10.5.2
DEALER SALES
AND
SERVICE AGREEMENT
ISUZU
AMERICAN ISUZU MOTORS INC.
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ISUZU DEALER SALES
AND
SERVICE AGREEMENT
ADDITIONAL PROVISIONS
TABLE OF CONTENTS
Page
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I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
II. SALES TO DEALER . . . . . . . . . . . . . . . . . . . . . . . . . . .3
A. Dealer's Orders. . . . . . . . . . . . . . . . . . . . . . . . .3
B. Shipment and Risk of Loss. . . . . . . . . . . . . . . . . . . .3
C. Passage of Title . . . . . . . . . . . . . . . . . . . . . . . .3
D. Freight. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
E. Diversions . . . . . . . . . . . . . . . . . . . . . . . . . . .4
F. Changes in and Discontinuance of Isuzu Products. . . . . . . . .4
G. Pricing and Other Terms of Sale. . . . . . . . . . . . . . . . .4
H. Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1. Payment for Vehicles. . . . . . . . . . . . . . . . . . . .4
2. Payment for Parts, Accessories and Other
Products. . . . . . . . . . . . . . . . . . . . . . . . . .5
3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .5
I. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . .5
J. Failure or Delay in Filling Orders . . . . . . . . . . . . . . .6
K. Alteration of Isuzu Products . . . . . . . . . . . . . . . . . .6
III. DEALERSHIP OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . .7
A. Dealership Location and Facilities . . . . . . . . . . . . . . .7
1. Dealership Facilities . . . . . . . . . . . . . . . . . . .7
2. Changes in Dealership Location or Facilities. . . . . . . .7
3. Hours of Business . . . . . . . . . . . . . . . . . . . . .7
4. Identification of Dealership Facilities . . . . . . . . . .7
5. Evaluation of Dealer's Performance with
Respect to Dealership Facilities. . . . . . . . . . . . . .7
B. Vehicle Sales Operations . . . . . . . . . . . . . . . . . . . .8
1. Responsibility of Dealer. . . . . . . . . . . . . . . . . .8
2. Sales Personnel . . . . . . . . . . . . . . . . . . . . . .8
3. Inventory . . . . . . . . . . . . . . . . . . . . . . . . .8
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4. Modification of Isuzu Vehicles. . . . . . . . . . . . . . .8
5. Evaluation of Dealer's Sales Performance. . . . . . . . . .8
6. Evaluation of Sales of Isuzu Trucks . . . . . . . . . . . .9
C. Used Vehicle Sales Operations. . . . . . . . . . . . . . . . . .9
D. Rental and Leasing Operations. . . . . . . . . . . . . . . . . 10
E. Parts and Accessories Sales Operations . . . . . . . . . . . . 10
1. Responsibility of Dealer. . . . . . . . . . . . . . . . . 10
2. Sales Personnel . . . . . . . . . . . . . . . . . . . . . 10
3. Inventory . . . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations Concerning Parts and
Accessories . . . . . . . . . . . . . . . . . . . . . . . 10
5. Evaluation of Dealer's Parts and Accessories
Sales Performance . . . . . . . . . . . . . . . . . . . . 11
F. Service Operations . . . . . . . . . . . . . . . . . . . . . . 11
1. General Service Responsibilities of Dealer. . . . . . . . 11
2. Specific Service Obligations of Dealer. . . . . . . . . . 11
(a) New Vehicle Pre-Delivery Inspections and
Adjustments. . . . . . . . . . . . . . . . . . . . . 11
(b) Complimentary Maintenance Service. . . . . . . . . . 11
(c) Warranty Repairs . . . . . . . . . . . . . . . . . . 12
(d) Campaign Inspections and Corrections . . . . . . . . 12
(e) Disposition of Replaced Parts. . . . . . . . . . . . 12
(f) Maintenance and Repair Service . . . . . . . . . . . 13
(g) Payments by Distributor to Dealer. . . . . . . . . . 13
3. Other Service Responsibilities of Dealer. . . . . . . . . 13
(a) Compliance with Laws Regulating Vehicles
and Other Products . . . . . . . . . . . . . . . . . 13
(b) Service Personnel. . . . . . . . . . . . . . . . . . 13
(c) Service Equipment and Special and
Essential Tools. . . . . . . . . . . . . . . . . . . 14
4. Evaluations of Dealer's Service Performance . . . . . . . 14
G. Advertising, Promotional and Public Relations
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1. Advertising Standards . . . . . . . . . . . . . . . . . . 14
2. Dealer's Advertising Programs . . . . . . . . . . . . . . 14
3. Participation in Distributor's Advertising
Programs. . . . . . . . . . . . . . . . . . . . . . . . . 14
4. Customer Relations. . . . . . . . . . . . . . . . . . . . 14
(a) Informing Customers as to Details of
Charges. . . . . . . . . . . . . . . . . . . . . . . 14
(b) Right of Retail Purchaser to Buy Vehicle
Without Purchasing Optional Equipment or
Accessories. . . . . . . . . . . . . . . . . . . . . 15
(c) Informing Retail Purchasers as to
Optional Equipment or Accessories
Installed by Dealer. . . . . . . . . . . . . . . . . 15
H. Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
I. Accounting System. . . . . . . . . . . . . . . . . . . . . . . 15
J. Records and Reports. . . . . . . . . . . . . . . . . . . . . . 16
1. Financial Statements. . . . . . . . . . . . . . . . . . . 16
2. Ownership and Management Records. . . . . . . . . . . . . 16
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3. Sales and Service Records and Reports . . . . . . . . . . 16
4. Records Concerning Applications and Claims for
Payments. . . . . . . . . . . . . . . . . . . . . . . . . 16
K. Inspection of Accounts and Records . . . . . . . . . . . . . . 17
L. Trademarks and Service Marks . . . . . . . . . . . . . . . . . 17
IV. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 18
A. Indemnification of Distributor . . . . . . . . . . . . . . . . 18
B. Indemnification of Dealer. . . . . . . . . . . . . . . . . . . 18
C. Exception to Indemnification . . . . . . . . . . . . . . . . . 19
V. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
A. Termination of Agreement . . . . . . . . . . . . . . . . . . . 20
1. Voluntary Termination by Dealer . . . . . . . . . . . . . 20
2. Termination Due to Acts or Events Controlled
by Dealer, Its Owner(s) or Manager(s) . . . . . . . . . . 20
3. Termination by Distributor for Failure of
Performance by Dealer . . . . . . . . . . . . . . . . . . 22
4. Termination Because of Death or Incapacity of
Owner and/or Executive Manager. . . . . . . . . . . . . . 22
5. Termination for Failure of Dealer or
Distributor to be Licensed. . . . . . . . . . . . . . . . 23
6. Termination by Mutual Agreement . . . . . . . . . . . . . 23
7. Right to Rely on Any Applicable Termination
Provision . . . . . . . . . . . . . . . . . . . . . . . . 23
B. Transactions After Termination . . . . . . . . . . . . . . . . 24
1. Effect of Termination on Orders . . . . . . . . . . . . . 24
2. Effect of Transactions After Termination. . . . . . . . . 24
3. Purchases of Eligible Items . . . . . . . . . . . . . . . 24
4. Responsibilities of Dealer. . . . . . . . . . . . . . . . 25
5. Payment by Distributor. . . . . . . . . . . . . . . . . . 26
VI. SUCCEEDING AND NEW AND SUPERSEDING
SALES AND SERVICE AGREEMENTS. . . . . . . . . . . . . 27
A. Succeeding Agreements. . . . . . . . . . . . . . . . . . . . . 27
B. New and Superseding Dealer Agreements. . . . . . . . . . . . . 27
C. Effect of New or Superseding Agreement on
Responsibilities and Obligations under this
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
VII. ESTABLISHMENT OF SUCCESSOR DEALER. . . . . . . . . . . . . . . . . 29
A. Because of Death of Owner. . . . . . . . . . . . . . . . . . . 29
B. Because of Death or Incapacity of Executive Manager. . . . . . 29
C. Evaluation of Successor Dealer . . . . . . . . . . . . . . . . 30
D. Termination of Market Representation . . . . . . . . . . . . . 30
E. Termination of Offer . . . . . . . . . . . . . . . . . . . . . 30
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VIII. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 31
A. Dealer Not Made Agent or Legal Representative. . . . . . . . . 31
B. Dealer's Responsibility for Its Operations,
Expenditures, Liabilities and Obligations. . . . . . . . . . . 31
C. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
D. Offsets and Set Offs . . . . . . . . . . . . . . . . . . . . . 31
E. Changes Required by Law. . . . . . . . . . . . . . . . . . . . 32
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ISUZU DEALER SALES
AND
SERVICE AGREEMENT
ADDITIONAL PROVISIONS
The following Additional Provisions have by reference been incorporated in
and made a part of the ISUZU DEALER SALES AND SERVICE AGREEMENT which they
accompany and which has been executed on behalf of Distributor and Dealer.
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
A. "Authorized Isuzu Dealers" shall mean dealers located in the United
States that are authorized by Distributor to conduct dealership operations in
connection with the sale of Isuzu Products.
B. "Isuzu Cars" shall mean such new passenger cars manufactured by or on
behalf of Manufacturer as are from time to time offered for sale by
Distributor to Dealer for resale.
C. "Isuzu Trucks" shall mean such new light duty trucks and chassis
manufactured by or on behalf of Manufacturer as are from time to time offered
for sale by Distributor to Dealer for resale.
D. "Isuzu Vehicles" shall mean Isuzu Cars and Isuzu Trucks.
E. "Isuzu Parts and Accessories" shall mean such parts and accessories
manufactured by or on behalf of Manufacturer or Distributor as are from time
to time offered for sale by Distributor to Dealer.
F. "Isuzu Products" shall mean Isuzu Vehicles and Isuzu Parts and
Accessories.
G. "Competitive Cars" shall mean those new cars which are designated by
Distributor as directly competitive with Isuzu Cars.
H. "Import Industry Cars" shall mean all new cars manufactured
other than within the United States which are imported into the
United States for sale, to the extent data relating to registration
thereof are reasonably available.
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I. "Industry Cars" shall mean all new cars of all manufacturers which are
sold and distributed within the United States, to the extent data relating to
registration thereof are reasonably available.
J. "Competitive Trucks" shall mean those new light duty trucks which are
designated by Distributor as directly competitive with Isuzu Trucks.
K. "Import Industry Trucks" shall mean all new light duty trucks
manufactured other than within the United States which are imported into the
United States for sale, to the extent data relating to registration thereof
are reasonably available.
L. "Industry Trucks" shall mean light duty trucks of all manufacturers
which are sold and distributed within the United States, to the extent data
relating to registration thereof are reasonably available.
M. "Dealership Location" shall mean the business location of Dealer
described in the initial paragraph of this Agreement.
N. "Dealership Facilities" shall mean the land areas at the Dealership
Location and the buildings and improvements erected thereon.
0. "Dealer's Market" shall mean the geographical area within which
potential purchasers and owners of Isuzu Products which Dealer can most
readily serve are located. Such area, or portions thereof, may at any time
be a part of the Market of other Authorized Isuzu Dealers as well as Dealer.
P. "Owner(s)" shall mean the person(s) named as Owner(s) in Section 4 of
this Agreement.
Q. "Executive Manager" shall mean the person named as Executive Manager in
Section 4 of this Agreement.
R. "Successor Addendum" shall mean the Successor Addendum, if any, executed
by Distributor and Dealer pursuant to the provisions of Article VII of this
Agreement.
S. "Dealership Standards" shall mean such reasonable standards as may be
established by Distributor for Authorized Isuzu Dealers from time to time
under its standard procedures with respect to such matters as dealership
facilities, tools, equipment, capitalization, inventories and personnel.
T. "Service Policies and Procedures Manual" shall mean the publication or
publications of Distributor, as the same may from time to time be amended,
revised or supplemented,
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which set forth Distributor's policies and procedures concerning and
administration of Distributor's warranties and related matters.
U. "Manufacturer" shall mean ISUZU MOTORS LIMITED.
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ARTICLE II. SALES TO DEALER
A. DEALER'S ORDERS
At such times as Distributor may from time to time designate, Dealer shall
submit to Distributor orders for Isuzu Products in such quantities and
varieties as may be reasonably necessary for Dealer to fulfill its
obligations under this Agreement. All orders shall be on forms supplied by
Distributor, shall be subject to acceptance by Distributor, and may be
accepted in whole or in part. Orders may be accepted by written notice to
Dealer or by actual delivery of the products ordered to Dealer or to a
carrier for transportation to Dealer. Except as otherwise provided in this
Agreement, orders shall not be cancellable by Dealer after acceptance by
Distributor. Distributor will process and fill Dealer's orders in accordance
with procedures relating thereto established by Distributor.
Because of the number of factors that affect the distribution of products and
the relevancy thereof at any given time, Distributor necessarily reserves to
itself discretion in applying such factors and in processing orders for Isuzu
Products it receives from Dealer. The judgment and decisions of Distributor
shall be final in all matters relating to the distribution and delivery of
Isuzu Products to Dealer.
B. SHIPMENT AND RISK OF LOSS
Distributor will ship Isuzu Products by whatever mode of transportation, by
whatever route, and from whatever point Distributor may select. Distributor
will, it requested by Dealer in such manner and within such time as
Distributor shall from time to time specify, prosecute claims for loss of or
damage to Isuzu Products during transportation from said point of shipment
against the responsible carrier for and on behalf of Dealer.
C. PASSAGE OF TITLE
Title to Isuzu Products shall pass from Distributor to Dealer, or, if
applicable, to the financial institution designed by Dealer, upon delivery of
said product to Dealer or to a carrier for transportation to Dealer,
whichever occurs first. Distributor shall retain a security interest in, and
the right to repossess, any such product until paid in full therefor.
D. FREIGHT
In addition to the prices and charges otherwise provided for herein, Dealer
will pay Distributor in connection with Isuzu Vehicles delivered to Dealer
the applicable destination charges that are in effect at the time of
shipment. Dealer shall pay such transportation charges for Isuzu Parts and
Accessories as may be in effect at the time of shipment.
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E. DIVERSIONS
Dealer shall pay all charges accruing after delivery of Isuzu Products to
Dealer or to carrier for transporation to Dealer, including, but not limited
to, charges for demurrage and storage. If diversions of shipments are made
upon Dealer's request or because of Dealer's failure or refusal to accept
delivery thereof, Dealer shall be responsible for and pay any additional
costs or expenses thereby incurred.
F. CHANGES IN AND DISCONTINUANCE OF ISUZU PRODUCTS
Distributor shall have the right in its sole discretion to discontinue the
supply, or make changes in the design or component materials, of any Isuzu
Product at any time. Distributor shall be under no liability to Dealer on
account of any such changes and shall not be required to make any changes to
Isuzu Products previously purchased by Dealer.
G. PRICING AND OTHER TERMS OF SALE
All sales of Isuzu Products shall be in accordance with the prices and other
applicable terms of sale in effect on the date said products are shipped by
Distributor to Dealer. Distributor may, without incurring any liability to
Dealer or to anyone else, at any time and from time to time change the
prices, charges, discounts, allowances and other terms of sale applicable to
any Isuzu Product. Except as otherwise provided in notices thereof sent to
Dealer by Distributor, any such change shall apply to all orders accepted but
not shipped by Distributor on the effective date of such change.
Except with respect to the pricing of any new model or body type of Isuzu
Vehicle at the introduction thereof, Distributor shall give written notice to
Dealer of any change increasing the price of any Isuzu Product to which such
change is applicable before shipping the same. Dealer may cancel or modify
orders for any such Isuzu Product by giving notice thereof to Distributor
within ten (10) days after receipt by Dealer of Distributor's notice of such
change. All unshipped orders for Isuzu Products not so cancelled or modified
shall remain in effect for shipment in accordance with said change.
H. PAYMENT
1. PAYMENT FOR VEHICLES
Dealer shall at all times during the term of this Agreement have flooring
arrangements (wholesale financing) satisfactory to Distributor with financial
institutions acceptable to Distributor. Payment by Dealer for Isuzu Vehicles
must be made in accordance with the applicable prices, charges, discounts,
allowances and other terms of sale established by Distributor either (i)
pursuant to wholesale financing arrangements in effect between
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Distributor, Dealer and a financial institution at the time of delivery of
said vehicles to Dealer or to a carrier for transportation to Dealer,
whichever shall first occur, or (ii) by cash or such other medium of payment
as Distributor may agree to accept paid by Dealer to Distributor prior to
delivery of said vehicles to Dealer or to a carrier for transportation to
Dealer, whichever shall first occur.
2. PAYMENT FOR PARTS, ACCESSORIES AND OTHER PRODUCTS
Parts, equipment, accessories and other products and services sold by
Distributor to Dealer will normally be billed by Distributor to Dealer on
Distributor's invoices, which shall be due the tenth (10th) day of the month
following the month of delivery of such products and services; provided,
however, Distributor reserves the right to place any and all sales of such
items on a C.O.D. or cash in advance basis, without notice. A late payment
charge will be assessed on any obligation not paid when due at a rate equal
to 1 1/2% per month; provided, however, that such late payment charge shall
not be assessed at a rate which exceeds the maximum permitted by applicable
law. Dealer shall, promptly upon Distributor's demand, execute such security
agreements, chattel mortgages, commercial code financing statements and other
instruments acknowledging and giving notice of Distributor's security
interest in Isuzu Products purchased by Dealer from Distributor for which
Dealer is indebted to Distributor.
3. TAXES
Dealer hereby represents and warrants that all Isuzu Products purchased from
Distributor are purchased for resale in the ordinary course of Dealer's
business. Dealer further represents and warrants that Dealer has obtained
all licenses and complied with all other requirements to collect sales, use
or other taxes incurred in any such resale transaction, and that Dealer will
furnish evidence thereof to Distributor, at Distributor's request. Dealer
agrees, as to any Isuzu Products put to a taxable use by Dealer or in fact
purchased by Dealer other than for resale, to pay directly to the appropriate
taxing authority any sales, use or similar taxes incurred as a result of such
use or purchase, to file any tax returns required in connection therewith,
and to hold Distributor harmless from any claims or demands with respect
thereto.
I. WARRANTIES
The only warranties of Manufacturer or Distributor that shall be applicable
to Isuzu Products (or any component thereof) shall be such written warranties
as may be made and furnished by Distributor. Except for the express
liability under such written warranties, neither Manufacturer nor Distributor
assumes or authorizes any other person to assume for it any obligations or
liabilities in connection with any Isuzu Product.
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Dealer shall comply with Distributor's instructions with all applicable laws
with respect to pre-sale availability and delivery of statements of
warranties to its customers and prospective customers.
J. FAILURE OR DELAY IN FILLING ORDERS
Distributor shall not be liable for any failure or delay in delivery or
shipment of orders for any Isuzu Products where such failure or delay is due,
in whole or in part, to non-receipt of said products from the Manufacturer or
other supplier thereof or to shortage or curtailment of labor, material,
transportation, or utility services, strikes, labor disputes or other labor
difficulties in connection with the operations of Distributor, Manufacturer
or any other person, acts or regulations of any government or to any cause or
causes beyond the control of Distributor.
K. ALTERATION OF ISUZU PRODUCTS
Unless directed in writing by Distributor or required to do so to comply with
an applicable law or rule, regulation or order of a governmental body, Dealer
shall not alter any Isuzu Product or change or substitute any of its
components. Dealer shall promptly notify Distributor in writing of any such
alterations made by Dealer.
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ARTICLE III. DEALERSHIP OPERATIONS
A. DEALERSHIP LOCATION AND FACILITIES
1. DEALERSHIP FACILITIES
Dealer shall Provide, at the Dealership Location, Dealership Facilities that
will enable Dealer to effectively perform its responsibilities under this
Agreement. The Dealership Facilities shall be satisfactory as to appearance
and layout, properly equipped and substantially in accordance with the
applicable Dealership Standards.
2. CHANGE IN DEALERSHIP LOCATION OR FACILITIES
Dealer shall not move, relocate, modify or change the Dealership Location or
any of the Dealership Facilities, nor shall Dealer or any Owner or Manager
directly or indirectly establish or operate any other locations or facilities
for the sale or servicing of Isuzu Products or for the conduct of any other
of the dealership operations contemplated by this Agreement without the prior
written consent of Distributor.
3. HOURS OF BUSINESS
In order to serve the needs of potential purchasers and the service
requirements of owners and users of Isuzu Products, Dealer shall keep its
Dealership Facilities open and operating for business during such days and
hours as automobile dealers' sales, parts and service facilities are
customarily open in the community wherein the Dealership Location is situated.
4. IDENTIFICATION OF DEALERSHIP FACILITIES
Insofar as permitted by local laws and regulations, Dealer shall display at
its Dealership Location, in such number and at such locations as Distributor
may reasonably require, signs which are compatible with the design standards
established by Distributor from time to time. Dealer shall maintain all such
signs in good condition at all times.
5. EVALUATION OF DEALER'S PERFORMANCE WITH RESPECT TO DEALERSHIP
FACILITIES
Distributor shall periodically evaluate Dealer's performance of its
responsibilities with respect to Dealership Facilities and shall discuss its
evaluation with Dealer. Dealer shall promptly take such action as may be
required to correct any deficiencies in its performance of these
responsibilities.
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B. VEHICLE SALES OPERATIONS
1. RESPONSIBILITY OF DEALER
Dealer shall actively and effectively promote the sale at retail (and, if
Dealer elects, the leasing and rental) of Isuzu Vehicles to potential
customers located in Dealer's Market.
However, nothing contained in this Agreement shall limit or be construed to
limit the geographical area within which or the persons to whom Dealer may
sell or promote the sale of Isuzu Vehicles.
2. SALES PERSONNEL
Dealer shall at all times employ the number of trained and competent new
vehicle managerial and sales personnel reasonably required to fulfill its
responsibilities with respect to the sales of Isuzu Vehicles.
Dealer shall, without expense to Distributor, have its said employees attend
such vehicle sales training sessions as Distributor may from time to time
conduct.
3. INVENTORY
Subject to the ability of the Distributor to supply the same, Dealer shall
maintain at all times stocks of Isuzu Vehicles of an assortment and in
quantities adequate to meet its responsibilities with respect to sales of
Isuzu Vehicles. Dealer shall also have available at all times an adequate
number and variety of Isuzu Vehicles for purposes of display and
demonstration and shall, at all times, maintain the same in first class
condition.
4. MODIFICATION OF ISUZU VEHICLES
If the laws of the state in which the Dealership Location is situated or of
the states in which customers of Dealer are located require the installation
on vehicles of equipment not installed or supplied as standard equipment by
Distributor, Dealer shall, prior to its sale of the Isuzu Vehicles on which
such installation is required, install at its own expense such additional
equipment. Dealer shall indemnify and hold Distributor harmless from and
against any and all liabilities arising from Dealer's failure to install such
additional equipment on said vehicles.
5. EVALUATION OF DEALER'S SALES PERFORMANCE
Distributor shall periodically evaluate Dealer's performance of its
responsibilities with respect to sales of Isuzu Cars and shall discuss its
evaluation with Dealer. Dealer shall
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promptly take such action as may be required to correct any deficiencies in
its performance of these responsibilities. Dealer's performance of these
responsibilities shall be evaluated by Distributor on the basis of such
reasonable factors as Distributor shall establish and furnish Dealer from
time to time. Such factors shall include:
(a) Reasonable sales objectives for Isuzu Cars which may be established from
time to time by Distributor for Dealer;
(b) Dealer's sales of Isuzu Cars as compared to:
(i) registrations of Isuzu Cars in Dealer's Market;
(ii) registrations of Competitive Cars in Dealer's Market;
(iii) registrations of Import Industry Cars in Dealer's Market;
(iv) registrations of Industry Cars in Dealer's Market; and
(v) the average sale of Isuzu Cars by comparable groupings of
Authorized Isuzu Dealers.
6. EVALUATION OF SALES OF ISUZU TRUCKS
Distributor shall periodically evaluate Dealer's performance of its
responsibilities with respect to sales of Isuzu Trucks and shall discuss its
evaluation with Dealer. Dealer shall promptly take such action as may be
required to correct any deficiencies in its performance of these
responsibilities. Dealer's performance of these responsibilities shall be
evaluated by Distributor on the basis of such reasonable factors as
Distributor shall establish and furnish Dealer from time to time. Such
factors shall include:
(a) Reasonable sales objectives for Isuzu Trucks which may be established
from time to time by Distributor for Dealer;
(b) Dealer's sales of Isuzu Trucks as compared to:
(i) registrations of Isuzu Trucks in Dealer's Market;
(ii) registrations of Competitive Trucks in Dealer's Market;
(iii) registrations of Import Industry Trucks in Dealer's
Market;
(iv) registrations of Industry Trucks in Dealer's Market; and
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(v) the average sales of Isuzu Trucks by comparable groupings
of Authorized Isuzu Dealers.
C. USED VEHICLE SALES OPERATIONS
To enhance Dealer's opportunities to operate successfully, Dealer will engage
in such used vehicle operations as Dealer may deem appropriate. Dealer shall
be entitled to identify such used vehicle operations as a part of its
dealership operations and to apply the trademarks, tradenames and service
marks of Distributor relating to used vehicle operations, but only as and to
the extent Dealer subscribes to and fulfills all requirements of programs
relating thereto offered Dealer by Distributor.
D. RENTAL AND LEASING OPERATIONS
Since the rental and leasing of Isuzu Vehicles will offer Dealer additional
opportunities to improve its effectiveness in fulfilling its responsibilities
with respect to sales of Isuzu Vehicles, Dealer will explore such
opportunities and will establish rental and leasing operations if such
additional opportunities are apparent. Dealer shall be entitled to identify
such rental and leasing operations as a part of its dealership operations and
to apply the trademarks, tradenames and service marks of Distributor relating
to rental and leasing operations, but only as and to the extent Dealer
subscribes to and fulfills all requirements of programs relating thereto
offered Dealer by Distributor.
E. PARTS AND ACCESSORIES SALES OPERATIONS
1. RESPONSIBILITY OF DEALER
Dealer shall actively and effectively promote the sale of Isuzu Parts and
Accessories to service, wholesale and other customers located in Dealer's
Market. However, nothing contained in this Agreement shall limit or be
construed to limit the geographical area within which or the persons to whom
Dealer may sell Isuzu Parts and Accessories.
2. SALES PERSONNEL
Dealer shall at all times employ the number of trained and competent parts
and accessories managerial and sales personnel reasonably required to fulfill
its responsibilities with respect to the sales of Isuzu Parts and
Accessories. Dealer shall, without expense to Distributor, have its said
employees attend such parts and accessories sales training sessions as
Distributor may from time to time conduct.
3. INVENTORY
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Dealer shall maintain at all times stocks of parts and accessories adequate
to meet its responsibilities with respect to service of Isuzu Products.
Dealer shall also maintain, subject to the ability of Distributor to supply
the same, stocks of Isuzu Parts and Accessories of an assortment and in
quantities adequate to meet customer demands and for warranty repairs,
special policy service and campaign corrections. Dealer shall maintain a
proper and adequate system of parts and accessories inventory control.
4. REPRESENTATIONS CONCERNING PARTS AND ACCESSORIES
In connection with its sale or offering for sale or use in the repair or
service of Isuzu Products, Dealer shall not represent as an Isuzu Part or
Accessory any part or accessory that in fact is not an Isuzu Part or
Accessory.
5. EVALUATION OF DEALER'S PARTS AND ACCESSORIES SALES PERFORMANCE
Distributor shall periodically evaluate Dealer's performance of its
responsibilities with respect to the sale of Isuzu Parts and Accessories and
shall discuss its evaluation with Dealer. Dealer shall promptly take such
action as may be required to correct any deficiencies in its performance of
these responsibilities.
F. SERVICE OPERATIONS
1. GENERAL SERVICE RESPONSIBILITIES OF DEALER
Dealer shall provide prompt, efficient and courteous service to owners and
users of Isuzu Products regardless of the origin of purchase thereof,
including, without limitation, the specific obligations described below. All
service performed by Dealer pursuant to this Agreement shall be performed in
a good and workmanlike manner and in accordance with the requirements,
specifications and instructions relating thereto set forth in the Service
Policies and Procedures Manual and bulletins and instructions furnished
Dealer by Distributor from time to time.
2. SPECIFIC SERVICE OBLIGATIONS OF DEALER
(a) NEW VEHICLE PRE-DELIVERY INSPECTIONS AND ADJUSTMENTS
Dealer shall perform pre-delivery inspections and adjustments on each Isuzu
Vehicle prior to sale and delivery thereof by Dealer. Such inspections and
adjustments shall be performed by Dealer without charge to the purchaser and
in accordance with the provisions relating thereto set forth in the Service
Policies and Procedures Manual and bulletins and instructions furnished
Dealer by Distributor from time to time.
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The completion of such inspections and adjustments on each such Vehicle shall
be verified by Dealer on forms supplied or approved by Distributor for this
purpose, a copy of which shall be retained in Dealer's files and a copy of
which shall be furnished to the purchaser.
(b) COMPLIMENTARY MAINTENANCE SERVICE
Dealer shall perform or be responsible for the performance of such
complimentary maintenance or other services following delivery of Isuzu
Vehicles (including labor for lubrication) as may be prescribed for such
vehicle in Distributor's applicable service bulletins, in accordance with the
provisions relating thereto set forth in the Service Policies and Procedures
Manual or in bulletins or instructions issued by Distributor to Dealer from
time to time. Dealer will perform such services as and when required and
requested by the owner or user of the vehicle, without regard to its origin
of purchase.
(c) WARRANTY REPAIRS
Dealer shall perform (i) warranty repairs on each Isuzu Product which
qualifies for such repairs under the provisions of any warranty furnished
therewith by Distributor or by the manufacturer thereof and (ii) such other
inspections, repairs or adjustments as may be approved or authorized by
Distributor.
Dealer shall perform such repairs and adjustments on each such Isuzu Product
as and when required thereon and requested by the owner, without regard to
its origin of purchase, and in accordance with the provisions relating
thereto set forth in the Service Policies and Procedures Manual and in
bulletins and instructions furnished by Distributor to Dealer from time to
time.
Dealer shall provide each owner or user for whom Dealer performs such repairs
or adjustments with a copy of the repair order covering the same.
(d) CAMPAIGN INSPECTIONS AND CORRECTIONS
Dealer shall perform campaign inspections and/or corrections, including those
described in owner notifications and recall campaigns conducted by
Distributor in furtherance of Federal or state laws or regulations, on Isuzu
Products that qualify for such inspections and/or corrections and those on
which such campaign inspections and corrections are requested by Distributor,
regardless of their origin of purchase.
Dealer shall perform such campaign inspections and/or corrections and shall
advise Distributor as and when the same are performed, all in accordance with
the bulletins and instructions relating thereto furnished Dealer by
Distributor and as set forth in the Service Policies and Procedures Manual.
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To enable Dealer to perform required corrections as promptly as practical,
and for the convenience of Dealer, parts and/or other materials required for
each such campaign may be pre-shipped to Dealer. Dealer will accept and
retain such parts and/or materials for use in such campaign. Upon completion
of the campaign, Dealer may return or dispose of any such parts and/or
materials that are in excess of Dealer's requirements for the campaign in
accordance with disposition instructions relating thereto furnished by
Distributor and Dealer shall receive credit therefor.
(e) DISPOSITION OF REPLACED PARTS
Dealer shall comply with the instructions set forth in the Service Policies
and Procedures Manual with respect to retention and disposition of parts
replaced by Dealer in the performance of repairs, adjustments and services
pursuant to Article III F2(a), (b), (c) and (d) of this Agreement.
(f) MAINTENANCE AND REPAIR SERVICE
Dealer shall provide, at its Dealership Facilities, prompt maintenance and
repair service to owners and users of Isuzu Products. Such service shall
include only those services specifically requested by the owner or user that
are discussed in advance by the Dealer with the owner or user as being
required.
Dealer shall provide all owners and users for whom Dealer provides
maintenance and repair service itemized invoices covering the details thereof.
(g) PAYMENTS BY DISTRIBUTOR TO DEALER
For Dealer's performance of pre-delivery inspections and adjustments,
complimentary maintenance service, warranty repairs, special policy
adjustments, and campaign inspections and corrections under and pursuant to
the above provisions, Distributor shall pay Dealer for the Parts and
Accessories and/or other materials or shall provide Dealer with the Parts and
Accessories and/or other materials required in connection therewith and shall
pay for labor in accordance with the provisions relating thereto set forth in
the Service Policies and Procedures Manual.
3. OTHER SERVICE RESPONSIBILITIES OF DEALER
(a) COMPLIANCE WITH LAWS REGULATING VEHICLES AND OTHER PRODUCTS
Dealer will comply with all applicable provisions of Federal, state and local
laws and governmental orders, rules
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and regulations, including but not limited to laws, orders, rules and
regulations relating to safety, emission, noise control, damageability and
customer service.
In furtherance of facilitating compliance with such laws, orders, rules and
regulations by Distributor and Dealer, Distributor will provide to Dealer,
and Dealer will provide to Distributor, as the case may be, such information
and assistance as may reasonably be requested by the other in connection with
the performance of their respective obligations under such laws, orders,
rules and regulations.
(b) SERVICE PERSONNEL
Dealer shall at all times employ the number of trained and competent service
managerial and technical personnel reasonably required to fulfill its
responsibilities with respect to the service of Isuzu Products. Dealer
shall, without expense to Distributor, have its said employees attend such
service training sessions as Distributor may from time to time conduct.
(c) SERVICE EQUIPMENT AND SPECIAL AND ESSENTIAL TOOLS
Dealer shall provide adequate service equipment and such special and
essential tools as are required to fulfill its responsibilities for service
of Isuzu Products.
4. EVALUATIONS OF DEALER'S SERVICE PERFORMANCE
Distributor shall periodically evaluate Dealer's performance of its
responsibilities with respect to the servicing of Isuzu Products and shall
discuss its evaluation with Dealer. Dealer shall promptly take such action
as may be required to correct any deficiencies in its performance of these
responsibilities.
G. ADVERTISING, PROMOTIONAL AND PUBLIC RELATIONS OPERATIONS
1. ADVERTISING STANDARDS
In order to secure and maintain the confidence and respect of the public in
Dealer, Distributor, Manufacturer and Isuzu Products, Dealer will at all
times maintain the highest standards of ethical advertising and will not
publish or cause or permit to be published any advertising relating to any of
its dealership operations or to any Isuzu Product which is not in compliance
with all applicable federal, state and local laws, rules, regulations and
orders or that is likely to mislead or deceive the public or impair the
goodwill of Dealer, Distributor or Manufacturer or the good reputation of
Isuzu Products.
2. DEALER'S ADVERTISING PROGRAMS
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Dealer shall develop and utilize advertising and promotion programs,
including, but not limited to, effective displays of Isuzu Products and use
of demonstration Isuzu Vehicles.
3. PARTICIPATION IN DISTRIBUTOR'S ADVERTISING PROGRAMS
Dealer shall participate in advertising and promotion programs developed from
time to time by Distributor, as and when requested by Distributor.
4. CUSTOMER RELATIONS
(a) INFORMING CUSTOMERS AS TO DETAILS OF CHARGES
In effecting sales or service of Isuzu Products, Dealer will inform the
customers of details covering the items which make up the purchase price or
charges, will give them itemized invoices covering the details thereof and
will provide them with such other information and documents relating thereto
as may be required under any applicable laws, rules, regulations or orders.
Dealer will not make any false, misleading or deceptive representations as to
the items making up the purchase price or charges, nor will Dealer make any
statements intended to lead any purchaser to believe that a greater portion
of the selling price of a Vehicle represents destination, factory delivery
and handling, or other charges than the amounts thereof actually charged to
and paid for by Dealer.
(b) RIGHT OF RETAIL PURCHASER TO BUY VEHICLE WITHOUT PURCHASING
OPTIONAL EQUIPMENT OR ACCESSORIES
Dealer shall not include, in any retail order for an Isuzu Vehicle taken by
Dealer nor in any order covering an Isuzu Vehicle submitted by Dealer to
Distributor, any item of optional equipment or accessories, unless the retail
purchaser thereof has requested such item and has knowledge that such item
will be included in such order or unless such item is required on such
vehicle under applicable laws, rules, regulations or orders.
(c) INFORMING RETAIL PURCHASERS AS TO OPTIONAL EQUIPMENT OR
ACCESSORIES INSTALLED BY DEALER
In order to avoid disparagement of any trademark that is applied by
Distributor to items of optional equipment and accessories manufactured by or
for Distributor and in order to avoid misleading any retail purchasers who
may assume that all items of optional equipment and accessories included in
Isuzu Vehicles have been manufactured by or for Distributor, Dealer shall, if
it installs on any Isuzu Vehicle any item of optional equipment or accessory
that has not been manufactured by or for Distributor, disclose to the retail
purchaser thereof that such
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item of optional equipment or accessory has not been manufactured by or for
Distributor and that it is not included in any warranty furnished by
Distributor. Such disclosure by Dealer shall be included in writing by
Dealer on the retail purchaser's order for any such Isuzu Vehicle, if one is
signed by the retail purchaser thereof, but in any event in the itemized
invoice covering the details of such purchase furnished the retail purchaser
by Dealer.
H. CAPITAL
Dealer shall at all times maintain and employ in the operations of its
dealership at least that amount and allocation of net working capital needed
for Dealer to effectively fulfill its responsibilities under this Agreement,
as agreed upon in writing by Distributor and Dealer from time to time.
I. ACCOUNTING SYSTEM
Dealer will install and maintain an accounting system of a type designated by
Distributor. Dealer will maintain said system in accordance with
instructions to be issued by Distributor from time to time.
J. RECORDS AND REPORTS
1. FINANCIAL STATEMENTS
Dealer shall furnish to Distributor, on or before the tenth day of each
month, on such forms as Distributor may designate, complete and accurate
financial and operating statements reflecting Dealer's true financial
condition as of the end of the preceding month and the results of Dealer's
operations during the preceding month and for that portion of Dealer's fiscal
year then ended, with supporting data, and shall, within two (2) months after
the closing date of Dealer's fiscal year, furnish to Distributor complete and
accurate financial and operating statements for said fiscal year. Distributor
shall not furnish to any third party any financial statements or data
submitted to it hereunder, except as an unidentified part of a composite or
coded report, unless authorized by Dealer or required to do so by law or
unless they are pertinent to judicial or governmental administrative
proceedings.
2. OWNERSHIP AND MANAGEMENT RECORDS
Dealer shall keep and maintain complete and up-to-date records covering (a)
the names of all persons who are Owner(s) of Dealer and the dates and manner
in which any such ownership interests of such persons are transferred or
changed in any manner whatsoever; (b) the election, appointment or selection
of each person having a management position with Dealer, including the duly
elected officers and directors of Dealer if Dealer is a corporation; and (c)
the persons or parties who have either directly or indirectly supplied funds,
on either a
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secured or unsecured basis, to those having any ownership interests in Dealer
in connection with their acquisition of such ownership interests.
3. SALES AND SERVICE RECORDS AND REPORTS
Dealer shall prepare and maintain complete and up-to-date records covering
its sales of and service performed by it on Isuzu Products. Promptly upon
the sale of each Isuzu Vehicle, Dealer shall accurately and fully complete
and send to Distributor the vehicle retail delivery report supplied by
Distributor with respect to said vehicle. Dealer will furnish Distributor
with such other and further reports covering sales and service of Isuzu
Products by Dealer in such form or forms and within such times as is
specified in notices or bulletins relating thereto furnished Dealer by
Distributor.
4. RECORDS CONCERNING APPLICATIONS AND CLAIMS FOR PAYMENTS
Dealer shall prepare and retain, for a minimum period of two (2) years, in
accordance with the procedures set forth in the Service Policies and
Procedures Manual, records in support of applications for payment for
pre-delivery inspections and adjustment, warranty repairs and policy
adjustments and campaign inspections and corrections performed by Dealer,
claims for parts compensation and applications for discounts, allowances,
refunds or credits.
K. INSPECTION OF ACCOUNTS AND RECORDS
Distributor shall have the right at any reasonable time during Dealer's
regular business hours to inspect the Dealership Facilities and to examine,
audit and make copies of all accounts and records relating to the sale and
service of Isuzu Products.
L. TRADEMARKS AND SERVICE MARKS
Distributor grants Dealer the non-exclusive privilege to identify itself as
an Authorized Isuzu Dealer and to display and otherwise use in connection
with the sale and service of Isuzu Products, the various trademarks,
tradenames, service marks and other word and design marks which Manufacturer
or Distributor may use in connection with or apply to Isuzu Products during
the term of this Agreement. Except as provided herein, Dealer shall make no
use of any such trademark, tradename, service xxxx, or other word and design
xxxx. Dealer shall not use any xxxx, word or name which is similar to any of
the various trademarks, tradenames, service marks and other word and design
marks which Manufacturer or Distributor may use in connection with or apply
to Isuzu Products. Dealer shall neither have nor claim to have any rights in
or to any such trademark, tradename, service xxxx or other word and design
xxxx. Upon Distributor's request and, in any case, upon termination of this
Agreement, Dealer shall promptly discontinue, or cause to be discontinued,
the display and use of all such trademarks, tradenames, service marks and
other word and design
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marks. Dealer shall promptly change the manner in which such trademarks,
tradenames, service marks and other word and design marks are displayed and
used when requested to do so by Distributor. No such trademark, tradename,
service xxxx or other word and design xxxx xxx be used as part of the name
under which Dealer's business is conducted, except with Distributor's prior
written consent.
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ARTICLE IV. INDEMNIFICATION
A. INDEMNIFICATION OF DISTRIBUTOR
Dealer shall:
1. Upon Distributor's written request defend Distributor against claims
that during the term of this Agreement may arise, commence or be asserted
against Distributor in an action concerning:
(a) Dealer's failure or alleged failure to comply, in whole or in part with
any obligation of Dealer under this Agreement;
(b) Any actual or alleged negligence, error, omission or act of Dealer in
connection with the preparation, repair or service (including warranty
service) by Dealer of Isuzu Products;
(c) Any modification made by or on behalf of Dealer to Isuzu Products,
except those made pursuant to the express instruction or with the express
approval of Distributor;
(d) Dealer's breach or alleged breach of any agreement between Dealer and
Dealer's customer or other third party; or
(e) Misleading statements, misrepresentations or deceptive or unfair
practices or allegations of misleading statements, misrepresentations or
deceptive or unfair practices by Dealer, directly or indirectly, to
Distributor, a customer or other third party.
2. Indemnify and hold Distributor harmless from any and all settlements
made and final judgments rendered with respect to any of the claims described
in Section A.1. of this Article IV.
B. INDEMNIFICATION OF DEALER
Distributor shall, upon Dealer's written request:
1. Defend Dealer against claims that during the term of this Agreement may
arise, commence or be asserted against Dealer in an action concerning bodily
injury or property damage arising out of an occurrence caused solely by a
defect or alleged defect existing or claimed to have existed in an Isuzu
Product at the time title to said product passed to Dealer, provided:
(i) that the defect could not have reasonably been discovered by Dealer
during the pre-delivery inspection of the product required by this Agreement;
and
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(ii) Distributor did not notify Dealer in writing of such defect prior to
delivery of the product to the first retail customer.
2. Indemnify and hold Dealer harmless from any and all settlements made
which are approved by Distributor and final judgments rendered with respect
to any of the claims described in Section B.1. of this Article IV; provided,
however, Dealer promptly notifies Distributor in writing of the assertion of
such claim and the commencement of such action against Dealer and cooperates
fully in the defense of such action in such manner and to such extent as
Distributor may require.
C. EXCEPTION TO INDEMNIFICATION
If the allegations asserted in any action or if any facts established during
or with respect to any action would require Dealer to defend and indemnify
Distributor under Section A, above, and Distributor to defend and indemnify
Dealer under Section B, above, Distributor and Dealer shall each be
responsible for its own defense in such an action and there shall be no
obligation or responsibility in connection with any defense, judgment,
settlement or expenses of such action as between Distributor and Dealer,
except to the extent that such an obligation or responsibility may be imposed
by applicable law.
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ARTICLE V. TERMINATION
A. TERMINATION OF AGREEMENT
1. VOLUNTARY TERMINATION BY DEALER
Dealer may terminate this Agreement at any time upon 30 days' written notice
to Distributor.
2. TERMINATION DUE TO ACTS OR EVENTS CONTROLLED BY DEALER, ITS OWNER(S)
OR MANAGER(S)
Each of the following represents an act or event that is within the control
of or originates from action taken by Dealer or its Owner(s) or Manager(s)
and over which Distributor has no control, but which, when contrary to the
spirit, nature, purpose or objectives of this Agreement, warrant its
termination:
(a) Any misrepresentation to Distributor by Dealer or by its Owner(s) or
Executive Manager in applying for this Agreement or any misrepresentation to
Distributor by Dealer or any such person as to the persons who are or will be
Owner(s) or Manager(s) of Dealer.
(b) Any attempted sale, transfer or assignment by Dealer of this Agreement
or any of the rights or privileges granted Dealer by this Agreement; or any
attempted transfer, assignment or delegation by Dealer of any of the
responsibilities assumed by Dealer under this Agreement, without in either
case the prior written consent of Distributor, which consent shall not be
unreasonably withheld.
(c) Any sale, transfer, relinquishment, voluntary or involuntary, by
operation of law or otherwise, of any ownership interest in Dealer without
the prior written consent of Distributor, which consent shall not be
unreasonably withheld.
(d) Any change of the Dealer's Executive Manager without the prior written
consent of Distributor, which consent shall not be unreasonably withheld.
(e) Any attempt by Dealer to conduct, either directly or indirectly, any of
the dealership operations contemplated by this Agreement at any facilities
other than the Dealership Facilities.
(f) Any sale or other transfer, by operation of law or otherwise, to any
third party or parties, or any relinquishment or discontinuance of use by
Dealer, of any of the Dealership Facilities or other principal assets that
are employed and required by Dealer in the conduct of the dealership
operations without the prior written consent of Distributor, which consent
shall not be unreasonably withheld.
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(g) Any dispute, disagreement, or controversy between or among the Owner(s)
or Executive Manager (or, if Dealer is a corporation, its directors or
officers) of Dealer relating to the ownership or management of Dealer or to
its dealership operations which, in the opinion of Distributor, may adversely
affect the dealership operations or the interest of Dealer or Distributor.
(h) Insolvency of Dealer; filing of a voluntary petition in bankruptcy by
Dealer; filing of a petition to have Dealer declared bankrupt, provided that
it is not vacated within one (1) month after filing; appointment of a
receiver or trustee for Dealer, provided such appointment is not vacated
within one (1) month after such appointment; or execution by Dealer of an
assignment for the benefit of creditors.
(i) Failure of Dealer to maintain the Dealership Facilities open for
business as required under the provisions of this Agreement, for seven (7)
consecutive business days.
(j) Conviction of Dealer or any Owner(s), Executive Manager or, if Dealer is
a corporation, any of its directors or officers, of any crime which, in the
opinion of Distributor, may adversely affect the reputation or interests of
Dealer or Distributor.
(k) Any submission by Dealer to Distributor of a false or fraudulent
application, or any claim or statement in support thereof, for payment
related to pre-delivery inspection or adjustment, or warranty repairs,
special policy or campaign adjustments performed by Dealer, or for parts
compensation or for any other discount, allowance, refund or credit whether
or not Dealer offers or makes to Distributor or Distributor seeks or obtains
from Dealer restitution of any payments made to Dealer on the basis of any
such false or fraudulent applications, claims or statements.
(l) Failure of Dealer to furnish Distributor with the financial and
operating statements or reports required to be furnished under this Agreement
or refusal by Dealer to permit Distributor to make any inspection or audit of
Dealer's facilities, accounts and records as provided in this Agreement, if
such failure or refusal shall continue for a period of one (1) month after
receipt by Dealer from Distributor of a written request for such statements
or reports or permission to make any such inspection or audit.
(m) Willful failure of Dealer to comply with the provisions of any laws,
rules, regulations or orders of a government body relating to Isuzu Products
or the advertising, promotion, sale or service thereof.
When Distributor has established to its satisfaction that any such act or
event has occurred, Distributor may terminate this Agreement by giving Dealer
written notice of termination, such termination to be effective upon receipt
by Dealer of such notice.
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3. TERMINATION BY DISTRIBUTOR FOR FAILURE OF PERFORMANCE BY DEALER
If, based on the evaluations thereof made by Distributor, Distributor
determines that Dealer has failed to fulfill any one or more of the
responsibilities assumed by Dealer under Article III of this Agreement by
failing to fulfill the responsibilities and obligations of Dealer relating
thereto set forth in said Article, Distributor will endeavor to review with
Dealer the nature and extent of such failure(s) and the reasons which, in
Distributor's opinion, account for such failure(s). Thereafter, based upon
such plan or plans of action as may be proposed by Dealer to remedy such
failure or failures and upon such other factors as Distributor deems relevant
in the circumstances, Distributor will determine whether it can be reasonably
expected that Dealer can and will remedy such failure or failures and the
period of time that Dealer may reasonably require to effect such remedy or
remedies.
As soon as practicable thereafter, Distributor will notify Dealer in writing
of the nature and extent of Dealer's failure or failures of performance and
of the period of time, if any, during which Dealer will be expected to remedy
such failure or failures of performance.
If, at the expiration of the period, if any, specified in such notice, such
failure or failures of performance have not been substantially remedied by
Dealer, Distributor may terminate this Agreement by giving Dealer written
notice of termination, with such termination to be effective three (3) months
after receipt by Dealer of such notice.
In the interest of providing continuing service to owners of Vehicles,
Distributor may, if it elects, process during such three (3) month period
applications for an Isuzu Dealer Sales and Service Agreement to replace
Dealer; provided, however, that such Isuzu Dealer Sales and Service Agreement
shall not become effective until after the effective date of termination of
this Agreement.
During such three (3) month period, Distributor and Dealer will commence such
actions as may be necessary or desirable so that the termination obligations
of Distributor and Dealer set forth in this Agreement may be fulfilled as
promptly as practicable.
4. TERMINATION BECAUSE OF DEATH OR INCAPACITY OF OWNER AND/OR EXECUTIVE
MANAGER
Since this Agreement is in the nature of a personal service agreement and its
continuation is conditioned upon Dealer being owned and managed as provided
in Section 4 hereof, Distributor (subject to the provisions of Article VII of
this Agreement) may terminate this Agreement by written notice to Dealer in
the event of the death of an Owner or the Executive Manager or in the event
Distributor determines that the Executive Manager is physically or mentally
incapacitated so as to be unable to actively exercise full managerial
authority for the operating management of Dealer. The effective date of any
such
-24-
termination shall be the date set forth in such written notice, which shall
be not less than three (3) months after receipt by Dealer of such notice.
In the interest of providing continuing service to owners of Vehicles,
Distributor may, if it elects, process, during the period from the receipt by
Dealer of such notice to the effective date of such termination applications
for an Isuzu Dealer Sales and Service Agreement to replace Dealer; provided,
however, that such Isuzu Dealer Sales and Service Agreement shall not become
effective until after the effective date of termination of this Agreement.
During the period from Dealer's receipt of such notice to the effective date
of such termination, Distributor and Dealer will commence such actions as may
be necessary or desirable so that the termination obligations of Distributor
and Dealer set forth in this Agreement may be fulfilled as promptly as
practicable.
5. TERMINATION FOR FAILURE OF DEALER OR DISTRIBUTOR TO BE LICENSED
If Distributor or Dealer requires a license for the performance of any
obligation under or in connection with this Agreement in any state or
jurisdiction where this Agreement is to be performed and if either of the
parties shall fail to secure or maintain such license or a renewal thereof or
if such license shall be suspended or revoked, irrespective of the cause or
reason therefor, either party may immediately terminate this Agreement by
giving to the other party written notice of such termination.
6. TERMINATION BY MUTUAL AGREEMENT
This Agreement may be terminated at any time by written mutual agreement
between Distributor and Dealer in the event (1) any person named as an Owner
or Executive Manager wishes to retire, (2) Distributor and Dealer desire to
effect either a discontinuance or a relocation of Dealer's Dealership
facilities or (3) Distributor and Dealer deem it desirable for any other
cause or reason.
The Provisions of Section B of this Article V shall be deemed applicable to a
termination under this Section A.6. only to the extent and in the manner set
forth in such written mutual agreement of termination.
7. RIGHT TO RELY ON ANY APPLICABLE TERMINATION PROVISION
Because the notice periods may be different with respect to, and the rights
and obligations of the parties may vary depending upon, the particular
provisions under which this Agreement is terminated, the terminating party
shall have the right to select the provision of this Section A under which it
elects to terminate this Agreement without reference in its notice of
termination to any other provision of this Section A that may also be
applicable in the
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circumstances. The exercise of such right shall not preclude the terminating
party from at any time asserting or establishing that the termination of this
Agreement is also supportable under another provision of this Section A.
B. TRANSACTIONS AFTER TERMINATION
1. EFFECT OF TERMINATION ON ORDERS
In the event that this Agreement is terminated in accordance with any
provision of Section A of this Article V (other than Section A.6.),
Distributor may cancel all unshipped orders received from Dealer for Isuzu
Products.
Termination of this Agreement shall not release Dealer, however, from the
obligation to pay any sum which may then be owing Distributor.
2. EFFECT OF TRANSACTIONS AFTER TERMINATION
Neither the processing by Distributor of orders from Dealer nor the
continuation of sales of Isuzu Products or any other products to Dealer nor
any other act of Distributor after termination of this Agreement shall be
construed as a waiver of the termination, or as a renewal, extension or
continuation of this Agreement.
3. PURCHASES OF ELIGIBLE ITEMS
Distributor shall purchase, subject to and upon compliance with the
provisions hereinafter set forth in subsections 4 and 5 of this Section B,
all or any of the following Eligible Items from Dealer:
(i) Vehicles
All new, unused, unlicensed, undamaged Isuzu Vehicles of the then current
model year purchased by Dealer from Distributor then unsold which are the
unencumbered property and in the possession of Dealer or of Dealer's
financing institution at Dealer's net cost or the price last established by
Distributor for the sale of identical vehicles by Distributor to Authorized
Isuzu Dealers, whichever is lower, plus destination charges paid by Dealer
thereon, less all refunds or allowances paid thereon by Distributor, any
amount paid by Distributor for pre-delivery inspection and service thereon
and any costs required to place said vehicles in new condition.
(ii) Parts
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All new, unused, undamaged, resalable Isuzu Parts (except Publications and
parts listed in Distributor's Parts List as "non-returnable"), which are
still in the original and undamaged package, are for the then current and
three (3) immediately preceding vehicle model years and are the unencumbered
property of and in the possession of Dealer at the dealer prices set forth in
Distributor's then-current price list.
(iii) Accessories
All new, unused, undamaged, resalable Isuzu Accessories which are still in
the original and undamaged package, are for the then current vehicle model
year and are the unencumbered property of and in the possession of Dealer at
the dealer prices set forth in Distributor's then current price list.
(iv) Signs
Any signs owned by Dealer of a type recommended in writing by Distributor at
a price established in accordance with Distributor's pricing formula then in
effect.
(v) Special Tools
Any special tools of a type recommended by Distributor and designed
specifically for service of any Isuzu Vehicles that were offered for sale by
Distributor to Isuzu Dealers during the three (3) year period immediately
preceding termination and were purchased by Dealer from Distributor, at
prices therefor established in accordance with the pricing formula set forth
in the then current Service Policies and Procedures Manual.
4. RESPONSIBILITIES OF DEALER
Immediately following the effective date of a termination of this Agreement,
Dealer shall furnish Distributor with a list of the identification numbers of
and such other information as Distributor may require concerning eligible
vehicles to be purchased by Distributor in accordance with subsection 3 of
this Section B. Dealer will deliver all such vehicles in accordance with
Distributor's instructions. Within one (1) month following the effective
date of a termination of this Agreement, Dealer shall mail or deliver to
Distributor a list of eligible special tools and eligible signs. Within two
(2) months following effective date of a termination of this Agreement,
Dealer shall mail or deliver to Distributor a complete list of eligible parts
and accessories. Dealer shall retain possession of all such eligible items
until receipt of written shipping instructions from Distributor. Within one
(1) month after receipt of such instructions, Dealer shall tag, pack and ship
such eligible items, transportation charges prepaid, to the destination(s)
specified in such instructions. Dealer shall take such action and shall
execute and deliver such instruments as may be necessary (a) to convey to
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Distributor good marketable title to all eligible items to be purchased
hereunder, (b) to comply with the requirements of any applicable state law
relating to bulk sales or transfers and (c) to satisfy and discharge any
liens or encumbrances on such eligible items prior to delivery thereof to
Distributor.
5. PAYMENT BY DISTRIBUTOR
Subject to its right to offset any amounts owing Distributor from Dealer,
Distributor shall pay Dealer for the eligible items purchased by it under the
provisions of this Section B as soon as practicable following delivery
thereof to Distributor; provided, however, that any payment for such eligible
items may be made by Distributor, at its option, directly to any financing
institution or other person or concern which shall have a security or
ownership interest therein.
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ARTICLE VI. SUCCEEDING AND NEW AND SUPERSEDING
SALES AND SERVICE AGREEMENTS
A. SUCCEEDING AGREEMENTS
So that the dealer sales and service agreements offered to Authorized Isuzu
Dealers will reflect changes in conditions applicable to the sales and
service of Isuzu Products as well as changes in applicable laws or
regulations, or in the interpretations thereof, Distributor will review the
provisions of its current forms of Isuzu Dealer Sales and Service Agreement
on a periodic basis and will prepare new forms of Isuzu Dealer Sales and
Service Agreements that will be offered to those Authorized Isuzu Dealers who
receive an offer from Distributor of a succeeding Isuzu Dealer Sales and
Service Agreement. Dealer acknowledges, therefore, that any new form of
Isuzu Dealer Sales and Service Agreement that may be offered Dealer may
reflect therein any changes and modifications that are deemed necessary or
desirable by Distributor.
B. NEW AND SUPERSEDING DEALER AGREEMENTS
In the event a new and superseding form of Isuzu Dealer Sales and Service
Agreement is offered by Distributor to Authorized Isuzu Dealers generally at
any time, Distributor may terminate this Agreement upon prior written notice
to Dealer, provided that, at the same time, Distributor offers Dealer such
new and superseding form of Isuzu Dealer Sales and Service Agreement.
C. EFFECT OF NEW OR SUPERSEDING AGREEMENT ON RESPONSIBILITIES AND OBLIGATIONS
UNDER THIS AGREEMENT
Although the execution by Distributor and Dealer of any new or superseding
Dealer Sales and Service Agreement, whether it is executed in accordance with
the provisions of Section A and B of this Article VI or for any other reason,
will, by the terms thereof, cancel and supersede this Agreement, such
succeeding or new and superseding Isuzu Dealer Sales and Service Agreement
generally contemplates continuation of the business relations contemplated by
this Agreement. Accordingly, unless otherwise expressly agreed in writing by
Distributor and Dealer, the rights and obligations of Dealer that may
otherwise become applicable upon any termination of this Agreement shall not
be applicable in the event of the execution by Distributor and Dealer of any
such new or superseding Isuzu Dealer Sales and Service Agreement. Any
evaluation (of the effectiveness of Dealer's performance of any of its
responsibilities under this Agreement may be reflected and considered
together with any evaluation made of the effectiveness of Dealer's
performance of similar responsibilities under any such succeeding or new and
superseding form of Isuzu Dealer Sales and Service Agreement. Except insofar
as they may be inconsistent with the provisions of such succeeding or new and
superseding form of Isuzu Dealer Sales and Service Agreement, any
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outstanding rights and obligations of Distributor and Dealer that arose under
this Agreement, or under any separate agreements executed by Distributor and
Dealer under this Agreement, shall be deemed continued under such succeeding
or new and superseding form of Isuzu Dealer Sales and Service Agreement.
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ARTICLE VII. ESTABLISHMENT OF SUCCESSOR DEALER
A. BECAUSE OF DEATH OF OWNER
In the event of termination of this Agreement by Distributor pursuant to
Section A.4 of Article V because of the death of an Owner, the following
provisions shall apply:
1. Subject to the other provisions of this Article, Distributor shall offer
a provisional Sales and Service Agreement the term of which shall not exceed
two (2) years to a successor dealer ("Successor Dealer") comprised of the
person nominated by such deceased Owner as his or her successor, together
with the surviving Owner(s), provided that:
(a) the nomination was submitted to Distributor on a Successor Addendum, was
consented to by the remaining Owner(s) and was approved by Distributor prior
to the death of the deceased Owner;
(b) Either (i) there has been no change in the Executive Manager of Dealer
or (ii) the provisions of Section B, below, have been complied with; and
(c) The Successor Dealer has capital and facilities substantially in
accordance with Distributor's Standards therefor at the time the provisional
Sales and Service Agreement is offered.
2. If the deceased Owner has not nominated a successor in accordance with
the provisions of Section A.1.(a), above, but all of the beneficial interest
of the deceased Owner has passed by will or the laws of intestate succession
directly to the deceased Owner's spouse and/or children or to one or more
surviving Owners who each held not less than a twenty-five percent (25%)
beneficial ownership interest in the dealership prior to the death of the
deceased Owner (collectively "Proposed New Owners"), subject to the other
provisions of this Article, Distributor shall offer a provisional Sales and
Service Agreement the term of which shall not exceed two (2) years to
Successor Dealer ("Successor Dealer") composed of the Proposed New Owners,
together with the surviving Owners provided that:
(a) Either (i) there has been no change in the Executive Manager of Dealer
or (ii) the provisions of Section B, below, have been complied with; and
(b) The Successor Dealer has capital and facilities substantially in
accordance with Distributor's Standards therefor at the time the provisional
Sales and Service Agreement is offered.
B. BECAUSE OF DEATH OR INCAPACITY OF EXECUTIVE MANAGER
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In the event of the termination of this Agreement by Distributor pursuant to
Section A.4. of Article V because of the death, physical or mental incapacity
("Disability Event") of the Executive Manager ("Disabled Executive Manager"),
subject to the other provisions of this Article, Distributor shall offer a
provisional Sales and Service Agreement the term of which shall not exceed
two (2) years to a Successor Dealer composed of the Owner(s), provided that:
1. Either (i) the Owner(s) had nominated, in a Successor Addendum, which
was approved by Distributor prior to such Disability Event, a person to
succeed the Disabled Executive Manager or (ii) not later than two (2) months
after the occurrence of such Disability Event a new Executive Manager is
proposed to Distributor by all of the Owner(s) and such a person is approved
by Distributor;
2. The new Executive Manager owns in the aggregate beneficial interests in
the Successor Dealer of not less than twenty-five percent (25%) or is given
the right to acquire and does acquire within twelve (12) months beneficial
interests in the Successor Dealer of not less than twenty-five percent (25%);
and
3. The Successor Dealer has capital and facilities substantially in
accordance with Distributor's Standards therefor at the time the provisional
Sales and Service Agreement is offered.
C. EVALUATION OF SUCCESSOR DEALER
During the term of the provisional Sales and Service Agreement, Distributor
will evaluate the performance of the Successor Dealer and periodically review
with the Successor Dealer this evaluation. If the Successor Dealer's
performance is deemed to be satisfactory to Distributor continuously during
the last three (3) months of the provisional Sales and Service Agreement,
Distributor will give first consideration to such Successor Dealer with
respect to a new Sales and Service Agreement.
D. TERMINATION OF MARKET REPRESENTATION
Notwithstanding anything stated or implied to the contrary in this Article,
Distributor shall not be obligated to offer a provisional or new Sales and
Service Agreement to any Successor Dealer if Distributor notified Dealer in
writing prior to the event causing the termination of this Agreement that
Distributor's market representation plans do not provide for continuation of
representation in Dealer's Market.
E. TERMINATION OF OFFER
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If the person or persons comprising a proposed Successor Dealer to which any
offer of a provisional or new Sales and Service Agreement shall have been
made pursuant to this Article shall not accept same within thirty (30) days
after notification to them of such offer, such offer shall automatically
expire.
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ARTICLE VIII. GENERAL PROVISIONS
A. DEALER NOT MADE AGENT OR LEGAL REPRESENTATIVE
This Agreement does not constitute Dealer the agent or legal representative
of Distributor or Manufacturer for any purpose whatsoever. Dealer is not
granted any express or implied right or authority to assume or to create any
obligation in behalf of or in the name of Distributor or Manufacturer or to
bind Distributor or Manufacturer in any manner or thing whatsoever.
B. DEALER'S RESPONSIBILITY FOR ITS OPERATIONS, EXPENDITURES, LIABILITIES AND
OBLIGATIONS
Dealer acknowledges that, as an independently owned and operated enterprise,
its success will be determined substantially by how effectively its
management manages and conducts its operations and affairs. This Agreement,
therefore, contemplates that all investments made by or in Dealer shall be
made, and Dealer shall fulfill its responsibilities and obligations under
this Agreement, in conformity with the provisions hereof, but otherwise at
the discretion of Dealer, its management and Owner(s). Nothing herein
contained shall impose any liability on Distributor or Manufacturer in
connection with the establishment or conduct of Dealer's facilities or
operations, and Dealer shall be solely responsible for any and all
expenditures, liabilities and obligations made, incurred or assumed by Dealer
in preparation for performance or in the performance of Dealer's
responsibilities and obligations under this Agreement.
C. NOTICES
All notices required or permitted to be given by either party to the other
under or in connection with this Agreement shall be in writing and delivered
personally or by mail to Dealer at its Dealership Location and to Distributor
at its national headquarters, or to such other address as the party to
receive the notice may have previously designated by written notice to the
other party. Notices shall be effective upon receipt. If mailed, such
notices shall be postage prepaid and sent by registered or certified mail,
return receipt requested.
D. OFFSETS AND SET OFFS
In addition to any other specific rights of offset or set off provided for
otherwise in any documents affecting Dealer and Distributor, Distributor
shall have the right to offset or set off any sums or accounts due or to
become due from Dealer to Distributor against any sums or accounts due or to
become due from Distributor to Dealer.
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E. CHANGES REQUIRED BY LAW
Should Distributor at any time determine that Federal or state laws, or
regulations adopted thereunder, or any new interpretation thereof, as any
thereof may be validly applied, require changes in any of the provisions of
this Agreement, Distributor may offer Dealer a new and superseding Isuzu
Dealer Sales and Service Agreement that has been appropriately modified to
reflect changes that are required by such new laws, regulations or
interpretations, or, in lieu thereof, Distributor may offer Dealer an
amendatory agreement to this Agreement reflecting such changes.
If Dealer shall fail to execute such new and superseding Isuzu Dealer Sales
and Service Agreement or such amendatory agreement and return it to
Distributor within thirty (30) days after it is offered Dealer, this
Agreement may be terminated by Distributor upon written notice thereof to
Dealer, with such termination to be effective upon receipt by Dealer of such
notice.
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