**Exhibit 10.1**

 

**TEAMING AGREEMENT**

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This Agreement, effective asof the 23rd day of March, 2009 (the “Effective Date”), is entered into by andbetween Force Protection Industries, Inc., a Nevada corporation (“FPII”),having a principal place of business at 9801 Highway 78, Building 1, Ladson,South Carolina 29456, a wholly owned subsidiary of Force Protection, Inc.(“Force Protection”) and Spartan Motors Chassis, Inc.,a Michigan corporation (“SMC”), having a principal place of business at 1000 Reynolds Road, Charlotte, Michigan 48813, awholly owned subsidiary of Spartan Motors, Inc. (collectively, the “Parties”).

 

**WHEREAS,**FPII, is thedesigner, manufacturer and prime contractor with regard to Cougar-classvehicles (including a number of variants and configurations) (“Vehicles”)purchased by the United States Department of Defense (“USDoD”) and other endusers;

 

**WHEREAS,**FPII desires to ensure, among other things, the superior survivability attributes of, and configuration controlover any changes to, the Vehicles;

 

**WHEREAS,**ForceProtection and SMC entered into a confidentiality agreement, dated July 1,2005 (“Confidentiality Agreement”);

 

**WHEREAS,**FPII and SMC entered into a term sheet dated July 17, 2007 (“Term Sheet”);

 

**WHEREAS,**SMC is asubcontractor to FPII, pursuant to which SMC provides significant automotiveintegration capabilities and services to FPII related to the production of theVehicles;

 

**WHEREAS,**FPII’s domesticcustomer of the vehicles, the USDoD desires to maintain, service and supportthe Vehicles, including but not limited TACOM, MARCORPSYSCOM, DLA, DIB or anyother US government agency supporting the Vehicles, but specifically excluding any other foreign customersof the Vehicles (the “Customer”);

 

**WHEREAS,**the Partiesdesire to supply Customer with the Vehicle automotive parts which have beenspecifically designed, developed, modified, configured, adapted or reconfiguredfor the Vehicles that are identified in Exhibit A, which is attachedhereto and incorporated by reference (the “Spare Parts”);

 

**WHEREAS,**the Partiesdesire to work together in a “contractor team arrangement” as that term isdefined in FAR 9.601(2) to submit proposals to Customer for Spare Parts to (collectively “Proposals”);

 

**WHEREAS,**the Partiesdesire to combine their respective complementary and non competitiveexperience, skills, facilities and capabilitiesin order to compete effectively to obtain and perform future military contractsfor the supply of Spare Parts for Vehicles to provide Customers with the bestcombination of performance, cost and delivery in obtaining contracts for theProposals (collectively “Contracts”);

 

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**WHEREAS,** the Partiesrecognize the criticality of supporting the Customer in maintaining, servicingand supporting the fielded Vehicles;

 

**WHEREAS,**FPII recognizesthe SMC capabilities related to supporting the Vehicles and meeting thecustomer’s requirements to service, maintain and support the fielded Vehicles;

 

**WHEREAS,**the Partiesrecognize that FPII is the design authority related to the Vehicles;

 

**WHEREAS,**the partiesdesire to resolve all outstanding issues and to work collaboratively to ensurethat both FPII, on behalf of Itself and its parent, affiliates and subsidiaries, and SMC, on behalf of itself and its parent, affiliates and subsidiaries,are focused on exceeding the Customer’s expectations with regard to supplyingSpare Parts to service, maintain and sustain the Vehicles;

 

**WHEREAS,**the Partiesseek to set out certain principles to establish subsequent parameters foragreements to exceed the Customers’ requirements for the Vehicles; and

 

**WHEREAS,**the Partiesagree that other vehicles may be included under the provisions of thisAgreement by the mutual written consent of both of the parties hereto.

 

**NOW, THEREFORE,**based on theforegoing premises, for valuable consideration derived under this Agreement andfor other good and valuable considerations acknowledged here, the Parties agreeas follows:

 

1                                          The Whereas Clauses are incorporated by reference.

 

2                                          Intellectual Property Rights.

 

(a)                                  FPII and SMC each agree that the Vehiclesare comprised of parts, subsystems and systems representing proprietaryprotectable intellectual property, along with all improvements, upgrades,substitutions, and enhancementsthereto. In addition to the intellectual property rights owned and retained bythe individual component manufacturers, in some cases, additional intellectualproperty is owned by Force Protection; in some cases, additional intellectualproperty is owned by Spartan; in other cases, additional intellectual propertywas jointly developed and owned by the Parties in order to timely complete theurgent project.

 

(b)                                 Conditioned upon terms that are compliantwith all laws and regulation, the Parties have worked collaboratively toidentify the universe of applicable Spare Parts and have determined both anylegal restrictions on the safe of such parts and the identification of theParty best suited to sell such spare parts to resellers, distributors, and thegovernment with a goal of sharing potential spare parts business, consistentwith the Parties’ capabilities, areas of expertise, and ownership ofintellectual property.

 

(c)                                  SMC hereby grants to FPII for the term anexclusive, royalty-free license of SMC’s intellectual property interests, ifany, related to the Vehicles or the Spare Parts in accordance with thisAgreement. FPII hereby grants to SMC for the term an exclusive, 

 

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royalty-free license of FPII’s intellectual propertyinterests, if any, related to the Spare Parts in accordance with thisAgreement.

 

(d)                                 The Parties agree that Spartan has uniquecapabilities with regard to the manufacture, assembly or sourcing of certain ofthe Spare Parts. Spartan agrees that it will not independently sell certain identified Spare Parts orany assembled subsystem or system comprised thereof, to any third partyincluding any agency, division or department of the USDoD or any contractorthereof, related to the Vehicles, provided however that such restriction complieswith all laws, rules and regulations as described in paragraph (g).

 

(e)                                  FPII agrees that it shall utilize SMC for thesale of the Spare Parts, or any assembled subsystem or system comprised thereof, to the Customer or any contractor thereof,related to the Vehicles as identifiedin Exhibit A. All FPII sales for Spare Parts shall beexclusively sourced through SMC under theterms of this Agreement, regardless of whether the Spare Parts are to besourced for Vehicle retrofits, upgrades, spares, replacement parts, re-set, orremanufacture.

 

(f)                                    FPII and SMC agree that neither party hasany intellectual property rightsin commercial off the shelf items as defined in the FAR (provided that suchitem has an existing manufacturer catalog part number) for the Vehicles, thatsuch items are not subject to this Agreement, and that each party is free tosell such items to anyone at anytime. (g) Any restriction on FPII’s or SMC’sability to sell Spare Parts must be consistentwith statutory and regulatory prohibitions on restricting spare partsales by a subcontractor. Anysuch restriction must be compliant with all laws, rules, and regulations, to include antitrust laws and regulations.In addition, the party acting as primecontractor may not restrict the directsale of unaltered COTS items from the party acting as subcontractor toany customer.

 

3                                          Proposals.

 

(a)                                  The parties agree to cooperate toproperly and timely respond to all requests from the Customer for quotes,proposals or information with regard to the Spare Parts.

 

(b)                                 FPII recognizes that SMC has superiorcapability in responding to Customer requests for quotes, proposals andinformation with regard to acquiring Spare Parts. SMC shall use its bestefforts to assist, support and provide information to FPII to ensure timely, fulsome and compliant proposals,information or quotes to the Customer with regard to the Spare Parts.

 

(c)                                  From March the Effective Date andthereafter, all inquiries, orders or requests regarding Spare Parts shall bedirected to, and responded to, by FPII regardless of the method of inquiry,order or request and regardless of the party receiving the inquiry, order orrequest.

 

(d)                                 Except as otherwise set forth in Exhibit A,during the term of this Agreement, as between SMC and FPII, FPII shall act asprime contractor for all activities regarding the 

 

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Spare Parts, and SMC shall act as a subcontractor forthe performance of the requirements related to the Spare Parts on an exclusive basis. FPII shall be theprimary point of contact with the Customer and will prepare all responses orproposals, integrate the data and material provided by SMC, and submit anyquote, proposal or information to the Customer. FPII will make the final determinationof the form and content of any response to the Customer and will makereasonable efforts to ensure SMC’s data is adequately portrayed and identified.FPII will afford SMC the opportunity to review, prior to proposal, response,quote or information submission, that portion to be performed by SMC. TheParties each agree to bear their respective proposal-related costs and expensesat no cost to the other. The Parties shall undertake reasonable efforts to negotiate in good faith and executea mutually agreeable fixed price subcontract or purchase order for the SpareParts with terms and conditions consistent with the respective Contract.

 

4                                          Records. The parties agree to keeprecords having a detail generally equivalent to that maintained by the partyfor confidential information owned by that party. The parties further agree tomake such records available to other party upon reasonable request and therequesting party shall have theright to examine such records during reasonable business hours for the purposeof determining a receiving party’s compliance with the terms of this Agreement.

 

5                                          Confidentiality.  Unless specifically provided for herein, theterms of the Confidentiality Agreement are incorporated herein by reference.

 

6                                          General. This Agreement shall be interpreted and construed in accordance with thelaws of the State of South Carolina. This written instrument shall constitutethe entire Agreement between the parties hereto with respect to the subjectmatter hereof, and all other prior agreements, covenants, promises andconditions, oral or written, between these parties are incorporated herein orsuperseded in their entirety by this Agreement and shall not be varied,amended, or supplementedexcept by a writing of subsequent or even data executed by both parties.

 

7                                          Authorizations.  It is understood and agreed by the partiesthat this Agreement is permanently subject to the rules prevailing in boththe U.S.A. and foreign countries regarding the transfer of technology andsupplies in the armament field and relevantauthorizations from the cognizant Government Authorities, including but notlimited to export licenses to be issuedby the respective authorities of such Governments.

 

8                                          Binding Agreement.  This Agreementshall be binding upon and inure to the benefit of the parties hereto andtheir respective successors and assigns.

 

9                                          Representations.    Each party represents that it will complywith all applicable export and import laws and regulations during performanceof this Agreement, including but not limited to, the U.S. Arms Export ControlAct, as amended (22 U.S.C. §§ 2751-2799), theInternational Traffic in Arms Regulations, as amended (22 C.F.R. Part 120et seq.), the Export Administration Act, as amended, (50 U.S.C. §§ 2401-2420), and the U.S.Export Administration Regulations, as amended (15 C.F.R. § 730 et seq.). The Parties shall not export,disclose, furnish or otherwise provide any article, technical data, technology,defense service, or technical assistance of the 

 

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other Party to anyforeign person or entity, whether within the U.S. or abroad, without obtaining,in advance, (a) appropriate U.S. government export authorization, and (b) writtenapproval from the Disclosing Party.

 

10                                    The parties agree that the violation ofany of the provisions of this Agreement will cause irreparable loss and harmwhich cannot be reasonably or adequately compensated by damages in an action at law, and, accordingly, theaggrieved party will be entitled to seek injunctive and other equitable reliefto enforce the provisions of this agreement and to prevent or cure any breachor threatened breach thereof; but no action for any such relief shall be deemedto be a waiver of right to bring an action for damages. The parties furtheragree that it will not be a defense to any request for such relief that anadequate remedy at law exists.

 

11                                    Either Party may unilaterally terminatethis Agreement if the other Party becomes suspended, debarred or otherwisedeemed not presently responsible. This Agreement will terminate in the event ofliquidation, bankruptcy, reorganization, dissolution or insolvency of eitherParty resulting in the Parties inability to perform.

 

12                                    The Term Sheet is superseded by thisAgreement.

 

13                                    The term of this Agreement shall be ten (10) years.

 

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**IN WITNESS WHEREOF,**the parties hereto have caused thisAgreement to be executed effective as of the day and year above provided.

 

ForceProtection Industries, Inc.

 

 
| By:                                           | /s/  Michael Moody    |   |
|-----------------------------------------------|-----------------------|--------|
| Name:  Michael Moody                          |                  |
| Title:  President and Chief Executive Officer |                  |
|                                          |                  |
|                                          |                  |
| Spartan  Motors Chassis, Inc.            |                  |
|                                          |                  |
|                                          |                  |
| By:                                           | /s/  John E. Sztykiel |   |
| Name:  John E. Sztykiel                       |                  |
| Title:  Chief Executive Officer               |                  |

 

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