EXHIBIT 10.11.1
TERM DEALER SALES AND SERVICE AGREEMENT
THIS AGREEMENT, effective the 13th day of May, 1996 is entered into by and
between AMERICAN SUZUKI MOTOR CORPORATION, Automotive Division, a California
Corporation (hereinafter referred to as "SUZUKI"), having its principal office
at 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxx, Xxxxxxxxxx, and LITHIA MOTORS, INC., A
CORPORATION DULY INCORPORATED UNDER THE LAWS OF THE STATE OF OREGON, and doing
business as LITHIA SUZUKI (hereinafter referred to as "DEALER"), having its
principal office at 000 X. XXXXXXX XXXXXX, XXXXXXX, XX 00000-0000.
PURPOSE OF AGREEMENT
It is acknowledged by both SUZUKI and DEALER that the purpose of this
Agreement is to establish DEALER as an authorized dealer of Suzuki Products and
to provide for the sale, lease and servicing of Suzuki Products by DEALER. It
is of utmost importance to SUZUKI that Suzuki products are sold and serviced in
a manner which promotes consumer satisfaction and confidence. It is hereby
understood and acknowledged that DEALER desires an opportunity to qualify for a
three-year American Suzuki Motor Corporation Dealer Sales and Service Agreement
for Suzuki Four Wheel Vehicle Products. DEALER understands, acknowledges and
accepts that DEALER must first fulfill all of DEALER's undertakings as
hereinafter set forth.
In furtherance of the purpose of this Agreement, the parties acknowledge
that SUZUKI is the exclusive distributor in the United States (except Hawaii) of
Suzuki Four Wheel Vehicles and Parts and Accessories therefor manufactured by
Suzuki Motor Co., Ltd., a corporation incorporated under the laws of Japan.
It is of utmost important to SUZUKI that Suzuki Products are sold and
serviced in a manner which promotes consumer satisfaction and confidence.
DEALER desires to become one of SUZUKI's authorized dealers. SUZUKI, based on
the representations and promises of DEALER, and in reliance on DEALER's
integrity, ability and expressed intention to deal fairly with SUZUKI and the
consumer, has accepted DEALER as an authorized retail dealer of Suzuki Products.
DEALER acknowledges Vat SUZUKI has"selected DEALER as an authorized SUZUKI
dealer and has granted to it a Dealership for Suzuki Products and related rights
pursuant to this Agreement solely in reliance upon the undertaking of DEALER to
fulfill its responsibilities to any third party or parties.
This Agreement sets forth the rights and responsibilities of SUZUKI and
DEALER. The relationship between SUZUKI and DEALER shall be that of vendor and
purchaser. DEALER is not the agent or legal representative of SUZUKI or Suzuki
Motor Co., Ltd. for any purpose whatsoever. DEALER does not have any express or
implied rights of authority to assume or create any obligations or
responsibilities on behalf of, or in the name of, SUZUKI or Suzuki Motor Co.,
Ltd.
THEREFORE, subject to the terms and conditions of this Agreement, based on
the foregoing facts and in consideration of the mutual promises and other
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
11. RIGHTS GRANTED TO DEALER
Subject to the terms of this Agreement, SUZUKI hereby appoints DEALER as a
nonexclusive authorized dealer for Suzuki Products and grants DEALER the
right to:
A. Sell, lease and service Suzuki Products to the satisfaction of SUZUKI
from the Dealership Facilities and Locations as set forth in the
Facility Standards Addendum and Section X herein.
B. Identify itself as an authorized Suzuki Dealer utilizing Suzuki-
approved signage at the Dealership Facilities; and
C. Use the name "Suzuki" and the Suzuki trademarks in the advertising,
promotion, sales, leasing and servicing of Suzuki Products in the
manner herein provided.
SUZUKI hereby reserves the unrestricted right to sell Suzuki Products and to
grant the privilege of using the Suzuki name and trademarks to other dealers and
entities, wherever they may be located.
12. RESPONSIBILITIES ACCEPTED BY DEALER
DEALER accepts its appointment as an authorized Suzuki Dealer and, in
consideration of its appointment and subject to other conditions and
provisions of the Agreement, agrees to:
A. Establish and maintain Dealership Facilities to the satisfaction of
SUZUKI as set forth herein and in the Facility Standards Addendum and
the Dealer Minimum Standards Addendum at the locations set forth
herein;
B. Sell, lease and promote Suzuki Products subject to, and in accordance
with, the terms and conditions of this Agreement;
C. Service, in a manner satisfactory to SUZUKI, Suzuki Products subject
to, and in accordance with, the terms and conditions of this
Agreement; and
D. Build and maintain public confidence and respect in DEALER, SUZUKI and
Suzuki Products by maintaining the highest ethical standards of
advertising, business practices and conduct.
13. TERM
This Agreement shall come into full force and effect at SUZUKI headquarters
in Brea, California when executed by SUZUKI and, subject to its earlier
termination, in accordance with the provisions of this Agreement, shall
continue in full force and effect for ONE YEAR expiring on MAY 13, 1997
subject to the provisions of Section 11.00 of the Standard Provisions only
upon the condition that DEALER complies and completes all the terms and
conditions of this Agreement.
14. OWNERSHIP OF DEALER
DEALER represents and warrants and this Agreement is conditioned upon, and
is entered into by SUZUKI upon the representations and warranties of DEALER
that:
A. Dealer is an OREGON CORPORATION (indicate whether a sole proprietor, a
partnership, a corporation or other type of organization)
B. The following person(s) and only said person(s) own and will continue
to own, throughout the term of this Agreement, the following interest
in ownership of the Dealership:
Percentage State Whether Partner
Name Of Interest Officer or Director
---- ----------- ---------------------
XXXXXX X. XXXXXX 62.5% PRES./SEC./TREAS./CEO
XXXXXXX X. XXXXXXX 37.5% VICE PRESIDENT
C. DEALER intends to carry on business under the name(s) of LITHIA
SUZUKI.
DEALER warrants that the appropriate registration or fictitious business
name statement reflecting the name in Paragraph (C) above has been filed
with the proper state authorities for the conduct of business under the
name by DEALER.
15. MANAGEMENT OF DEALERSHIP
A. SUZUKI enters into this Agreement on DEALER's representation that
XXXXXX X. XXXXXX and no other person, shall be General Manager and
shall have full managerial authority and responsibility for the
operation and management of all phases of the business of the
Dealership with authority to make all decisions on behalf of DEALER
with respect to the operation of the Dealership and the performance of
this Agreement.
16. CHANGE IN OWNERSHIP OR MANAGEMENT
SUZUKI has entered into this Agreement in reliance on DEALER's
representation that the persons identified as Owners and/or General Manager
in Sections IV and V herein possess the ability, experience and other
personal qualifications requisite for the performance of this Agreement.
Therefore, if there is to be a change in the person(s) named as having full
ownership and/or full managerial authority as General Manager and
responsibility for the operation and management of the Dealership, DEALER
must give prior written notice of the change to SUZUKI, (except a change
caused by death, in which case DEALER or the DEALER's legal representative
shall give immediate written notice to SUZUKI). No such change or notice
shall alter or modify any of the provisions in this Agreement until
embodied in an appropriate written amendment and executed by all parties.
SUZUKI will not unreasonably withhold consent to a change in ownership or
management, provided that SUZUKI receives all information requested by it
concerning the prospective owner(s) and/or General Manager, and provided
that the prospective owner(s) and/or General Manager meet(s) all SUZUKI
financial qualifications and other qualifications in effect at the time of
the proposed change.
17. LICENSING OF DEALER
If any state, city or other jurisdiction where the Dealership operations
are to be located and conducted requires DEALER to obtain and maintain a
license for the conduct of Dealership operations as set forth herein, this
Agreement shall not be valid until and unless DEALER shall have first
provided to SUZUKI certification of the issuance of such license(s) to
DEALER. DEALER shall immediately notify SUZUKI in writing of failure to
obtain or maintain any such licenses or renewal thereof. DEALER shall
further notify SUZUKI in writing if any license
that DEALER has obtained pursuant to this Paragraph is suspended or
revoked and the date and reasons therefor.
18. INCORPORATION OF STANDARD PROVISIONS
The Suzuki Dealer Sales and Service Agreement Standard Provisions
accompanying this Agreement are incorporated herein by this reference and
made a part of this Agreement with the same force and effect as if fully
set forth at this point.
19. INCORPORATION OF DOCUMENTS AS PART OF AGREEMENT
The Dealer Application, Facility Standards Addendum, Dealer Minimum
Standards Addendum and Dealer Updates are incorporated by this reference
and made a part of this Agreement with the same force and effect as if all
the representations and warranties in the Dealer Application, and all terms
and conditions of the Facility Standards Addendum, Dealer Minimum Standards
Addendum and Dealer Updates were set forth in full herein. The DEALER
represents and warrants and SUZUKI enters into this Agreement in reliance
upon those representations and warranties that all representations and
warranties made by the DEALER in the Dealer Application, Facility Standards
Addendum and Dealer Minimum Standards Addendum are true and correct as of
the date of execution of this Agreement.
20. CONDITIONS OF SUZUKI'S OFFER
If this Agreement is not terminated prior to its expiration date as set
forth above, SUZUKI hereby offers to enter into A three-year American
Suzuki Corporation Dealer Sales and Service Agreement with DEALER in such
form as shall be in use by SUZUKI at that time. This offer may be accepted
by DEALER fulfilling all of the following conditions during the term of
this Agreement and at the expiration thereof, each of which DEALER
recognizes, understands and agrees as being reasonable and necessary:
(a) Provide through acquisition or construction, and maintain the
following facilities for the Suzuki Dealership and for the sale,
leasing and servicing of Suzuki Products:
000 X. XXXXXXX XXXXXX
XXXXXXX, XX 00000-0000
Dealer shall not establish or conduct any Dealership operations which are
the subject of this Agreement, including the display, sale, leasing or
servicing of Suzuki Products, at any location or facility other than as set
forth above or in the Facility Standards Addendum.
(b) Complete the acquisition and installation, at the Dealership
Facilities, of improvements, signs, furniture and furnishings, tools
and equipment as recommended by SUZUKI for the Dealership;
(c) Empty such personnel, in qualification and number, as recommended by
SUZUKI for the Dealership;
(d) Furnish SUZUKI, on forms or in the format designated by SUZUKI, by the
tenth (10th) day of each month, with the financial and operating
statements set forth in Section 3.04 of the Standard Provisions;
(e) Comply with all other of SUZUKI's standards of DEALER to operate the
Dealership and qualify in all other aspects for a Suzuki three-year
Dealer Sales and Service Agreement;
(f) Comply with all federal, state and local governmental statutes,
ordinances, rules, regulations and standards to conduct business as an
authorized Suzuki Dealer at the Dealership Facilities;
(g) Other Conditions:
- COMPLETE AND MAINTAIN A MINIMUM OF TWO (2) SUZUKI TRAINED
TECHNICIANS IN PRODUCT INTRO AND EFI TO SERVICE THE SUZUKI
PRODUCT LINE DURING THE TERM OF THIS AGREEMENT.
- MAINTAIN AVERAGE MONTHLY DISTRICT, REGION, OR NATIONAL TOTAL
SALES PER DEALER, WHICHEVER IS HIGHEST, DURING THE ENTIRE TERM OF
THE TERM DEALER SALES AND SERVICE AGREEMENT.
- PURSUANT TO SECTION 5.02 OF THE SUZUKI STANDARD PROVISIONS,
DEALER AGREES TO OBTAIN AND MAINTAIN ADEQUATE FLOORING
ARRANGEMENTS CONFORMING TO THE REQUIREMENTS ESTABLISHED and
APPROVED BY SUZUKI, IN NO EVENT LESS THAN $500,000.
- Utilize Suzuki financial statement and submit by the 20th of each
month to National AND Regional Offices during the term of this
agreement.
- Maintain approved Suzuki signage in accordance with paragraph
2.02 of the Standard Provisions of the Dealer Sales and Service
Agreement.
- Maintain Suzuki Information Center during the term of this
agreement. Maintain Suzuki SCAT System during the term of this
agreement.
Should DEALER fail to fulfill each and every condition set forth in this
Paragraph during the term of the Agreement and prior to the expiration
thereof, the above offer made by SUZUKI shall be automatically revoked on
the expiration date set forth in Paragraph III without further notice to
dealer.
21. EFFECT OF LEGAL PROCEEDINGS ON SUZUKI'S OFFER TO DEALER
Should a proceeding of any nature be filed with or initiated in any court
or administrative body seeking to prevent or delay SUZUKI from entering
into a Dealer Sales and Service Agreement with DEALER and/or seeking
damages resulting from SUZUKI doing so, SUZUKI shall be under no obligation
to enter into such Agreement during the pendency of such proceeding.
Furthermore, if, as a result of such proceeding, SUZUKI shall be ordered or
prevented from entering into such an Agreement with Dealer, the offer
contained in Section X herein shall be void and SUZUKI shall have no
liability to DEALER whatsoever for any damages which DEALER may incur as a
result thereof.
22. BREACH OF AGREEMENT BY DEALER
Should DEALER fail to comply with and fully and completely carry out all of
the terms and conditions of this Agreement, including those incorporated by
reference, such failure shall constitute a material breach of this
Agreement, and SUZUKI shall be under no obligation whatsoever to DEALER to
extend this Agreement in whole or in part, to enter into a regular three
year Dealer Sales and Service Agreement with DEALER or be under any other
obligation or have any liability to DEALER whatsoever.
23. ONLY AGREEMENT
Unless expressly referred to and incorporated herein, this Agreement
cancels and supersedes all previous contracts, agreements and
understandings between SUZUKI and DEALER with respect to Suzuki Products,
and there are no promises, representations, understandings or agreements
except as stated herein.
IN WITNESS WHEREOF the parties hereto have executed this Agreement this 13th day
of May, 1996.
AMERICAN SUZUKI MOTOR
CORPORATION
Automotive Division
By: [Signature]
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X. Xxxxxx, President
Name and Title
LITHIA MOTORS, INC. DBA
LITHIA SUZUKI
Dealer Entity Name
BY: [Signature]
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President
BY: [Signature]
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Secretary
