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 Starcraft Automotive Group, Inc., located at Goshen, IN
(hereinafter "Manufacturer"), effective July 1, 1999.
WHEREAS, GM is engaged in the business of assembling and marketing
complete and incomplete motor vehicles, including Chevrolet and GMC trucks and
truck chassis (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 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 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 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.
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Article 2: Vehicle Orders; 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 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.
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 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.
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 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.
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.
Article3: 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.
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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 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.
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, GM 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 pricing, promotions, inventory charges,
and other purposes, and to the extent possible, Manufacturer shall 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.
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
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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.
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 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, 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.
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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 full 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
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.
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
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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 times and in the manner 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
Motors' 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 any 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 non-conformity 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.
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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 complaint, 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: Indemnifications 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 of any obligation contained in this
Agreement, the breaching party shall indemnify the nonbreaching party
for any damage, costs, and expense, including reasonable attorneys'
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
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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 purchase
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 shall
be paid to GM by certified check or bank check delivered not later than
the aforesaid third business day. In the alternative, GM shall retake
possession of Vehicles 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 Vehicles, 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 the 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, and Manufacturer's 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 Vehicles 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.
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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
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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, setoff
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: GENERAL MOTORS CORPORATION
Starcraft Automotive Group, Inc.
Chevrolet S.V.M. Code: 59-264, 59-924
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GMC S.V.M. Code: 56-120
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By: \s\Xxxxxxx X. Xxxxxxxxxx By: \s\X. X. Xxxxxxx
------------------------- -------------------------------
Xxxxxxx X. Xxxxxxxxxx X. X. Xxxxxxx
Title: President Title: Manager-Pool Operations
------------------------- ----------------------------
Fleet and Commercial Operations
Date: July 1, 1999 Date: July 30, 1999
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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 Xxxxxxx Xxxxxx, Xxxxxx, XX
2. 0000 Xxxxxxx Xxxxx, Xxxxxx, XX
3. 0000 Xxxxxx Xxxxx, Xxxxxxx, XX (National Mobility Corp.)
4.
5.
MANUFACTURER: GENERAL MOTORS CORPORATION
Starcraft Automotive Group, Inc.
Chevrolet S.V.M. Code: 59-264, 59-924
--------------
GMC S.V.M. Code: 56-120
------
By: \s\Xxxxxxx X. Xxxxxxxxxx By: \s\X.X. Xxxxxxx
---------------------------------- ----------------------------------
Xxxxxxx X. Xxxxxxxxxx X. X. Xxxxxxx
Title: President Title: Manager-Pool Operations
------------------------------ -------------------------------
Fleet and Commercial Operations
Date: July 1, 1999 Date: July 30, 1999
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