EXHIBIT
10.2.4.1
BMW OF NORTH AMERICA, INC.
DEALER AGREEMENT
This DEALER AGREEMENT is effective as of the 1st day of January, 1994,
by and between BMW of North America, Inc., a Delaware Corporation having its
principal place of business at Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000 ("BMW NA") and
DEALER NAME: DiFeo BMW Partnership
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DEALER LOCATION: 000 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx , a
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BUSINESS TYPE: Partnership ,
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(if a corporation or partnership) organized or incorporated under the laws of
the
STATE OF: New Jersey and
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DOING BUSINESS AS: DiFeo BMW
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having its principal place of business at
ADDRESS: 301 County Road , in
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CITY/TOWN: Tenafly , in the
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COUNTY OF: Bergen , in the
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STATE OF: New Jersey (as "Dealer").
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All terms defined in the DEALER STANDARD PROVISIONS (Form 93/B) are incorporated
herein by reference.
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PURPOSE OF AGREEMENT
The purpose of this Agreement is to authorize Dealer to operate a BMW automobile
dealership and to set forth the responsibilities of both BMW NA and Dealer in
providing BMW Products and services to the consuming public.
The United States automotive market requires a fluid relationship between BMW NA
and authorized BMW dealers who represent BMW Products. Mutual compliance with
the terms of this Agreement will promote the interests of both BMW NA and Dealer
by providing each party an opportunity to earn a reasonable return on its
investment through developing and retaining satisfied customers and by building
a spirit of cooperation between BMW NA and authorized BMW dealers (collectively
the "BMW Dealers") which will increase the value and customer perception of BMW
trademarks.
BMW NA and Dealer have entered into this Agreement with confidence in each
other's integrity, ability and expressed intention to deal fairly with the other
party and the consuming public. Dealer is relying upon BMW NA's commitment to
distribute quality BMW Products which meet the needs and expectations of the BMW
customers in Dealer's primary market and to provide Dealer with a broad range of
support activities to assist Dealer in its retail operations. BMW NA is relying
upon Dealer's commitment to perform and carry out the responsibilities of an
authorized BMW dealer, as set forth in this Agreement. Each party recognizes
that it must rely upon the efforts of the other party in performing successfully
under this Agreement.
IN CONSIDERATION OF the foregoing and the mutual covenants herein contained, the
parties hereto agree as follows:
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A. APPOINTMENT OF DEALER
BMW NA appoints Dealer as a dealer of BMW Products. Subject to the terms of
this Agreement, Dealer is granted the non-exclusive right to buy BMW Products.
Dealer accepts such appointment and agrees to be bound by this Agreement.
While dealer recognizes that its performance will be primarily measured based
upon its activities in its Primary Market Area, Dealer agrees that this
appointment does not confer upon it the exclusive right to deal in BMW Products
in any specific geographic area within the 50 United States, nor does it limit
the persons within the 00 Xxxxxx Xxxxxx to whom Dealer may sell BMW Products for
use therein.
Dealer agrees that it will not sell BMW Products for resale or use outside the
00 Xxxxxx Xxxxxx. Dealer further agrees to abide by any Export Policy
established by BMW NA.
Dealer acknowledges that BMW NA reserves the right to appoint additional
dealers, whether located near Dealer's location or elsewhere, as BMW NA in its
sole discretion deems necessary or appropriate. BMW NA agrees that it will not
explore additional representation without first conferring individually with the
BMW Dealer(s) surrounding the proposed location to determine whether other
alternatives to additional representation are satisfactory to BMW NA. If a
decision is made to proceed with establishment of additional representation,
BMW NA will provide such BMW Dealer(s) no less than thirty (30) days written
notice of such decision.
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B. DEALER STANDARD PROVISIONS AND DEALER OPERATING REQUIREMENTS
The accompanying DEALER STANDARD PROVISIONS (Form 93/B), DEALER OPERATING
REQUIREMENTS, DEALER FACILITY GUIDELINES, and all currently effective Addenda
issued to Dealer by BMW NA, all of which may be amended, cancelled or superseded
from time to time, are hereby incorporated into this Dealer Agreement
("Incorporated Documents"). Unless the context otherwise indicates, the term
"Agreement" shall mean this document, the Incorporated Documents, and the
documents referred to therein. Dealer hereby acknowledges receipt of this
Agreement and agrees to become familiar with its terms.
While Dealer is not contractually required to comply with the BMW DEALER
OPERATING SYSTEM, Dealer agrees to consider conforming its operations to the
guidelines and recommendations of the BMW Dealer Operating System.
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C. DEALER OWNERSHIP AND MANAGEMENT
This is a PERSONAL SERVICES AGREEMENT. BMW NA is entering into this Agreement
in reliance upon the qualifications, abilities and integrity of the Dealer
Operator and upon the representation of the Dealer's Owner(s) that the Dealer
Operator will have full managerial authority for operations and activities of
Dealer. In order to induce BMW NA to enter into this Agreement, Dealer states
that:
(i) DEALER'S OWNERS. The beneficial owners, record owners and partners, if any
of Dealer are (include Record Owners if different from Beneficial):
NAME % RECORD OR BENEFICIAL
DiFeo Partnership Inc. 70%
DiFeo BMW, Inc. 30%
ADDITIONAL NAMES ATTACHED / /
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(ii) DEALER'S OFFICERS. The following persons are Dealer's Officers:
NAME TITLE
Xxxx X. Xxxxx CEO
Xxxxxx X. Xxxxxx COO
Xxxxxx X. XxXxx Executive Vice President
Xxxxxx X. XxXxx Executive Vice President
Xxxxxx X. Xxxxx Executive Vice President
(iii) DEALER'S CORPORATE DIRECTORS. If Dealer is a corporation, the following
are its Corporate Directors:
NAME TITLE
Xxxxxxxx X. Xxxxx Chairman of the Board
Xxxx X. Xxxxx
Xxxxxx X. XxXxx
Xxxxxx X. XxXxx
Xxxxxx X. Xxxxxx
(iv) DEALER OPERATOR. The following person shall be in complete charge of
Dealer's BMW Operations with authority to make all operating decisions on behalf
of Dealer with respect to Dealer's BMW Operations and is the person upon whom
BMW NA can rely to act on Dealer's behalf:
Name: Xxxxxx X. Xxxxx
(v) GENERAL MANAGER. The following is Dealer's General Manager (if none, enter
"NONE"):
Name: Xxxxxx X Xxxxx
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(vi) SUCCESSOR. The Dealer's Owners have nominated the following individual(s)
as proposed Dealer Owner(s) of a Successor Dealer to be established if this
Agreement is terminated because of the death or permanent disability of any of
the Dealers Owners (if none, enter "NONE"):
Name: _________________________________________________________________________
Name: _________________________________________________________________________
Because of the importance that BMW NA places on the statements and
representations of the Dealer's Owners and the qualifications of the Dealer
Operator, Dealer agrees that there will be no change in the (a) identity of the
Dealer's Owners (i above); (b) the Dealer Operator (iv above); or (c) Dealer's
name, identity, business organization or structure without the prior written
consent of BMW NA.
To enable BMW NA to maintain effectively the BMW NA dealer network, Dealer
further agrees to provide BMW NA with forty-five (45) days prior written notice
of any proposed change in the ownership of Dealer, which would change the
majority interest or control of Dealer, or of any proposed disposition of
Dealer's BMW assets. Any such change in ownership or disposition of Dealer's
BMW assets shall not be effective without the prior written consent of BMW NA
which consent shall not be unreasonably withheld. BMW NA shall respond to
Dealer's notification within forty-five (45) days after Dealer has furnished to
BMW NA all applications and information reasonably requested to evaluate the
proposal.
Without limiting other considerations in determining whether BMW NA will provide
consent, this Agreement may not be transferred, assigned or assumed until all
indebtedness of Dealer to BMW NA, its subsidiaries or affiliates has been fully
satisfied and unless the transferee, assignee or party assuming this Agreement
agrees and commits to fulfill and complete all of the obligations under this
Agreement and the Improvement Addendum (if applicable).
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Dealer recognizes that BMW NA has a vital interest in ensuring that qualified
personnel are employed by BMW Dealers. Therefore, Dealer agrees to employ
personnel who meet the qualifications for each position. BMW NA agrees that
Dealer has the right to decide reasonably all matters concerning management and
personnel.
Dealer has designated herein certain individuals as officers, directors,
managers and/or individuals with responsibility for Dealer's BMW Operations.
Dealer agrees to notify BMW NA in writing of any change in the designated
individuals (ii, iii and v above) and recognizes that such designation shall not
relieve Dealer of its responsibility for performance under this Agreement.
Dealer agrees that BMW NA may rely upon the Dealer Operator and General Manager
(if applicable) to act on Dealer's behalf and that such reliance will not alter
Dealer's responsibilities under this Agreement.
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D. DEALER'S FACILITIES
Dealer agrees that Dealer's Facilities shall satisfy all applicable provisions
of this Agreement, including reasonable space, facility and BMW Corporate
Identification requirements in the Dealer Operating Requirements Addendum and/or
Dealer Facilities Guidelines. BMW NA recognizes the investment Dealer has in
its facilities and hereby approves the location of the following Dealer's
Facilities for the exclusive purpose of:
1) A showroom and sales facility for BMW Vehicles at:
Address: 000 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
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2) Service and Parts facilities for BMW Vehicles at:
Address: 000 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
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3) Facilities for the display and sale of used BMW Vehicles at:
Address: 000 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
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4) Other facilities (indicate the nature of the facility; e.g., storage
facility):
Address: None
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Unless otherwise provided herein, Dealer shall conduct Dealer's BMW Operations
and keep BMW Products exclusively at Dealer's Facilities designated above.
In the event that Dealer desires to (i) change its principal place of business
from that first set forth in this Agreement; (ii) change any location of
Dealer's Facilities; (iii) establish any additional locations for either
operating its business or storage of BMW products; (iv) make any major
structural or design change in Dealer's Facilities; or (v) change the usage or
function of any locations or facility approved herein or otherwise utilize such
locations or facilities for any functions other than the approved functions,
Dealer must obtain the prior written approval of BMW NA for any such change or
establishment.
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In the event Dealer desires to establish or add any additional automobile
franchise, line, make or dealership at Dealer's Facilities simultaneously with
Dealer's BMW Operations, Dealer agrees to provide BMW NA thirty (30) days prior
written notice of such establishment or addition. At the time notice is
provided, Dealer shall demonstrate in writing to BMW NA that Dealer will
continue to comply with the Dealer Operating Requirements Addendum and will not
adversely impact the representation or sale of BMW Products. If Dealer is
unable to comply, Dealer shall not pursue such establishment or addition, but
may submit a detailed plan of compliance with the Dealer Operating Requirements
and Dealer Operating Requirements Addendum to BMW NA. If BMW NA approves the
detailed plan of compliance, Dealer may proceed with the establishment or
addition. Dealer understands that BMW NA may, at its sole option, reject the
plan or require issuance or modification of an Improvement Addendum in the event
the plan is approved. Such approval shall not be unreasonably withheld.
E. EXCLUSION OF WARRANTIES
EXCEPT AS SPECIFICALLY PROVIDED FOR IN THE NEW CAR LIMITED WARRANTY, THE LIMITED
WARRANTY ON EMISSION CONTROLS, THE LIMITED WARRANTY AGAINST RUST PERFORATION,
THE LIMITED WARRANTY ON ORIGINAL BMW PARTS AND THE LIMITED WARRANTY ON ORIGINAL
PARTS SOLD OVER THE COUNTER; ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
EXCLUDED. THE EXCLUSION ALSO APPLIES TO INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
INDIRECT DAMAGES FOR ANY BREACH OF EXPRESS OR IMPLIED WARRANTY, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND/OR FITNESS, IF ANY, APPLICABLE TO BMW
PRODUCTS.
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F. BMW DEALER FORUM
BMW NA and Dealer agree that it is in their mutual interest to have an
independent group of BMW dealer representatives serve on the BMW Dealer Forum
("DEALER FORUM"). The DEALER FORUM shall represent BMW Dealers and will
communicate the position of BMW Dealers to BMW NA on various common issues.
BMW NA and DEALER FORUM shall establish a mechanism to xxxxxx open and frequent
communication on substantive issues affecting BMW NA and BMW Dealers.
Each BMW dealer is entitled and encouraged to serve on the DEALER FORUM or on a
committee of the DEALER FORUM pursuant to its by-laws and each BMW dealer is
expected to support and participate in the DEALER FORUM.
The DEALER FORUM shall adopt by-laws as BMW Dealers deem reasonable and
necessary. The DEALER FORUM may establish committees to study various aspects
of the retail environment and the BMW NA - BMW Dealers' relationship.
Before any material change may be made to this Agreement, BMW NA agrees to
notify the DEALER FORUM and consider BMW Dealers' position regarding the
proposed change.
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G. TERM
This Agreement shall continue in full force and effect and shall govern all
relations and transactions between the parties commencing on the effective date
hereof and continuing as follows:
- If Dealer has fulfilled all of its obligations hereunder and no
Improvement Addendum is currently in force, this Agreement shall expire
five years from the effective date hereof, unless terminated earlier in
accordance with the applicable provisions of this Agreement. In such event
BMW NA will renew this Agreement or offer Dealer an opportunity to enter
into a superseding Agreement.
- If Dealer has outstanding obligations as of the effective date of this
Agreement and/or an Improvement Addendum is in force, this Agreement shall
expire on the earlier of three years from the effective date hereof or
sixty (60) days following the earliest "Compliance Date" specified in said
Addendum, unless otherwise terminated in accordance with the applicable
provisions of this Agreement.
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H. ALTERNATE DISPUTE RESOLUTION
BMW NA and Dealer agree to minimize disputes between them. However, in the
event that disputes arise, BMW NA and Dealer agree that they will attempt to
resolve all matters between them before any formal action is taken to seek any
administrative or judicial adjudication or governmental review.
A BMW BOARD ("BOARD") will act as the Administrator of all disputes between
BMW NA and Dealer arising out of this Agreement. The BOARD will consist of
three representatives who will be selected by BMW NA and three representatives
of BMW Dealers who will be selected by the DEALER FORUM. The BOARD will
determine eligibility requirements, develop procedures to ensure a fair and
equitable decision ("ADR PROCEDURES") and select individuals to participate in a
DISPUTE RESOLUTION PANEL ("PANEL") to hear an eligible dispute. The PANEL shall
consist of at least one BMW NA employee, one BMW dealer and one independent
person selected by the BOARD.
The BOARD shall also monitor the dispute resolution process, report to BMW NA
and the DEALER FORUM annually on the effectiveness of this process and, when
required, make recommendations for changes in this process.
BMW NA and Dealer agree that the process outlined in this Article H and
developed by the BOARD in the ADR PROCEDURES will be mandatory. The PANEL's
recommendation will be non-binding, unless the parties agree to be bound by the
decision of the PANEL. The purpose of the PANEL will be to recommend a
resolution and work with the parties to reach a fair and equitable solution to
their dispute in a cost-effective, efficient manner and to avoid formal
adjudication or government intervention.
If either party to this Agreement initiates any action in court or an
administrative agency prior to issuance of a PANEL recommendation on a dispute,
that party shall pay all costs, fees and expenses, including attorneys fees, of
the other party which arise out of the enforcement of this Article H.
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I. RIGHT OF FIRST REFUSAL
BMW NA recognizes the investment which Dealer has committed to remain a BMW
dealer. Dealer recognizes the importance to BMW NA of continuing dealership
operations from approved locations to provide for effective sale and service of
BMW Products. Accordingly, whenever Dealer intends to dispose of Dealer's BMW
assets or to change majority ownership from that listed in Article C(i), BMW NA
shall have the first right to purchase Dealer's BMW assets or ownership
interests pursuant to this Article. Dealer agrees to disclose to the
prospective buyer that any sale or disposition shall be subject to the terms of
this Dealer Agreement.
BMW NA will advise Dealer if it will exercise the right of first refusal
within forty-five (45) days after Dealer has furnished all applications and
information in accordance with Article C. If BMW NA exercises the right, BMW
NA will assume the proposed buyer's rights and obligations under the written
agreement the proposed buyer negotiated with Dealer (the "Buy/Sell
Agreement"). The purchase price shall be that set forth in the Buy/Sell
Agreement.
In the event BMW NA exercises its right of first refusal, BMW NA may assign the
Buy/Sell Agreement to any party. BMW NA shall remain responsible to guarantee
the purchase price to be paid by the assignee.
Dealer shall transfer the assets and any applicable real estate free and clear
of all liens and encumbrances. Any property shall be transferred by Warranty
Deed, where possible, conveying marketable title. Deeds will be in the proper
form for recording. Possession will be deemed transferred when the deed is
delivered. Dealer will furnish copies of, and will assign where required, all
agreements, licenses, easements, permits or other documents necessary for the
conduct of Dealer's BMW Operations.
If it exercises its right under this Article, BMW NA will reimburse Dealer for
all acceptable expenses, excluding brokerage commissions, incurred by Dealer in
connection with the development of the Buy/Sell Agreement. Dealer will supply
BMW NA with reasonable documentation to support all those expenses and all
copies of materials generated during the negotiation and development of the
Buy/Sell Agreement in anticipation of the sale (including environmental reports,
accounting reviews, among others.) Any dispute regarding reimbursement shall be
presented for review under Article H.
This Article shall not apply in the event that Dealer proposes to change
majority ownership, dispose of its assets or otherwise enter into a proposed
Buy/Sell Agreement with a member of Dealer's immediate family (spouse, child,
brother, sister, parent, grandchild, or spouse of child); to an individual who
is listed on the Successor Addendum; to an individual who is currently employed
by Dealer and has been actively employed by Dealer for at least three
consecutive years in the BMW Operations and is otherwise qualified as a Dealer
Operator; or to an individual who is currently listed as a Dealer's Owner in
Article C and has been so listed for the past three consecutive years and is
otherwise qualified as a Dealer Operator.
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J. CUSTOMER SATISFACTION
BMW NA and Dealer agree to conduct their respective businesses to promote and
support the image and reputation of BMW NA, BMW Products and BMW Dealers. BMW
Products must be perceived as the finest available. BMW NA and BMW Dealers must
be recognized as providing the best service in the industry.
Dealer, as the direct link to the BMW customer, is responsible for satisfying
customers in all matters, except those directly related to product design and
manufacturing. Dealer will take reasonable steps to ensure that each customer
is satisfied with BMW Products, and with the services and the practices of
Dealer. Dealer will recommend to BMW NA methods of reasonably satisfying
customers. BMW NA will support Dealer's customer satisfaction efforts through
counseling, training opportunities and providing survey results.
When requested by BMW NA, Dealer shall submit a plan detailing its customer
satisfaction programs. That plan shall include continuous reinforcement to all
dealership personnel of the importance of customer satisfaction, necessary
training for dealership personnel and methods of conveying to customers that
Dealer is committed to their satisfaction.
Following consultation with and notice from BMW NA or its authorized
representative, Dealer shall remedy to the satisfaction of BMW NA any practice
or method of operation which would have a detrimental effect upon customer
satisfaction or would impair the reputation or image of BMW NA, BMW Products or
Dealer.
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K. EXECUTION OF AGREEMENT
This Agreement shall not become effective until signed by a duly authorized
officer of Dealer, if a corporation; or by one of the general partners of
Dealer, if a partnership; or by the named individual if a sole proprietorship;
and countersigned by authorized representatives of BMW NA.
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L. MODIFICATION OF AGREEMENT
No representative of BMW NA shall have the authority to waive any of the
provisions of this Agreement or to make any amendment or modification of or any
other change in, addition to, or deletion of any portion of this Agreement or to
make any other agreement which imposes any obligation on either BMW NA or Dealer
which is not specifically imposed by this Agreement or which renews or extends
this Agreement; unless such waiver, amendment, modification, change, addition,
deletion or agreement is reduced to writing and signed by two authorized
representatives of BMW NA and by the authorized representative of Dealer as set
forth in Article K of this Agreement.
BMW OF NORTH AMERICA, INC. DIFEO BMW PARTNERSHIP
BY: /s/ Xxxxx X. Xxxx BY: /s/ Xxxxxx X. Xxxxx
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TITLE: General Manager TITLE: V.P.
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BY: /s/ Illegible
------------------------ FEDERAL TAX ID# 000000000
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TITLE: Area Manager ATTEST: (If Dealer is a Corporation)
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Secretary
WITNESS: (If Partnership or Proprietorship)
/s/Illegible
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Name
000 Xxxxxx Xx., Xxxxxxx XX 00000
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Address
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EXHIBIT A
% of Ownership Title
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Owners of DiFeo Partnership, Inc.
United Auto Group, Inc. 100% N/A
12/2/94
Name
Owners of EMCO Motor Holdings, Inc.
Xxxx X. Xxxxx 3% President
00 X. 00xx Xxxxxx EMCO Motor Holdings, Inc.
Xxx Xxxx, XX 00000
'21 International Holdings 97% N/A
000 X. 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx X. Xxxxx Voting Control Chairman
000 Xxxx Xxxxxx '21 International Holdings
Xxx Xxxx, XX 00000
Owners of DiFeo BMW, Inc.
Xxxxxx X. XxXxx 37.5% President/
00 Xxxxxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Xxxxxx X. Xxxxx 25% Vice President
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. XxXxx 37.5% Secretary
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
AMENDMENT TO BMW OF NORTH AMERICA, INC.
DEALER AGREEMENT
This Amendment to the BMW Dealer Agreement is entered into among BMW of North
America, Inc. ("BMW NA"), DiFeo BMW ("Dealer"), DiFeo BMW Partnership
("Partnership"), DiFeo Partnership, Inc. ("DPI") and United Auto Group, Inc.
("UAG").
WHEREAS, BMW NA has entered into a BMW Dealer Agreement with Dealer dated
January 1, 1994, (the "Dealer Agreement"), pursuant to which Dealer is
authorized to operate a BMW automobile dealership; and
WHEREAS, the ownership and organization of Dealer are such that the terms of the
Dealer Agreement may not be wholly adequate to address the needs and concerns of
Dealer, Partnership, DPI and BMW NA; and
WHEREAS, Dealer and BMW NA entered into the Dealer Agreement in consideration of
and in reliance on certain understandings, assurances and representations which
the parties here to wish to document;
WHEREAS, BMW NA is relying on the representations of Dealer, Partnership, DPI
and UAG contained herein and would not have entered into this Amendment, but for
those representations.
NOW, THEREFORE, the parties agree as follows:
1. For purposes of the Dealer Agreement, including Article C(iv), Xxxxxx Xxxxx
shall be designated Dealer Operator. BMW NA has relied and is relying on the
personal qualifications, abilities and integrity of Dealer Operator and the
appointment and continued employment of Xx. Xxxxx as Dealer Operator was and is
a material inducement for BMW NA to enter into the Dealer Agreement with Dealer.
Dealer, Partnership, DPI and UAG hereby represent and warrant that Dealer
Operator is and will be in complete charge of Dealer's BMW Operations with
authority to make all operating decisions on behalf of Dealer with respect to
those operations and is the person upon whom BMW NA can rely to act on Dealer's
behalf. Neither Dealer nor Partnership nor DPI nor UAG will revoke, modify or
amend such authority without the prior written approval of BMW NA.
2. The removal or withdrawal of Dealer Operator without the prior written
consent of BMW NA shall constitute grounds for termination of the Dealer
Agreement, subject to applicable law. However, BMW NA recognizes that Dealer
Operator's employment relationship with Dealer may change. In that case, Dealer
shall have the opportunity to propose a replacement Dealer Operator in
accordance with Article C of the Dealer Agreement.
3. Dealer is a wholly owned subsidiary of Partnership, which, in turn, is a
wholly owned subsidiary of DPI, which, in turn, is a wholly owned subsidiary of
UAG. Dealer, Partnership, DPI and UAG hereby warrant that the representations
and assurances of each
herein are within their respective authority to make and do not contravene any
directive, policy or procedure of any of them. The parties hereto acknowledge
that the provisions of this Amendment shall not be applicable until such time as
UAG completes a public offering of its stock.
4. Any material changes, including the change in 20% of the outstanding shares
as described in Paragraph 5, in the ownership of Dealer, Partnership, DPI and
UAG shall be considered a change of ownership of Dealer under the terms of the
Dealer Agreement, and all applicable terms of the Dealer Agreement shall apply
to any such change. BMW NA has executed the Dealer Agreement in reliance upon
the ownership and management structure of Dealer, Partnership, DPI and UAG and
any material change in the interest or control of any of those entities, or any
disposition of Dealer's BMW assets, without prior written consent of BMW NA
shall constitute grounds for the termination of the Dealer Agreement, subject to
applicable law. Such consent shall not be unreasonably withheld by BMW NA.
With respect to a Public Company (as defined in Paragraph 5) a material change
in ownership can only occur as described therein.
5. Given the ultimate control Partnership, DPI, and UAG have over Dealer,
the control of Dealer through a Company whose securities are publicly traded
which may eventually control Dealer ("Public Company") and BMW NA's strong
interest in assuring that those who own and control its Dealers have
interests consistent with those of BMW NA; Dealer, Partnership, DPI and UAG
agree that if an ownership interest is acquired in a Public Company by a
person or entity which notifies Public Company via Schedule 13D filed with
the Securities and Exchange Commission. Dealer shall advise BMW NA in
writing, and attach a copy of that Schedule. In the event Item 4 of that
Schedule discloses that the person or entity acquiring such ownership
interest owns or controls twenty (20%) of Public Company and intends or may
intend either: (a) an acquisition of additional securities of Public Company
or (b) an extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving a Public Company or any of its
subsidiaries or (c) a sale or transfer of a material amount of assets of
Public Company or any of its subsidiaries or (d) any change in the present
Board of Directors or management of Public Company or (e) any other material
change in Public Company's business or corporate structure or (f) any action
similar to those noted above, then, if BMW NA reasonably concludes that such
person or entity does not have interests compatible with those of BMW NA, or
is otherwise not qualified to have an ownership interest in a BMW NA
dealership, Dealer, DPI, Partnership and UAG agree that within 90 days of
receipt of written notice from BMW NA of this fact, it will: (i) transfer
the assets associated with Dealer to a third party acceptable to BMW NA, (ii)
voluntarily terminate the Dealer Agreements in effect with Dealer, or (iii)
provide evidence to BMW NA that such person or entity no longer has such an
ownership interest in a Public Company. Should Dealer enter into an agreement
to transfer its assets to a third party, the right of first refusal described
in Article I of the Dealer Agreement shall apply to any such transfer.
Failure of Dealer, Partner, DPI, UAG or Public Company to comply with this
provision shall constitute grounds of termination of the Dealer Agreement.
6. Dealer, Partnership, DPI and UAG stipulate and agree that the alternate
dispute resolution process set forth at Article H of the Dealer Agreement shall
be the initial and exclusive source
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of resolution of any dispute regarding the Dealer Agreement and this Amendment,
including, but not limited to, involuntary termination of the Dealer Agreement.
7. Dealer, Partnership, DPI and UAG future stipulate and agree that if Dealer,
Partnership, DPI, BMW NA and the public are to realize the potential benefits
that Dealer, Partnership, DPI and UAG represent to be the result of BMW NA
approving the ownership structure proposed by Dealer, then Dealer shall comply
fully with the terms and conditions of The BMW Advantage program, the details of
which have previously been communicated to Dealer.
8. Dealer, Partnership, DPI and UAG agree that Dealer's Facilities shall be
used exclusively for the representation of BMW Products and related services and
in no event shall they be used for the display, sale or promotion of any new
vehicle other than BMW motor vehicles.
9. The parties agree that this Amendment shall supplement the terms of the
Dealer Agreement in accordance with Article L of the Dealer Agreement.
10. In the event that the policies of BMW NA with regard to the issues
addressed herein should be modified, the parties agree to review such
modifications to determine whether modifications to this Amendment are
appropriate.
11. Nothing in this Amendment or the Dealer Agreement shall be construed to
confer any rights upon any person not a party hereto or thereto, nor shall it
create in any party an interest as a third party beneficiary of this
Amendment or the Dealer Agreement. Dealer, Partnership, DPI, and UAG thereby
agree to indemnify and hold BMW NA, its parent, directors, officers,
employees, subsidiaries, agents and representatives harmless from and against
all claims, actions, damages, expenses, costs and liability arising from or
in connection with any action by a third party in its capacity as a
stockholder in Dealer, Partnership, DPI or other related entity.
12. This Amendment is intended to modify and adapt certain provisions of the
Dealer Agreement and is intended to be incorporated as part of the Dealer
Agreement. In the event that any provisions of this Amendment are in conflict
with other provisions of the Dealer Agreement, the provisions contained in this
Agreement shall govern.
13. Dealer, Partnership, DPI and UAG agree to indemnify BMW NA for any and all
costs that BMW NA may incur in defending or enforcing this Amendment, including
a challenge brought by any party hereto or any third party arising out of the
termination or transfer of the Dealer Agreement under the terms of this
Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment this ___ day of
October 1996.
DiFEO BMW DiFEO BMW PARTNERSHIP
By: DiFeo Partnership, Inc., as
General Partner
/s/ Xxxxxx X. XxXxx /s/ Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------------
By: Xxxxxx X. XxXxx By: Xxxx Xxxxxxxxxx
Title: Vice President Title: Chairman & Chief Executive
Date: October 21, 1996 Officer
Date: October 21, 1996
DiFEO PARTNERSHIP, INC. UNITED AUTO GROUP, INC.
/s/ Xxxx Xxxxxxxxxx /s/ Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------------
By: Xxxx Xxxxxxxxxx By: Xxxx Xxxxxxxxxx
Title: Chairman & Chief Title: Chairman & Chief Executive
Executive Officer Officer
Date: October 21, 1996 Date: October 21, 0000
XXX XX XXXXX XXXXXXX, INC.
/s/ Xxxxx X. Xxxx /s/ Xxxxxx Xxxxxxx
-------------------------------- --------------------------------------
By: Xxxxx X. Xxxx By: Xxxxxx Xxxxxxx
Title: Senior Vice President Title: General Counsel and Secretary
General Manager
Eastern Region
Date: October 21, 1996 Date: October 21, 0000
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XXXXXXXXX TO BMW OF NORTH AMERICA, INC.
DEALER AGREEMENT
This Amendment to the BMW Dealer Agreement is entered into among BMW of North
America, Inc. ("BMW NA"), DiFeo BMW ("Dealer"), DiFeo BMW Partnership
("Partnership"), DiFeo Partnership, Inc. ("DPI") and United Auto Group, Inc.
("UAG").
WHEREAS, BMW NA has entered into a BMW Dealer Agreement with Dealer dated
January 1, 1994, (the "Dealer Agreement"), pursuant to which Dealer is
authorized to operate a BMW automobile dealership; and
WHEREAS, the ownership and organization of Dealer are such that the terms of the
Dealer Agreement may not be wholly adequate to address the needs and concerns of
Dealer, Partnership, DPI and BMW NA; and
WHEREAS, Dealer and BMW NA entered into the Dealer Agreement in consideration of
and in reliance on certain understandings, assurances and representations which
the parties here to wish to document;
WHEREAS, BMW NA is relying on the representations of Dealer, Partnership, DPI
and UAG contained herein and would not have entered into this Amendment, but for
those representations.
NOW, THEREFORE, the parties agree as follows:
1. For purposes of the Dealer Agreement, including Article C(iv), Xxxxxx Xxxxx
shall be designated Dealer Operator. BMW NA has relied and is relying on the
personal qualifications, abilities and integrity of Dealer Operator and the
appointment and continued employment of Xx. Xxxxx as Dealer Operator was and is
a material inducement for BMW NA to enter into the Dealer Agreement with Dealer.
Dealer, Partnership, DPI and UAG hereby represent and warrant that Dealer
Operator is and will be in complete charge of Dealer's BMW Operations with
authority to make all operating decisions on behalf of Dealer with respect to
those operations and is the person upon whom BMW NA can rely to act on Dealer's
behalf. Neither Dealer nor Partnership nor DPI nor UAG will revoke, modify or
amend such authority without the prior written approval of BMW NA.
2. The removal or withdrawal of Dealer Operator without the prior written
consent of BMW NA shall constitute grounds for termination of the Dealer
Agreement, subject to applicable law. However, BMW NA recognizes that Dealer
Operator's employment relationship with Dealer may change. In that case, Dealer
shall have the opportunity to propose a replacement Dealer Operator in
accordance with Article C of the Dealer Agreement.
3. Dealer is a wholly owned subsidiary of Partnership, which, in turn, is a
wholly owned subsidiary of DPI, which, in turn, is a wholly owned subsidiary of
UAG. Dealer, Partnership, DPI and UAG hereby warrant that the representations
and assurances of each
herein are within their respective authority to make and do not contravene any
directive, policy or procedure of any of them. The parties hereto acknowledge
that the provisions of this Amendment shall not be applicable until such time as
UAG completes a public offering of its stock.
4. Any material changes, including the change in 20% of the outstanding shares
as described in Paragraph 5, in the ownership of Dealer, Partnership, DPI and
UAG shall be considered a change of ownership of Dealer under the terms of the
Dealer Agreement, and all applicable terms of the Dealer Agreement shall apply
to any such change. BMW NA has executed the Dealer Agreement in reliance upon
the ownership and management structure of Dealer, Partnership, DPI and UAG and
any change in the majority interest or control of any of those entities, or any
disposition of Dealer's BMW assets, without prior written consent of BMW NA
shall constitute grounds for the termination of the Dealer Agreement, subject to
applicable law. Such consent shall not be unreasonably withheld by BMW NA.
With respect to a Public Company (as defined in Paragraph 5) a material change
in ownership can only occur as described therein.
5. Given the ultimate control Partnership, DPI, and UAG have over Dealer, the
control of Dealer through a Company whose securities are publicly traded which
may eventually control Dealer ("public company") and BMW NA's strong interest in
assuring that those who own and control their Dealers have interests consistent
with those of BMW NA; Dealer, Partnership, DPI and UAG agree that if an
ownership interest is acquired in a public company by a person or entity which
notifies public company via Schedule 13D filed with the Securities and Exchange
Commission, Dealer shall advise BMW NA in writing, and attach a copy of that
Schedule. In the event Item 4 of that Schedule discloses that the person or
entity acquiring such ownership interest owns or controls twenty (20%) of public
company and intends or may intend either: (a) an acquisition of additional
securities of public company or (b) an extraordinary corporate transaction such
as a merger, reorganization or liquidation, involving a public company or any of
its subsidiaries or (c) a sale or transfer of a material amount of assets of
public company or any of its subsidiaries or (d) any change in the present Board
of Directors or management of public company or (e) any other material change in
public company's business or corporate structure or (f) any action similar to
those noted above, then, if BMW NA reasonably concludes that such person or
entity does not have interests compatible with those of BMW NA, or is otherwise
not qualified to have an ownership interest in a BMW NA dealership, Dealer, DPI,
Partnership and UAG agree that within 90 days of receipt of written notice from
BMW NA of this fact, it will: (i) transfer the assets associated with Dealer to
a third party acceptable to BMW NA, (ii) voluntarily terminate the Dealer
Agreements in effect with Dealer, or (iii) provide evidence to BMW NA that such
person or entity no longer has such an ownership interest in a public company.
Should Dealer enter into an agreement to transfer its assets to a third party,
the right of first refusal described in Article I shall apply to any such
transfer. Failure of Dealer or public company to comply with this provision
shall constitute grounds of termination of the Dealer Agreement.
6. Dealer, Partnership, DPI and UAG stipulate and agree that the alternate
dispute resolution process set forth at Article H of the Dealer Agreement shall
be the initial and exclusive source
-2-
of resolution of any dispute regarding the Dealer Agreement and this Amendment,
including, but not limited to, involuntary termination of the Dealer Agreement.
7. Dealer, Partnership, DPI and UAG future stipulate and agree that if Dealer,
Partnership, DPI, BMW NA and the public are to realize the potential benefits
that Dealer, Partnership, DPI and UAG represent to be the result of BMW NA
approving the ownership structure proposed by Dealer, then Dealer shall comply
fully with the terms and conditions of The BMW Advantage program, the details of
which have previously been communicated to Dealer.
8. Dealer, Partnership, DPI and UAG agree that Dealer's Facilities shall be
used exclusively for the representation of BMW Products and related services and
in no event shall they be used for the display, sale or promotion of any new
vehicle other than BMW automobiles.
9. The parties agree that this Amendment shall supplement the terms of the
Dealer Agreement in accordance with Article L of the Dealer Agreement.
10. In the event that the policies of BMW NA with regard to the issues
addressed herein should be modified, the parties agree to review such
modifications to determine whether modifications to this Amendment are
appropriate.
11. Nothing in this Amendment or the Dealer Agreement shall be construed to
confer any rights upon any person not a party hereto or thereto, nor shall it
create in any party an interest as a third party beneficiary of this Amendment
or the Dealer Agreement. Dealer, Partnership and DPI hereby agree to indemnify
and hold BMW NA, its parent, directors, officers, employees, subsidiaries,
agents and representatives harmless from and against all claims, actions,
damages, expenses, costs and liability arising from or in connection with any
action by a third party in its capacity as a stockholder in UAG other than
through a derivative stockholder suit authorized by the board of directors of
UAG.
12. This Amendment is intended to modify and adapt certain provisions of the
Dealer Agreement and is intended to be incorporated as part of the Dealer
Agreement. In the event that any provisions of this Amendment are in conflict
with other provisions of the Dealer Agreement, the provisions contained in this
Agreement shall govern.
13. Dealer, Partnership, DPI and UAG agree to indemnify BMW NA for any and all
costs that BMW NA may incur in defending or enforcing this Amendment, including
a challenge brought by any party hereto or any third party arising out of the
termination or transfer of the Dealer Agreement under the terms of this
Amendment.
-3-
IN WITNESS WHEREOF, the parties have executed this Amendment this ___ day of
July 1996.
DiFEO BMW DiFEO BMW PARTNERSHIP
By: DiFeo Partnership, Inc., as
General Partner
/s/ Xxxxxx X. XxXxx /s/ Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------------
By: Xxxxxx X. XxXxx By: Xxxx Xxxxxxxxxx
Title: Vice President Title: Chairman and Chief Executive
Date: July 30, 1996 Officer
Date: July 30, 1996
DiFEO PARTNERSHIP, INC. UNITED AUTO GROUP, INC.
/s/ Xxxx Xxxxxxxxxx /s/ Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------------
By: Xxxx Xxxxxxxxxx By: Xxxx Xxxxxxxxxx
Title: Chairman and Chief Title: Chairman and Chief Executive
Executive Officer Officer
Date: July 30, 1996 Date: July 30, 0000
XXX XX XXXXX XXXXXXX, INC.
/s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------------
By: Xxxxx X. Xxxx By:
Title: Senior Vice President Title:
General Manager
Eastern Region
Date: July 25, 1996 Date:
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