1
EXHIBIT 10.2.12
MERCEDES-BENZ USA, INC.
Mercedes-Benz
Light Truck Retailer Agreement
Table of Contents
-----------------
RETAILER AGREEMENT Page
----
MERCEDES-BENZ STATEMENT OF COMMITMENT (i)
A. APPOINTMENT OF RETAILER (ii)
B. TERM (ii)
C. ADDITIONAL PROVISIONS (ii)
D. RETAILER OWNERSHIP (ii)
E. RETAILER MANAGEMENT (ii)
F. MERCEDES-BENZ CENTER FACILITIES (iii)
G. MERCEDES-BENZ PARTNERSHIP GROUPS (iii)
H. MODIFICATION OF AGREEMENT (iv)
I. EXECUTION OF AGREEMENT (iv)
J. MUTUAL RELEASE (iv)
K. CERTIFICATION (iv)
FINAL PARAGRAPH (V)
STANDARD PROVISIONS
I. ACQUISITION, DELIVERY AND INVENTORY OF MERCEDES-
BENZ LIGHT TRUCK PRODUCTS 1
A. PRICES AND TERMS OF SALE 1
B. AVAILABILITY AND ALLOCATION OF PRODUCTS 1
C. DELIVERY OF PRODUCTS 1
D. PASSAGE OF TITLE 1
E. RISK OF DAMAGE OR LOSS 2
X. XXXXX OR FAILURE OF DELIVERY 2
G. DIVERSION AND STORAGE CHARGES 2
H. SECURITY INTEREST 2
1. Grant of Security Interest 2
2. Default in Payment 3
3. Assembly of Collateral, Payment of Costs and Notices 3
4. Recording and Further Assurances 3
5. Records and Schedules of Inventory 3
2
I. CHANGES OF DESIGN, SPECIFICATIONS OR OPTIONS 4
J. DISCONTINUANCE OF MANUFACTURE OR
IMPORTATION 4
K. MINIMUM VEHICLE INVENTORIES 4
L. PRODUCT MODIFICATIONS 4
II. RETAILER'S MARKETING AND SALES OF MERCEDES-
BENZ LIGHT TRUCK PRODUCTS 4
A. RETAILER'S GENERAL RESPONSIBILITIES 4
B. EXPORT POLICY 5
C. MERCEDES-BENZ RETAILER ASSOCIATION 5
D. AREA OF INFLUENCE 6
E. EVALUATION OF RETAILER'S MARKETING AND
SALES PERFORMANCE 6
III. RETAILER'S SERVICE OBLIGATIONS 6
A. CLIENT SERVICE STANDARDS 6
B. RETAILER'S SPECIFIC SERVICE OBLIGATIONS 7
1. Pre-Delivery Inspections and Service 7
2. Warranty Repairs and Policy Service 7
3. Service Campaign Inspections and Corrections 7
4. Roadside Assistance Program 8
C. USE OF PARTS AND ACCESSORIES IN
NON-WARRANTY SERVICE 8
1. Quality Standards 8
2. Retailer's Disclosures as to Use of and
Warranties for Non-Genuine Parts and Accessories 8
D. COMPLIANCE WITH SAFETY AND EMISSION
CONTROL REQUIREMENTS 9
E. COMPLIANCE WITH CONSUMER PROTECTION
STATUTES, RULES AND REGULATIONS 9
IV. RETAILER'S SERVICE AND PARTS ORGANIZATION 9
A. ORGANIZATION AND STANDARDS 9
B. SERVICE EQUIPMENT AND SPECIAL TOOLS 00
X. XXXXX XXXXXXXX XXXXX 00
X. AFTER HOURS DELIVERY 10
E. ASSISTANCE PROVIDED BY MBUSA 10
3
1. Service Manuals and Materials 10
2. Field Personnel Assistance 10
F. EVALUATION OF RETAILER'S SERVICE
AND PARTS PERFORMANCE 11
G. ADDITIONAL FACILITIES OR LOCATIONS 11
V. CLIENT SATISFACTION RESPONSIBILITIES 11
A. RETAILER'S CLIENT SATISFACTION
OBLIGATIONS 11
1. Retailer's Client Satisfaction Plan 11
2. Employee Training 12
3. Client Assistance Response System 12
B. EVALUATION OF RETAILER'S CLIENT
SATISFACTION PERFORMANCE 12
VI. MERCEDES-BENZ CENTER FACILITIES AND
IDENTIFICATION 12
A. LOCATION AND FACILITIES 12
B. CHANGES AND ADDITIONS 13
C. RETAILER'S OPERATING HOURS 13
D. CORPORATE IDENTITY 14
E. EVALUATION OF MERCEDES-BENZ CENTER
FACILITIES 14
F. OWNERSHIP AND USE OF MERCEDES-BENZ MARKS 14
1. Validity and Exclusive Ownership of
Mercedes-Benz Marks 14
2. Use by Retailer 14
3. Discontinuance of Use 15
4. Enforcement 15
VII. WARRANTIES 15
XXXX.XXXXXXX, CREDIT, RECORDS AND UNIFORM SYSTEMS 16
A. NET WORKING CAPITAL 16
B. FLOORING AND LINES OF CREDIT 16
C. PAYMENT TERMS 16
D. UNIFORM ACCOUNTING SYSTEM 17
E. RECORDS MAINTENANCE 17
4
F. EXAMINATION OF MERCEDES-BENZ CENTER
ACCOUNTS AND RECORDS 17
G. TAXES 18
H. CONFIDENTIALITY 18
I. MERCEDES-BENZ RETAILER COMMUNICATIONS
SYSTEM AND PROPRIETARY MANUFACTURER
SYSTEMS 18
J. SALES REPORTING 18
IX. TRANSFERS 19
A. SALE OF ASSETS OR OWNERSHIP INTEREST 19
B. RIGHT OF FIRST REFUSAL OR OPTION TO XXXXXXXX 00
0. Rights Granted 19
2. Exercise of MBUSA'S Rights 20
3. Right of First Refusal 20
4. Option to Purchase 21
S. Retailer's Obligations 21
X. SUCESSION RIGHTS UPON DEATH OR INCAPACITY 22
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF
OWNER 22
B. INCAPACITY OF OWNER 23
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH
OR INCAPACITY OF OWNER 23
XI. TERMINATION 24
A. VOLUNTARY TERMINATION BY RETAILER 24
B. TERMINATION FOR CAUSE 24
1. Immediate Termination 24
2. Termination Upon Sixty Days Notice 26
3. Termination for Failure of Performance 27
4. Termination Upon Death or Incapacity 27
C. TERMINATION UPON TERMINATION OF
DISTRIBUTORSHIP 27
D. TERMINATION FOR FAILURE OF MBUSA TO BE
LICENSED 00
X. XXXXXXXXXXX XXXX XXXXXXXX TO ENTER INTO A
NEW OR AMENDED LIGHT TRUCK RETAILER
AGREEMENT 28
F. NOTICE OF TERMINATION 28
5
G. CONTINUANCE OF BUSINESS RELATIONS 28
H. REPURCHASE PROVISIONS 28
1. MBUSA's Obligations 28
2. Retailer's Responsibilities 29
3. Payment by MBUSA 30
XII. DISPUTE RESOLUTION PROCESS 30
A. THE MERCEDES-BENZ BOARD 30
B. MANDATORY MEDIATION 31
C. OPTIONAL ARBITRATION 31
XIII.DEFENSE AND INDEMNIFICATION 32
A. DEFENSE AND INDEMNIFICATION BY MBUSA 32
B. DEFENSE AND INDEMNIFICATION BY RETAILER 33
C. CONDITIONAL DEFENSE AND/OR
INDEMNIFICATION 34
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS 34
E. TIME TO RESPOND AND RESPONSIBILITIES
OF THE PARTIES 34
XIV. NOTICE OF BREACH OR FAILURE TO ACT IN GOOD FAITH 35
XV. GENERAL PROVISIONS 35
A. NOTICES 35
B. NO IMPLIED WAIVERS 35
C. SOLE AGREEMENT OF THE PARTIES 35
D. RETAILER NOT AN AGENT OR REPRESENTATIVE 36
E. ASSIGNMENT OF RIGHTS OR DELEGATIONS OF
DUTIES 36
F. NO FRANCHISE FEE 36
G. BENEFIT 36
H. NEW JERSEY LAW 36
XVI. DEFINITIONS 37
XVII.ADDITIONAL PROVISIONS 38
6
MERCEDES-BENZ USA, INC.
MERCEDES-BENZ LIGHT TRUCK RETAILER AGREEMENT
STANDARD PROVISIONS
I. ACQUISITION, DELIVERY AND INVENTORY OF MERCEDES-BENZ LIGHT TRUCK PRODUCTS
A. PRICES AND TERMS OF SALE
MBUSA shall offer to sell to Retailer and Retailer shall have the
right to purchase from MBUSA Mercedes-Benz Light Truck Products in
accordance with the provisions of this Agreement and the prices and
other terms of sale that MBUSA shall establish and revise from time to
time. Such revised prices or terms shall apply to any Mercedes-Benz
Light Truck Product not invoiced to Retailer by MBUSA at the time the
notice of such change is given to Retailer (in the case of
Mercedes-Benz Light Trucks), or upon issuance of a new or modified
parts price list or through change notices, letters, bulletins or
revision sheets (in the case of Genuine Mercedes-Benz Light Truck
Parts and Accessories), or at such other times as may be designated in
writing by MBUSA.
B. AVAILABILITY AND ALLOCATION OF PRODUCTS
MBUSA will allocate Mercedes-Benz Light Truck Products among its light
truck retailers in a fair and equitable manner. MBUSA will, upon
Retailer's request, explain the considerations and method used to
allocate Mercedes-Benz Light Truck Products to Retailer.
C. DELIVERY OF PRODUCTS
MBUSA will ship Mercedes-Benz Light Truck Products to Retailer by
whatever mode of transportation, by whatever route, and from whatever
point MBUSA may select. Retailer shall pay MBUSA such charges as MBUSA
in its sole discretion establishes for such transportation services.
D. PASSAGE OF TITLE
Title to each Mercedes-Benz Light Truck Product shall pass from MBUSA
to Retailer, or to the financial institution designated by Retailer,
upon MBUSA'S receipt of payment for said Product and upon delivery
of said Product to Retailer or to a carrier for transportation to
Retailer.
-1-
7
E. RISK OF DAMAGE OR LOSS
Retailer shall bear the risk of damage to or loss of Mercedes-Benz
Light Truck Products during transportation from the point of shipment;
however, MBUSA will, if requested by Retailer in such manner and
within such time as MBUSA may specify, prosecute claims for damage to
or loss of Mercedes-Benz Light Trucks during said transportation
against the responsible carrier for and on behalf of Retailer. To the
extent required by law, Retailer shall notify the purchaser of a
vehicle of any damage sustained by such vehicle prior to sale.
X. XXXXX OR FAILURE OF DELIVERY
MBUSA shall not be liable for delay or failure to deliver
Mercedes-Benz Light Truck Products that it has previously agreed to
deliver, where such delay or failure to deliver is the result of any
event beyond the control of MBUSA, including but not limited to any
law or regulation of any governmental entity, acts of God, foreign or
civil wars, riots, interruptions of navigation, shipwrecks, fires,
floods, storms, strikes, lockouts, or other labor troubles, embargoes,
blockades, or delay or failure of MBUSA to deliver Mercedes-Benz Light
Truck Products.
G. DIVERSION AND STORAGE CHARGES
Retailer shall be responsible for and shal1 pay all charges for
demurrage, storage and other expense accruing after shipment to
Retailer or to a carrier for transportation to Retailer. If diversions
of shipments are made upon Retailer's request or are made by MBUSA as
a result of Retailer's failure or refusal to accept shipments made
pursuant to Retailer's orders, Retailer shall pay all additional
charges and expenses incident to such diversions.
H. SECURITY INTEREST
1. GRANT OF SECURITY INTEREST
As security for the full payment of all sums from time to time
owed by Retailer to MBUSA under this Agreement, whether such sums
are now or hereafter become due and owing, Retailer hereby grants
to MBUSA a security interest in the following items for which
MBUSA has not received payment (collectively referred to as
"Collateral"):
(i) All Genuine Mercedes-Benz Light Truck Parts
and Accessories and other related items
delivered by MBUSA to Retailer hereunder on
account (all such inventory hereinafter
referred to collectively as "Inventory" and
individually as "Item of Inventory"); and
(ii) All proceeds from any of the foregoing,
including without limitation, insurance
payable by reason of the loss, damage or
-2-
8
destruction of any Item of Inventory; and
all accounts and chattel paper of Retailer
arising from its sale, lease or other
disposition of Inventory now existing or
hereafter arising, and all liens,
securities, guarantees, remedies and
privileges pertaining thereto, together
with all rights and liens of Retailer
relating thereto.
2. DEFAULT IN PAYMENT
Retailer shall be in default of this Section I.H if: (i)
Retailer shall fail to pay any amounts secured hereby when due or
fail to perform any obligations under this Section I in a timely
manner; (ii) Retailer shall fail to pay any amounts secured
pursuant to Section I of the Mercedes-Benz Passenger Car Retailer
Agreement when due or fail to perform any obligations under that
Section I in a timely manner, (iii) there shall occur any
material adverse change in the financial condition of Retailer;
or (iv) Retailer shall dissolve or become insolvent or bankrupt;
and, in any such case, MBUSA may declare all sums secured by this
Section I.H immediately due and payable and MBUSA shall have all
the rights and remedies afforded to a secured party after default
under the Uniform Commercial Code or other applicable law in
effect on the date of this Agreement.
3. ASSEMBLY OF COLLATERAL, PAYMENT OF COSTS AND NOTICES
Retailer shall, if requested by MBUSA upon the occurrence of any
default under Section I.H.2, assemble the Collateral and make it
available to MBUSA at a place or places designated by MBUSA.
Retailer also shall pay all costs of MBUSA, including without
limitation, attorneys fees incurred with respect to the
enforcement of any of MBUSA's rights under this Section I.H.
4. RECORDING AND FURTHER ASSURANCES
Retailer shall execute and deliver such financing statements and
such other instruments or documents and take any other action as
MBUSA may request in order to create or maintain the security
interest intended to be created by this Section I.H, or to enable
MBUSA to exercise and enforce its rights hereunder. A carbon,
photographic or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in lieu of a
financing statement in any and all jurisdictions which accept
such reproductions.
5. RECORDS AND SCHEDULES OF INVENTORY
Retailer shall keep accurate records itemizing and describing the
kind, type and quantity of Inventory and shall furnish to MBUSA
within five (5)
-3-
9
days of receipt of MBUSA's request therefor, a current schedule
of inventory in form and substance satisfactory to MBUSA
("Schedule of Inventory"), which shall be true and accurate in
all respects. A physical inventory shall be conducted no less
than annually in connection with preparation of year-end
financial statements of Retailer and, at MBUSA's request, a
report of such inventory shall be promptly provided to MBUSA.
I. CHANGES OF DESIGN, SPECIFICATIONS OR OPTIONS
MBUSA may change the design or specifications of any Mercedes-Benz
Light Truck Product or the options in any Mercedes-Benz Light Truck
Product and shall be under no obligation to provide notice of same or
to make any similar change to Mercedes-Benz Light Truck Products
previously purchased by or shipped to Retailer. No change shall be
considered a model year change unless so specified by MBUSA.
J. DISCONTINUANCE OF MANUFACTURE OR IMPORTATION
MBUSI and/or MBUSA may discontinue the manufacture, importation or
distribution of all or part of any Mercedes-Benz Light Truck Product,
whether light truck parts, options or accessories, including any
model, series or body style of any Mercedes-Benz Light Truck at any
time without any obligation or liability to Retailer by reason
thereof.
K. MINIMUM VEHICLE INVENTORIES
Retailer agrees that it shall, at all times, maintain in showroom
ready condition at least the minimum inventory of Mercedes-Benz Light
Trucks that may be established by MBUSA from time to time.
L. PRODUCT MODIFICATIONS
Retailer agrees that it will not install aftermarket accessories or
make any modifications to Mercedes-Benz light trucks that may impair
or adversely affect their safety, emissions, structural integrity or
performance.
II. RETAILER'S MARKETING AND SALES OF MERCEDES-BENZ LIGHT
TRUCK PRODUCTS
A. RETAILER'S GENERAL RESPONSIBILITIES
Retailer recognizes that client satisfaction and the successful
promotion and sale of Mercedes-Benz Light Truck Products are
significantly dependent on Retailer's advertising and sales promotion
activities. Therefore, Retailer at all times shall:
-4-
10
1. Actively and effectively promote and sell new Mercedes-Benz Light
Truck Products to clients located within its Area of Influence;
2. Advertise and merchandise Mercedes-Benz Light Truck Products, and
use current Mercedes-Benz showroom displays, sales materials and
other promotional media;
3. Organize a complete sales organization of the highest quality,
ensure that its sale personnel meet the educational and
management standards established by MBUSA, and, at Retailer's
expense, have such personnel as are appropriate attend all
training courses prescribed by MBUSA;
4. Comply with the Retailer Advertising Guidelines, maintain a high
standard of ethics in advertising, promoting and selling
Mercedes-Benz Light Truck Products, and avoid engaging in any
misrepresentation or unfair or deceptive practices. Retailer
shall discontinue any advertising that MBUSA considers injurious
to MBUSA's business or reputation or to the Mercedes-Benz Marks,
or that are likely to be violative of applicable laws or
regulations; and
5. Accurately represent to clients the total selling price of
Mercedes-Benz Light Truck Products. Retailer agrees to explain to
clients of Mercedes-Benz Light Truck Products the items that make
up the total selling price and to give the clients itemized
invoices and all other information required by law. Retailer
understands and hereby acknowledges that it may sell
Mercedes-Benz Light Truck Products at whatever price Retailer
desires.
B. EXPORT POLICY
Retailer is authorized to sell Mercedes-Benz Light Trucks only to
clients residing in the United States of America. Retailer agrees that
it will not sell Mercedes-Benz Light Trucks for resale or use outside
the United States of America. Retailer agrees to be bound by and
comply with any export policy established by MBUSA.
C. MERCEDES-BENZ RETAILER ASSOCIATION
MBUSA considers participation by Mercedes-Benz light truck retailers
in Mercedes-Benz Light Truck Retailer Advertising Associations to be a
fundamental part of an overall marketing strategy for their businesses
and Mercedes-Benz Light Truck Products. MBUSA urges Retailer to
cooperate in the establishment of such an association and to fund its
fair share of advertising and merchandising programs undertaken by the
association.
-5-
11
D. AREA OF INFLUENCE
MBUSA will assign to Retailer a geographic area consisting of a
collection of zip codes that is called an Area of Influence ("AOI").
MBUSA may alter or adjust Retailer's AOI at any time. The AOI is a
tool used by MBUSA to evaluate Retailer's performance of its primary
obligations hereunder. Retailer agrees that it has no right or
interest in any AOI and that MBUSA may add new retailers to or
relocate retailers into Retailer's AOI. Any such addition or
relocation of a retailer will result in an alteration or adjustment of
Retailer's AOI.
E. EVALUATION OF RETAILER'S MARKETING AND SALES PERFORMANCE
MBUSA will periodically evaluate Retailer's sales and marketing
performance under this Agreement. Retailer's evaluation will be based
on such reasonable criteria as MBUSA may establish, including without
limitation: (i) Retailer's reasonable sales objectives that may be
established by MBUSA; (ii) Retailer's sales of Mercedes-Benz Light
Trucks as a percentage of registrations of Mercedes-Benz Light Trucks
or Competitive Vehicles in Retailer's AOI; (iii) the registrations of
Mercedes-Benz Light Trucks as a percentage of registrations of
Competitive Vehicles in Retailer's AOI; (iv) Retailer's sales or
registrations of Mercedes-Benz Light Trucks as compared to sales or
registrations of Mercedes-Benz Light Trucks by authorized
Mercedes-Benz light truck retailers in other areas, including but not
limited to the metropolitan area, market and/or region in which
Retailer is located; and (v) Retailer's performance in building and
maintaining consumer satisfaction with Retailer and Mercedes-Benz
Light Truck Products. MBUSA will review such evaluations with
Retailer, and Retailer shall take prompt corrective action, if
required, to improve its performance.
III. RETAILER'S SERVICE OBLIGATIONS
A. CLIENT SERVICE STANDARDS
Retailer and MBUSA agree that client satisfaction and the future
growth of their respective businesses is substantially dependent upon
the ability of owners of Mercedes-Benz light trucks to obtain
high-quality servicing from Retailer. Therefore, Retailer agrees to:
1. Provide prompt, efficient and courteous service of the highest
quality for all Mercedes-Benz light trucks, regardless of
where purchased and whether or not under warranty;
2. Accurately diagnose and advise clients of the necessary repairs,
and obtain their consent prior to the initiation of such
repairs;
3. Professionally perform the necessary repairs; and
-6-
12
4. Treat clients fairly at all times.
B. RETAILER'S SPECIFIC SERVICE OBLIGATIONS
1. PRE-DELIVERY INSPECTIONS AND SERVICE
Retailer shall perform pre-delivery inspections and service on each
Mercedes-Benz Light Truck prior to sale and delivery thereof by
Retailer in accordance with the Warranty Manual.
2. WARRANTY REPAIRS AND POLICY SERVICE
Retailer shall promptly, courteously and efficiently perform (i)
warranty repairs on each Mercedes-Benz Light Truck Product that
qualifies for such repairs under the provisions of any warranty
furnished therewith by MBUSA or MBUSI, and (ii) such other
inspections, repairs or corrections on Mercedes-Benz Light Truck
Products as may be approved or authorized by MBUSA to be made at
MBUSA's expense (hereinafter "policy service"). Retailer shall perform
such repairs and service on each such Mercedes-Benz Light Truck
Product as and when requested by the owner or user (or in the case of
policy service when requested by MBUSA), without regard to where such
Mercedes-Benz Light Truck Product was purchased and in accordance with
the Warranty Manual. MBUSA agrees to compensate Retailer for all
warranty repairs and policy service, including labor, diagnosis and
Genuine Mercedes-Benz Light Truck Parts and Accessories, in accordance
with procedures and at rates to be established from time to time by
MBUSA. Unless otherwise approved in advance by MBUSA, Retailer shall
use only Genuine Mercedes-Benz Light Truck Parts and Accessories when
performing Mercedes-Benz warranty repairs and policy service. Warranty
repairs and policy service are provided for the benefit of clients,
and Retailer agrees that the client shall not be obligated to pay any
charges for such work or any other services for which Retailer is
reimbursed by MBUSA, except as required by law.
3. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS
Retailer agrees to perform service campaign inspections and/or
corrections for owners or users of all Mercedes-Benz Light Truck
Products that qualify for such inspections and/or corrections in
accordance with MBUSA's directives and the applicable procedures in
the Warranty Manual. MBUSA agrees to reimburse Retailer for all
replacement parts and/or other materials required and used in
connection with such work and for labor according to such directives
and the applicable provisions of the Warranty Manual.
-7-
13
4. ROADSIDE ASSISTANCE PROGRAM
Retailer agrees to participate in the Mercedes-Benz Roadside
Assistance Program as specified by MBUSA.
C. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICE
Subject to the provisions of Sections I.L and III.B.2, Retailer has the
right to sell, install or use for making non-warranty repairs products that
are not Genuine Mercedes-Benz Light Truck Parts and Accessories.
1. QUALITY STANDARDS
Retailer acknowledges, however, that its clients expect that any parts
or accessories that Retailer sells, installs or uses in the sale,
repair or servicing of Mercedes-Benz light trucks are, or meet the
high quality standards of, Genuine Mercedes-Benz Light Truck Parts and
Accessories. Retailer agrees that in sales, repairs or servicing where
Retailer does not use Genuine Mercedes-Benz Light Truck Parts and
Accessories, Retailer will utilize only such other parts or
accessories as:
1. Will not adversely affect the mechanical operation of the
Mercedes-Benz light truck being sold, repaired or serviced; and
2. Are equivalent in quality and design to Genuine Mercedes-Benz
Light Truck Parts and Accessories.
Retailer further agrees that it will not offer to sell any parts or
accessories that for reasons of quality or image are reasonably
objected to by MBUSA.
2. RETAILER'S DISCLOSURES AS TO USE OF AND WARRANTIES FOR NON-GENUINE
PARTS AND ACCESSORIES
In order to avoid confusion and to minimize potential client
dissatisfaction, in any non-warranty instance where Retailer sells,
installs or uses non-Genuine Mercedes-Benz Light Truck Parts or
Accessories, Retailer shall disclose such fact to the client and shall
advise the client that the item is not included in warranties
furnished by MBUSA or MBUSI. Such disclosure shall be written,
conspicuous and stated on the client's copy of the service or repair
order or sale document. In addition, Retailer will clearly explain to
the client the extent of any warranty covering the parts or
accessories involved and will deliver a copy of the warranty to the
client.
-8-
14
D. COMPLIANCE WITH SAFETY AND EMISSION CONTROL REQUIREMENTS
Retailer agrees to comply and operate consistently with all applicable
provisions of the National Traffic and Motor Vehicle Safety Act of
1966, and the Federal Clean Air Act, as amended, including applicable
rules and regulations issued from time to time thereunder, and all
other applicable federal, state, and local motor vehicle safety and
emission control statutes, rules, and regulations.
In the event that the laws of the state in which Retailer is located
require motor vehicle retailers or distributors to install in new or
used motor vehicles, prior to their sale, any safety devices or other
equipment not installed or supplied as standard equipment by MBUSI,
then Retailer, prior to the sale of any Mercedes-Benz light truck on
which such installations are required, shall properly install such
devices or equipment on such Mercedes-Benz light trucks. Retailer
shall comply with state and local laws pertaining to the installation
and reporting of such equipment.
In the interest of motor vehicle safety and emission control, MBUSA
and Retailer agree to provide to each other such information and
assistance as may reasonably be requested by the other in connection
with the performance of obligations imposed on either party by the
National Traffic and Motor Vehicle Safety Act of 1966, and the Federal
Clean Air Act, as amended, and their rules and regulations, and all
other applicable federal, state and local motor vehicle safety and
emission control statutes, rules and regulations.
E. COMPLIANCE WITH CONSUMER PROTECTION STATUTES, RULES AND REGULATIONS
Retailer agrees to comply and operate consistently with all applicable
provisions of any repair or replace or other consumer protection
statutes, rules and regulations (hereinafter "consumer protection
laws"). Because certain client complaints may impose liability upon
MBUSA under consumer protection laws, Retailer agrees to provide
prompt notice to MBUSA of such complaints and take such other steps as
MBUSA may require. Retailer also agrees to provide applicable required
client notifications and disclosures as prescribed by consumer
protection laws. Retailer will do nothing to affect adversely MBUSA's
rights under consumer protection laws.
IV. RETAILER'S SERVICE AND PARTS ORGANIZATION
A. ORGANIZATION AND STANDARDS
Retailer agrees to organize and maintain a complete service and parts
organization of the highest quality, including diagnostic specialists,
technicians and a sufficient complement of qualified service and parts
personnel as recommended by
-9-
15
MBUSA. Retailer's personnel will meet the educational, management and
technical training standards reasonably established by MBUSA and, at
Retailer's expense, will complete all service, parts and client
satisfaction training courses prescribed by MBUSA.
B. SERVICE EQUIPMENT AND SPECIAL TOOLS
Retailer agrees to acquire and properly maintain adequate service
equipment and such special service tools and instruments as are
reasonably specified by MBUSA. Anything herein to the contrary
notwithstanding, if MBUSA determines that Retailer requires special
tools and instruments to service a model of Mercedes-Benz Light Truck,
Retailer acknowledges that it has no right to purchase such model from
MBUSA unless and until it has acquired all such special tools and
instruments, and completed all related training courses prescribed by
MBUSA.
C. PARTS STOCKING LEVEL
Retailer agrees to maintain its parts stock at minimum stocking levels
reasonably established by MBUSA.
D. AFTER-HOURS DELIVERY
Retailer agrees to provide MBUSA, upon request, access to a secure
area for after-hours parts or light truck delivery.
E. ASSISTANCE PROVIDED BY MBUSA
1. SERVICE MANUALS AND MATERIALS
MBUSA agrees to make available to Retailer copies of such service
manuals and bulletins, publications, computer software and
technical data as MBUSA shall deem to be necessary for the needs
of Retailer's service and parts organization. Retailer shall be
responsible for keeping such manuals and materials current and
available for consultation by its employees.
2. FIELD PERSONNEL ASSISTANCE
To assist Retailer in handling its responsibilities under this
Agreement, MBUSA agrees to make available qualified field
personnel who will, from time to time, advise and counsel
Retailer on service-related subjects, including service policies,
product and technical adjustments, repair and replacement of
product components, client relations, warranty administration,
service and parts merchandising, and personnel/management
training.
-10-
16
F. EVALUATION OF RETAILER'S SERVICE AND PARTS PERFORMANCE
MBUSA will periodically evaluate Retailer's: (i) service performance
in areas such as client satisfaction, warranty administration, service
repairs, service management, facilities, operating procedures and new
vehicle pre-delivery service; and (ii) parts operations, facilities,
tools and equipment. MBUSA will review such evaluations with Retailer,
and Retailer shall take prompt action to improve the service and parts
performance to satisfactory levels as MBUSA may require. Such action
shall, if requested by MBUSA, include an action plan by Retailer for
improvement of service and parts performance within a specific time
period approved by MBUSA, including but not limited to the
establishment of additional space, facilities or locations for such
operations.
G. ADDITIONAL FACILITIES OR LOCATIONS
If, with MBUSA's prior written consent, Retailer establishes
additional facilities or locations for its service and parts
operations, Retailer shall meet the facilities, identification,
organizational, equipment, parts stocking and other standards
reasonably established by MBUSA from time to time for such facilities
or locations.
V. CLIENT SATISFACTION RESPONSIBILITIES
The "Three-Pointed Star" is the symbol of automotive excellence. In
furtherance of that image and reputation, MBUSA and Retailer agree to
conduct their respective businesses in a manner that achieves the highest
levels of client satisfaction by marketing the finest products and
providing the best service in the automotive industry.
A. RETAILER'S CLIENT SATISFACTION OBLIGATIONS
Retailer will be responsible for satisfying Mercedes-Benz clients in
all matters except those that are directly related to product design
and manufacturing. Retailer will take all reasonable steps to ensure
that each client is completely satisfied with Mercedes-Benz Light
Truck Products and the services and practices of Retailer. Retailer
will not engage in any practice or method of operation if its nature
or quality may impair the reputation of MBUSA or Mercedes-Benz Light
Truck Products.
1. RETAILER'S CLIENT SATISFACTION PLAN
Upon MBUSA's request, Retailer shall provide a detailed plan of
Retailer's client satisfaction program to MBUSA and shall
implement such program on a continuous basis. This plan shall
include an ongoing system for emphasizing client satisfaction to
all Retailer's employees, for training
-11-
17
Retailer employees and for conveying to clients that
Retailer is committed to the highest possible level of
client satisfaction.
2. EMPLOYEE TRAINING
Retailer agrees to participate and to have its employees
participate, at Retailer's expense, in Mercedes-Benz client
satisfaction training as required by MBUSA.
3. CLIENT ASSISTANCE RESPONSE SYSTEM
Retailer agrees to implement a system, approved by MBUSA,
that will respond immediately to requests for client
assistance from MBUSA.
B. EVALUATION OF RETAILER'S CLIENT SATISFACTION PERFORMANCE
MBUSA periodically will evaluate Retailer's client satisfaction
performance based on the following considerations and efforts by
Retailer.
1. MBUSA will provide Retailer with Client Relationship Index
("CRI") reports or such other equivalent data as will permit
Retailer to assess its performance and maintain the highest
level of client satisfaction. Retailer agrees to review with
its employees on a regular basis the results of the client
satisfaction reports or other data it receives.
2. Retailer shall continuously develop and implement specific
action plans to improve its client satisfaction performance
and results. The plans are to be reviewed with MBUSA on a
basis that MBUSA deems appropriate. Retailer will respond on
a timely basis to requests from MBUSA to take action on
unsatisfactory client satisfaction matters and to commit
necessary resources to remedy deficiencies reasonably
specified by MBUSA.
VI. MERCEDES-BENZ CENTER FACILITIES AND IDENTIFICATION
A. LOCATION AND FACILITIES
Retailer shall provide Mercedes-Benz Center Facilities at
the Approved Location(s) that (i) will enable Retailer to
effectively perform its responsibilities under this
Agreement, (ii) are satisfactory in space, appearance,
layout, equipment and corporate identification, and (iii)
are otherwise substantially in accordance with the Retailer
Operating Requirements Addendum, Retailer Facility Space
Analysis Addendum, Corporate Identity Manual and such other
standards as MBUSA may establish from time to time. Retailer
shall conduct its Mercedes-Benz Center Operations only from
the Approved Location(s). If the Approved
-12-
18
Location(s) is comprised of more than one place of business,
Retailer shall use each such place of business only for the
purposes specified therefor in Paragraph F and the Final
Paragraph of this Agreement, and, if applicable, in the
Retailer Facility Space Analysis Addendum.
B. CHANGES AND ADDITIONS
Retailer shall not move, relocate or change the designated
usage or function of the Approved Location(s) or any of the
Mercedes-Benz Center Facilities, or substantially modify any
of the Mercedes-Benz Center Facilities, nor shall Retailer
or any person named in the Final Paragraph of this Agreement
directly or indirectly establish or operate any other
locations or facilities for the sale or servicing of
Mercedes-Benz Light Truck Products or for the conduct of any
other of the Mercedes-Benz Center Operations contemplated by
this Agreement, without the prior written consent of MBUSA.
Any changes in the Approved Location(s) or the Mercedes-Benz
Center Facilities that may be agreed to by MBUSA and
Retailer may be reflected in a new Agreement or in a new
Retailer Facility Space Analysis Addendum.
Retailer agrees that it shall conduct Mercedes-Benz Center
Operations only from location(s) and Mercedes-Benz Center
facilities that are "Approved Location(s)" and
"Mercedes-Benz Center Facilities" under the Mercedes-Benz
Passenger Car Retailer Agreement.
Retailer acknowledges that the addition of sales, service or
parts operations for another line of vehicles to the
Mercedes-Benz Center Facilities or at the Approved
Location(s) could adversely affect Retailer's sales, service
and parts performance with respect to Mercedes-Benz Light
Truck Products. Accordingly, to give MBUSA an adequate
opportunity to evaluate the effect of such a proposed
addition and to determine whether or not to consent thereto,
Retailer agrees to notify MBUSA in writing at least sixty
(60) days before Retailer enters into any agreement or
letter of intent with respect to the addition of such sales,
service or parts operations to the Mercedes-Benz Center
Facilities or at the Approved Location(s).
C. RETAILER'S OPERATING HOURS
Retailer agrees to conduct Mercedes-Benz Center Operations
during all days and hours that are customary and lawful for
such operations in the community or locality in which
Retailer is located and in accordance with industry
standards. In addition, when necessary to accommodate client
needs, Retailer shall extend its operating hours.
-13-
19
D. CORPORATE IDENTITY
Subject to applicable governmental statutes, ordinances and
regulations, Retailer agrees to erect, display and maintain, at
Approved Location(s) only and at Retailer's sole expense, such
standard authorized product and service signs and other corporate
identity elements as are specified in the Corporate Identity
Manual or otherwise required by MBUSA from time to time.
E. EVALUATION OF MERCEDES-BENZ CENTER FACILITIES
MBUSA will periodically evaluate the Mercedes-Benz Center
Facilities. In making such evaluations, MBUSA may consider, among
other things: the actual building and land provided by Retailer
for the performance of its responsibilities under this Agreement;
compliance with MBUSA's current requirements for Mercedes-Benz
Center Operations; the appearance, condition, layout and signage
of the Mercedes-Benz Center Facilities; and such other factors as
in MBUSA's opinion may relate to Retailer's performance of its
responsibilities under this Agreement. MBUSA will discuss such
evaluations with Retailer, and Retailer shall take prompt action
to comply with MBUSA's recommendations and minimum facility
standards.
F. OWNERSHIP AND USE OF MERCEDES-BENZ MARKS
1. VALIDITY AND EXCLUSIVE OWNERSHIP OF MERCEDES-BENZ MARKS
Retailer acknowledges the validity and DCAG's exclusive
ownership of the Mercedes-Benz Marks, and agrees not to
contest the same during the term of the Agreement or at any
time thereafter. Retailer and MBUSA agree to cooperate with
each other in preventing any acts of trademark infringement
or unfair competition with respect to any Mercedes-Benz
Xxxx, but DCAG or MBUSA shall have sole control over all
actions and legal proceedings to redress infringement of or
any unfair competition with respect to any Mercedes-Benz
Xxxx.
2. USE BY RETAILER
MBUSA grants Retailer a non-exclusive license to use the
Mercedes-Benz Marks subject to the terms and conditions
of the Agreement and the Corporate Identity Manual. Retailer
agrees that it will use the Mercedes-Benz Marks only in
connection with the sale and servicing of Mercedes-Benz
Light Truck Products and only in such manner, at such
location, to such extent, and for such purposes as MBUSA may
specify from time to time. Retailer shall promptly change or
discontinue its use of any Mercedes-Benz Marks upon MBUSA's
request. Retailer shall not use the Mercedes-Benz Marks as
part of its corporate or business name without MBUSA's prior
written consent.
-14-
20
3. DISCONTINUANCE OF USE
Upon termination of this Agreement, Retailer agrees that it
shall immediately:
a. Discontinue the use of the word Mercedes-Benz and the
Mercedes-Benz Marks, or any semblance of same,
including without limitation, the use of all
stationery, telephone directory listing and other
printed material referring in any way to Mercedes-Benz
or bearing any Mercedes-Benz Xxxx;
b. Discontinue the use of the word Mercedes-Benz or the
Mercedes-Benz Marks, or any semblance of same, as part
of its business or corporate name, and file a change or
discontinuance of such name with appropriate
authorities;
C. Remove all product signs bearing said word(s) or
Mercedes-Benz Marks at Retailer's sole cost and
expense;
d. Cease representing itself as an authorized
Mercedes-Benz light truck retailer; and
e. Refrain from any action, including without limitation,
any advertising, stating or implying that it is
authorized to sell or distribute Mercedes-Benz Light
Truck Products.
4. ENFORCEMENT
In the event Retailer fails to comply with the terms and
conditions of this Section VI.F, MBUSA shall have the
right, in its sole discretion, to effect, compliance through
litigation and/or to enter upon Retailer's premises and
remove, without liability, all such product signs and
identification bearing the word Mercedes-Benz or any
Mercedes-Benz Xxxx. Retailer agrees that it shall reimburse
MBUSA for any costs and expenses incurred in such
litigation and/or removal, including reasonable attorney
fees.
VII. WARRANTIES
The only warranties of MBUSA or MBUSI applicable to Mercedes-Benz Light
Truck Products shall be the New Vehicle Limited Warranty or such other
written warranties that may be expressly furnished by MBUSA or MBUSI.
Except for its express limited liability under such written warranties,
MBUSA and MBUSI do not assume any additional warranty obligations or
liabilities in connection with any Mercedes-Benz Light Truck Products.
Retailer is not authorized to assume any additional obligations or
-15-
21
liabilities on behalf of MBUSA or MBUSI. Any such additional
obligations assumed by Retailer shall be the sole responsibility of
Retailer.
Retailer shall expressly incorporate in full and without modification
any warranty furnished by MBUSA or MBUSI with a Mercedes-Benz Light
Truck as a conspicuous part of each order form or other contract for
the sale of such a Mercedes-Benz Light Truck by Retailer to any buyer.
Retailer shall make available to the buyer of each Mercedes-Benz Light
Truck Product prior to the purchase of such Mercedes-Benz Light Truck
Product, copies of such applicable warranties as may be furnished by
MBUSA or MBUSI. Retailer shall also provide to the buyer of each
Mercedes-Benz Light Truck Product, in full and without modification,
any owner's manual, warranty booklet or other owner information which
MBUSA or MBUSI may provide to Retailer for delivery with such
Mercedes-Benz Product. Retailer agrees to abide by and implement in
all other respects MBUSA's warranty procedures then in effect.
VIII. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS
A. NET WORKING CAPITAL
Retailer agrees to establish and maintain actual net working capital
in an amount not less than the minimum net working capital specified
by MBUSA. MBUSA will have the right to modify the amount of net
working capital required, and Retailer agrees promptly to establish
and maintain the required amount.
B. FLOORING AND LINES OF CREDIT
Retailer agrees to obtain and maintain at all times a confirmed and
adequate flooring line with a bank or financial institution or other
method of financing acceptable to MBUSA to enable Retailer to perform
its obligations pursuant to this Agreement.
MBUSA may increase the required amounts of flooring or lines of
credit, and Retailer agrees promptly to establish and maintain the
increased amount.
Subject to the foregoing obligations, Retailer is free to do its
financing business, wholesale, retail or both, with whomever it
chooses and to engage in retail financing activity to the extent it
desires.
C. PAYMENT TERMS
All monies or accounts due Retailer from MBUSA will be considered net
of Retailer's indebtedness to MBUSA. MBUSA may deduct or offset any
amounts due or to become due from Retailer to MBUSA, or any amounts
held by MBUSA, from or against any sums or accounts due or to become
due from MBUSA to Retailer; provided, however, that MBUSA shall not
deduct or offset such amounts for any transaction where MBUSA has
failed to provide written notice to Retailer
-16-
22
of the amounts due within six (6) months of the transaction.
Payments by Retailer to MBUSA shall be made in such a manner
as prescribed by MBUSA and shall be applied against Retailer's
indebtedness in accordance with MBUSA's policies and
practices. If Retailer disputes any deduction or offset
imposed by MBUSA pursuant to this Section VIII.C, it shall
provide written notice of such dispute to MBUSA within ninety
(90) days of the date on which MBUSA imposed such deduction or
offset. If Retailer fails to provide such notice to MBUSA
within that 90-day period, it shall be deemed to have waived
any right that it may have to challenge such deduction or
offset pursuant to Section XII or before any court,
administrative agency or governmental body.
D. UNIFORM ACCOUNTING SYSTEM
Retailer agrees to maintain its financial books and records in
accordance with the Mercedes-Benz Accounting Manual, as
amended from time to time by MBUSA. In addition, Retailer
shall furnish to MBUSA complete and accurate financial or
operating information, including without limitation, a
financial and/or operating statement covering the current
month and calendar year-to-date operations and showing the
true and accurate condition of Retailer's business. Retailer
shall promptly furnish to MBUSA copies of any adjusted annual
statements, including any and all adjusted, year-end
statements prepared for tax or any other purposes. All such
information shall be furnished by Retailer to MBUSA via
MBUSA's electronic communications network and in such a format
and at such times as prescribed by MBUSA. If requested by
MBUSA, Retailer shall furnish to MBUSA an audited annual
financial statement.
E. RECORDS MAINTENANCE
Retailer agrees to keep complete, accurate and current records
regarding its sale, leasing and servicing of Mercedes-Benz
Light Truck Products for a minimum of five (5) years,
exclusive of any retention period required by any governmental
entity. Retailer shall prepare, keep current and retain
records in support of requests for reimbursement for warranty
and policy work performed by Retailer in accordance with the
Warranty Manual.
F. EXAMINATION OF MERCEDES-BENZ CENTER ACCOUNTS AND RECORDS
MBUSA shall have the right at all reasonable times and during
regular business hours to inspect the Mercedes-Benz Center
Facilities and to examine, audit and reproduce all records,
accounts and supporting data relating to all Mercedes-Benz
Center operations for any line of vehicles conducted in the
Mercedes-Benz Center Facilities or at the Approved
Location(s), including without limitation, sales reporting,
service and repair of Mercedes-Benz Light Truck Products by
Retailer.
-17-
23
G. TAXES
Retailer shall be responsible for and duly pay all sales
taxes, use taxes, excise taxes and other governmental or
municipal charges imposed, levied or based upon the purchase
or sale of Mercedes-Benz Light Truck Products by Retailer, and
shall maintain accurate records of the same.
H. CONFIDENTIALITY
MBUSA agrees that it shall not provide any data or documents
submitted to it by Retailer to any third party unless
authorized by Retailer, required by law, or required to
generate composite or comparative data for analytical
purposes. Retailer agrees to keep confidential and not to
disclose, directly or indirectly, any information that MBUSA
designates as confidential.
I. MERCEDES-BENZ RETAILER COMMUNICATIONS SYSTEM AND PROPRIETARY
MANUFACTURER SYSTEMS
MBUSA has established the Mercedes-Benz Retailer
Communications System ("RCS") to retrieve information from and
disseminate information to Retailer. The RCS (which is
presently called MBNet) collects parts, warranty and financial
data from Retailer, and provides access to various reports,
data bases and administrative messages to Retailer. Retailer
shall utilize the RCS to provide such information to MBUSA as
MBUSA shall specify from time to time. Retailer shall acquire,
install and maintain at its expense the necessary equipment
and systems compatible with the RCS, as well as other
proprietary manufacturer systems, which are deemed necessary
by MBUSA to transact business and serve clients in the most
efficient manner.
J. SALES REPORTING
Retailer agrees to accurately report to MBUSA, with such
relevant information as MBUSA may reasonably require, the
delivery of each Mercedes-Benz Light Truck to an ultimate
consumer by the end of the day in which the vehicle is
delivered to such ultimate consumer, and to furnish MBUSA with
such other reports as MBUSA may reasonably require in
accordance with MBUSA's Ultimate Consumer DDR Reporting
Provision or such other sales reporting requirements as MBUSA
may establish from time to time.
-18-
24
IX. TRANSFERS
A. SALE OF ASSETS OR OWNERSHIP INTEREST
This is a personal service Agreement that MBUSA has entered
into in reliance upon the personal qualifications, reputation,
integrity, expertise and commitment of Owners and Retailer
Operator. MBUSA has also entered into this Agreement in
reliance on Retailer's agreement at all times to conduct
Mercedes-Benz Center Operations hereunder in conjunction with,
and at the "Approved Location(s)" and "Mercedes-Benz Center
Facilities" for, its "Mercedes-Benz Center Operations" under
the Mercedes-Benz Passenger Car Retailer Agreement. For these
reasons, Retailer agrees to obtain MBUSA's prior written
consent to any proposed sale or transfer of Retailer's
principal assets or any ownership interest of Owner, which
consent shall not be unreasonably withheld; provided, however,
that anything herein to the contrary notwithstanding, Retailer
agrees that (i) it shall not sell or transfer any such assets
or ownership interest relating to the conduct of Mercedes-Benz
Center Operations hereunder separate and apart from the assets
or ownership interest relating to the conduct of
"Mercedes-Benz Center Operations" under the Mercedes-Benz
Passenger Car Agreement, and that (ii) any such attempted sale
or transfer shall be void and not binding on MBUSA.
MBUSA shall not be obligated to execute a new Agreement with a
proposed transferee of such assets or ownership interest
unless Retailer first makes arrangements acceptable to MBUSA
to satisfy any outstanding indebtedness to MBUSA.
B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
Subject to Section IX.A., the parties agree as follows:
1. RIGHTS GRANTED
If a proposal to sell Retailer's principal assets or
transfer the majority ownership interest in Retailer is
submitted by Retailer to MBUSA, or in the event of the
death of the majority Owner of Retailer, MBUSA has a
right of first refusal or option to purchase such assets
or ownership interest, including any leasehold interest
or realty. MBUSA's exercise of its right or option under
this Section IX.B supersedes Retailer's right to
transfer its interest in, or ownership of, the
Mercedes-Benz Center. MBUSA's right or option may be
assigned by it to any third party and MBUSA hereby
guarantees the full payment to Retailer of the purchase
price by such assignee. MBUSA may disclose the terms of
any pending buy/sell agreement and any other relevant
Mercedes-Benz Center performance information to any
potential assignee. MBUSA's rights under this Section
IX.B will be binding on and enforceable against any
-19-
25
assignee or successor in interest of Retailer or
purchaser of Retailer's assets.
Anything herein to the contrary notwithstanding, MBUSA
shall not have a right of first refusal or option to
purchase Retailer's principal assets or the majority
interest in Retailer if the proposed transferee is the
spouse or a child of an Owner and such spouse or child
meets the criteria then currently used by MBUSA in
qualifying owners of Mercedes-Benz light truck
retailers. If the proposed transferee fails to meet such
criteria due to insufficient personal qualifications or
expertise, MBUSA may, in its sole discretion, approve
the transfer subject to the proposed transferee's
successful completion of such training as MBUSA may
require. If the proposed transferee fails to complete
such training successfully or otherwise fails to meet
the criteria then currently used by MBUSA in qualifying
such owners within the time period prescribed by MBUSA,
MBUSA may thereafter exercise its right of first refusal
or option to purchase under this Section IX.B.
2. EXERCISE OF MBUSA'S RIGHTS
MBUSA shall have thirty (30) days from the following
events within which to exercise its option to purchase
or right of first refusal: (i) MBUSA's receipt of all
data and documentation customarily required by it to
evaluate a proposed transfer of ownership; (ii) MBUSA's
receipt of notice from Retailer of the death of the
majority Owner of Retailer, or (iii) MBUSA's disapproval
of any application submitted by Owner's heirs pursuant
to Section X. MBUSA's exercise of its right of first
refusal under this Section IX.B neither shall be
dependent upon nor require its prior refusal to approve
the proposed transfer.
3. RIGHT OF FIRST REFUSAL
If Retailer has entered into a bona fide written
buy/sell agreement for its Mercedes-Benz Center business
or assets, MBUSA's right under this Section IX.B is a
right of first refusal, enabling MBUSA to assume the
buyer's rights and obligations under such buy/sell
agreement, and to cancel this Agreement and all rights
granted Retailer. Upon MBUSA's request, Retailer agrees
to provide other documents relating to the proposed
transfer and any other information which MBUSA deems
appropriate, including, but not limited to, those
reflecting other agreements or understandings between
the parties to the buy/sell agreement. If Retailer
refuses to provide such documentation or to state in
writing that no such documents exist, it shall be
conclusively presumed that the buy/sell agreement is not
a bona fide agreement. If Retailer withdraws its
proposal in writing within ten (10) days following
Retailer's receipt of MBUSA's notice exercising its
right of first refusal, such right shall be null and
void.
-20-
26
If, as a result of MBUSA's exercise of its right of
first refusal, Retailer is contractually obligated to
reimburse the initial buyer for reasonable attorney's
fees, broker's fees, title searches, property
inspections, and other similar costs and fees that the
buyer incurred in connection with the buy/sell
agreement, MBUSA shall reimburse Retailer for such costs
and fees in an amount up to but not exceeding Fifty
Thousand Dollars ($50,000.00). Retailer shall provide
MBUSA with all documents substantiating such costs and
fees as MBUSA may reasonably request.
4. OPTION TO PURCHASE
In the event of the death of the majority Owner or if
Retailer submits a proposal which MBUSA determines is
not bona fide or in good faith, MBUSA has the option to
purchase the principal assets of Retailer utilized in
Mercedes-Benz Center Operations, including real estate
and leasehold interest, and to cancel this Agreement and
the rights granted Retailer hereunder. The purchase
price of the Mercedes-Benz Center assets will be
determined by good faith negotiations between the
parties. If an agreement cannot be reached, the purchase
price will be determined pursuant to the Dispute
Resolution Process established in Section XII.
5. RETAILER'S OBLIGATIONS
Upon MBUSA's exercise of its right or option and tender
of performance under the buy/sell agreement or upon
whatever terms may be expressed in the buy/sell
agreement, Retailer shall forthwith transfer the
affected real property by warranty deed conveying
marketable title free and clear of all liens, claims,
mortgages, encumbrances, tenancies and occupancies. The
warranty deed shall be in proper form for recording, and
Retailer shall deliver complete possession of the
property and deed at the time of closing. Retailer shall
also furnish to MBUSA all copies of any easements,
licenses or other documents affecting the property or
Mercedes-Benz Center Operations and shall assign any
permits or licenses that are necessary or desirable for
the use of or appurtenant to the property or the conduct
of such operations. Retailer also agrees to execute and
deliver to MBUSA instruments satisfactory to MBUSA
conveying title to all personal property, including
leasehold interests, involved in the transfer or sale to
MBUSA. If any personal property is subject to any lien
or charge of any kind, Retailer agrees to procure the
discharge and satisfaction thereof prior to the closing
of sale of such property to MBUSA.
-21-
27
X. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF OWNER
In the event that an Owner dies and his or her interest in
Retailer passes directly to any person or persons ("Heirs")
who wish to succeed to Owner's interest, then Owner's legal
representative must notify MBUSA within sixty (60) days of the
death of Owner of such Heir's or Heirs' intent to succeed
Owner. The legal representative also must then designate a
proposed Retailer Operator for MBUSA's approval. The effect of
such notice from Owner's legal representative will be to
suspend any notice of termination provided for in Section
XI.B.4 issued hereunder.
Upon delivery of such notice, Owner's legal representative
shall immediately request any person(s) identified by it as
intending to succeed Owner and the designated candidate for
Retailer Operator to submit an application and to provide all
personal and financial information that MBUSA may reasonably
and customarily require in connection with its review of such
applications. All requested information must be provided
promptly to MBUSA and in no case later than thirty (30) days
after receipt of such request from Owner's legal
representative. MBUSA shall have sixty (60) days after its
receipt of all requested information in which to: (i) review
such application(s) pursuant to the then current criteria
generally applied by MBUSA in qualifying owners and/or
retailer operators of Mercedes-Benz light truck retailers, and
(ii) either approve or disapprove the application(s);
provided, however, that if MBUSA does not receive such
application(s) and all requested information within thirty
(30) days of Owner's legal representative's request therefor,
MBUSA shall have no obligation to review and approve or
disapprove such application(s). If MBUSA approves the
application(s), it shall offer to enter into a new
Mercedes-Benz Light Truck Retailer Agreement with Owner's
Heir(s) in the form then currently in use, subject to such
additional conditions and for such term as MBUSA deems
appropriate; provided, however, that anything herein to the
contrary notwithstanding, MBUSA shall have no obligation to
execute a new Mercedes-Benz Light Track Retailer Agreement
with Owner's Heir(s) unless MBUSA approves such Heirs'
application for, and such Heirs execute, a new Mercedes-Benz
Passenger Car Retailer Agreement.
In the event that MBUSA does not approve the designated
Heir(s) or designated candidate for Retailer Operator, or if
Owner's legal representative withdraws his or her notice of
the intent of Heir(s) to succeed as Owner(s), or if the legal
representative or any proposed Owner or Retailer Operator
fails to timely provide the required information, MBUSA may
reinstate or issue a notice of termination. This Section X.A
is subject to, and shall not be deemed to waive, MBUSA's right
to exercise its option to purchase as set forth in Section IX.
-22-
28
If MBUSA has notified Retailer that it does not plan to
continue to have a Mercedes-Benz light truck retailer in
Retailer's AOI, MBUSA shall have no obligation to execute a
new Mercedes-Benz Light Truck Retailer Agreement with Owner's
Heir(s) pursuant to this Section X.
B. INCAPACITY OF OWNER
The parties agree that, as used herein, incapacity shall refer
to any physical or mental ailment that, in MBUSA's opinion,
adversely affects an Owner's ability to meet his or her
obligations under this Agreement. MBUSA may terminate this
Agreement when an incapacitated Owner also is the Retailer
Operator identified herein.
Prior to the effective date of any notice of termination, an
incapacitated Owner who is also the Retailer Operator, or his
or her legal representative, may propose a new candidate for
the position of Retailer Operator. Such proposal shall be in
writing and shall suspend any pending notice of termination
until MBUSA advises Retailer of its approval or disapproval of
the new candidate. Upon receipt of such notice, MBUSA and
Retailer shall follow the qualification procedures set forth
in Section X.A.
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH OR INCAPACITY OF OWNER
An Owner owning a majority of Retailer's stock may nominate a
candidate to assume ownership and/or the position of Retailer
Operator of the Mercedes-Benz Center upon his or her death or
incapacity.
As soon as practicable after such nomination, MBUSA will
request such personal financial information from the nominated
Owner and/or Retailer Operator candidate as it reasonably and
customarily may require in evaluating such candidates. MBUSA
shall apply criteria then currently used by MBUSA in
qualifying owners and/or retailer operators of Mercedes-Benz
light truck retailers. Upon receipt of all requested
information, MBUSA shall either approve or disapprove such
candidate. If MBUSA initially approves the candidate, said
approval shall be reflected in a Successor Addendum and shall
remain in effect for five (5) years if the proposed candidate
continues to comply with the then current criteria used by
MBUSA in qualifying such candidates. If MBUSA does not
initially qualify the candidate, MBUSA agrees to review the
reason(s) for its decision with Owner. Owner is free at any
time to renew its nomination. However, in such instances, the
candidate must again qualify pursuant to the then current
criteria. Owner may, by written notice, withdraw a nomination
at any time, even if MBUSA has previously qualified said
candidate.
-23-
29
XI. TERMINATION
A. VOLUNTARY TERMINATION BY RETAILER
Retailer may voluntarily terminate this Agreement at any time
by written notice to MBUSA, such termination to be effective
thirty (30) days after receipt of the notice by MBUSA unless
otherwise mutually agreed in writing.
B. TERMINATION FOR CAUSE
1. IMMEDIATE TERMINATION
Retailer and MBUSA agree that the following conduct is
within Retailer's control and is so contrary to the
goals, purposes and objectives of this Agreement as to
warrant its immediate termination. Accordingly, Retailer
agrees that if it engages in any of the following types
of conduct, MBUSA shall have the right to terminate this
Agreement immediately:
a. Any conduct that warrants the termination of the
Mercedes-Benz Passenger Car Retailer Agreement;
b. Any attempted or actual sale, transfer or
assignment by Retailer of this Agreement or any
of the rights granted Retailer hereunder, or any
attempted or actual transfer, assignment or
delegation by Retailer of any of the
responsibilities assumed by it under this
Agreement, without the prior written consent of
MBUSA, including but not limited to any
attempted or actual sale, transfer or assignment
of Retailer's principal assets or any ownership
interest of Owner relating to the conduct of
Mercedes-Benz Center Operations hereunder
separate and apart from the assets or ownership
interest relating to the conduct of
"Mercedes-Benz Center Operations" under the
Mercedes-Benz Passenger Car Retailer Agreement;
c. Subject to the provisions of Section IX, a
change by operation of law or otherwise in the
direct or indirect ownership of Retailer,
whether voluntary or involuntary, from that set
forth in the Final Paragraph of this Agreement,
except as expressly permitted herein, without
the prior written consent of MBUSA;
d. Removal, resignation, withdrawal or elimination
from Retailer for any reason of the Retailer
Operator; provided, however, MBUSA shall give
Retailer a reasonable period of time within
which to replace such person with a Retailer
Operator satisfactory to MBUSA;
-24-
30
e. The failure of Retailer to conduct all
Mercedes-Benz Center Operations required by this
Agreement during and for not less than the
customary and lawful hours for five (5)
consecutive business days, except in the event
such closure or cessation of operation is caused
by some physical event beyond the control of the
Retailer, such as strikes, civil war, riots,
fires, floods, earthquakes, or other acts of
God;
f. Any undertaking by Retailer to conduct, directly
or indirectly, any of the Mercedes-Benz Center
Operations at a location or facility other than
those specified in Paragraph F and the Final
Paragraph of this Agreement for that
Mercedes-Benz Center Operation;
g. Insolvency of Retailer, voluntary institution by
Retailer of any proceeding under the federal
bankruptcy laws or under any state insolvency
law, institution against Retailer of any
proceeding under the federal bankruptcy laws or
under any state insolvency law which is not
vacated within thirty (30) days from the
institution thereof, appointment of a receiver,
trustee or other officer having similar powers
for Retailer or Retailer's business, provided
such appointment is not vacated within thirty
(30) days of the date of such appointment;
execution by Retailer of an assignment for the
benefit of creditors; or any levy under
attachment, foreclosure, execution or similar
process whereby a third party acquires rights to
a significant portion of the assets of Retailer
necessary for the performance of Retailer's
responsibilities under this Agreement or to the
operation or ownership of Retailer, which is not
within thirty (30) days from the date of such
levy vacated or removed by payment or bonding;
h. Any material misrepresentation by Retailer or
any person named in the Final Paragraph of this
Agreement as to any fact relied on by MBUSA in
entering into, amending or continuing with this
Agreement, including without limitation any
representation concerning the ownership,
management or capitalization of the Retailer;
i. The conviction in a court of original
jurisdiction of Retailer or Owner of a crime
affecting the Mercedes-Benz Center Operations or
of any felony, or any willful failure of
Retailer to comply with the provisions of any
laws, ordinances, rules, regulations or orders
relating to the conduct of Mercedes-Benz Center
Operations;
j. Submission by Retailer to MBUSA of: (i) a
knowingly false or fraudulent report or
statement; (ii) a knowingly false or fraudulent
claim (or statement in support thereof) for
payment, reimbursement
-25-
31
or for any discount, allowance, refund, rebate,
credit or other incentive under any plan that
may be offered by MBUSA, whether or not Retailer
offers or makes restitution; (iii) false
financial information; (iv) false sales
reporting data; or (v) any false report or
statement relating to pre-delivery inspection,
testing, warranties, service, repair or
maintenance required to be performed by
Retailer, or
k. The failure of Retailer to obtain or maintain
any license, permit or authorization necessary
for the conduct by Retailer of Mercedes-Benz
Center Operations pursuant to this Agreement, or
the suspension or revocation such license,
permit or authorization.
2. TERMINATION UPON SIXTY DAYS NOTICE
The following conduct violates the terms and conditions
of this Agreement and if Retailer engages in such
conduct, MBUSA shall have the right to terminate this
Agreement upon sixty (60) days notice if Retailer fails
to cure such conduct within the sixty-day period
provided in such notice:
a. Failure of Retailer to pay MBUSA for any
Mercedes-Benz Light Truck Products;
b. Failure of Retailer to establish or maintain the
required net working capital or adequate
flooring and lines of credit;
c. Any dispute, disagreement or controversy among
managers, officers or Owners of Retailer that,
in the reasonable opinion of MBUSA, adversely
affects the ownership, operation, management,
business, reputation or interests of Retailer or
MBUSA;
d. Impairment of the reputation or financial
standing of Retailer subsequent to the
execution of this Agreement;
e. Refusal to permit MBUSA to examine or audit
Retailer's accounting records as provided herein
upon receipt by Retailer from MBUSA of written
notice requesting such permission or
information;
f. Failure of Retailer to timely furnish accurate
sales or financial information and related
supporting data; or
g. Breach or violation by Retailer of any other
term or provision of this Agreement
-26-
32
3. TERMINATION FOR FAILURE OF PERFORMANCE
If, upon evaluation of Retailers performance pursuant to Sections
II.E, IV.F, V.B or VI.E herein, MBUSA concludes that Retailer has
failed to perform adequately its marketing and sales, service or
client satisfaction responsibilities or to provide adequate
Mercedes-Benz Center facilities, MBUSA shall issue to Retailer a
Retailer Improvement Addendum notifying it of such failure(s).
MBUSA will endeavor to review promptly with Retailer the nature
and extent of such failure(s) and will grant Retailer one hundred
eighty (180) days or such other period as may be required by law
to correct such failure(s). If Retailer fails or refuses to
correct such failure(s) or has not made substantial progress
towards remedying such failure(s) at the expiration of such
period, MBUSA may terminate this Agreement upon sixty (60) days
notice or such other notice as may be required by law.
4. TERMINATION UPON DEATH OR INCAPACITY
Subject to certain exceptions identified in Section X, MBUSA may
terminate this Agreement in the event of the death of an Owner or
upon the incapacity of any Owner who is also the Retailer
Operator, upon written notice to Retailer and such Owner's legal
representative. Termination upon either of these events shall be
effective ninety (90) days from the date of such notice.
C. TERMINATION UPON TERMINATION OF DISTRIBUTORSHIP
MBUSA may terminate this Agreement at any time by written notice to
Retailer, such termination to be effective thirty (30) days after
receipt of notice by Retailer unless otherwise mutually agreed in
writing, if any licensing or distribution agreement pursuant to which
MBUSA is distributor for Mercedes-Benz Light Truck Products in the
United States of America shall terminate or be terminated.
D. TERMINATION FOR FAILURE OF MBUSA TO BE LICENSED
If MBUSA fails to obtain or maintain any license, permit or
authorization necessary for MBUSA's performance of its obligations
under this Agreement or if such license, permit or authorization is
suspended or revoked, and such suspension or revocation continues for
a period of five (5) days, either party may immediately terminate this
Agreement by giving notice to the other party.
-27-
33
E. TERMINATION UPON OFFERING TO ENTER INTO A NEW OR AMENDED LIGHT TRUCK
RETAILER AGREEMENT
MBUSA may terminate this Agreement at any time by giving Retailer
ninety (90) days prior notice thereof and offering to enter into a new
or amended form of Light Truck Retailer Agreement with Retailer in a
form being offered generally to Mercedes-Benz light truck retailers.
F. NOTICE OF TERMINATION
Any notice of termination under this Agreement shall be in writing and
shall be mailed to the person(s) designated to receive such notice,
via overnight mail, or shall be delivered in person. Such notice shall
be effective upon the date of receipt. MBUSA shall state the grounds
on which it relies in its termination of Retailer, and shall have the
right to amend such notice as appropriate. MBUSA's failure to refer to
additional grounds for termination shall not constitute a waiver of
its right later to rely upon such grounds.
G. CONTINUANCE OF BUSINESS RELATIONS
Upon receipt of any notice of termination, Retailer agrees to conduct
itself and its operation until the effective date of termination in a
manner that will not injure the reputation or goodwill of the
Mercedes-Benz Marks or MBUSA.
H. REPURCHASE PROVISIONS
1. MBUSA'S OBLIGATIONS
Upon the termination of this Agreement, MBUSA shall have the
right to cancel any and all shipments of Mercedes-Benz Light
Truck Products scheduled for delivery to Retailer, and MBUSA
shall repurchase from Retailer the following:
a. New, unused, unmodified and undamaged Mercedes-Benz Light
Trucks then unsold in Retailer's inventory that are of the
then current or prior model year. The prices of such light
trucks shall be the same as those at which they were
originally purchased by Retailer, less all prior refunds or
other allowances made by MBUSA to Retailer with respect
thereto.
b. New, unused and undamaged Genuine Mercedes-Benz Light Truck
Parts and Accessories then unsold in Retailer's inventory
that are in good and saleable condition and are listed in
the current parts catalog. The prices for such parts and
accessories shall be the prices last established by MBUSA
for the sale of identical parts or
-28-
34
accessories to Mercedes-Benz light truck retailers in the
area in which Retailer is located.
c. Special service tools recommended by MBUSA and then owned by
Retailer and that are especially designed for servicing
Mercedes-Benz Light Trucks. The prices for such special
service tools will be the price paid by Retailer less
depreciation calculated on a straight-line basis over a
three-year period, or such other price as the parties may
negotiate.
d. Signs that MBUSA has recommended for identification of
Retailer. The price of such signs shall be the price paid by
Retailer less appropriate depreciation calculated on a
straight-line basis over a three-year period, or such other
price as the parties may negotiate.
2. RETAILER'S RESPONSIBILITIES
MBUSA's obligations to repurchase the items set forth in this
Section XI.H are contingent upon Retailer fulfilling all of the
following obligations:
a. Within thirty (30) days after the effective date of
termination of this Agreement, Retailer shall deliver or
mail to MBUSA a detailed inventory of all items referred to
in this Section XI.H that it requests MBUSA repurchase and
shall certify that such list is true and accurate.
b. Retailer shall be entitled to request repurchase of only
those items that it purchased from MBUSA, unless MBUSA
agrees otherwise.
c. Retailer will deliver to MBUSA at MBUSA's place of business
and at Retailer's expense all Mercedes-Benz Light Truck
Products and special service tools to be repurchased by
MBUSA. If Retailer fails to do so, MBUSA may transfer such
items and deduct the cost therefor from the repurchase
price.
d. Retailer will execute and deliver to MBUSA instruments
satisfactory to MBUSA conveying good and marketable title to
the aforesaid items to MBUSA. If such items are subject to
any lien or charge of any kind, Retailer will procure the
discharge in satisfaction thereof prior to their repurchase
by MBUSA. Retailer will comply with the requirements of any
state or federal laws that relate to the repurchase,
including bulk sales or transfer laws.
e. Retailer will provide to MBUSA in writing the names and
addresses of all of its Mercedes-Benz light truck service
clients.
-29-
35
f. Retailer will deliver to MBUSA at MBUSA's place of business
Or to a third person designated by MBUSA and at Retailer's
expense any and all sales instruction manuals, promotional
materials, technical or service literature, advertising and
other printed material, computer software or other media
relating to Mercedes-Benz Light Truck Products then in
Retailer's possession and that were acquired or obtained by
Retailer from MBUSA.
g. Retailer will remove, at its own expense, all signage and
corporate identification from Retailer's Approved
Location(s), including all Mercedes-Benz Marks, before it is
eligible for payment hereunder.
3. PAYMENT BY MBUSA
MBUSA will pay Retailer for such items as Retailer may request be
repurchased and that qualify hereunder as soon as practicable
upon Retailer's compliance with all of the obligations set forth
herein and upon computation of any outstanding indebtedness of
Retailer to MBUSA.
MBUSA shall have the right to offset from any amounts due to
Retailer hereunder the total sum of Retailer's outstanding
indebtedness to MBUSA.
If Retailer disagrees with MBUSA's valuation of any item herein,
and Retailer and MBUSA have not resolved their disagreement
within ninety (90) days of the effective date of termination of
this Agreement, MBUSA shall pay to Retailer the amount to which
it reasonably believes Retailer is entitled. Retailer's exclusive
remedy to recover any additional sums that it believes are due
under this Section shall be by resort to the procedures set forth
in Section XII.
XII. DISPUTE RESOLUTION PROCESS
A. THE MERCEDES-BENZ BOARD
MBUSA and Retailer agree to minimize disputes between them. However,
in the event that disputes arise, MBUSA and Retailer agree that they
will attempt to resolve all matters between them before any formal
action is taken to initiate any judicial, administrative or
governmental proceeding.
A Mercedes-Benz Board ("Board") will act as the administrator of all
disputes between MBUSA and Retailer arising out of or relating to this
Agreement. The Board will consist of three representatives who will be
selected by MBUSA and three retailer operators of Mercedes-Benz
passenger car retailers who will be selected by the Mercedes-Benz
Retailer Board. The Board will determine eligibility requirements,
develop procedures to ensure a fair and equitable
-30-
36
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 MBUSA representative, one
retailer operator of a Mercedes-Benz passenger car retailer, and one
independent person who has been selected by the Board.
The Board shall also monitor the Dispute Resolution Process, report to
MBUSA and the Mercedes-Benz Retailer Board annually on the
effectiveness of this process and, when required, make recommendations
for changes in this process.
There are two steps in the Dispute Resolution Process: mandatory
mediation and optional arbitration. All disputes must first be
submitted to mediation, unless that step is waived by written
agreement of the parties. If mediation does not resolve the dispute to
their mutual satisfaction, then Retailer may submit the dispute to
arbitration.
B. MANDATORY MEDIATION
Prior to initiating any judicial, administrative or governmental
proceeding, MBUSA and Retailer agree to mediate any dispute arising
out of or relating to the Agreement. MBUSA and Retailer agree that the
procedures contained in the Retailer Dispute Resolution Guide shall
govern mediation under Section XII.B. Mediation will be conducted by a
Panel, which will evaluate each position and recommend a solution.
This recommended solution is not binding on either party.
If the parties are unable to resolve a dispute under this Section XII,
and a party elects to initiate a judicial, administrative or
governmental proceeding with respect to such dispute, the prevailing
party shall be entitled to recover its costs of such proceeding,
including its reasonable attorneys fees, from the other party.
The parties hereby agree and stipulate that the Panel's recommended
solution is admissible in any arbitration, judicial, administrative or
governmental proceeding with respect to the dispute.
C. OPTIONAL ARBITRATION
If a dispute has not been resolved after mediation, or if Retailer and
MBUSA have agreed in writing to waive mediation, Retailer may submit
the dispute to arbitration in accordance with the procedures in the
Retailer Dispute Resolution Guide. The award of the arbitration panel
shall be binding on MBUSA but not on Retailer, and shall be
non-appealable except as otherwise provided in the United States
Arbitration Act. Retailer may pursue its remedy in a judicial,
administrative or governmental proceeding if Retailer chooses not to
be bound by the arbitration award. Judgment upon any award rendered by
the arbitrator(s) may be entered and enforced in any court having
jurisdiction.
-31-
37
XIII. DEFENSE AND INDEMNIFICATION
A. DEFENSE AND INDEMNIFICATION BY MBUSA
MBUSA agrees to assume the defense of Retailer and to indemnify and
hold Retailer harmless in any lawsuit naming Retailer as a defendant
and involving any Mercedes-Benz Light Truck Product when the lawsuit
also involves allegations of:
1. Bodily injury or property damage arising out of an occurrence
allegedly caused solely by a defect or failure to warn of a
defect in design, manufacture or assembly of a Mercedes-Benz
Light Truck Product, provided that the defect could not
reasonably have been discovered by Retailer during the
pre-delivery inspections and service of the Mercedes-Benz Light
Truck Product or otherwise;
2. Any misrepresentation or misleading statement or unfair or
deceptive trade practice of MBUSA; or
3. Any substantial damage to a Mercedes-Benz Light Truck Product
purchased by Retailer from MBUSA that was repaired by MBUSA and
where Retailer had not been notified of such damage in writing
prior to the delivery of the subject light truck, part or
accessory to a retail client; and
Provided:
4. That Retailer delivers to MBUSA, in a manner to be designated by
MBUSA, within twenty (20) days of the service of any summons or
complaint, copies of such documents and requests in writing a
defense and/or indemnification therein (except as provided in
Section XIII.D below);
5. That the complaint does not involve allegations of Retailer
misconduct, including but not limited to, improper or
unsatisfactory service or repair, misrepresentation, or any claim
of Retailer's unfair or deceptive trade practice;
6. That the Mercedes-Benz Light Truck Product which is the subject
of the lawsuit was not altered by or for Retailer;
7. That Retailer agrees to cooperate fully in the defense of such
action as MBUSA may reasonably require; and
8. That Retailer agrees that MBUSA may offset any recovery on
Retailer's behalf against any indemnification that may be
required hereunder.
-32-
38
B. DEFENSE AND INDEMNIFICATION BY RETAILER
Retailer agrees to assume the defense of MBUSA or MBUSI and to
indemnify and hold them harmless in any lawsuit naming MBUSA or MBUSI
as a defendant when the lawsuit involves allegations of:
1. Retailer's failure to comply, in whole or in part, with any
obligation assumed by Retailer under this Agreement;
2. Retailer's negligent or improper inspection, preparation, repair
or servicing of a new or used Mercedes-Benz Light Truck Product,
or such other motor vehicles or equipment as may be sold or
serviced by Retailer;
3. Retailers alleged breach of any contract or warranty other than
that provided by MBUSA or MBUSI;
4. Retailer's alleged misleading statements, misrepresentations, or
deceptive or unfair trade practices;
5. Any modification or alteration made by or on behalf of Retailer
to a Mercedes-Benz Light Track Product, except those made
pursuant to the express written instruction or with the express
written approval of MBUSA;
6. Any change in the employment status or in the terms or conditions
of employment of any officer, employee or agent of Retailer or of
any Owner or the Retailer Operator, including but not limited to
claims for breach of employment contract, wrongful termination or
discharge, tortious interference with contract or economic
advantage, and similar claims; and
Provided:
7. That MBUSA delivers to Retailer, within twenty (20) days of the
service of any summons, or complaint, copies of such documents,
and requests in writing a defense and/or indemnification therein
(except as provided in Section XIII.D below);
8. That MBUSA agrees to cooperate fully in the defense of such
action as Retailer may reasonably require; and
9. That the complaint does not involve allegations of liability
premised upon MBUSA's separate conduct or omissions.
-33-
39
C. CONDITIONAL DEFENSE AND/OR INDEMNIFICATION
In agreeing to defend and/or indemnify each other, Retailer and MBUSA
may make their agreement conditional on the continued existence of the
state of facts as then known to such party and may provide for the
withdrawal of such defense and/or indemnification at such time as
facts arise which, if known at the time of the original request for a
defense and/or indemnification, would have caused either Retailer or
MBUSA to refuse such request.
The party withdrawing from its agreement to defend and/or indemnify
shall give timely notice of its intent to withdraw. Such notice shall
be in writing and shall be effective upon receipt. The withdrawing
party shall be responsible for all costs and expenses of defense up to
the date of receipt of its notice of withdrawal.
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS
In the event that subsequent developments in a case make clear that
the allegations which initially preclude a request or an acceptance of
a request for a defense and/or indemnification are no longer at issue
therein or are without foundation, any party having a right to a
defense and/or indemnification hereunder may tender such request for a
defense and indemnification to the other party. Neither Retailer nor
MBUSA shall be required to agree to such subsequent request for a
defense and/or indemnification where that party would be unduly
prejudiced by such delay.
E. TIME TO RESPOND AND RESPONSIBILITIES OF THE PARTIES
Retailer and MBUSA shall have sixty (60) days from the receipt of a
request for a defense and/or indemnification to conduct an
investigation to determine whether or not, or under what conditions,
it may agree to defend and/or indemnify pursuant to this Section.
If local rules require a response to the complaint in the lawsuit
prior to the time provided hereunder for a response to such request,
the requesting party shall take all steps necessary, including
obtaining counsel, to protect its own interest in the lawsuit until
Retailer or MBUSA assumes the requested defense and/or
indemnification. In the event that Retailer or MBUSA agrees to assume
the defense and/or indemnification of a lawsuit, it shall have the
right to engage and direct counsel of its own choosing and, except in
cases where the request is made pursuant to Section XIII.D above,
shall have the obligation to reimburse the requesting party for all
reasonable costs and expense, including actual attorneys' fees,
incurred prior to such assumption.
-34-
40
XIV. NOTICE OF BREACH OR FAILURE TO ACT IN GOOD FAITH
In the interest of maintaining a harmonious relationship between MBUSA and
Retailer, if Retailer believes that MBUSA has breached this Agreement or
has failed to act in good faith toward Retailer, Retailer shall report its
belief and the bases therefor promptly, in writing, to the President or a
Vice President of MBUSA. For the purposes of this Section XIV, the term
"good faith" shall mean MBUSA and its representatives acting in a fair,
honest, commercially reasonable, equitable, and impartial manner toward
Retailer. It is the intention of the parties that the purpose of the
requirement of such notification by Retailer is to afford MBUSA sufficient
opportunity to consider the claim of Retailer and if, in the sole
determination of MBUSA, such claim is found to be meritorious, to undertake
such measures as may be necessary to correct the condition of which
Retailer complains.
XV. GENERAL PROVISIONS
A. NOTICES
Except as otherwise specifically provided herein, any notice required
to be given by either party to the other shall be in writing, shall be
delivered personally or by mail to the party at its address as stated
in this Agreement, and shall be effective upon receipt by hand
delivery or upon mailing.
B. NO IMPLIED WAIVERS
The failure of either party at any time to require performance by the
other party of any provision herein shall in no way affect the right
of such party to require such performance at any time thereafter. The
waiver by any party of a breach of any provision herein shall not
constitute a waiver of any succeeding breach of the same or any other
provision or constitute a waiver of the provision itself.
C. SOLE AGREEMENT OF THE PARTIES
This Agreement terminates and supersedes all prior agreements between
the parties relating to the subject matters covered herein. There are
no prior agreements or understandings, either oral or written, between
the parties affecting this Agreement or relating to the sale or
service of Mercedes-Benz Light Truck Products, except as otherwise
specifically provided for or referred to in this Agreement. Retailer
acknowledges that no representations or statements other than those
expressly set forth therein were made by MBUSA or any officer,
employee, agent, or representative thereof, or were relied upon by
Retailer in entering into this Agreement.
-35-
41
D. RETAILER NOT AN AGENT OR REPRESENTATIVE
Retailer is an independent business. This Agreement does not
constitute Retailer the agent or legal representative of MBUSA or
MBUSI for any purpose whatsoever. Retailer is not granted any express
or implied right or authority to assume or create any obligation on
behalf of or in the name of MBUSA or MBUSI or to bind MBUSA or MBUSI
in any manner whatsoever. No fiduciary obligations are created by this
Agreement.
E. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
This is a personal service agreement and may not be assigned or sold
in whole or in part, directly or indirectly, voluntarily or by
operation of law, without the prior written consent of MBUSA. Any
attempted transfer, assignment or sale without MBUSA's prior written
consent will be void and not binding upon MBUSA.
F. NO FRANCHISE FEE
Retailer warrants that it has paid no fee, nor has it provided any
goods or services in lieu of same, to MBUSA in consideration of
entering into this Agreement. The sole consideration for MBUSA's
entering into this Agreement is Owner's and Retailer Operator's
ability, integrity, assurance of personal services, and expressed
intention to deal fairly and equitably with MBUSA and the public.
G. BENEFIT
This Agreement is entered into by and between MBUSA and Retailer for
their sole and mutual benefit. Neither this Agreement nor any specific
provision contained in it is intended or shall be construed to be for
the benefit of any third party.
H. NEW JERSEY LAW
This Agreement shall be deemed to have been entered into in the State
of New Jersey, and all questions concerning the validity,
interpretation, or performance of any of its terms, or of any
contractual rights or obligations of the parties hereto, shall be
governed by and resolved in accordance with the internal laws of the
State of New Jersey, including, without limitation, its statutes of
limitations.
-36-
42
XVI. DEFINITIONS
As used in this Agreement, the parties agree that the following terms shall
be defined exclusively as set forth below.
A. RETAILER: The natural person or entity that executes the Agreement and
is authorized by MBUSA to sell and service Mercedes-Benz Light Truck
Products as defined herein.
B. OWNER: The persons identified in Paragraph D and the Final Paragraph
of this Agreement.
C. RETAILER OPERATOR: The person identified in Paragraph E and the Final
Paragraph of this Agreement.
D. MERCEDES-BENZ CENTER FACILITIES: The buildings, improvements, fixtures
and equipment situated at the Approved Location(s) and identified in
Paragraph F and the Final Paragraph of this Agreement.
E. APPROVED LOCATION(S): The location(s) and any facilities thereon
designated in Paragraph F and the Final Paragraph of this Agreement
that MBUSA has approved for the Mercedes-Benz Center Operation(s)
specified therein.
F. MERCEDES-BENZ CENTER OPERATIONS: All retailer functions contemplated
by this Agreement including, without limitation, sale and servicing of
Mercedes-Benz Light Truck Products, use and display of Mercedes-Benz
Marks and Mercedes-Benz Light Truck Products, rental and leasing of
Mercedes-Benz Light Trucks, body shop work, financing or insurance
services and any other activities undertaken by Retailer in connection
with Mercedes-Benz Light Truck Products whether conducted directly or
indirectly by Retailer.
G. DCAG: DaimlerChrysler Aktiengesellschaft, a corporation of the Federal
Republic of Germany and the owner of the Mercedes-Benz Marks, and any
successor thereto.
H. MERCEDES-BENZ MARKS: The various Mercedes-Benz trademarks, service
marks, names, logos and designs that Retailer is authorized to use in
the sale and servicing of Mercedes-Benz Light Truck Products,
including the "Three-Pointed Star."
1. MBUSI: Mercedes-Benz U.S. International, Inc., a Delaware corporation
and the manufacturer of Mercedes-Benz Light Trucks.
J. MERCEDES-BENZ LIGHT TRUCKS: All new Mercedes-Benz light trucks that
MBUSA is authorized to sell to Mercedes-Benz light truck retailers in
the
-37-
43
United States of America pursuant to a written distribution agreement
between MBUSI and MBUSA, and that MBUSA, in its sole discretion, sells
to Retailer for resale.
K. GENUINE MERCEDES-BENZ LIGHT TRUCK PARTS AND ACCESSORIES: All
Mercedes-Benz light truck parts and accessories manufactured by or on
behalf of MBUSA or MBUSI and such other parts and accessories
specifically approved by MBUSI for use in servicing Mercedes-Benz
Light Trucks that MBUSA sells to Retailer for resale.
L. MERCEDES-BENZ LIGHT TRUCK PRODUCTS: All Mercedes-Benz Light Trucks
and Genuine Mercedes-Benz Light Truck Parts and Accessories that MBUSA
sells to Retailer for resale.
M. COMPETITIVE VEHICLES: Those new vehicles that are considered by MBUSA
to be directly competitive with Mercedes-Benz Light Trucks.
N. WARRANTY MANUAL: The Mercedes-Benz Warranty Policies and Procedures
Manual.
O. MERCEDES-BENZ PASSENGER CAR RETAILER AGREEMENT: The Mercedes-Benz
Passenger Car Retailer Agreement between MBUSA and Retailer.
XVII. ADDITIONAL PROVISIONS
In consideration of MBUSA's agreement to appoint Retailer as a
Mercedes-Benz light truck retailer, Retailer further agrees:
-38-
