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 L.A. West, Inc, located at LaGrange,
IN (hereinafter 'Manufacturer'), effective Oct. 16, 2000.
WHEREAS, GM is engaged in the business of assembling and marketing
complete and incomplete motor vehicles, including Chevrolet and GMC
trucks and truck chassis (hereafter 'Vehicles'); and
WHEREAS, Manufacturer is engaged in the business of manufacturing and
marketing special bodies and equipment installed on or in Vehicles
(Vehicles modified by Manufacturer are hereinafter 'End Products');
and
WHEREAS, independent authorized Chevrolet and GMC 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: Agreement to Sell and Purchase Vehicles
1.1 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 Converters
Program Manual (hereinafter 'Manual'), setting forth the polices
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
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.
Article 2: Vehicle Order; Prices; Financing
2.1 Manufacturer shall submit orders to GM for Vehicles
electronically. 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 or 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.
2.2 Prices and other terms of sale applicable to Vehicles are those
set forth in the Chevrolet and GMC Data Book or the Manual. Such
prices may be changing 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
order submitted directly by a Dealer to GM.
2.3 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
financial 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 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.
2.4 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.
2.5 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 3: Handling of Vehicles
3.1 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.
3.2 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.
3.3 Manufacturer shall have corrected all damage or shortages noted
upon receipt. All repairs must be performed by an authorized
Chevrolet or GMC dealer.
Article 4: Delivery; Title and Risk of Loss; Insurance
4.1 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
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.
4.2 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. The
Manufacturer's Statement or Certificate of Origin for each
Vehicle, prepared by GM, will not be delivered to Manufacturer,
but will be held by GM until the End Product is sold by
Manufacturer to a Dealer. Following an agreement by Manufacturer
with a Dealer for the Dealer's purchase of an End Product,
Manufacturer shall notify GM. Upon such notice and payment to GM
by the dealer for the involved Vehicle, GM will credit
Manufacturer for the original cost of the Vehicle and charge the
Dealer for that Vehicle. Upon receipt of payment, CM will issue
the MSO to and in the name of such Dealer.
4.3 Manufacturer shall, absent written agreement to the contrary, be
responsible for delivery of End Products to Dealers, 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 price
promotion, inventory charges and other purposes, and to the
extent possible, Manufacturer shall ship the appropriate End
Product promptly upon a dealers 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.
4.4 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
manufacture 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.
4.5 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 acceptable to GM. 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.)
Manufacturer shall provide GM with a certificate of insurance and
insurance policy evidencing GM as an additional insured for all
above-mentioned coverages except Workers Compensation and
Employer Liability for all activities connected with this
Agreement. and stating that the above-listed insurance is primary
to ..Y coverage that may be available to GM. Manufacturer shall
provide at least thirty days' prior written notice to GM of
cancellation modification or material change to any policy. Such
certificate 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 coverages shall be maintained throughout the
duration of this Agreement with the exception of Comprehensive
General Liability coverage referenced In Paragraph 1 above which
shall be maintained for a period of ten years after termination
of this Agreement.
Article 5: Upfitting; Standard of Workmanship; Compliance With
Laws
5.1 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 demonstrators
and unassigned speculative inventory (see GMAC MFP Agreement
parameters); 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.
5.2 To the extent possible, Manufacturer shall process Vehicles
delivered under the terms of this Agreement on a first-in, first-
out basis.
5.3 Manufacturer shall use its best skills and Judgment and shall
perform all work 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 to assist
Manufacturer, but Manufacturer will control and bear rail
responsibility for the design and manufacture of the End
Product..
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.
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 warranty, and to
maintain through dealer. 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 he 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.
5.4 Manufacturer shall comply with all federal, state, and local
laws, regulations, and standards in its performance of its work.
Manufacturer acknowledges its legal responsibility insofar as it
is the manufacturer of an End Product and agrees to certify and
warrant its contribution to the End Product. Further,
Manufacturer agrees to cooperate with GM in achieving compliance
with applicable laws and regulations. Manufacturer shall
maintain a copy of the 'Document for Incomplete Vehicles'
supplied by GM with certain Vehicles and a record of the name and
address of the first retail purchaser of each End Product and
shall make such information available to GM at the time and in
the manor specified by GM.
5.5 Manufacturer shall promptly notify GM of any real or potential
defect in the End Products.
Article 6: New Vehicle Preparation: Vehicle Warranty and Campaign
Corrections by Manufacturer
6.1 Manufacturer shall have performed, by an authorized Chevrolet or
GMC dealer needed warranty and special policy repairs and
adjustments, and campaign corrections directed by GM. All such
services performed on Chevrolet and GMC vans only may be
performed prior to upfitting, provided all Federal Motor Vehicle
Safety Standards are left intact in upfitting. All Such services
performed on models other than Chevrolet or GMC vans shall be
performed after upfitting but before the End Products leave
Manufacturer's possession. Manufacturer shall make End Products
available to such dealer in such fashion as to facilitate the
performance of services.
6.2 The written new Vehicle Warranty provided with each Vehicle
contains the only GM Warranty applicable to such Vehicle, and GM
neither assumes nor authorizes anyone to assume for it any other
obligation or liability in connection with such Vehicle. In
particular, GM does not assume. and hereby disclaims, any
warranty or other liability or obligation, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND ANY PRODUCT LIABILITIES BASED UPON NEGLIGENCE OR STRICT'
LIABILITY, to Manufacturer, except if Manufacturer becomes an
owner of a Vehicle, and then only to the extent of the written
new Vehicle warranty. Manufacturer shall ensure that General
Motor' written new Vehicle warranty and other product information
intended for the consumer are placed in the End Product and
remain with it when it leaves the custody of the Manufacturer.
Article 7: Recall Campaigns; Product Liability
7.1 In the event of a recall campaign by GM necessitated by a defect
or nonconformity in a Vehicle for which Manufacturer is
responsible, in whole or in part, Manufacturer shall reimburse GM
the direct costs. expenses and all penalties which may be
incurred, with the understanding that the portion of such direct
costs, expenses and penalties to be borne by Manufacturer shall
be proportional to the degree to which the defect or
nonconformity of Manufacturer's work caused the recall. Prior to
GM performing any recall campaign for which GM expects
reimbursement, GM and Manufacturer will exchange information and
will consult with each other with respect to the need and
advisability thereof; provided, however, that the final decision
as to whether or not to have such a recall shall in every
instance rest with General Motors.
7.2 With respect to any actual, potential or threatened claim,
action, or proceeding (hereinafter "Claim''), regardless of
whether such Claim is based on strict liability, negligence,
warranty, or other theory (hereinafter "Product Liability").
relating to any aspect of Manufacturer's work, each of the
parties to this Agreement shall (a) communicate and cooperate
with the other and, If necessary, the appropriate insurance
carrier, to the fullest extent reasonably possible in
investigation of the facts and circumstances surrounding the
Claim and in any litigation involving the Claim; (b) refrain from
taking any position adverse to the interests of the other party
to this Agreement; and (c) not, except in enforcement of the
rights hereunder, Institute any claim, action, or proceeding,
whether by cross-complaint, third party compliant, interpleader,
or otherwise, against the other party to this Agreement.
7.3 With respect to any Product Liability or related liability,
costs, and expense under this Article, the following are
applicable:
a. Any settlement or payment to satisfy an adverse judgment in
any Claim shall be apportioned to GM and Manufacturer based
upon such judgment or, if there is no judgment or it is not
definitive as to causation, each party's liability and
b. GM and Manufacturer shall bear their respective costs and
expenses incurred in connection with cooperation in
investigation and litigation, including those costs incurred
for the production of documents and answering of other
discovery.
7.4 In the event a Product Liability Claim is brought against GM or
Manufacturer relating to the other's work, each party shall
promptly forward to the other party every Summons and Complaint
and every other Court document received by it; and if the other
party is named a party in the action, in no event shall either
party take any action toward settlement without prior
notification to the other party of such proposed action followed
by a reasonable period of time to allow the other party to
respond to such notification.
Article 8: Indemnification; Dispute Resolution
8.1 In the event a suit or other proceeding is commenced relating to
any aspect of Manufacturer's work, including any portions of a
Vehicle affected by Manufacturer's work, Manufacturer agrees to
hold GM harmless and indemnify GM completely from Product
Liability losses. Each party shall retain the right to conduct
its own defense to such suit or proceeding.
8.2 In the event of any breach or of any obligation contained in this
Agreement the breaching party shall notify the nonbreaching party
for any damage, costs, and expense, including reasonable attorney
fees, suffered by the nonbreaching party due to the breach.
8.3 If It cannot be determined whether, or the extent to which, a
settlement of or judgment in a Claim or a recall campaign was
based on an aspect of Manufacturer's work or on another part in a
Vehicle that plaintiff alleged was defective, then either party
may submit the matter to binding arbitration in order to
determine the relative percentage allocable to each party. Such
disputes shall be finally settled under the Rules of the American
Arbitration Association, provided that the arbitration shall not
occur until after the conclusion of the case. There shall be
three (3) arbiters, one appointed by GM and one appointed by
Manufacturer, with the third appointed by the other two. Costs of
the arbitration shall be shared equally.
Article 9: Termination: U.S. Distribution
9.1 This Agreement may be terminated by either party at any time by
written notice thereof to the other party. Written notice of
termination shall be delivered personally or by certified mail,
return receipt requested; termination shall be effective at the
end of the third business day after the day of receipt of such
written notice or at such later time as may be set forth in such
notice.
9.2 If this Agreement Is terminated by GM, Manufacturer may pursue
outright or have a dealer purchase outright any or all Vehicles
in Manufacturer's custody. The net purchase price for each such
Vehicle shall be the dealer invoice price at which GM would have
sold such Vehicle to a dealer on the date of GM's invoice to
Manufacturer inclusive of any discounts or allowances (including
model close-out allowance, if applicable) that might have been
available to such dealer. Unless otherwise agreed in writing,
such purchase price will be paid to GM by certified check or bank
check delivered not later than the aforesaid next business day.
In the alternative, GM shall retake possession of Vehicle in
Manufacturer's custody and credit Manufacturer for Manufacturer's
original purchase price from GM.
9.3 If this Agreement is terminated by Manufacturer, Manufacturer
shall, prior to the effective date of termination, purchase
outright or have a dealer purchase outright all Vehicles in its
custody in accordance with the terms of Section 9.2; provided,
however, that GM at its option may retake possession of such
Vehicle, or any of them, and (a) credit Manufacturer for
Manufacturer's original purchase price from GM, and (b) charge
Manufacturer the lesser of the expense incurred by GM to
redistribute such Vehicles or destination charge applicable to
similar units delivered to any authorized Chevrolet or GMC dealer
near Manufacturer's business premises.
9.4 GM shall have a reasonable period, and in any event not less than
thirty days from the date of termination, in which to remove
Vehicles from Manufacturer's premises, an Manufacturers
obligation under this Agreement in connection with safekeeping
vehicles in its possession shall continue during such period.
9.5 If GM retakes possession of any Vehicles under this Article, the
terms of this Agreement shall not apply to any Vehicle upon which
Manufacturer has installed bodies or other equipment, or that are
not in a new and unused condition or have missing parts or
components.
9.6 If this Agreement is terminated, any and all funds in the
Manufacturer's Merchandising Reserve account, addressed in
Article 10 herein, shall revert to GM.
9.7 Vehicles sold to Manufacturer under this Agreement are for
distribution in the 00 Xxxxxx Xxxxxx, and the District of
Columbia ("U.S.") or Puerto Rico. It is a material breach of
this Agreement for Manufacturer to sell, cause or arrange to be
sold End Products or new motor vehicles for resale or principal
use outside the U.S. or Puerto Rico.
Article 10: Merchandising Reserve
10.1 To assist Manufacturer with merchandising and marketing expenses
resulting from sales of eligible Chevrolet or GMC Vehicles, GM
may in its sole discretion provide a merchandising reserve in an
amount to be determined each model year (hereinafter the
"Merchandising Reserve").
10.2 This Merchandising Reserve will be accumulated by GM for any
eligible Vehicles released to dealers from September 1 through
August 31 of each year, until further notice. The Merchandising
Reserve fund will be paid to the Manufacturer's open account the
following January.
10.3 Until the Merchandising Reserve is actually paid to Manufacturer,
it remains the sole property of GM. Also GM has the right to
recoup. setoff or deduct from the Merchandising Reserve any
amounts due or to become due (whether matured, contingent or
liquidated) from Manufacturer to GM or its subsidiaries. If this
Agreement is terminated, any and all funds in the Merchandising
Reserve account shall not be paid to Manufacturer.
10.4 Merchandising Reserve funds are intended to assist Manufacturer
with its merchandising of eligible Vehicles to Chevrolet and GMC
dealers. As a condition to receipt of these funds annually,
Manufacturer must spend not less than an equal amount to the
reserve on such merchandising. GM may request receipts to support
such payments.
Article 11; General Terms
11.1 No waiver or modification of any term of this Agreement or
creation of additional terms shall be valid or binding upon GM
unless made in writing executed on its behalf by a Manager in
General Motor's Fleet & Commercial operations. The failure by
either party to enforce any term of this Agreement at any future
time shall not be considered a waiver of any right or remedy
available hereunder or by law.
11.2 This Agreement does not constitute either party the agent or
legal representative of the other for any purpose whatsoever.
This Agreement is the sole and complete agreement of the parties.
and there are no other agreements between them, either oral or
written. respecting the subject matter hereof, which are not
superseded by this Agreement insofar as concerns Vehicles
delivered hereunder.
11.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Michigan as if entirely performed
therein.
11.4 Notices In respect of any matter under this Agreement shall, in
the absence of contrary written instructions provided by the
party involved, be addressed to the attention of the
representative executing this Agreement at the address set forth
above.
11.5 All monies or accounts due Manufacturer from GM under this
Agreement shall be Considered net of any indebtedness of
Manufacturer to GM, including its subsidiaries, and GM may, at
its election, recoup, set off or deduct any indebtedness of
Manufacturer or Manufacturer's financial institution to GM
against any monies or accounts due from GM to Manufacturer.
,
IN WITNESS WHEREOF, the parties have caused their duly
authorized representatives to execute this Agreement on the dates
set forth below:
Manufacturer:
L.A. West, Inc.
Chevrolet S.V.M. Code: 59-950
GM S.V.M. Code: 56-246
By /s/ Xxxx Xxxxxxxx
Title: President
Date: 10-16-00
GENERAL MOTORS CORPORATION
By: /s/ X.X. Xxxxxxx
Title: Manager-Pool Accounts
Fleet and Commercial operations
Date: October 18. 2000
EXHIBIT A To
SPECIAL VEHICLE MANUFACTURER CONVERTERS PROGRAM AGREEMENT
Agreement applies to all models of trucks and truck chassis (Vehicles)
available through General Motors Fleet and Commercial operations which
are shipped under this Agreement.
Vehicles delivered to Manufacturer shall be stored at the following
locations, and no others:
1. 0000 Xxxx X.X. 00 XxXxxxxx, XX 00000
MANUFACTURER:
Manufacturer:
L.A. West, Inc.
Chevrolet S.V.M. Code: 59-950
GM S.V.M. Code: 56-246
By /s/ Xxxx Xxxxxxxx
Title: President
Date: 10-16-00
GENERAL MOTORS CORPORATION
By: /s/ X.X. Xxxxxxx
Title: Manager-Pool Accounts
Fleet and Commercial operations
Date: October 18. 2000
