Exhibit 10.12
Execution Copy
Ford Motor Company
FORD AUTHORIZED
CONVERTER POOL
AGREEMENT
THIS AGREEMENT is made this first
day of May, 2008(the “Effective Date”) between Supreme
Corporation and subsidiaries with its principal place of business
at 2581 East Kercher Road, Goshen, IN 46528
(“Manufacturer”) and Ford Motor Company, a Delaware
corporation with its principal place of business at The American
Road, Dearborn, Michigan 48126 (“Ford”) (the
“Agreement”).
WHEREAS, Ford is engaged in the
business of manufacturing and marketing completed and incomplete
motor vehicles, including Ford trucks and Ford truck chassis
(“Vehicles”) and Ford sells such Vehicles to its
authorized Ford Lincoln and Mercury dealers (“Authorized Ford
Dealers”); and
WHEREAS, Manufacturer, as a final
stage manufacturer, is engaged in the business of manufacturing and
marketing modified completed vehicles and in the installation of
special bodies and equipment on or in incomplete Vehicles, which
installations include improvements, modifications, additions and
changes (collectively, the “Modifications”) (all of
which vehicles, as modified by Manufacturer, are referred to herein
as “End Products”); and
WHEREAS, certain Authorized Ford
Dealers desire to purchase the End Products and as such, purchase
the Vehicles from Ford and the Modifications from the Manufacturer;
and
WHEREAS, the price and terms and
conditions of purchase of the Modifications from the Manufacturer
are governed by agreement between the Manufacturer and the
Authorized Ford Dealer, and Ford has no liability, obligation or
responsibility with respect to the Modifications; and
WHEREAS, the parties to this
Agreement (the “Parties”) desire to provide for
Manufacturer to maintain Vehicles at Manufacturer’s location,
at no charge to Manufacturer, for no more than 90 days, so as to
facilitate the business operations of Ford, its Authorized Ford
Dealers and Manufacturer, and so as to accommodate the production
schedules of Ford and Manufacturer to the extent feasible, and Ford
is willing to deliver such Vehicles on bailment to Manufacturer and
Manufacturer is willing to accept delivery of these Vehicles from
Ford, subject to the terms of this Agreement; and
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WHEREAS, if there is no purchaser
for the End Product after 90 days from Commencement of Bailment (as
defined herein), Manufacturer shall pay Storage Charges (as defined
herein) to Ford as set forth herein; and
NOW, THEREFORE, in consideration of
the foregoing and the mutual promises hereinafter contained, the
Parties agree as follows:
1.
BAILMENT
Ford and Manufacturer agree that
this Agreement shall constitute a bailment of the Vehicles ordered
by Manufacturer from Ford (“Bailment”). Such Vehicles
shall be held by Manufacturer as bailee of the Vehicles in
accordance with the terms and conditions of this
Agreement.
2.
FINAL STAGE MANUFACTURER
Manufacturer, as a final stage
manufacturer, shall enter into a separate agreement with Authorized
Ford Dealer for the price and terms and conditions of the purchase
by Authorized Ford Dealer for the Modifications and Ford shall have
no liability, obligation or responsibility for such Modifications
or the terms and conditions thereof.
3.
FORD AUTHORIZED CONVERTER PROCEDURES
MANUAL
Ford shall provide Manufacturer with
a copy of its Ford Authorized Converter Procedures Manual (the
“Manual”), setting forth the policies and procedures to
be followed in the handling of Vehicles, including Vehicle orders,
inventory accounting for Vehicles, repair of transportation damage
and defective parts, special use chassis, and similar matters.
Manufacturer shall abide by the policies and procedures as are set
forth in the Manual. Ford reserves the right to change the Manual
at any time.
4.
ORDERS
Manufacturer shall submit orders for
Vehicles electronically or by other method specified by Ford in the
Manual. Ford shall have no obligation to accept any such order or
to deliver to Manufacturer on Bailment, any specific model or
number of Vehicles, but may deliver to Manufacturer such number and
type of Vehicles ordered by Manufacturer as Ford deems appropriate.
Manufacturer shall provide to Ford, at Ford’s request,
forecasts of Manufacturer’s requirements for
Vehicles.
5.
RECEIPT AND INSPECTION
PROCEDURES
Manufacturer shall examine Vehicles
upon delivery and, upon satisfaction that the number of Vehicles
received as shown on the documents is accurate, accept delivery and
sign the invoices, delivery receipts, damage reports and other
documents specified by Ford (“Acceptance of Delivery”).
Ford shall deliver the Vehicles to Manufacturer at the locations
listed in Exhibit A or at such other locations as may be
approved by Ford, in writing from time to time. Ford shall not be
responsible for any delay in delivering the Vehicles to
Manufacturer.
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6.
COMMENCEMENT OF BAILMENT
The Bailment begins upon
Manufacturer’s Acceptance of Delivery (“Commencement of
the Bailment”). Such acceptance constitutes acknowledgement
that the Vehicle was received in the condition, quantity and state
described.
7.
STORAGE
(a) Upon Commencement of the
Bailment, Manufacturer shall maintain Vehicles at
Manufacturer’s location, at no charge to Manufacturer, for no
more than 90 days. If there is no purchaser for the End Product
after 90 days from Commencement of the Bailment, storage charges
will begin to accrue on the Vehicle (“Storage Charge”).
Beginning on the ninety-first (91 st ) day
until such time that the Vehicle is re-billed to an Authorized Ford
Dealer, Manufacturer shall pay daily Storage Charges to Ford as set
forth below:
0 to 90 days: No Charge
91-360 days: Prime Rate plus 1
point
361-450 days: Prime Rate plus
5 points
451 + days: Prime Rate plus 10
points
Manufacturer’s Storage Charges
shall appear in Ford Motor Credit Company’s Dealer Finance
system on the first day of the month and shall be payable the same
day (the 1st). On a monthly basis, Ford will provide Manufacturer
with information regarding the Storage Charges for each
Vehicle.
i.
Manufacturer shall pay a daily
storage charge based on the Invoice Amount of each vehicle
beginning on the Storage Charge Start Date for such Vehicle, in an
amount equal to the Prime Rate pIus (1 point, 5 points or 10
points as set forth above) as the “Storage Charge”. The
term “Invoice Amount” shall mean that amount reflected
on the applicable Vehicle invoice that can be accessed by Ford and
Manufacturer via the Lason Vision system online at
www.fleet.ford.com. The term “Prime Rate” means the
interest rate for “Bank prime loans” under the column
entitled “Week Ending” for the Friday preceding the
last Monday of a calendar month as reported in the Federal Reserve
Statistical Release No. H.15 (519) issued by the Federal
Reserve Board. In the event such Release is discontinued or
modified to eliminate the reporting of a 30-day bank prime loans
rate, then Ford will substitute, in its sole discretion, a
comparable report or release of the bank prime loans rate published
by a comparable source.
ii. The Storage Charge will be calculated on the
basis of 360-day year. For purposes of computing the Storage Charge
on a Vehicle, the Storage Charge shall change on the first day of
each month following the Storage Charge Start Date following any
month in which there is a change in the Prime Rate. The Storage
Charge in effect on the first day of a month shall be deemed to be
in effect throughout such month.
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(b) Vehicles shall be stored
only at the locations approved by Ford in Exhibit A hereto or
at such other locations as may be approved by Ford, in writing,
from time to time. Unless otherwise agreed, all Vehicles shall be
kept at the approved location, within a fenced and locked storage
area, and shall be placed in an area within the storage area
separate from that used by Manufacturer to store any other
property. Manufacturer shall not move any Vehicles from the
approved location to one not approved by Ford without first
obtaining the written authorization of Ford. Ford shall have the
right to enter onto Manufacturer’s premises, at reasonable
times and upon prior reasonable notice, to inspect the Vehicles and
Manufacturer’s records with respect thereto.
(c) Manufacturer, at its sole
cost and expense, shall ensure that Vehicles do not deteriorate
from a “like new” condition in appearance or quality
during the period of storage. Vehicles in inventory over 30 days
are to be inspected and maintained by Manufacturer in accordance
with the vehicle inspection procedure outlined in the
Manual.
(d) Upon request by Ford, any
or all of the Vehicles shall be immediately returned to Ford as set
forth in paragraph 9 herein.
8.
LOSS
Ford shall not be responsible for
any delay in delivering the Vehicles to Manufacturer. Manufacturer
shall assume all risks of loss with respect to the Vehicles,
including all loss or damage that occurs despite
Manufacturer’s exercise of reasonable care from the time that
Manufacturer accepted the Vehicle and until the Bailment ends.
Manufacturer is liable for any and all loss or shortage resulting
from its failure to examine any shipment and for any damage and
other loss resulting from its failure to comply with any shipping,
loading, packaging, storage or other instructions issued by
Ford.
9.
END OF BAILMENT
For each Vehicle, the Bailment shall
end in one of the following ways (1) at the time that the
Vehicle is sold by Ford to an Authorized Ford Dealer according to
the procedures set forth in the Manual; or (2) upon authorized
return of the Vehicle(s) to Ford by Manufacturer. Upon the
occurrence of any of the following events set forth in
(a) — (e) herein, the Vehicle(s) must be
returned to Ford by Manufacturer at Manufacturer’s expense,
to the place and in the manner requested by Ford; otherwise, if
Ford requests such return of the Vehicle(s), Ford shall bear the
expense: (a) Manufacturer becomes the subject of a bankruptcy
petition filed in a court in any jurisdiction, whether voluntary or
involuntary; (b) a receiver or trustee is appointed for all or
a substantial portion of Manufacturer’s assets;
(c) Manufacturer makes an assignment for the benefit of its
creditors; (d) Manufacturer fails to perform any material
covenant or obligation in this agreement; or (e) any
representation or warranty in this agreement by Manufacturer ceases
to be true and correct in all material respects.
10.
TITLE
Title to the Vehicles, is, and will
at all times remain, the sole and exclusive property of Ford until
sold by Ford to an Authorized Ford Dealer. Manufacturer has no
property
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rights or interest in any of the
Vehicles and cannot grant any rights or interest to a third party.
Manufacturer has no right to transfer any Vehicle or to use it
except as directed by Ford in this Agreement. Manufacturer has no
right to retain possession of any Vehicle after receipt of a
written demand, at any time, by Ford for return of the Vehicle.
Neither this Agreement nor the Manufacturer’s obligations may
be assigned either by Manufacturer’s own act or by operation
of law.
11.
UCC FILINGS
Manufacturer authorizes Ford, at its
option, to file UCC financing statement(s) evidencing this
Bailment and Ford’s ownership of the Vehicles. Manufacturer
represents that it is organized under the laws of the state of
Texas.
12.
NOTICE TO MANUFACTURER’S
CREDITORS
Within 10 business days after the
Effective Date of this Agreement, Manufacturer will (i) send
each of its secured creditors and lienholders written notification
that it is holding the Vehicles for Ford at Manufacturer’s
facility, and (ii) provide to Ford a list of the creditors and
lienholders notified, together with a copy of the written
notification sent to secured creditors and lienholders.
Manufacturer will certify to Ford that it has notified all known
secured creditors and lienholders.
13.
USE OF VEHICLES
Subject to section 14 herein,
Manufacturer shall not use the Vehicles in any manner other than to
make modifications to the Vehicles after such the Vehicle is sold
by Ford to an Authorized Ford Dealer. Manufacturer agrees that in
no case shall it make any addition or modification to any Vehicle
until it has been purchased by an Authorized Ford
Dealer.
14.
SALE OF VEHICLE TO AUTHORIZED FORD
DEALER; MODIFICATIONS
(a) Manufacturer shall notify
Ford electronically or by other methods specified by Ford in the
Manual when an Authorized Ford Dealer desires to purchase a
Vehicle. Following such notification, Ford may sell such Vehicle to
one of its Authorized Ford Dealers at such price and on such terms
as Ford shall determine in its sole and exclusive
discretion.
(b) Subject to section
14(e) below, Manufacturer agrees that in no case, prior to the
Vehicle being purchased by an Authorized Ford Dealer from Ford,
shall Manufacturer (i) make any Modification to any Vehicle;
(ii) install any body or equipment thereon; or
(iii) remove any Vehicle from the location approved by
Ford.
(c) Manufacturer may transfer
Vehicle(s) to other Manufacturers approved by Ford if Ford has
given consent.
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(d) The price and terms and
conditions of the Modifications provided by Manufacturer to an
Authorized Ford Dealer, and any improvements, modifications or
changes thereto, shall be governed by a separate agreement between
the Manufacturer and the Authorized Ford Dealer and Ford shall have
no liability, obligation, or responsibility with respect thereto to
any person, including without limitation, Manufacturer, Authorized
Ford Dealer or other third Party.
(e) Ford may, from time to
time, allow Manufacturer to make a Modification and/or install a
body or equipment on certain Demonstrators or other such Vehicles
authorized by Ford prior to such Vehicle being purchased by an
Authorized Ford Dealer from Ford, provided that
(i) Manufacturer obtains the prior written consent of Ford in
each case; (ii) such Modifications and installations do not
decrease the value of the Vehicle; (iii) such Vehicles are not
driven unless authorized by Ford; and (iv) Manufacturer is
entirely responsible for such Modification and installation made to
the modified Vehicles. A Demonstrator Vehicle is a vehicle
(i) authorized by Ford to be modified or upfit prior to being
purchased by a Ford Dealer, and (ii) used for demonstration
purposes only. Demonstrator vehicles must be enrolled in and meet
the requirements of the Show Them The Value (“STTV”)
Demonstrator Program for eligible Ford Authorized Converter Pool
Accounts. STTV Demonstration Program details are available at
www.sttvdeinoprogram.com. The STTV Demonstrator Program is limited
to eligible Pool Accounts and may be terminated by Ford at any time
for any reason.
15.
DEMONSTRATOR VEHICLES
In addition to the terms and
conditions for all bailed Vehicles set forth in this Agreement,
Manufacturer shall strictly adhere to the terms and conditions set
forth in this section 15 when using Demonstrator (Demo)
Vehicles:
(a) Authorized Manufacturers
shall utilize Demonstrator Vehicles only according to the terms
arid conditions set forth in the annual Show Them The Value
Demonstrator Program announcement and website at
www.sttvdemoprogram.com or according to other terms and conditions
set forth by Ford from time to time. Use of Demo Vehicles according
to Ford’s terms and conditions shall be considered the
Allowable Use. Ford and Manufacturer agree that Demo Vehicles are
on bailment from Ford to the Manufacturer. Ford lends the Demos to
Manufacturer to be held and used by Manufacturer, only as a bailee
of the Vehicle, in accordance with this Agreement and the terms and
conditions of the respective STTV program. Demos shall not be
removed from Manufacturer’s control without Ford’s
prior written approval, other than for the Allowable Use purposes.
Demo
