EXHIBIT 10.6.3
FORD MOTOR COMPANY
IMPORTED VEHICLE SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
1. NOTICES
Any notice or designation required or permitted by this agreement shall be
in writing and shall be given by personal delivery or by first-class mail,
postage prepaid. Notices to the Company shall be delivered to or addressed
to the District Sales Manager of the area in which the Dealer is located;
notices to the Dealer shall be delivered to any person designated in
paragraph F(ii) of this agreement or directed to the Dealer at the Dealer's
principal place of business as described herein.
2. OPERATION OF BUSINESS
(a) SALES AND SERVICE RESPONSIBILITY. The Dealer shall vigorously and
aggressively promote, solicit and make sales of IMPORTED VEHICLES at
retail, and of other IMPORTED PRODUCTS at retail and wholesale, in the
DEALER'S LOCALITY in volumes that are satisfactory in the considered
business judgment of the Company in the light of, among other things, the
total sales and registrations of IMPORTED VEHICLES and other foreign and
domestic vehicles of similar price and function in such locality, the
retail sales objectives for IMPORTED PRODUCTS established for the Dealer by
the Company from time to time, the number and location of other IMPORTED
PRODUCT dealers in such locality and the sales and registrations of
IMPORTED VEHICLES, other IMPORTED PRODUCTS and other imported and domestic
vehicles of similar price and function in any of the Company's sales zone,
district or region in which the Dealer is located. The Dealer shall also
render prompt, workmanlike, courteous and willing service on all IMPORTED
PRODUCTS presented to his place of business for such purpose, including
without limitation all service to which a purchaser of an IMPORTED PRODUCT
from any authorized dealer may be entitled, pursuant to the Company's then
current Warranty and Policy Manual; however, the Dealer shall render
warranty and policy service on eligible IMPORTED PRODUCTS to all purchasers
of any such products from any authorized dealer. The Dealer shall not be
limited to residents of the DEALER'S LOCALITY in making sales or rendering
service.
(b) PLACE OF BUSINESS, FACILITIES AND EQUIPMENT. The Dealer shall
establish and maintain a place of business at a location mutually
satisfactory to the Dealer and the Company, which shall (i) contain such
space for the storage, display, sale and service of IMPORTED VEHICLES at
retail and GENUINE NEW PARTS at retail and wholesale, the retail sale of
used vehicles, customer parking and waiting, and office functions, and (ii)
be equipped with such tools and diagnostic and other equipment, as will
meet facility, tool and equipment standards established by the Company from
time to time, in the exercise of its considered business judgment, for all
IMPORTED PRODUCTS dealers of comparable market area and
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sales potential and as will enable the Dealer to fulfill his sales and
service responsibilities hereunder. The Dealer shall maintain the
operation of such place of business during and for not less than the
business hours customary in the trade in the area, and shall not move or
alter the same or establish any other place of business for the sale or
service of IMPORTED PRODUCTS or the retail sale of used vehicles at any
other location, without the prior written consent of the Company.
(c) CAPITAL. The Dealer at all times shall maintain and employ in
connection with the Dealer's business and operations under this agreement
such investment, net working capital, net worth, lines of credit and retail
finance plans as may be required to enable the Dealer to fulfill all of the
Dealer's responsibilities under this agreement.
(d) SIGNS. The Dealer shall identify the Dealer's place of business as an
authorized sales and service establishment for IMPORTED PRODUCTS with such
signs as are consistent with standards established by the Company from time
to time and approved by the Company with respect to any display therein of
any trademark or trade name used or claimed by the Company.
(e) PERSONNEL. The Dealer shall employ and train a sufficient number of
competent personnel of good character, including, without limitation,
managers, salesmen and service technicians, to fulfill all of the Dealer's
responsibilities under this agreement, and shall cause such personnel to
attend such training schools as the Company may establish for them from
time to time.
(f) ACCOUNTING SYSTEM. The Dealer shall install and use in his business in
IMPORTED PRODUCTS and trade-ins thereon an accounting system in accordance
with the Company's manuals of accounting procedures for its authorized
dealers. Such system shall be given priority in use by the Dealer but
shall not be exclusive of any other system the Dealer may desire to use.
(g) REPORTS. The Dealer shall furnish to the Company, at the times and on
the forms prescribed by the Company, complete, accurate and true statements
of the financial condition and operating results of the Dealer's business
in IMPORTED PRODUCTS and trade-ins thereon, and such sales and other
reports as the Company from time to time may require. All such statements
and reports shall be based whenever applicable upon the accounting system
referred to in subparagraph 2(f) hereof. Financial information furnished
by the Dealer shall be handled on a confidential basis by the Company and,
unless authorized by the Dealer or required by law, or offered in evidence
in judicial or arbitration proceedings, shall not be furnished, except as
an unidentified part of a composite or coded report, to any party outside
of the Company.
(h) THE DEALER'S STOCKS. The Dealer, subject to the Company's filling his
orders, shall maintain stocks of IMPORTED VEHICLES and GENUINE NEW PARTS of
an assortment and quantity adequate to meet the Dealer's share of current
demand therefor in the DEALER'S LOCALITY and enable the Dealer to meet his
sales and service responsibilities hereunder.
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(i) THE DEALER'S ORDERS. The Dealer shall furnish the Company each month
on the dates and forms designated by the Company, (i) orders for the
numbers and models of IMPORTED VEHICLES the Dealer will purchase during
such further succeeding months as the Company may designate from time to
time, (ii) estimates of the Dealer's requirements of IMPORTED VEHICLES for
such succeeding months as the Company from time to time may request, and
orders for the Dealer's requirements of GENUINE NEW PARTS.
(j) DEMONSTRATORS. The Dealer shall keep available at all times in good
appearance and running order for demonstration purposes an adequate number
of new IMPORTED VEHICLES of the latest year model.
(k) CUSTOMER HANDLING. The Dealer shall cooperate with Company programs,
and develop and maintain his own programs, designed to develop good
relationships between the Dealer and the public. The Dealer shall make
reasonable efforts to handle satisfactorily all matters brought to his
attention relating to the sale and servicing of IMPORTED PRODUCTS, shall
make regular contact with owners and users of IMPORTED PRODUCTS in the
DEALER'S LOCALITY, and shall report promptly to the Company the details of
each inquiry or complaint received by the Dealer relating to any IMPORTED
PRODUCT which the Dealer cannot handle satisfactorily. The Dealer shall
not display, offer for sale, or promote as a GENUINE NEW PART, any part or
accessory which is not in fact a GENUINE NEW PART. The Dealer shall not
make directly or indirectly any false or misleading statement or
representation to a customer as to any IMPORTED VEHICLE, GENUINE NEW PART
or other item of purchase, or the source, condition or capabilities
thereof, or the prices or charges therefor, or the charges made by the
Company for distribution, delivery, taxes or other items.
(l) CUSTOMER DEPOSITS. The Dealer shall use all reasonable efforts to
safeguard each deposit of cash or property (and proceeds therefrom)
received from a customer in anticipation of a future delivery of an
IMPORTED VEHICLE until such delivery is consummated.
(m) TRADE PRACTICES AND ADVERTISING. The Dealer shall conduct business in
a manner that will reflect favorably at all times on the good name and
reputation of the Company and IMPORTED PRODUCTS; and avoid in every way any
"BAIT," deceptive, misleading, confusing or illegal advertising or business
practice. The Company shall not employ or encourage any dealer to employ
any such practice.
(n) INSPECTIONS AND TESTS. The Dealer shall allow persons designated by
the Company, at reasonable times and intervals, to examine the Dealer's
facilities, stocks of IMPORTED PRODUCTS and used vehicles and vehicles in
for service, to test the Dealer's equipment and to examine, copy and audit
any or all of the Dealer's records and documents relating in any way to the
Dealer's business hereunder. The Dealer shall maintain all records and
documents relating to claims made upon or paid by the Company for one (1)
year from the date of payment in the case of warranty and policy claims and
for two (2) years from the date of payment in the case of any other claims.
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(o) SUGGESTED PRICE LABELS. If any passenger car IMPORTED VEHICLE is
delivered by the Company to the Dealer with an incorrect label, or without
a completed label, affixed thereto pursuant to the Federal Automobile
Information Disclosure Act, the Dealer shall promptly complete and affix to
such vehicle a label on the form and in accordance with the directions
furnished by the Company.
(p) INDEMNIFICATION BY THE COMPANY. The Company shall defend, indemnify,
hold harmless and protect the Dealer from any losses, damages or expense,
including costs and attorney's fees, resulting from or related to lawsuits,
complaints or claims commenced against the Dealer by third parties
concerning:
(1) Property damage to an IMPORTED PRODUCT or bodily injury or
property damage arising out of an occurrence caused solely by a
"production defect" in that product (i.e., due to defective materials
or workmanship utilized or performed at the factory), except for any
"production defect" in tires and diesel engines made by others,
provided, however, that the "production defect" could not have been
discovered by the Dealer in the reasonable predelivery inspection of
the IMPORTED VEHICLE as recommended by the Company.
(2) Property damage to an IMPORTED PRODUCT or bodily injury or
property damage arising out of an occurrence caused solely by a defect
in the design of that product, except for a defect in the design of
tires or diesel engines made by others.
(3) Any damage occurring to a new IMPORTED VEHICLE and repaired by
the Company (excluding removal and replacement of an entire component
with a like component where no welding, riveting or painting is
involved), from the time the IMPORTED VEHICLE leaves the Company's
assembly plant or warehouse to the time it is delivered to the
Dealer's designated location, provided the Company failed to notify
the Dealer in writing of such damage and repair in transit prior to
delivery of the IMPORTED VEHICLE to the first retail customer.
In the event that any legal action arising out of any of these causes is
brought against the Dealer, the Company shall undertake, at its sole
expense, to defend said action on behalf of the Dealer when requested to do
so by the Dealer, provided that the Dealer promptly notifies the Company in
writing of the commencement of the action against the Dealer and cooperates
fully in the defense of the action in such manner and to such extent as the
Company may reasonably require (provided, however, that the Company shall
have the right to continue the suit in the name of the Dealer, if the
Company deems such action to be necessary). Should the Company refuse to
undertake the defense on behalf of the Dealer, or fail to undertake an
adequate defense, the Dealer may conduct its own defense and the Company
shall be liable for the cost of such defense, including reasonable
attorney's fees, together with any verdict, judgment or settlement paid by
the Dealer (provided, however, that the Dealer shall notify the Company
within a reasonable period of any such settlement).
(4) Personal injury or property damage arising solely out of a
negligent or improper act of any employee of the Company.
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3. SALES TO OTHERS AND PURCHASES FROM OTHERS
The Dealer reserves the right to make purchases from others without
liability of any kind to the Company, provided that the Dealer shall not be
relieved of any responsibility under this agreement. The Company reserves
the right to make sales to others (including without limitation to other
dealers) and to appoint other or additional dealers in IMPORTED PRODUCTS
without liability of any kind to the Dealer. The Dealer shall be given an
opportunity to discuss with Company representatives the appointment of any
additional dealer in IMPORTED VEHICLES in the DEALER'S LOCALITY prior to
the Company's appointing the same.
4. CONSIDERATION OF ORDERS
The Company shall make reasonable efforts to fill each order of the Dealer
that is accepted by the Company, but shall not be liable in any respect for
failure or delay in shipping any accepted order that is due wholly or in
part to any shortage of material, labor, transportation, or utility
service, or to any labor or production difficulty of the Company, any
source supplying IMPORTED PRODUCTS to the Company, or their suppliers, or
to any cause beyond the Company's control or without the Company's fault or
negligence. The Company shall not be liable for shipping IMPORTED PRODUCTS
over routes or by means of transportation not specified by the Dealer.
5. PRICES AND CHARGES
The Dealer shall pay the Company the DEALER PRICE for each IMPORTED PRODUCT
purchased from the Company by the Dealer, plus the Company's charges for
reimbursement for all applicable taxes and duties, plus any applicable
holdback deposit, plus any charge for import handling or advertising and
reimbursement of taxes not included in the DEALER PRICE. The Company may
change such DEALER PRICE, charges or deposit at any time without notice.
Such price, charges and deposit shall be those in effect, and delivery to
the Dealer shall be deemed made and the order filled, on the date of
delivery to the carrier or to the Dealer, whichever occurs first. If the
Company increases the DEALER PRICE for any IMPORTED PRODUCT, the Dealer may
cancel, by notice to the Company within ten (10) days after his receipt of
notice of the increase, any orders for such product placed by him prior to
receiving notice of the increase and unfilled at the time the Company
receives his notice of cancellation.
6. TERMS AND TITLE
(a) PAYMENT. Payment for each IMPORTED PRODUCT purchased by the Dealer
shall be made in cash in advance unless the invoice or the Company's then
current and applicable wholesale payment plan provides otherwise, in which
event the terms of the invoice or such plan shall govern. Receipt of any
commercial paper shall not constitute payment until collected in full. The
Dealer shall pay all collection charges.
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(b) TITLE. Title to each IMPORTED PRODUCT purchased by the Dealer shall
pass to the Dealer, or to the finance institution designated by him, upon
delivery by the Company to the carrier or the Dealer, whichever occurs
first, but the Company shall retain a security interest in and right to
repossess any product until paid therefor.
(c) LOSSES, SHIPPING AND STORAGE CHARGES. The Dealer shall bear all risk
of loss or damage to, and all shipping charges applicable to any IMPORTED
VEHICLE purchased by him occurring or accruing after delivery of the
vehicle to him or the carrier f.o.b. at a Company designated location. The
Dealer shall be responsible for and pay any and all demurrage, storage and
other charges accruing after arrival of any shipment at its destination.
(d) STATE AND LOCAL TAXES. As a part of each order, the Dealer represents
and warrants that all IMPORTED PRODUCTS are purchased for resale in the
ordinary course of business and that he has complied with all requirements
for his collection and/or payment of applicable sales, use and like taxes.
The Dealer agrees to make timely and proper return and payment of all
applicable sales, use and like taxes, and to hold the Company harmless from
all claims and demands therefor.
7. REFUNDS ON DEALER PRICE REDUCTIONS
If the Company changes the DEALER PRICE for any then current year model of
IMPORTED VEHICLE (or for any new year model which replaces an equivalent
next prior year model) or any factory-installed options therefor, the
Company shall pay or credit to the Dealer, for each unused, undamaged and
unsold IMPORTED VEHICLE and each Dealer-owned demonstrator of record, of
such current (or next prior) year model in the Dealer's stock or service on
the effective date of such change, the difference between the total DEALER
PRICES for such stock or demonstrator vehicle and factory-installed options
thereon before and after such changes, provided (i) such changes result,
after allowing for all other sums paid or offered by the Company on the
vehicle or its options, in a net price reduction for the vehicle as so
equipped in excess of Five Dollars ($5.00), (ii) the vehicle was purchased
from the Company or another authorized dealer within the next preceding
twelve (12) months, (iii) no substantial change has been made in the
opinion of the Company in the capacity, performance, size, weight, design,
and/or specifications of the vehicle or its factory-installed options, and
(iv) the Dealer applies for such payment or credit on the form, in the time
and with the supporting evidence specified by the Company.
Notwithstanding anything to the contrary in this paragraph 7, the Company
shall have no obligation to make any refund or credit hereunder with
respect to: (i) any reduction in the amount of the Company's charges for
reimbursement of taxes; (ii) any reduction in any contribution for
advertising or sales promotion; (iii) any reduction in or lower DEALER
PRICE for any option not factory-installed; (iv) any reduction in or lower
DEALER PRICE made by the Company in response to any law, order, regulation
or request of any government or governmental agency; or (v) any price
change or sum paid or offered by the Company with respect to any IMPORTED
PRODUCT unless it is announced by the Company as a reduction in the DEALER
PRICE, and is reflected in the Company's Suggested List Price, for such
product.
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8. CHANGES WITH RESPECT TO IMPORTED PRODUCTS
The Dealer acknowledges that the Company's plans for continued importation
and sale of IMPORTED PRODUCTS and its domestic marketing strategy therefor
depend upon satisfactory prices from the supplier(s) thereof, and will be
affected, among other things, by changes in international relationships,
world market conditions, foreign exchange rates and U.S. customs duties and
surcharges, the development of competitive products domestically produced
by the Company or other manufacturers, as well as satisfactory shipments,
sales and profits. Accordingly, the Dealer recognizes that at any time and
from time to time:
(a) The design of any IMPORTED PRODUCT may be changed without notice, or
(b) Upon notice to the Dealer, the Company may:
(i) reduce or discontinue the importation of any IMPORTED
PRODUCT, or
(ii) provide the Dealer a new product in place of any IMPORTED
PRODUCT, or
(iii) market a competitive product through other dealers,
all without any liability or obligation to the Dealer, including without
limitation, any obligation with respect to any IMPORTED PRODUCT theretofore
ordered or purchased by, or delivered to the Dealer.
9. WARRANTY
(a) IMPORTED VEHICLE WARRANTY. The Company shall from time to time
establish, by notice to the Dealer, the warranty to the owner
applicable to each IMPORTED VEHICLE. There shall be NO OTHER
WARRANTY, express or implied, including any warranty of
MERCHANTABILITY OR FITNESS, or any other obligation of the Company to
the Dealer or the owner with respect to the IMPORTED VEHICLE or any
part thereof except the warranty established pursuant to this
subparagraph. The Dealer shall expressly incorporate such warranty as
a part of each buyer's order form or other contract for the sale of an
IMPORTED VEHICLE and shall deliver a copy of the warranty, in the form
furnished by the Company, to the owner at the time the IMPORTED
VEHICLE is delivered to the owner, all in accordance with instructions
set forth in the Company's then current Warranty and Policy Manual and
supplements thereto (hereinafter called "Warranty Manual").
(b) GENUINE NEW PART WARRANTY. The Company shall from time to time
establish, by notice to the Dealer, the warranty applicable to each
GENUINE NEW PART. There shall be NO OTHER WARRANTY, express or
implied, including any warranty of MERCHANTABILITY OR FITNESS, or any
other obligation of the Company to the Dealer or the customer with
respect to any GENUINE NEW PART or any part thereof except the
warranty established pursuant to this subparagraph.
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10. OWNER LITERATURE
The Dealer shall deliver to each retail purchaser of an IMPORTED VEHICLE
from him, information concerning the warranty, product service and dealer
service policies in such form as may then be in effect.
11. PREDELIVERY INSPECTION
The Dealer shall, at his own expense, unless the Company shall establish a
reimbursement procedure therefor, inspect and condition each IMPORTED
VEHICLE before delivery to a retail customer in accordance with schedules
and instructions furnished by the Company from time to time.
12. DEALER NOT AGENT OF THE COMPANY
This agreement does not in any way create the relationship of principal and
agent between the Company and the Dealer; and under no circumstances shall
the Dealer be considered to be the agent of the Company. The Dealer shall
not act or attempt to act, or represent himself, directly or by
implication, as agent of the Company or in any manner create or attempt to
create any obligation on behalf or in the name of the Company.
13. TRADEMARKS AND TRADE NAMES
(a) LIMITATIONS ON USE. The Dealer shall not use, or permit the use of,
the word "Ford" or any other trademark or trade name used or claimed by the
Company or any source supplying IMPORTED PRODUCTS to the Company, or coined
words or combinations containing the same or parts thereof, either as a
part of any firm name or trade name unless the Company shall consent
thereto in writing, or in connection with any business conducted by the
Dealer other than dealing, under this agreement, in IMPORTED PRODUCTS to
which such ▇▇▇▇ or name refers, and in trade-ins thereon, and then only in
the manner, form and extent approved by the Company. The Dealer shall
accomplish discontinuance of such use on request of the Company at any
time.
(b) PROTECTION AND NON-CONTEST. The Dealer shall promptly carry out all
instructions issued by the Company from time to time to protect and promote
any trademark or trade name used or claimed by the Company or any source
supplying IMPORTED PRODUCTS to the Company, and shall not contest the
validity of, or the right of the Company or any such source to exclusive
use of, any such trademark or trade name.
14. TERMINATION
(a) BY THE COMPANY. The Company may terminate this agreement:
(1) By notice given to the Dealer not less than ninety (90) days
prior to the effective date of such notice in the event the
Dealer shall have failed to fulfill any one or more of the
Dealer's responsibilities set forth in this agreement.
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(2) By notice given to the Dealer, effective immediately, in any of
the following events: (i) failure of the Dealer to fulfill any
one or more of the Dealer's responsibilities set forth in
paragraphs 5 as to prices or charges, 6 as to terms or title, and
13 as to trademarks and trade names; (ii) any assignment or
attempted assignment by the Dealer of any interest in this
agreement or any change, however accomplished, in the direct or
indirect ownership or management of the Dealer from that set
forth in paragraph F, without the Company's prior written assent;
(iii) failure of the Dealer for any reason to function in the
ordinary course of business or to keep his place of business open
during and for not less than the hours customary in the trade in
his area; (iv) any conviction in a court of competent
jurisdiction of the Dealer or any person named in paragraph F, or
any disagreement between or among such persons, which in the
opinion of the Company may affect adversely the ownership,
operation, management, business, reputation or interest of the
Dealer or the Company; (v) submission by the Dealer to the
Company of any false or fraudulent report or statement, including
without limitation claims for labor or parts under paragraph 9 as
to warranties, and claims for any other sum from the Company;
(vi) the Dealer shall have continued or repeated any advertising
or practice contrary to subparagraph 2(m) or shall have engaged
in similar advertising or practices after notice from the Company
that the same may be regarded by the Company as a basis for
termination of this agreement; (vii) the Dealer shall have
continued or repeated any customer handling practice contrary to
subparagraph 2(k) or shall have engaged in similar customer
handling or practices after notice from the Company that the same
may be regarded by the Company as a basis for termination of this
agreement; (viii) misrepresentation by the Dealer to the Company
as to the ownership or management of the Dealer either in
connection with the application for this agreement or thereafter;
(ix) if the Dealer has been holding one or more other sales and
service agreements from the Company covering other vehicles made
or sold by the Company, the termination for any reason of any
such other agreement by either the Company or the Dealer; (x) any
of the reasons set forth in subparagraph 8(b) hereof (except
clause (iii) thereof) with respect to IMPORTED VEHICLES.
(3) By notice given to the Dealer not less than thirty (30) days
prior to the effective date of such notice in the event the
Company decides to terminate all outstanding sales agreements
with Dealers for IMPORTED PRODUCTS and to offer to them a new or
amended form or forms of sales and service agreement.
(b) BY EITHER PARTY. Either party may terminate this agreement by notice
given to the other, effective immediately, in any of the following
events: (i) dissolution of the Dealer if the Dealer is a corporation
or partnership; (ii) insolvency of the Dealer, inability of the Dealer
to meet debts as they mature, filing by or against the Dealer of any
petition under any bankruptcy or reorganization or receivership law,
appointment by a court of a temporary or permanent receiver or trustee
or custodian for the Dealer
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or all or any part of the Dealer's business, or an assignment by the
Dealer for benefit of creditors; (iii) failure of either party to
obtain or maintain any required license; or (iv) death or physical or
mental incapacity of any owner of the Dealer named in paragraph F,
provided, however, that in order to facilitate orderly liquidation of
the dealership, the Company shall defer the effective date of
termination for a period of from three months to one year, as the
Company may determine, if the representative of such deceased or
incapacitated owner shall so request.
(c) BY THE DEALER. The Dealer may terminate this agreement at any time at
will by notice given to the Company at least thirty (30) days prior to the
effective date of such notice.
15. ACTS IN GOOD FAITH
The Dealer acknowledges that each of the Dealer's responsibilities under
this agreement is reasonable, proper and fundamental to the purposes of
this agreement and failure by the Dealer to fulfill any of the same would
constitute a material breach of this agreement. The Dealer further
acknowledges that the occurrence of any of the events of immediate
termination described in subparagraphs 14(a)(2) or 14(b) would seriously
impair fundamental considerations upon which this agreement is based, and
that the right of termination reserved in subparagraph 14(a)(3) for the
offer of new sales and service agreements is necessary to permit the
Company to remain competitive at all times with other manufacturers and
sellers of vehicles. The Dealer agrees that if the Company or any of its
representatives (i) requests the Dealer to fulfill any of such
responsibilities, or (ii) believes that any such failure, occurrence or
event is occurring or has occurred and advises the Dealer that, unless
remedied, such failure, occurrence or event may result in termination or
nonrenewal of this agreement by the Company, or (iii) recommends or gives
notice of termination or nonrenewal of, or terminates, or does not renew,
this agreement because of any such failure, occurrence or event, then such
request, advice, recommendation, notice, termination or nonrenewal shall
not be considered to constitute or be evidence of coercion or intimidation,
or threat thereof, or action not in good faith.
16. OPPORTUNITY TO CURE
Notwithstanding anything herein to the contrary, the Company shall give the
Dealer a reasonable opportunity to cure any failure by the Dealer to
fulfill any of the Dealer's responsibilities set forth in paragraphs 2 as
to operation of his business, 5 as to prices and charges, 6 as to terms and
title, 9 as to warranties, 10 as to owner literature, 11 as to predelivery
inspection, 12 as to no agency and 13 as to trademarks and trade names
prior to giving the Dealer notice of termination or nonrenewal based upon
such failure.
17. DISPOSITION OF THE DEALER'S ASSETS
The Dealer agrees that the Company has the right to select the dealers it
shall appoint to distribute products made or sold by it and may decline to
appoint, as an authorized dealer of the Company, any purchaser or
prospective purchaser of any of the assets or capital stock of the Dealer
upon the termination of this agreement or otherwise.
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18. OBLIGATIONS UPON TERMINATION
Upon termination or nonrenewal of this agreement the Dealer shall cease to
be an authorized dealer in IMPORTED PRODUCTS and shall:
(a) SUMS OWING THE COMPANY. Pay to the Company all sums owing from the
Dealer to the Company.
(b) DISCONTINUANCE OF USE OF TRADEMARKS AND TRADE NAMES. At the Dealer's
expense (i) remove all signs erected or used by the Dealer, or by any
business affiliated with the Dealer and bearing any trademark or trade name
used or claimed by the Company or any source supplying IMPORTED PRODUCTS to
the Company (except as such use may be permitted under other sales and
service agreements with the Company), or any word indicating that the
Dealer is an authorized dealer in any IMPORTED PRODUCT; (ii) erase or
obliterate all such trademarks, trade names and words from stationery,
forms and other papers used by the Dealer or any business affiliated with
the Dealer; (iii) permanently discontinue all advertising of the Dealer as
an authorized dealer in any IMPORTED PRODUCT; and (iv) refrain from doing
anything that would indicate that the Dealer is or was an authorized dealer
in any IMPORTED PRODUCT. If the Dealer does not comply with any of the
requirements of this paragraph 18(b), the Dealer shall reimburse the
Company for all costs and expenses, including attorneys' fees, incurred by
the Company in effecting or enforcing compliance.
(c) ASSIGNMENT OF ORDERS AND CUSTOMER DEPOSITS. Assign to the Company, or
its nominee, all customer orders for IMPORTED PRODUCTS which the Dealer has
not filled, and all customer deposits made thereon; and deliver to the
Company the names and addresses of the Dealer's existing and prospective
customers of IMPORTED PRODUCTS.
(d) CANCELLATION OF ORDERS. Termination or nonrenewal of this agreement
shall operate to cancel each order for an IMPORTED PRODUCT theretofore
received by the Company from the Dealer and unfilled (as defined in
paragraph 5) on the effective date of termination or nonrenewal.
(e) WARRANTY WORK. The Dealer shall cease to be eligible to receive
reimbursement from the Company with respect to any work thereafter
performed or part thereafter supplied under any warranty or policy
applicable to any IMPORTED PRODUCT, unless specifically authorized by the
Company in writing to perform such work and then only in the manner and for
the period of time set forth in such authorization.
(f) SERVICE RECORDS. The Dealer shall deliver to the Company or its
nominee all of the Dealer's records with respect to predelivery, warranty,
policy, campaign and other service work of the Dealer.
19. REACQUISITION OF IMPORTED PRODUCTS AND ACQUISITION OF THE DEALER'S
SIGNS, TOOLS AND EQUIPMENT
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Upon termination or nonrenewal of this agreement by the Company
(except pursuant to subparagraph 14(a)(3) unless the Dealer shall fail
to accept a new agreement) or by the Dealer, the Dealer may elect, as
provided in paragraph 20, to have the Company purchase or accept upon
return from the Dealer, in return for his general release specified in
paragraph 20:
(a) IMPORTED VEHICLES. Each unused, undamaged and unsold IMPORTED
VEHICLE (including all factory-installed options thereon) in the
Dealer's stock on the effective date of such termination or
nonrenewal, provided such vehicle is in first-class saleable
condition, is of a then current year model, has not been altered since
purchase from the Company, and was purchased by the Dealer from the
Company or another authorized dealer in IMPORTED VEHICLES prior to the
time the Dealer first learned of the prospective termination or
nonrenewal of this agreement. The price for such IMPORTED VEHICLE
shall be its DEALER PRICE, plus the Company's charges for holdback
deposits, import handling, advertising and reimbursement of taxes if
the same are not included in the DEALER PRICE at the time it was
purchased from the Company, less all allowances previously paid or
offered thereon by the Company.
(b) GENUINE NEW PARTS.
(i) Each unused, undamaged and unsold GENUINE NEW PART
(including unopened appearance and maintenance materials and
paint) in the Dealer's stock on the effective date of
termination or nonrenewal, provided such part is offered for
sale by the Company to authorized IMPORTED VEHICLE dealers
in the Company's then current price list of pass and
accessories, is in first-class saleable condition and was
purchased by the Dealer either from the Company or in
reasonable volume from another authorized dealer in IMPORTED
VEHICLES prior to the time the Dealer first learned of the
prospective termination or nonrenewal of this agreement.
(ii) Each unused, undamaged and unsold accessory for IMPORTED
VEHICLES in the Dealer's stock on the effective date of
termination or nonrenewal, provided such accessory is in
first-class saleable condition, was purchased by the Dealer
either from the Company or another authorized dealer in
IMPORTED VEHICLES prior to the time the Dealer first learned
of the prospective termination or nonrenewal of this
agreement, and was sold by the Company either for use in an
IMPORTED VEHICLE that is a current year model on such
effective date or within the twelve months next preceding
such effective date.
(iii) The price for each such part or accessory shall be its
DEALER PRICE in effect on the effective date of termination
or nonrenewal, less all allowances and discounts paid or
offered thereon by the Company.
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(iv) The Dealer at his own expense shall carefully pack and box
such of the eligible parts and accessories as the Company
may direct and the Company shall pay the Dealer an
additional 5% of the DEALER PRICE of the eligible parts and
accessories so packed and boxed.
(c) THE DEALER'S SIGNS. Each sign or portion thereof bearing the word
"Merkur" or any trademark or trade name used or claimed by the Company
pertaining to IMPORTED PRODUCTS which is located at a place of
business of and is owned by the Dealer on the effective date of
termination or nonrenewal, and was approved by the Company pursuant to
subparagraph 2(d) hereof. The price for each such sign or part
thereof shall be its fair market value on such effective date as
agreed by the Company and the Dealer, or, if they cannot agree, as
determined by a qualified independent appraiser selected by the
Company and the Dealer.
(d) TOOLS AND MECHANICAL EQUIPMENT. All tools and automotive service
equipment owned by the Dealer on the effective date of termination or
nonrenewal which were designed especially for servicing IMPORTED
PRODUCTS, which are of a type and number recommended in writing by the
Company, which are in usable and good condition except for reasonable
wear and tear, and which were purchased by the Dealer within the three
(3) year period preceding the effective date of termination or
nonrenewal. The price for each such tool and item of automotive
service equipment shall be its fair market value on such effective
date as agreed by the Company and the Dealer, or, if they cannot
agree, as determined by a qualified independent appraiser selected by
the Company and the Dealer.
(e) PROCEDURES, DELIVERY AND TITLE. The Dealer shall return all property
to be purchased or reacquired by the Company pursuant to this
paragraph 19 in accordance with the procedures and timetables then
established by the Company, shall deliver such property at the
Dealer's place of business unless the Company directs otherwise (in
which event the Company shall pay transportation costs to the place of
delivery) and shall furnish a general warranty ▇▇▇▇ of sale thereof
satisfactory to the Company, together with evidence satisfactory to
the Company that the Dealer has complied with all applicable bulk
sales laws and that such property is free and clear of all claims,
liens and encumbrances.
(f) PAYMENT. The Company shall pay the Dealer for the property purchased
or reacquired by it pursuant to this paragraph 19 within a reasonable
time following the Dealer's fulfillment of all of the Dealer's
obligations under paragraph 18 and this paragraph 19, subject to the
Dealer's tender of a general release as specified in paragraph 20 and
subject to offset of any obligations then owing by the Dealer to the
Company.
(g) ASSIGNMENT OF BENEFITS. As an assist to the Dealer in effecting an
orderly transfer of his assets to a replacement dealer and to minimize
possible interruptions in customer convenience and service, in the
event of termination or nonrenewal by either party, any rights or
benefits with respect to subparagraphs 19(a), 19(b), 19(c) and 19(d),
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herein may be assigned by the Dealer to anyone to whom the Dealer has
agreed to sell the respective property and whom the Company has
approved as a replacement for the Dealer. Such assignments will be
subject to Dealer's fulfillment of his obligations under paragraph 18
and this paragraph 19 and subject to the Dealer's tender of a general
release as specified in paragraph 20.
20. TERMINATION BENEFITS FULL COMPENSATION; GENERAL RELEASE
If the Company or the Dealer terminates or does not renew this agreement,
the Company shall, within a reasonable time after the effective date of
such termination or nonrenewal, submit to the Dealer a written tender of
the benefits set forth in paragraph 19, including an estimate of the amount
to be paid thereunder, and a form for the Dealer to use if he desires to
reject and release the Company from providing such benefits. The Dealer
shall have thirty (30) days after his receipt of such tender and release
form to elect either (i) to reject all of such benefits by executing and
returning the release form to the Company within such thirty (30) days, or
(ii) to accept any or all such benefits as full and complete compensation
to the Dealer for such termination or nonrenewal by failing to execute and
return the release form within such thirty (30) days. Upon the Dealer's
election to accept any of such benefits, the Company shall be released from
any and all other liability to the Dealer, however claimed to arise, except
for such amounts as the Company may have agreed in writing to pay to the
Dealer. The Dealer, simultaneously with his receipt of the benefits
provided for in paragraph 19, shall execute and deliver to the Company a
satisfactory general release which shall exempt any remaining liability
under paragraph 19 or other written agreements.
21. DISPOSITION OF THE DEALERS ASSETS
In view of the nature, purposes and objectives of the Company's Dealer
Sales and Service Agreements, and the differences in operating requirements
among dealerships of differing sizes and types of markets, the Company
expressly reserves the right to select the dealers with whom it will enter
into such agreements so as to maintain as high quality a dealer
organization as possible.
In the event this agreement is terminated or not renewed by either party or
if the Dealer plans to terminate or not renew this agreement, the Company
acknowledges that the Dealer has the right to negotiate for the sale of the
assets of the Dealer at such price as may be agreed upon by the Dealer and
the prospective purchaser. In turn, the Dealer acknowledges that the
Company has the right to approve or decline to approve any prospective
purchaser as to his character, automotive experience, management, capital
and other qualifications for appointment as an authorized dealer in
IMPORTED PRODUCTS for the dealership operations involved. Approval by the
Company of the prospective purchaser shall not, however, be unreasonably
withheld. If, in the opinion of the Company, the price to be paid for such
assets appears, on the basis of the average operating results of other
dealers, to result in an unsatisfactory return on investment so that such
prospective purchaser (i) may not remain as a dealer, or (ii) may be
impelled to sell IMPORTED PRODUCTS at high noncompetitive prices with a
probable reduction in sales volume, the Company may without liability to
the Dealer, counsel with such prospective purchaser regarding such
opinions.
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22. DEALER'S SUCCESSOR ON DEATH OR INCAPACITY
Upon any termination or nonrenewal of this agreement because of the death
or incapacity of any owner named in paragraph F(i), the Company shall offer
a two-year interim sales agreement for IMPORTED PRODUCTS:
(a) To any person previously nominated, in an amendment to paragraph
F(ii), by such owner as his successor, together with any remaining
persons named in paragraph F(i), provided that:
(i) The nominee has been participating in the management of the
dealership for a reasonable period of time and is named in
paragraph F(ii) when notice of such termination or
nonrenewal is given; and
(ii) The facilities and capital of the dealership are then
satisfactory in the opinion of the Company; and
(iii) If more than one person has been nominated, the Company in
its discretion shall determine to which nominee or nominees
the interim agreement shall be offered.
(b) If there is no valid nominee, then to the spouse of such owner,
together with any remaining persons named in paragraph F(i), provided
that:
(i) Managerial authority for the operation of the dealership
will be vested in persons named in paragraph F(ii), or in
other persons determined by the Company to be qualified; and
(ii) The facilities and capital of the dealership are then
satisfactory in the opinion of the Company.
(c) Such two-year interim sales and service agreement shall be the same as
the Company's then standard sales and service agreement for IMPORTED
PRODUCTS, except that it shall be designated as an interim agreement.
The Company may, in its discretion, extend the term of any interim
sales and service agreement to facilitate the purchase by others of
the former owner's interest in the dealership. Before the end of any
interim sales and service agreement, the Company shall determine, in
its discretion, whether or not the persons named in paragraphs F(i)
and F(ii) of such agreement then possess the necessary qualifications,
capital and facilities of an authorized dealer. If the Company
determines that they do possess the same, the Company shall offer them
its then standard form of IMPORTED PRODUCTS sales and service
agreement.
(d) In the event that the persons to whom an interim or standard sales and
service agreement is offered do not accept the same within thirty (30)
days, the offer shall automatically expire.
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(e) Notwithstanding anything to the contrary in this paragraph 22, the
Company shall not be obligated to offer an Interim Agreement to any
person if the Company notifies the Dealer in writing prior to
termination or nonrenewal of this agreement because of the death or
incapacity of an owner named in paragraph F(i) that the Company's
plans do not provide for continuation of representation of IMPORTED
PRODUCTS at the Dealer's location.
23. ACKNOWLEDGMENTS
This agreement terminates and supersedes all other agreements, and
constitutes the entire agreement, between the parties with respect to
IMPORTED PRODUCTS. Each party acknowledges that, except as expressly set
forth herein or elsewhere in writing, no representation, understanding or
presumption of law or fact has been made or relied upon (i) which has
induced the execution of this agreement or would in any way modify any of
its provisions, or (ii) with respect to the effectiveness or duration of
this agreement or the sales or profit expectancy of the Dealer. The Dealer
also acknowledges that he has voluntarily entered into this agreement
without coercion or intimidation or threats thereof from the Company, and
that each of its terms and conditions are reasonable, fair and equitable.
24. ASSIGNMENT
Neither this agreement nor any right or interest hereunder may be assigned
by the Dealer without the prior written assent of the Company.
25. NO IMPLIED WAIVERS
Except as expressly provided in this agreement, the waiver by either party,
or the failure by either party to claim a breach, of any provision of this
agreement shall not constitute a waiver of any subsequent breach, or affect
in any way the effectiveness of such provision.
26. TRANSACTIONS AFTER TERMINATION NOT A RENEWAL
In the event either party has any business relations with the other party
after termination or nonrenewal of this agreement, such relations shall not
constitute a renewal of this agreement or a waiver of such termination, but
all such transactions shall be governed by terms identical with the
provisions of this agreement unless the parties execute a new and different
agreement.
27. LIMITATION OF THE COMPANY'S LIABILITY
This agreement contemplates that all investments by or in the Dealer shall
be made, and the Dealer shall purchase and resell IMPORTED PRODUCTS, in
conformity with the provisions hereof, but otherwise in the discretion of
the Dealer and the Dealer's owners. Except as herein specified, nothing
herein contained shall impose any liability on the Company in connection
with the Dealer's operations under this agreement or otherwise or for
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any expenditure made or incurred by the Dealer in preparation for
performance or in performance of the Dealer's responsibilities under this
agreement.
28. EFFECT OF DETERMINATIONS BY THE COMPANY
Any determination, opinion or exercise of discretion to be made by the
Company in connection with any provision of this agreement shall be made by
the Company alone and shall be final, conclusive, and binding upon the
parties hereto.
29. AMENDMENT
Notwithstanding anything in this agreement to the contrary, the Company
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 the Company that might affect materially the relationship
between the Company and the Dealer.
30. MICHIGAN AGREEMENT
This agreement has been signed by the Dealer and sent to the Company in
Michigan for final approval and execution, and has been signed and
delivered on behalf of the Company. The parties intend this agreement to
be executed as a Michigan agreement and to be construed in accordance with
the laws of the State of Michigan.
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