EX-10
Exhibit 10.14.1 Hyundai Dealer Sales & Serv Agmt
EXHIBIT 10.14.1
HYUNDAI MOTOR AMERICA
DEALER SALES AND SERVICE AGREEMENT
This is an Agreement between HYUNDAI MOTOR AMERICA (HMA), a California
corporation, and Lithia JEF, Inc. (DEALER), a corporation, duly incorporated
in the state of California and doing business as Lithia Hyundai of Fresno.
INTRODUCTION
HMA sells Hyundai Products which are manufactured or approved by
Hyundai Motor Company (FACTORY). HMA has established a network of authorized
Hyundai Dealers, operating at approved locations and according to Hyundai
standards, to sell and service Hyundai Products. HMA has selected its
Dealers based on their experience and commitment that they will sell and
service Hyundai Products in a manner which promotes and maintains Customer
confidence and satisfaction, and increases product acceptance and awareness.
DEALER represents that its Owner(s) and General Manager identified
herein have the skill, experience, capital and facilities to ensure that
DEALER operates a first-class dealership. HMA enters into this Agreement
upon DEALER's assurances of the continued personal services of said Owner(s)
and General Manager. The purpose of this Agreement is to memorialize such
assurances, to appoint DEALER as an authorized Hyundai Dealer, to provide for
the effective representation of Hyundai Products and to set forth the rights
and obligations of HMA and DEALER hereunder.
Accordingly, the parties agree as follows:
1. APPOINTMENT OF DEALER
Subject to the terms of this Agreement, HMA hereby grants DEALER the
non-exclusive right:
To buy the Hyundai Products identified in the Hyundai Product Addendum
attached hereto which HMA, in its sole discretion, may revise from time to
time; and
To identify itself as an authorized Hyundai Dealer using Hyundai Marks
in the promotion, sale and servicing of Hyundai Products and at the
location(s) approved herein.
DEALER accepts its appointment as an authorized Hyundai Dealer and
agrees to:
Conduct its business in a manner which will engender Customer
confidence and satisfaction and reflect positively upon HMA;
Effectively promote and sell Hyundai Products;
Professionally service Hyundai Products; and
Establish and maintain satisfactory dealership facilities at the
location(s) approved by HMA.
2. TERM OF THIS AGREEMENT
This Agreement will become effective on the date it is executed by HMA
and with continue in effect for a period of 2 years, unless terminated as
provided herein. This Agreement may not be extended or renewed except in
writing signed by the President and Executive Vice President of HMA.
3. DEALER OWNERSHIP
HMA enters into this Agreement in reliance upon the personal
qualifications and representations of the persons identified below and upon
DEALER's assurances that the following persons, and only the following
persons, will be the Owner(s) of DEALER.
OWNERSHIP
NAME ADDRESS TITLE INTEREST
Lithia Motors, Inc. 100%
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4. DEALER MANAGEMENT
DEALER recognizes that the effective performance of its obligations
hereunder requires that experienced DEALER management be actively involved at
all times. HMA enters into this Agreement in reliance upon the qualifications
of Xxx Xxxxxx to manage DEALER'S operations and upon DEALERS assurance that
such person, and no other person, will at all times function as General
Manager and be considered as Dealer Operator with complete authority to make
all decisions on behalf of DEALER with respect to DEALER's operations.
DEALER further agrees that the General Manager shall devote full time (100%)
to the management of DEALER's operations.
5. CHANGE IN DEALER OWNERSHIP OR MANAGEMENT
This is a personal services agreement. HMA has entered into this
Agreement in reliance upon DEALER's assurances of the active involvement of
the Owners and General Manager identified herein in DEALER's operations.
Accordingly, any change in ownership, regardless of the share or relationship
between parties, or any change in General Manager, from the person(s)
identified herein, requires the prior written consent of HMA, which HMA shall
not unreasonably withhold.
6. DEALER LOCATION
DEALER is free to sell Hyundai Products to Customers wherever they may
be located. However, in order for HMA to establish and maintain an effective
network of authorized Hyundai Dealers for the sale and servicing of Hyundai
Products and to maximize Customer convenience, HMA has approved the following
facilities as the exclusive location(s) for the sale and servicing of Hyundai
Products and for the display of Hyundai Marks:
HYUNDAI NEW VEHICLE SALES
AND SHOWROOM PARTS AND SERVICE
0000 X. Xxxxxxxxxx Xxx. 000 X. Xxxx Xxxxxx Xx.
Xxxxxx, XX 00000 Xxxxxx, XX 00000
SALES AND GENERAL OFFICES USED VEHICLE DISPLAY SALES
0000 X. Xxxxxxxxxx Xxx. X/X
Xxxxxx, XX 00000
BODY AND PAINT
N/A
DEALER agrees not to display Hyundai Marks or to conduct any dealership
operations, including the display, sale and/or service of Hyundai Products,
at any location other than at the location(s) approved herein, without the
prior written consent of HMA.
Moreover, each location is approved only for the activity indicated.
DEALER may not alter the activity of any location approved herein or
otherwise use such location for any activities other than the approved
activity, without the prior written consent of HMA.
7. STANDARD PROVISIONS
The HMA Dealer Sales and Service Agreement Standard Provisions are
incorporated herein
and made a part of this Agreement as if fully set forth herein.
8. ADDITIONAL PROVISIONS
In consideration of HMAs agreement to appoint DEALER as an authorized
Hyundai Dealer, DEALER further agrees:
HMA has entered into this Agreement based upon DEALER!s promise to
provide adequate representation in the current dealership facility, located
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000. DEALER acknowledges that
adequate representation may include, but not be limited to, those standards
set forth in HMA's "DEALERSHIP FINANCIAL/FACILITY/SIGNAGE STANDARDS", signed
by DEALER on 12/1/97 and incorporated by reference herein.
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DEALER further acknowledges that HMA's approval of DEALER's current
operation, does not, in any way, constitute a promise by HMA that it will
sell DEALER any particular number of vehicles or an assurance by HMA that,
DEALER will achieve any particular level of sales, operate at a profit or
realize any return on investment. The actual profits to be realized will
depend to a great extent on the management of the dealership, as well as on
business and economic conditions. DEALER acknowledges that, as in any
investment in a competitive industry, there are no guarantees.
DEALER recognizes that the obligations incurred herein are material
terms of this Agreement. Failure to comply with any or all of these
provisions may be grounds for termination of this Agreement.
SERVICE WRITE-UP:
DEALER shall designate one (1) service write-up lane for the use of
Hyundai service customers. Including appropriate signage to identify the
service write-up lane as that for Hyundai service use.
SERVICE:
DEALER shall designate fourteen (14) service bays for the service of
Hyundai vehicles.
PARTS:
DEALER shall provide a parts ' counter designated for the sale of
Hyundai parts. Further DEALER shall provide a minimum of 3582 sq. ft. for
the storage of Hyundai parts.
SIGNAGE: DEALER shall obtain all signage as recommended by HMA's sole
authorized sip vendor including but not limited to the following:
1. One set of Hyundai building fascia letters (HL-24) shall be
installed right hand justified on the front fascia of the showroom.
2. All signage work shall be effectuated by Hyundai's authorized
sign vendor.
In recognition of his responsibilities hereunder, DEALER hereby agrees
to display a minimum of (3) Hyundai vehicles on the Showroom floor at all
times during the term of this Agreement.
DEALER is a corporation known as Lithia JEF, Inc. DEALER is owned by a
corporate entity known as Lithia Motors, Inc. ("LITHIA"). A majority of the
stock of LITHIA is held by Lithia Holding Company, L.L.C. ("LHC"), and the
remainder by sale of stock to the public. LHC is in turn owned by three
individuals, Xxxxxx XxXxxx, R. Xxxxxxxx Xxxx, and X.X. Xxxx Xxxxxxx. All
voting stock of LHC is owned by Xxxxxx XxXxxx.
Pursuant to this agreement, LITHIA, LHC, and Xxxxxx XxXxxx, as
individuals through their respective Boards of Directors, appoint Xxxxxx X.
XxXxxx as dealer principal of DEALER with complete authority to make all
decisions and enter into all commitments on behalf of DEALER, and HMA will
rely completely on the authority of such person. LITHIA and LHC agree that
the foregoing person shall not be changed as dealer principal without prior
consent of HMA. LITHIA, LHC, and DEALER further agree that there will be no
change in majority direct ownership of DEALER without prior written consent
of HMA. In the event that LHC reduces its ownership in LITHIA below 50%,
such that the public shares own a majority of LHC, then DEALER, LITHIA, and
LHC shall inform HMA so as to amend this agreement accordingly.
DEALER recognizes that the obligations incurred herein are material
terms of this Agreement, and that failure to obtain such consent shall be
grounds for termination under Paragraph 16 of this Dealer Agreement.
9. EXECUTION OF AGREEMENT
This Agreement shall be valid and binding only if it is signed:
On behalf of DEALER by a duly authorized person; and
On behalf of HMA by the President, the Executive Vice President and the
General and/or Regional Manager, if any, of HMA.
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By their signatures hereto, the parties agree to abide by the terms and
conditions of this Agreement, including the Standard Provisions incorporated
herein, in good faith and for their mutual benefit.
Lithia JEF, Inc. dba Lithia Hyundai of Fresno
(Dealer Entity Name)
Date: By: /s/ Xxxxxx X. XxXxxx President
Xxxxxx X. XxXxxx
Hyundai Motor America
Date: 1/26/98 By: /s/ X. X. Xxxxxxx General Manager
X. X. Xxxxxxx
Date: 1/26/98 By: /s/ X. X. Xxxxxx Executive Vice
President
X. X. Xxxxxx
Date: 1/26/98 By: /s/ X. Xxxx President
X. Xxxx
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PRODUCT ADDENDUM
TO
HYUNDAI MOTOR AMERICA
DEALER SALES AND SERVICE AGREEMENT
January 26, 1998
Pursuant to Paragraph 1 of the Hyundai Motor America (HMA) Dealer Sales
and Service Agreement, HMA grants DEALER the non-exclusive right to buy the
Hyundai Products identified below:
Accent, Elantra, Excel, Scoupe, Sonata, Tiburon
and all parts, accessories and equipment for such vehicle(s).
This Hyundai Product Addendum shall remain in effect unless and until
superseded by a new Hyundai Product Addendum furnished by HMA.
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