EX-10
Exhibit 10.13.1 BMW Dealer Agmt
EXHIBIT 10.13.1
BMW OF NORTH AMERICA, INC.
DEALER AGREEMENT
This DEALER AGREEMENT is effective as of the 3rd day of October, 1997,
by and between BMW of North America, Inc., a Delaware Corporation having its
principal place of business at Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000 ("BMW NA") and
Dealer Name: Lithia BB, Inc.
Dealer Location: Bakersfield, California
Business Type: Corporation
(if a corporation or partnership) organized or incorporated under the laws of
the
State of : California
And Doing Business As: BMW of Bakersfield having its principal place of
business at
Address: 0000 Xxxxxx Xx.
City/Town: Bakersfield, California
County of: Xxxx
State of: California (as "Dealer").
All terms defined in the Dealer Standard Provisions (Form 93/B) are
incorporated herein by reference.
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PURPOSE OF AGREEMENT
The purpose of this Agreement is to authorize Dealer to operate a BMW
automobile dealership and to set forth the responsibilities of both BMW NA
and Dealer in providing BMW Products and services to the consuming public.
The United States automotive market requires a fluid relationship
between BMW NA and authorized BMW dealers who represent BMW Products. Mutual
compliance with the terms of this Agreement will promote the interests of
both BMW NA and Dealer by providing each party an opportunity to earn a
reasonable return on its investment through developing and retaining
satisfied customers and by building a spirit of cooperation between BMW NA
and authorized BMW dealers (collectively the "BMW Dealers") which will
increase the value and customer perception of BMW trademarks.
BMW NA and Dealer have entered into this Agreement with confidence in
each other's integrity, ability and expressed intention to deal fairly with
the other party and the consuming public. Dealer is relying upon BMW NA's
commitment to distribute quality BMW Products which meet the needs and
expectations of the BMW customers in Dealer's primary market and to provide
Dealer with a broad range of support activities to assist Dealer in its
retail operations. BMW NA is relying upon Dealer's commitment to perform and
carry out the responsibilities of an authorized BMW dealer, as set forth in
this Agreement. Each party recognizes that it must rely upon the efforts of
the other party in performing successfully under this Agreement.
IN CONSIDERATION OF the foregoing and the mutual covenants herein
contained, the parties hereto agree as follows:
A. APPOINTMENT OF DEALER
BMW NA appoints Dealer as a dealer of BMW Products. Subject to the
terms of this Agreement, Dealer is granted the non-exclusive right to buy BMW
Products. Dealer accepts such appointment and agrees to be bound by this
Agreement.
While dealer recognizes that its performance will be primarily measured
based upon its activities in its Primary Market Area, Dealer agrees that this
appointment does not confer upon it the exclusive right to deal in BMW
Products in any specific geographic area within the 50 United States, nor
does it limit the persons within the 00 Xxxxxx Xxxxxx to whom Dealer may sell
BMW Products for use therein.
Dealer agrees that it will not sell BMW Products for resale or use
outside the 00 Xxxxxx Xxxxxx. Dealer further agrees to abide by any Export
Policy established by BMW NA.
Dealer acknowledges that BMW NA reserves the right to appoint
additional dealers, whether located near Dealer's location or elsewhere, as
BMW NA in its sole discretion deems necessary or appropriate. BMW NA agrees
that it will not explore additional representation without first conferring
individually with the BMW Dealer(s) surrounding the proposed location to
determine whether other alternatives to additional representation are
satisfactory to BMW NA. If a decision is made to proceed with establishment
of additional representation, BMW NA will provide such BMW Dealer(s) no less
than thirty (30) days written notice of such decision.
B. DEALER STANDARD PROVISIONS AND DEALER OPERATING REQUIREMENTS
The accompanying Dealer Standard Provisions (Form 93/B), Dealer
Operating Requirements, Dealer Facility Guidelines, and all currently
effective Addenda issued to Dealer by BMW NA, all of which may be amended,
canceled or superseded from time to time, are hereby incorporated into this
Dealer Agreement ("Incorporated Documents"). Unless the context otherwise
indicates, the term "Agreement" shall mean this document, the Incorporated
Documents, and the documents referred to therein. Dealer hereby acknowledges
receipt of this Agreement and agrees to become familiar with its terms.
While Dealer is not contractually required to comply with the BMW
Dealer Operating System, Dealer agrees to consider conforming its operations
to the guidelines and recommendations of the BMW Dealer Operating System.
C. DEALER OWNERSHIP AND MANAGEMENT
This is a PERSONAL SERVICES AGREEMENT. BMW NA is entering into this
Agreement in reliance upon the qualifications, abilities and integrity of the
Dealer Operator and upon the representation of the Dealer's Owner(s) that the
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Dealer Operator will have full managerial authority for operations and
activities of Dealer. In order to induce BMW NA to enter into this
Agreement, Dealer states that:
(i) Dealer's Owners. The beneficial owners, record owners and
partners, if any of Dealer are (include Record Owners if different from
Beneficial):
Name % Record Or Beneficial
Lithia Motors, Inc. 100% Record
Additional Names Attached ____
(ii) Dealer's Officers. The following persons are Dealer's Officers:
Name Title
Xxxxxx X. XxXxxx President
Secretary/Treasurer
M.L. Xxxx Xxxxxxx Vice-President
(iii) Dealer's Corporate Directors. If Dealer is a corporation, the
following are its Corporate Directors:
Name Title
Xxxxxx X. XxXxxx President
Secretary/Treasurer
M.L. Xxxx Xxxxxxx Vice-President
(iv) Dealer Operator. The following person shall be in complete
charge of Dealer's BMW Operations with authority to make all operating
decisions on behalf of Dealer with respect to Dealer's BMW Operations and is
the person upon whom BMW NA can rely to act on Dealer's behalf:
Name: Xxxxx X. Xxxxx
(v) General Manager. The following is Dealer's General Manager (if
none, enter "NONE"):
Name: Xxxxx X. Xxxxx
(vi) Successor. The Dealer's Owners have nominated the following
individual(s) as proposed Dealer Owner(s) of a Successor dealer to be
established if this Agreement is terminated because of the death or permanent
disability of any of the Dealers Owners (if none, enter "NONE"):
Name: None
Name:
Because of the importance that BMW NA places on the statements and
representations of the Dealer's Owners and the qualifications of the Dealer
Operator, Dealer agrees that there will be no change in the (a) identity of
the Dealer's Owners (i above); (b) the Dealer Operator (iv above); or (c)
Dealer's name, identity, business organization or structure without the prior
written consent of BMW NA.
To enable BMW NA to maintain effectively the BMW NA dealer network,
Dealer further agrees to provide BMW NA with forty-five (45) days prior
written notice of any proposed change in the ownership of Dealer, which would
change the majority interest or control of Dealer, or of any proposed
disposition of Dealer's BMW assets. Any such change in ownership or
disposition of Dealer's BMW assets shall not be effective without the prior
written consent of BMW NA which consent shall not be unreasonably withheld.
BMW NA shall respond to Dealer's notification within forty-five (45) days
after Dealer has furnished to BMW NA all applications and information
reasonably requested to evaluate the proposal.
Without limiting other considerations in determining whether BMW NA
will provide consent, this Agreement may not be transferred, assigned or
assumed until all indebtedness of Dealer to BMW NA, its subsidiaries or
affiliates has been fully satisfied and unless the transferee, assignee or
party assuming this Agreement agrees and commits to fulfill and complete all
of the obligations under this Agreement and the Improvement Addendum (if
applicable).
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Dealer recognizes that BMW NA has a vital interest in ensuring that
qualified personnel are employed by BMW Dealers. Therefore, Dealer agrees to
employ personnel who meet the qualifications for each position. BMW NA
agrees that Dealer has the right to decide all matters concerning management
and personnel.
Dealer has designated herein certain individuals as officers,
directors, managers and/or individuals with responsibility for Dealer's BMW
Operations. Dealer agrees to notify BMW NA in writing of any change in the
designated individuals (ii, iii and v above) and recognizes that such
designation shall not relieve Dealer of its responsibility for performance
under this Agreement.
Dealer agrees that BMW NA may rely upon the Dealer Operator and General
Manager (if applicable) to act on Dealer's behalf and that such reliance will
not alter Dealer's responsibilities under this Agreement.
D. DEALER'S FACILITIES
Dealer agrees that Dealer's Facilities shall satisfy all applicable
provisions of this Agreement, including reasonable space, facility and BMW
Corporate Identification requirements in the Dealer Operating Requirements
Addendum and/or Dealer Facilities Guidelines. BMW NA recognizes the
investment Dealer has in its facilities and hereby approves the location of
the following Dealer's Facilities for the exclusive purpose of:
1) A showroom and sales facility for BMW Vehicles at:
Address: 0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000
2) Service and Parts facilities for BMW Vehicles at:
Address: 0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000
3) Facilities for the display and sale of used BMW Vehicles at:
Address: 0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000
4) Other facilities (indicate the nature of the facility; e.g.,
storage facility):
Address: NONE
Unless otherwise provided herein, Dealer shall conduct Dealer's BMW
Operations and keep BMW Products exclusively at Dealer's Facilities
designated above.
In the event that Dealer desires to (i) change its principal place of
business from that first set forth in this Agreement; (ii) change any
location of Dealer's Facilities; (iii) establish any additional locations for
either operating its business or storage of BMW Products; (iv) make any major
structural or design change in Dealer's Facilities; or (v) change the usage
or function of any locations or facility approved herein or otherwise utilize
such locations or facilities for any functions other than the approved
functions, Dealer must obtain the prior written approval of BMW NA for any
such change or establishment.
In the event Dealer desires to establish or add any additional
automobile franchise, line, make or dealership at Dealer's Facilities
simultaneously with Dealer's BMW Operations, Dealer agrees to provide BMW NA
thirty (30) days prior written notice of such establishment or addition. At
the time notice is provided, Dealer shall demonstrate in writing to BMW NA
that Dealer will continue to comply with the Dealer Operating Requirements
Addendum and will not adversely impact the representation or sale of BMW
Products. If Dealer is unable to comply, Dealer shall not pursue such
establishment or addition, but may submit a detailed plan of compliance with
the Dealer Operating Requirements and Dealer Operating Requirements Addendum
to BMW NA. If BMW NA approves the detailed plan of compliance, Dealer may
proceed with the establishment or addition. Dealer understands that BMW NA
may, at its sole option, reject the plan or require issuance or modification
of an Improvement Addendum in the event the plan is approved. Such approval
shall not be unreasonably withheld.
E. EXCLUSION OF WARRANTIES
EXCEPT AS SPECIFICALLY PROVIDED FOR IN THE NEW CAR LIMITED WARRANTY,
THE LIMITED WARRANTY ON EMISSION CONTROLS, THE LIMITED WARRANTY AGAINST RUST
PERFORATION, THE LIMITED WARRANTY ON ORIGINAL BMW PARTS AND THE LIMITED
WARRANTY ON ORIGINAL PARTS SOLD OVER THE COUNTER, ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE EXCLUDED. THE EXCLUSION ALSO APPLIES TO
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INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FOR ANY BREACH OF
EXPRESS OR IMPLIED WARRANTY, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS, IF ANY, APPLICABLE TO BMW PRODUCTS.
F. BMW DEALER FORUM
BMW NA and Dealer agree that it is in their mutual interest to have an
independent group of BMW dealer representatives serve on the BMW Dealer Forum
("DEALER FORUM"). The DEALER FORUM shall represent BMW Dealers and will
communicate the position of BMW Dealers to BMW NA on various common issues.
BMW NA and the DEALER FORUM shall establish a mechanism to xxxxxx open and
frequent communication on substantive issues affecting BMW NA and BMW Dealers.
Each BMW dealer is entitled and encouraged to serve on the DEALER FORUM
or on a committee of the DEALER FORUM pursuant to its by-laws and each BMW
dealer is expected to support and participate in the DEALER FORUM.
The DEALER FORUM shall adopt by-laws as BMW Dealers deem reasonable and
necessary. The DEALER FORUM may establish committees to study various
aspects of the retail environment and the BMW NA - BMW Dealers' relationship.
Before any material change may be made to this Agreement, BMW NA agrees
to notify the DEALER FORUM and consider BMW Dealers' position regarding the
proposed change.
G. TERM
This Agreement shall continue in fill force and effect and shall govern
all relations and transactions between the parties commencing on the
effective date hereof and continuing as follows:
o If Dealer has fulfilled all of its obligations hereunder and no
Improvement Addendum is currently in force, this Agreement shall expire five
years from the effective date hereof, unless terminated earlier in accordance
with the applicable provisions of this Agreement. In such event BMW NA will
renew this Agreement or offer Dealer an opportunity to enter into a
superseding Agreement.
o If Dealer has outstanding obligations as of the effective date of
this Agreement and/or an Improvement Addendum is in force, this Agreement
shall expire on the earlier of three years from the effective date hereof or
sixty (60) days following the earliest "Compliance Date" specified in said
Addendum, unless otherwise terminated in accordance with the applicable
provisions of this Agreement.
H. ALTERNATE DISPUTE RESOLUTION
BMW NA and Dealer agree to minimize disputes between them. However, in
the event that disputes arise, BMW NA and Dealer agree that they will attempt
to resolve all matters between them before any formal action is taken to seek
any administrative or judicial adjudication or governmental review.
A BMW BOARD ("BOARD") will act as the Administrator of all disputes
between BMW NA and Dealer arising out of this Agreement. The BOARD will
consist of three representatives who will be selected by BMW NA and three
representatives of BMW Dealers who will be selected by the DEALER FORUM. The
BOARD will determine eligibility requirements, develop procedures to ensure a
fair and equitable decision ("ADR PROCEDURES") and select individuals to
participate in a DISPUTE RESOLUTION PANEL ("PANEL") to hear an eligible
dispute. The PANEL shall consist of at least one BMW NA employee, one BMW
dealer and one independent person selected by the BOARD.
The BOARD shall also monitor the dispute resolution process, report to
BMW NA and the DEALER FORUM annually on the effectiveness of this process
and, when required, make recommendations for changes in this process.
BMW NA and Dealer agree that the process outlined in this Article H and
developed by the BOARD in the ADR PROCEDURES will be mandatory. The PANEL's
recommendation will be non-binding, unless the parties agree to be bound by
the decision of the PANEL. The purpose of the PANEL will be to recommend a
resolution and work with the parties to reach a fair and equitable solution
to their dispute in a cost-effective, efficient manner and to avoid formal
adjudication or government intervention.
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If either party to this Agreement initiates any action in court or an
administrative agency prior to issuance of a PANEL recommendation on a
dispute, that party shall pay all costs, fees and expenses, including
attorneys fees, of the other party which arise out of the enforcement of this
Article H.
I. RIGHT OF FIRST REFUSAL
BMW NA recognizes the investment which Dealer has committed to remain a
BMW dealer. Dealer recognizes the importance to BMW NA of continuing
dealership operations from approved locations to provide for effective sale
and service of BMW Products. Accordingly, whenever Dealer intends to dispose
of Dealer's BMW assets or to change majority ownership from that listed in
Article C(i), BMW NA shall have the first right to purchase Dealer's BMW
assets or ownership interests pursuant to this Article. Dealer agrees to
disclose to the prospective buyer that any sale or disposition shall be
subject to the terms of this Dealer Agreement.
BMW NA will advise Dealer if it will exercise the right of first
refusal within forty-five (45) days after Dealer has furnished all
applications and information in accordance with Article C. If BMW NA
exercises the right, BMW NA will assume the proposed buyer's rights and
obligations under the written agreement the proposed buyer negotiated with
Dealer (the "Buy/Sell Agreement"). The purchase price shall be that set
forth in the Buy/Sell Agreement.
In the event BMW NA exercises its right of first refusal, BMW NA may
assign the Buy/Sell Agreement to any party. BMW NA shall remain responsible
to guarantee the purchase price to be paid by the assignee.
Dealer shall transfer the assets and any applicable real estate free
and clear of all liens and encumbrances. Any property shall be transferred
by Warranty Deed, where possible, conveying marketable title. Deeds will be
in the proper form for recording. Possession will be deemed transferred when
the deed is delivered. Dealer will furnish copies of, and will assign where
required, all agreements, licenses, easements, permits or other documents
necessary for the conduct of Dealer's BMW Operations.
If it exercises its right under this Article, BMW NA will reimburse
Dealer for all acceptable expenses, excluding brokerage commissions, incurred
by Dealer in connection with the development of the Buy/Sell Agreement.
Dealer will supply BMW NA with reasonable documentation to support all those
expenses and all copies of materials generated during the negotiation and
development of the Buy/Sell Agreement in anticipation of the sale (including
environmental reports, accounting reviews, among others.) Any dispute
regarding reimbursement shall be presented for review under Article H.
This Article shall not apply in the event that Dealer proposes to
change majority ownership, dispose of its assets or otherwise enter into a
proposed Buy/Sell Agreement with a member of Dealer's immediate family
(spouse, child, brother, sister, parent, grandchild, or spouse of child); to
an individual who is listed in the Successor Addendum; to an individual who
is currently employed by Dealer and has been actively employed by Dealer for
at least three consecutive years in the BMW Operations and is otherwise
qualified as a Dealer Operator; or to an individual who is currently listed
as a Dealer's Owner in Article C and has been so listed for the past three
consecutive years and is otherwise qualified as a Dealer Operator.
J. CUSTOMER SATISFACTION
BMW NA and Dealer agree to conduct their respective businesses to
promote and support the image and reputation of BMW NA, BMW Products and BMW
Dealers. BMW Products must be perceived as the finest available. BMW NA and
BMW Dealers must be recognized as providing the best service in the industry.
Dealer, as the direct link to the BMW customer, is responsible for
satisfying customers in all matters, except those directly related to product
design and manufacturing. Dealer will take reasonable steps to ensure that
each customer is satisfied with BMW Products, and with the services and the
practices of Dealer. Dealer will recommend to BMW NA methods of reasonably
satisfying customers. BMW NA will support Dealer's customer satisfaction
efforts through counseling, training opportunities and providing survey
results.
When requested by BMW NA, Dealer shall submit a plan detailing its
customer satisfaction programs. That plan shall include continuous
reinforcement to all dealership personnel of the importance of customer
satisfaction, necessary training for dealership personnel and methods of
conveying to customers that Dealer is committed to their satisfaction.
Following consultation with and notice from BMW NA or its authorized
representative, Dealer shall remedy to the satisfaction of BMW NA any
practice or method of operation which would have a detrimental effect upon
customer satisfaction or would impair the reputation or image of BMW NA, BMW
Products or Dealer.
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K. EXECUTION OF AGREEMENT
This Agreement shall not become effective until signed by a duly
authorized officer of Dealer, if a corporation; or by one of the general
partners of Dealer, if a partnership; or by the named individual if a sole
proprietorship; and countersigned by authorized representatives of BMW NA.
L. MODIFICATION OF AGREEMENT
No representative of BMW NA shall have the authority to waive any of
the provisions of this Agreement or to make any amendment or modification of
or any other change in, addition to, or deletion of any portion of this
Agreement or to make any other agreement which imposes any obligation on
either BMW NA or Dealer which is not specifically imposed by this Agreement
or which renews or extends this Agreement; unless such waiver, amendment,
modification, change, addition, deletion or agreement is reduced to writing
and signed by two authorized representatives of BMW NA and by the authorized
representative of Dealer as set forth in Article K of this Agreement.
BMW OF NORTH AMERICA, INC.
By: /s/ Xxxxx X. Xxxx 10/17/97
Xxxxx X. Xxxx
Title: Senior Vice President
General Manager
Western Region
By: /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
Title: Market Manager
LITHIA BB, INC.
By: /s/ Xxxxxx X. XxXxxx
Xxxxxx X. XxXxxx
Title: President
Federal Tax ID #00-0000000
ATTEST (If Dealer Is A Corporation)
/s/ Xxxxxx X. XxXxxx
(Secretary)
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