Ford Motor Company
FORD AUTHORIZED CONVERTER POOL AGREEMENT
THIS AGREEMENT, made this 12th day of August, 1992 between L.A. West,
Inc., a corporation having its principal place of business at 0000
X.X. 00 Xxxx, XxXxxxxx, XX 00000 ("Manufacturer"), and Ford Motor
Company, a Delaware corporation with its principal place of business
at Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Ford"),
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
WHEREAS, 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 (all of
which vehicles, as modified by Manufacturer, are referred to herein as
"End Products"); and
WHEREAS, certain Ford dealers purchase bodies and equipment from
Manufacturer or sell Vehicles to Manufacturer; and
WHEREAS, the parties desire to provide for n supply of Vehicles to be
maintained from time to time at Manufacturer's location so as to
facilitate the business operations of Ford, its authorized dealers and
Manufacturer, and so as to accommodate the production schedules of
Ford and Manufacturer to the extent feasible; and
WHEREAS, Manufacturer, having been given the opportunity to select its
own financial arrangements, desires to finance the acquisition of
Vehicles from Ford through a financial institution acceptable to Ford.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises hereinafter contained, the parties agree as follows:
1. PURCHASE AND SALE
During the term hereof, Manufacturer shall purchase and Ford shall
sell, and Manufacturer shall thereafter resell and Ford shall
thereafter repurchase, Vehicles pursuant to the terms of this
Agreement.
2. 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 with reasonable prior notice.
3. ORDERS
Manufacturer shall submit orders for Vehicles electronically or by
other methods specified by Ford in the Manual. Ford shall have no
obligation to accept any such order or to deliver to Manufacturer 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.
4. CONDITIONS OF SALE
(a) Ford shall deliver to Manufacturer such Vehicles for which it
has accepted Manufacturer's offer to purchase. The acceptance of
Manufacturer's offer in each case is expressly conditioned on:
(i) Manufacturer's obligation to resell such Vehicles to Ford
pursuant to Paragraph 9 hereof, and
(ii) Manufacturer's continued full performance of the terms and
conditions of this Agreement.
It is agreed by Ford and Manufacturer that this Agreement is for the
benefit of Manufacturer, Ford and Ford Dealers since it will
facilitate their respective business purposes. Ford and Manufacturer
agree that Ford will not transfer to Manufacturer the Certificates of
Origin ("COV") prepared by Ford for Vehicles delivered to Manufacturer
hereunder, except for Demonstrators as set forth in Paragraph 19
hereof.
(b) Manufacturer agrees that in no case shall it make any addition
or modification to any Vehicle until it has been purchased by a Ford
dealer pursuant to Paragraph 9 hereof.
5.. PRICE
The price to be paid by Manufacturer for the Vehicles shall be the
invoice price charged by Ford, from time to time, to its authorized
dealers for such vehicles, less dealer holdback, finance charge and
any discounts or incentives applicable to such vehicles.
6. PRICE PROTECTION
(a) Vehicles ordered by but not sold to Manufacturer under this
Agreement shall not be eligible for any price protection allowance
unless specifically authorized by Ford in writing.
(b) Vehicles sold to Manufacturer pursuant to Paragraph 4 herein shall
be repurchased by Ford.
7. 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 with damages noted and other documents
specified by Ford. Manufacturer shall be liable for any 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.
8. STORAGE
(a) 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.
(b) 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 reasonable wear and tear
excepted. Vehicles in inventory over 30 days are to be inspected and
maintained by Manufacturer in accordance with procedures issued by
Ford.
9. REPURCHASE
(a) Manufacturer shall notify Ford electronically or by other methods
specified by Ford in
the Manual when a Ford dealer desires to purchase a Vehicle. Ford
shall repurchase such Vehicle from Manufacturer and shall credit
Manufacturer's finance source for the amount Manufacturer originally
paid Ford for the Vehicle pursuant to Paragraph 5 hereof. Following
such repurchase, Ford may sell such Vehicles to one of its authorized
dealers or other third party and on such terms as Ford shall determine
in its sole and exc1usive discretion at a price equivalent to the
amount Ford credits to Manufacturer's finance source as set forth
above. If, in connection with any such sale of a Vehicle,
improvements, modifications or changes are requested by the dealer or
third party and provided by Manufacturer, the price and terms and
conditions of any such improvement, modification or change shall be
governed by a contract between the Manufacturer and the dealer or
other third party, and Ford shall have no liability, obligation or
responsibility with respect thereto to any person, including without
limitation, Manufacturer, dealer or other third party.
(b) Manufacturer shall not sell any Vehicle to anyone other than Ford,
except as provided in Paragraph 19 hereof with respect to
Demonstrators.
10. PREDELIVERY
Manufacturer agrees to perform Predelivery Inspection on the Vehicle
portion of each End Product prior to delivery to the dealer or third
party in strict accordance with the Body and Conversion Companies
Prede1ivery Inspection Application.
11.MODIFICATION
Manufacturer shall not, prior to the Vehicle being purchased by Ford
pursuant to Paragraph 9 hereof:
(a) make any addition or modification to any Vehicle;
(b) install any body or equipment thereon: or
(c) remove any Vehicle from the location approved by Ford.
Manufacturer may transfer Vehicle(s) to other Manufacturers approved
by Ford if Ford has given consent, and may move Vehicle(s) to a Ford
Dealer for warranty repairs.
12. COMPLIANCE WITH LAWS AND REGULATIONS
In the interest of protecting the reputation of the products of
Manufacturer and Ford, and maintaining customer goodwill, Manufacturer
agrees to:
(a) employ components and workmanship of high commercial quality in
the manufacture of End Products and to assure that End Products
conform in all respects to applicable Federal and State laws, rules
and regulations; and,
(b) provide assistance to Ford in communicating promptly, when
necessary, with the first retail purchasers of End Products. To that
end, Manufacturer agrees to secure and maintain records of the names
and addresses of the first retail purchasers of End Products.
13. LABELING
Manufacturer shall affix to all Vehicles such labels as Ford supplies
(if not already affixed) and maintain the labels in place, but such
labeling at Ford's instructions shall not constitute recertification
of the Vehicle by Manufacturer.
14. INDEMNIFICATION
Ford and Manufacturer recognize that the burden of defending against
product liability allegations, whether or not meritless or frivolous,
should be borne by the party whose alleged negligence, wrongdoing or
defective product is at issue, regardless of whether it is a party to
the particular litigation. The parties also recognize that, under
existing law, there are circumstances where a claimant may xxx only
one party even though the defect, wrongdoing or negligence alleged is
the principal responsibility of the other party. The parties also
recognize that this results in the named defendant bearing more than
its fair share of the cost of the litigation. In order to avoid
possible controversy between the parties as to which shall defend such
litigation, or bear the cost of defending such litigation, including
the cost of settlements or verdicts, the parties agree as follows:
(a) Indemnification by Ford. With respect to any Vehicle supplied by
Ford to Manufacturer, Ford shall indemnify, hold harmless and protect
Manufacturer from any loss, damage or expense, including, without
limitation, settlements, judgments, expert fees and reasonable
attorney's fees, resulting from or related to lawsuits, complaints or
claims against Manufacturer for property damage or personal injury
where Manufacturer's liability, if any, arises solely because of a
defect in manufacture, assembly, materials or design for which Ford
alone is responsible.
(b) Ford's Duty to Defend. Manufacturer shall promptly notify Ford
of any lawsuit, complaint or claim which Manufacturer has reason to
believe may be covered by this indemnity provision. If the claimant's
sole allegation against Manufacturer is that Manufacturer is strictly
liable for a defect for which Ford alone is responsible, and if Ford's
investigation discloses no basis for Manufacturer's liability other
than the allegations in the lawsuit, complaint, or claim, Ford shall
assume Manufacturer's defense upon Manufacturer's request.
Manufacturer, and/or its product liability insurance carrier, shall
cooperate fully in the defense of the action as Ford, and/or its
Product liability insurance carrier, may reasonably require. Ford
shall have the right to assume Manufacturer's defense at any time,
provided that Ford acknowledges Manufacturer's right to indemnity
under this provision.
(c) Indemnification by Manufacturer. With respect to any Vehicle
supplied by Ford to Manufacturer, Manufacturer shall indemnify, hold
harmless and protect Ford from any loss, damage or expense, including,
without limitation, settlements, judgments, expert fees, and
attorney's fees, resulting from or related to lawsuits, complaints or
claims against Ford for property damage or personal injury, where
Ford's liability, if any, arises solely from modifications or
additions made by Manufacturer or from processing of Vehicles by
Manufacturer. Liability on the part of Ford which arises, if at all,
because Ford knew or should have known that the processing,
modification or additions made by Manufacturer were negligent,
improper or defective, or that Ford expressly or impliedly approved
the modifications or additions made by Manufacturer, shall be deemed
to be liability which arises "solely from processing, modifications or
additions made by Manufacturer" within the meaning of this paragraph.
However, Manufacturer shall not be obligated to indemnify Ford if the
modifications or additions were made or the processing was conducted
pursuant to express written approval provided by Ford.
(d) Manufacturer's Duty to Defend. Ford shall promptly notify
Manufacturer of any lawsuit, complaint or claim which Ford has reason
to believe may be covered by this indemnity provision, If Ford's
alleged liability arises solely from modifications or additions made
by Manufacturer or processing conducted by Manufacturer not pursuant
to express written approval from Ford, and if Manufacturer's
investigation discloses no basis for Ford's liability other than the
allegations in the lawsuit, complaint, or claim, Manufacturer shall
assume Ford's defense upon Ford's request. Ford and/or its product
liability carrier shall cooperate fully in the defense of the action
as Manufacturer, or its product liability carrier, may reasonably
require. Manufacturer shall have the right to assume Ford's defense at
any time, provided that Manufacturer acknowledges Ford's right to
indemnity under this provision.
(e) Cross-Claims or Third party Complaints. Neither party shall file
cross-claims or third-party complaints against the other without
notifying the other in advance. Where practicable, the notice should
be given sufficiently in advance to allow thorough discussion of
alternatives to such filing.
(f) Contributions to Settlement. In the appropriate case the parties
shall, where settlement is or may be warranted, make a reasonable
effort to agree upon the amount each party shall contribute to
settlement, based upon the nature of the plaintiff's allegations. For
example, if the case involves an allegation that a Manufacturer's
component is defective, a reasonable allocation would require the
Manufacturer to contribute all or most of any settlement amount. If,
however, the allegation concerns a component supplied by Ford, a
reasonable allocation would require Ford to contribute all or most of
any settlement amount. It is recognized that there shall be cases of
multiple allegations with respect to each party and that allocation of
responsibility shall be dependent on the circumstances of the case.
(g) Contributions to Adverse Judgment. If the case, for any reason,
does not settle, the parties shall, in advance of trial, make a
reasonable attempt to agree upon the extent to which each company
shall contribute to satisfy any adverse judgment or verdict that may
be returned, based upon the principles set forth in the preceding
paragraph. Based on these principles, the parties shall likewise
attempt to agree upon the extent to which each shall contribute to the
cost of defending the litigation, including attorney's fees.
(h) Unilateral Settlement; Notifying Other Party. In cases where
both parties are named defendants, neither party shall unilaterally
enter into a settlement agreement without giving reasonable notice to,
and consulting in advance with, the other party.
15. INSURANCE
(a) Manufacturer shall maintain at all times a minimum limit of $1
million per occurrence of Commercial General Liability insurance,
including products, completed operations and blanket contractual
liability (or contractual liability coverage specific to this
Agreement) with insurers rated at least A VI by A.M. Best Company.
Manufacturer shall arrange to provide Ford with a certificate of
insurance showing the coverage specified in this paragraph. The
insurance policies providing the foregoing coverage shall provide that
the insurance company issuing such policy shall give Ford at least 30
days prior written notice of any material alterations, including
substantial reduction of aggregate limits, if such limits apply, or
any change or cancellation.
(b) So long as Vehicles are located on the premises or facilities
operated by Manufacturer or its agents or assigns, Manufacturer, at
its sole cost and expense, shall keep such Vehicles fully insured
under an automobile liability insurance policy with coverage not less
than $1 million combined single limit per occurrence.
16, TAXES
(a) Personal Property Taxes. Unless otherwise agreed by Ford,
Manufacturer shall report, bear, and pay all applicable personal
property taxes on Vehicles.
(b) Excise Taxes. All Vehicles purchased from Ford without
collection by Ford of the retailer's tax imposed by Section 4051 of
the Internal Revenue Code (the "Excise Tax") are for resale by
Manufacturer to Ford. In the event of Manufacturer's taxable use or
taxable sale of a Vehicle, Manufacturer shall report and pay the
Excise Tax. If Manufacturer uses, modifies or disposes of a Vehicle in
a manner that subjects Ford to Excise Tax liability for that Vehicle,
Manufacturer shall indemnify Ford for that liability and reimburse
Ford all Excise Taxes paid by Ford.
17. WARRANTIES
(a) No warranty obligation of Ford for any Vehicle shall be more
extensive than Ford's warranty obligation for such Vehicle under
Ford's warranty to retail purchasers. Ford shall supply Manufacturer
with copies of these warranties. These warranties shall be the only
warranties made or deemed to have been made by Ford end, with respect
to Manufacturer, shall be expressly IN LIEU OF ANY AND ALL OTHER
EXPRESS OR IMPLIED WARRANTIES; GUARANTEES, CONDITIONS OR
REPRESENTATIONS, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FORA PARTICULAR PURPOSE, WITH THE REMEDY SET FORTH THEREIN
AS THE SOLE AND EXCLUSIVE REMEDY THEREUNDER.
(b) With each Vehicle delivered by Manufacturer to dealers, or
retail customers on dealers' behalf, Manufacturer shall deliver copies
of any applicable Ford warranty and an Owner's Guide, owner
registration card and such other consumer and operating material as
Ford generally provides with that model of vehicle.
(c) The warranty obligations of Ford (and any governmental
certification made by Ford) shall cover only the Vehicles as
manufactured by Ford and provided to Manufacturer, and shall not
extend to any addition, modification or change of or to the Vehicle by
Manufacturer. Ford's warranty shall not be deemed to be voided by
additions, modifications, or changes to the Vehicle unless such
addition, modification or change causes a failure to a Ford component.
18. VEHICLE INVENTORY FINANCING AND SECURITY
(a) Manufacturer shall provide to Ford a copy of the Vehicle
Financing Agreement between Manufacturer and its financing
institution, if other than Ford Motor Credit Company. Manufacturer
shall notify Ford in advance of any proposed changes in its financing
arrangements, and such changes are subject to review and approval by
Ford.
(b) Manufacturer shall maintain a separate, current account for all
Vehicles in its custody in accordance with the Manual. Manufacturer
shall not store any Vehicles at any location not identified by address
on Exhibit X. Xxxx shall have the right to examine Vehicles and
Manufacturer's records in respect thereof at any time during regular
business hours.
(c) Except for the purpose of financing Manufacturer's acquisition
of Vehicles hereunder, Manufacturer shall not grant any security
interest, lien or other interest in any part of a Vehicle without
Ford's prior approval and shall not permit any other person, including
any governmental entity, to acquire such an interest adverse to Ford.
19. DEMONSTRATORS
Manufacturer may modify Vehicles purchased from Ford for use as
demonstrators in such quantities as specifically authorized by Ford.
Demonstrators shall not be repurchased by Ford pursuant to Paragraph 9
hereof. Ford shall send Manufacturer the COV for such Vehicle when it
notifies Ford that a Vehicle has been designated a demonstrator.
Manufacturer shall notify Ford immediately of the sale date, name and
address of the Ford Dealer to which it subsequently sells the
Demonstrator. In no case shall Manufacturer send the Demonstrator to
anyone other than a Ford Dealer. For those converted Vehicles of the
types typically sold at retail by dealers other than Ford Dealers,
such as ambulances, buses, and motor homes, Manufacturer shall not be
required to send the Demonstrator to a Ford Dealer, but must notify
Ford immediately of the sale date and name and address of the
purchaser.
20. TERMINATION
(a) This Agreement may be terminated by either party, at any time, for
any reason, with or without cause, by written notice 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 thirtieth (30) calendar day after the day
of receipt of such written notice or at such later time as may be set
forth in such notice. Ford shall have the right to cancel any and all
shipments scheduled for Manufacturer for delivery more than thirty
(30) days after Ford gives such notice.
(b) Upon termination of the Agreement by either party, Ford shall
have the right, but not the obligation, to repurchase from
Manufacturer any Vehicle (except demonstrators) in the possession of
Manufacturer so long as such Vehicles were purchased from Ford, and
not repurchased by Ford pursuant to Paragraph 9 hereof, and are new,
undamaged, unmodified and unsold, except that if such Vehicles are not
current model year Vehicles, Ford may offer to repurchase such
Vehicles at prices, terms and conditions it deems commercially
reasonable and Manufacturer may either accept such offer or dispose of
such Vehicles to Ford dealers.
(c) If Ford elects to purchase such Vehicles pursuant to (b) above,
Manufacturer shall provide proof, satisfactory to Ford, of good clear
title to such Vehicles, and evidence that the Manufacturer has fully
complied with all applicable bulk sale laws, along with a warranty
with respect thereto that such property is owned by Manufacturer free
and clear of all claims, liens and encumbrances.
(d) Ford shall give written notice to Manufacturer of those Vehicles
that it intends to repurchase under this Paragraph. Once that notice
has been given, Manufacturer shall fully cooperate with Ford in
returning such Vehicles to Ford at such place or places as Ford shall
designate.
(e) Ford shall credit Manufacturer's finance source for an amount
equal to the amount Manufacturer paid Ford for such Vehicle(s),
pursuant to paragraph 5.
(f) Ford shall credit Manufacturer's finance source for the Vehicles
purchased pursuant to this paragraph within a reasonable time
following the Manufacturer's fulfillment of the obligations set forth
in this Paragraph, subject to Manufacturer's tender of a general
release, satisfactory to Ford, that releases Ford from any and all
obligations with respect to this Agreement, except as to Paragraph 14
hereof, and further subject to Ford's right to offset any obligations
owing to Ford by Manufacturer.
(g) Ford shall have no other obligations to Manufacturer upon
termination of this Agreement except those set forth in this
Paragraph.
21. GENERAL TERMS
(a) This agreement shall bind the company when it bears the facsimile
signature of the General Manager and the manual signature of the
Manager of Recreation and Special Vehicle Sales of the Ford Division
of the Company and a duplicate original thereof is delivered
personally or by mail to the Manufacturer or the Manufacturer's
principal place of business. No waiver or modification of any term of
this Agreement, or creation of additional terms, shall be valid or
binding upon Ford unless made in writing as set forth above. The
failure by either party to enforce any term of his Agreement at any
future time shall not be considered waiver of any right or remedy
available hereunder or by law.
(b) This Agreement does not constitute either party the agent or
legal representative of the other party for any purpose whatsoever.
(c) This Agreement shall apply to Vehicles on hand or in transit to
Manufacturer and to Vehicles produced and delivered to Manufacturer on
or after June 15,1990, and with respect to those Vehicles, this
Agreement terminates and supersedes the Ford Motor Company Vehicle
Consignment Agreement and any other agreements concerning Vehicles
between the parties and constitutes the entire and complete agreement
between the parties with respect to the subject matter hereof and
there are no other agreements between them, either oral or written,
respecting the subject matter hereof.
(d) This Agreement and all transactions hereunder, including all
Vehicle sales by Ford to Manufacturer, shall be governed by and
construed in accordance with the laws of the State of Michigan as if
entirely performed therein.
(e) Notices in respect of any matter under this Agreement shall, in
the absence of contrary written instructions provided by the party to
be notified, be addressed in writing to the attention of the
representative executing this Agreement at the address set forth
above.
(f) Manufacturer may not assign this Agreement or delegate
performance of its obligations hereunder without the prior written
consent of Ford.
(g) Notwithstanding anything this Agreement to the contrary, Ford
shall have the right to amend, modify or change this Agreement in case
of legislation, government regulation or changes in circumstances
beyond the control of Ford that might affect materially the relation-
ship between Ford and Manufacturer.
(h) This Agreement shall be effective on the date when signed by
Ford.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement on the dates set forth
below.
The parties have reviewed this document with legal counsel of their
choice.
MANUFACTURER: FORD:
By: /s/ Xxxx Xxxxxxxxx By:
Title: Countersigned By:
Date: 8/12/92 Date: August 27, 1992
