Vehicles”); and
WHEREAS, Manufacturer is engaged in
the business of manufacturing and marketing special bodies and
equipment installed on or in Vehicles (Vehicles modified, completed
or altered by Manufacturer are hereinafter “End
Products”); and
WHEREAS, GM and Manufacturer are
currently parties to a Special Vehicle Manufacturer Converters
Agreement, which will be terminated and superseded by this
Agreement.
WHEREAS, independent authorized GM
dealers (hereinafter “Dealers”) may acquire End
Products from Manufacturer; and
WHEREAS, GM and Manufacturer desire
that GM sell Vehicles to Manufacturer on a restricted basis to be
made into End Products by Manufacturer for resale to Dealers so as
to facilitate the business operations of GM, its Dealers, and
Manufacturer, including the accommodation of the parties’
production schedules to the extent feasible; and
WHEREAS, implementation of this
Agreement will require, among other things, the establishment and
maintenance of an arrangement between Manufacturer and a financial
institution to finance the purchase of and facilitate the payment
for the Vehicles from GM;
NOW, THEREFORE, in reliance on and
in consideration of the premises and the mutual promises contained
in this Agreement, the parties hereby agree as follows:
Article 1 : Term of
Agreement
1.1
The term of this agreement shall be
five (5) years from the effective date specified
above.
Article 2: Agreement to Sell
and Purchase Vehicles
2.1
GM agrees to sell to Manufacturer,
and Manufacturer agrees to purchase from GM, Vehicles subject to
all of the terms and conditions of this Agreement. GM has provided
Manufacturer with a copy of its current Special Vehicle
Manufacturer Policy and Procedures Manual (hereinafter
“Manual”), setting forth the policies and procedures
Manufacturer is required to follow in the processing of
Vehicles hereunder, including policies and procedures for ordering
Vehicles, and repair of transportation damage and defective parts.
GM reserves the right to change the
March 2008
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Manual in writing at any time. The
Manual is hereby incorporated by reference into this Agreement, and
all of the provisions now or hereafter contained in the Manual
shall be deemed to be part and parcel of this Agreement.
Manufacturer shall follow the policies and procedures set forth in
the Manual in the performance of its obligations hereunder. In case
there is a conflict between provisions of the Manual and the terms
and conditions of this Agreement, the terms and conditions of this
Agreement shall govern.
Article 3: Vehicle Orders;
Prices; Financing
3.1
Manufacturer shall submit orders to
GM for Vehicles electronically, or in such other manner as may be
specified by GM. There are numerous factors which affect the
availability of Vehicles. GM reserves to itself absolute discretion
in accepting orders and distributing Vehicles, and its judgment in
such matters shall be final. Manufacturer’s orders for
Vehicles are not binding on GM until accepted by GM, and may be
canceled by Manufacturer until that time. An order is accepted by
GM when the Vehicle is released to production. Manufacturer shall
be responsible for ordering Vehicles with emissions systems that
comply with the emissions laws in the states in which the End
Products will be sold.
3.2
Prices and other terms of sale
applicable to Vehicles are those set forth in GMPricing.com. Such
prices may be changed by GM at any time. Except as otherwise
provided by GM in writing, such changes will apply to Vehicles not
shipped at the time the changes are effective. Vehicles ordered
under this Agreement are not eligible for any price protection
allowance that otherwise may have been available on orders
submitted directly by a Dealer to GM.
3.3
Manufacturer shall establish and
maintain a financing arrangement between Manufacturer and a
financial institution for the purpose of financing the purchase of
and facilitating the payment for the Vehicles from GM. The
financial institution must be satisfactory to GM. Manufacturer
shall provide to GM a copy of the Agreement between Manufacturer
and its financial institution. Manufacturer shall notify GM in
advance of any proposed changes in its financing arrangement for
review and acceptance by GM. Manufacturer and its financial
institution shall furnish GM with a statement as to the maximum
number of Vehicles that will be financed by such financial
institution at any particular time. This maximum number of Vehicles
is referred to in this Agreement and the Manual as the
“Credit Limit.” Failure of Manufacturer to obtain or
retain a Vehicle inventory financing arrangement in an amount
satisfactory to GM and with a financial institution acceptable to
GM will result in termination of this Agreement.
3.4
Except for the purpose of financing
Manufacturer’s acquisition of Vehicles hereunder,
Manufacturer shall not grant, nor cause or permit to arise, any
security, lien, or other interest in any part of an End Product
(other than a special body or equipment installed thereon by
Manufacturer) without GM’s prior written approval.
Manufacturer shall promptly reimburse GM for any money paid by GM
to discharge any such adverse lien or interest, if it elects or is
required to do so.
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3.5
GM shall have the right, with or
without advance notice, to examine Vehicles and
Manufacturer’s records in respect thereof at any time during
regular business hours.
Article 4: Handling of
Vehicles
4.1
Upon receipt of Vehicles,
Manufacturer shall inspect each Vehicle for damage or shortage and
shall accept custody of, and execute an appropriate receipt for,
each Vehicle. Manufacturer agrees to resolve any damage or warranty
claims in accordance with the Manual.
4.2
Manufacturer shall keep and maintain
each Vehicle delivered to it in safe storage (including, as
appropriate, in a defined area enclosed by an adequate fence and
protected to the extent appropriate in that vicinity by security
personnel). Manufacturer shall not store any Vehicle at any
location not identified by address on Exhibit A.
Manufacturer’s obligation is to ensure that Vehicles do not
deteriorate from a like new condition in appearance or quality
during the period of Manufacturer’s control.
4.3
Manufacturer shall have corrected
all damage or shortages noted upon receipt. All repairs must be
performed by an authorized GM Dealer.
Article 5: Delivery; Title
and Risk of Loss; Insurance
5.1
GM will select the assembly and
shipping locations and the modes of transportation for delivery of
Vehicles to Manufacturer. Risk of loss shall pass to Manufacturer
upon delivery by GM to a carrier (F.O.B. GM’s assembly
plant), and actual and legal title shall similarly pass to
Manufacturer but with restrictions for mutual benefit as further
provided in this Agreement. Delivery shall be to
Manufacturer’s business premises identified on
Exhibit A, unless GM decides another location is appropriate.
Any claims for loss or damage to a Vehicle while in the possession
of a carrier must be noted on the delivery receipt and submitted to
GM.
5.2
Manufacturer’s purchase and
possession of Vehicles hereunder is a restrictive purchase and
possession for mutual benefit, and Manufacturer acknowledges that
this Agreement is intended to result in the distribution of quality
End Products only to GM’s Dealer network for the particular
Vehicle brand. Following an agreement by Manufacturer with a Dealer
for the Dealer’s purchase of an End Product, Manufacturer
shall notify GM in a manner specified by GM. Upon such notice, GM
will credit Manufacturer for the original cost of the Vehicle and
charge the Dealer for that Vehicle. Within two days after invoicing
the Dealer, GM will initiate delivery of the Manufacturer’s
Statement or Certificate of Origin (“MSO”) for each
Vehicle to Dealer. Manufacturer agrees not to perform any
modifications or alterations to the Vehicle until issuance of the
MSO. Manufacturer agrees that after ownership of each Vehicle has
been transferred to Dealer, Manufacturer’s possession of the
Vehicle is a bailment for purposes of upfitting and storage
only.
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5.3
Manufacturer shall, absent written
agreement to the contrary, be responsible for delivery of End
Products to Dealers with certification and labeling in accordance
with Section 8.1 of this Agreement, and for invoicing and
collecting for its work on or in Vehicles. Manufacturer
acknowledges that the date of GM’s charge to a Dealer for a
Vehicle has significance for purposes of pricing, promotions,
inventory charges, and other purposes, and to the extent possible,
Manufacturer shall modify, alter or complete the End Product and
ship the appropriate End Product promptly upon a Dealer’s
purchase of such End Product. Manufacturer agrees to promptly
negotiate a reasonable settlement in good faith with any Dealer
which incurs undue delay in delivery of an End Product.
5.4
Manufacturer hereby indemnifies and
holds GM harmless from and against any and all claim, cause of
action, loss, damage, or expense, including reasonable
attorneys’ fees and expenses incurred from any litigation,
arising from or relating to any claim for injury or property damage
in connection with the manufacturing or marketing of End Products
or with the use, operation or storage of any Vehicle while
Manufacturer has title, custody, possession, or risk of loss under
this Agreement.
5.5
Manufacturer shall obtain and
maintain, pursuant to the terms of this Agreement, at its sole
expense, the following types of insurance coverage, with minimum
limits as set forth below:
1.
Comprehensive General Liability
coverage, including products, completed operations and contractual
liability, at a limit acceptable to GM but not less than
$10,000,000 per occurrence for personal injury and property damage
combined.
2.
Comprehensive Automobile Liability
covering all owned, hired, and non-owned vehicles at a limit of not
less than $5,000,000 per occurrence for personal injury and
property damage combined, including all statutory coverages for all
states of operation.
3.
Workers Compensation in the
statutory limits for all states of operation.
4.
Employers Liability in limits of not
less than $1,000,000 for all states of operation.
5.
Garage Keepers Legal Liability on a
Direct Primary coverage basis including comprehensive and collision
coverage at a limit equal to at least the highest value of vehicles
in the Manufacturer’s care, custody and control at any one
time. Coverage should apply to all vehicles while in the care,
custody or control of Manufacturer for any cause of physical damage
on a primary basis without regard to negligence. (This coverage
should be maintained separate and distinct from coverage available
under the Manufacturer’s finance plan.)
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6.
Manufacturer shall provide annually
to GM a certificate of insurance and insurance policy evidencing GM
as an additional insured for all above-mentioned coverages except
Workers Compensation and Employers Liability for all activities
connected with this Agreement, and stating that the above-listed
insurance is primary to any coverage that may be available to GM.
Manufacturer shall provide at least thirty days’ prior
written notice to GM of cancellation, modification, expiration or
material change to any policy and, at that time, shall provide GM
with a certificate of insurance and insurance policy for the
modified, renewed or replacement policy. Such
certificate(s) shall be in a form acceptable to, and
underwritten by, insurance company (ies) satisfactory to GM. The
purchase of appropriate insurance coverage by Manufacturer or the
furnishing of certificate(s) of insurance shall not release
Manufacturer from its respective obligations or liabilities under
this Agreement. All coverage’s shall be maintained throughout
the duration of this Agreement with the exception of Comprehensive
General Liability coverage referenced in Section 5.5.1 above,
which shall be maintained for a period of ten years after
termination of this Agreement.
Article 6. End Product
Demonstrators; Show and Event End Products
6.1
In some cases, Manufacturer may seek
to loan an End Product to Dealer(s) for demonstration purposes
andlor to GM for static display at a show or event, without
reaching an agreement with Dealer for the purchase for the End
Product and without the Manufacturer reporting the End Product or
Vehicle to GM as “Sold”. GM, in its sole discretion,
may approve Manufacturer’s use of a limited number of such
End Products for demonstrator services (“End Product
Demo” or “Demo”) to support the
Manufacturer’s marketing of End Products to Dealers and at
shows and events. GM, in its sole discretion, will specify the
number of Demos that Manufacturer may have in use at any one time.
Manufacturer must enter the End Product Demo into the GM Demo
program service, in accordance with GM’s then standard
requirements, as may change from time to time for a specified
minimum days service (Demo Period). Additionally, if a Demo is
loaned to GM for static display at a show or event, any such loan
shall be in accordance with GM’s then standard requirements
for show and event Demos loaned to GM, as may change from time to
time, including by executing a Loan of Upfit Vehicle Terms and
Conditions.
6.2
GM will retain the MSO of Vehicles
incorporated into End Products enrolled in the Demo program,
pending its restricted sale to a Dealer at the end of the Demo
Period.. Manufacturer shall make every effort to
“pre-sell” the Demo to a GM Dealer before the end of
the Demo Period.
6.3
Except as expressly provided in this
Article 6 , all the terms and conditions of this Agreement,
including but not limited to title, risk of loss, labeling,
certification, indemnification and insurance, shall apply to End
Product Manufacturer shall be
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responsible for all costs related to
the Demo End Products, including tax, title, registration, fuel,
maintenance, mileage, wear Demos and tear, licensing fees, and
insurance for the End Product.
Article 7: Upfitting;
Standard of Workmanship
7.1
Manufacturer shall not alter any
Vehicle, install any body or equipment thereon, or remove any
Vehicle from its business premises where originally delivered prior
to:
a.
Approval by GM of its financial
institution for Demos or Show and Event End Products; or
b.
For all other Vehicles, sale of such
Vehicle(s) by Manufacturer to a Dealer as provided in this
Agreement and notice thereof to GM.
7.2
To the extent possible, Manufacturer
shall process Vehicles delivered under the terms of this Agreement
on a first-in, first-out basis.
7.3
Manufacturer shall use its best
skills and judgment and shall perform all work on its premises
(unless an alternate location to perform the work has been approved
by GM) in accordance with the highest professional standards of
workmanship, and it shall exercise due care to ensure that all work
it performs is free from defects in design, materials, and
workmanship. Manufacturer shall further employ or retain persons
with appropriate technical competence for the work being performed.
GM may provide technical information on Vehicles to assist
Manufacturer, but Manufacturer will control and bear full
responsibility for the design and manufacture of the End
Product.
7.4
Manufacturer acknowledges that the
reputation of GM and its products may be affected by the quality,
reliability, and durability of Manufacturer’s products and
its conduct in the marketplace. GM may provide Manufacturer with
process guidelines and other information for improving End Product
quality, reliability and durability, and provide to Manufacturer a
periodic assessment of its processes. Manufacturer is responsible
for selecting and implementing processes which meet customer
expectations for quality, reliability, and durability.
7.5
Manufacturer agrees to maintain a
viable Dealer and consumer relations activity, to offer a
competitive warranty on its work to Dealers and consumers equal in
duration and every other aspect to the applicable chassis model
year new Vehicle and powertrain warranties, and to maintain through
Dealers, and others at Manufacturer’s discretion, a system of
convenient Warranty corrections for consumers, and to make
available to Dealers service replacement parts with number
identification systems (this shall hereinafter be referred to as
“Parts Number Identification”) for Warranty and
non-Warranty service for a reasonable period of time after End
Products are sold to consumers.
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Article 8: Compliance with
Applicable Laws
8.1
Manufacturer shall comply with all
federal, state, and local laws, regulations, and standards in its
performance of its work. Manufacturer ac
