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Exhibit 10.18
DEALER SALES AND SERVICE AGREEMENT
BETWEEN
PETERBILT MOTORS COMPANY
AND
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TABLE OF CONTENTS
Page
I. INTRODUCTION ........................................................................... 1
A. PURPOSE AND GENERAL OBLIGATIONS...................................................... 1
B. APPOINTMENT OF DEALER................................................................ 1
C. LOCATION OF DEALER FACILITY.......................................................... 1
D. TERM OF THE AGREEMENT................................................................ 1
II. SALE OF PRODUCTS............................................................................ 1
A. DEALER RESPONSIBILITIES.............................................................. 1
1. PRODUCT SALES............................................................... 1
2. DEALER PERFORMANCE EVALUATION............................................... 1
3. SALES OPERATIONS AND PRODUCT PROMOTION...................................... 2
4. SALES REPORTING............................................................. 3
5. PURCHASE ORDERS............................................................. 3
6. PRICES AND PAYMENTS......................................................... 3
7. PAYMENT DEFAULT............................................................. 3
8. DELIVERY.................................................................... 3
9. WARRANTY.................................................................... 4
10. PRODUCT ALTERATIONS......................................................... 4
B. ADVERTISING.......................................................................... 4
III. SERVICE AND PARTS........................................................................... 4
A. DEALER RESPONSIBILITIES.............................................................. 4
1. PREDELIVERY SERVICE, WARRANTY SERVICE,
CAMPAIGN INSPECTIONS........................................................ 4
2. REIMBURSEMENT RATES......................................................... 4
3. NONGENUINE PARTS OR ACCESSORIES............................................. 4
B. ASSISTANCE PROVIDED BY PETERBILT..................................................... 5
1. CUSTOMER LISTS.............................................................. 5
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2. SALES AND SERVICE TRAINING ASSISTANCE....................................... 5
3. SERVICE MANUALS AND MATERIALS............................................... 5
4. FIELD SALES AND SERVICE PERSONNEL
ASSISTANCE.................................................................. 5
IV. CAPITAL STANDARDS........................................................................... 5
A. NET WORKING CAPITAL.................................................................. 5
B. OWNERSHIP........................................................................... 5
V. ACCOUNTS, RECORDS AND REPORTS............................................................... 5
A. UNIFORM ACCOUNTING SYSTEM............................................................ 5
B. AUDIT OF DEALER RECORDS.............................................................. 6
C. CONFIDENTIALITY...................................................................... 6
VI. TRADEMARKS, SERVICE MARKS AND TRADE NAMES................................................... 6
A. USE BY DEALER........................................................................ 6
B. DISCONTINUANCE OF USE................................................................ 6
VII. DEALER'S REPRESENTATION OF COMPETING LINES.................................................. 7
VIII. TERMINATION OF AGREEMENT.................................................................... 7
A. TERMINATION BY DEALER................................................................ 7
B. TERMINATION FOR CAUSE................................................................ 7
1. IMMEDIATE TERMINATION....................................................... 7
2. TERMINATION UPON 60 DAYS NOTICE ............................................ 8
3. TERMINATION FOR FAILURE OF PERFORMANCE
ON 100 DAYS NOTICE.......................................................... 9
4. TERMINATION BASED ON MARKET WITHDRAWAL...................................... 9
5. TERMINATION UPON DEATH OR INCAPACITY........................................ 9
C. EFFECTIVE DATE OF TERMINATION........................................................ 9
D. EFFECT OF TERMINATION................................................................ 9
1. THE RIGHT TO PURCHASE PRODUCTS ............................................. 9
2. REPURCHASE OF PRODUCTS...................................................... 10
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IX. VOLUNTARY ARBITRATION OF DISPUTES........................................................... 11
A. FILING CLAIM......................................................................... 11
B. EXCLUSIVE REMEDY..................................................................... 11
C. PROCEDURES........................................................................... 11
D. CHOICE OF ARBITRATOR................................................................. 11
E. ARBITRATOR'S AWARD................................................................... 11
F. PAYMENT OF FEES...................................................................... 12
G. TIME PERIOD.......................................................................... 12
X. DEFENSE AND INDEMNIFICATION BY PETERBILT.................................................... 12
XI. MISCELLANEOUS PROVISIONS.................................................................... 12
A. ENTIRE AGREEMENT..................................................................... 12
B. AMENDMENT.......................................................................... 12
C. COLLATERAL ASSIGNMENT................................................................ 12
D. SEVERABILITY......................................................................... 12
E. GOVERNING LAW........................................................................ 12
F. WAIVERS .......................................................................... 12
G. NOTICES .......................................................................... 12
H. NEW AND SUPERSEDING DEALER AGREEMENTS................................................ 13
I. INDEPENDENT ENTITY................................................................... 13
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ADDENDA
A. PRODUCTS
B. DEALERSHIP LOCATION AND FACILITY STANDARDS
C. OPERATING REQUIREMENTS, PERFORMANCE GOALS AND SALES/SERVICE EVALUATION
D. STATEMENT OF OWNERSHIP AND FINANCIAL AND MANAGEMENT STANDARDS
E. RIGHT OF FIRST REFUSAL
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EXHIBIT 10.18
DEALER SALES AND SERVICE AGREEMENT
This is an AGREEMENT between Peterbilt Motors Company ("PETERBILT"), a division
of PACCAR Inc, a Delaware corporation, and the principal owners identified in
Addendum D and _____________. a corporation (collectively referred to as
"DEALER" throughout this AGREEMENT), duly incorporated in the State of Delaware
and doing business as ___________________.
I. INTRODUCTION
A. PURPOSE AND GENERAL OBLIGATIONS. This AGREEMENT provides for the sale
and servicing of PETERBILT trucks and tractors ("Vehicles"), and parts
and accessories manufactured by or for PETERBILT and/or PACCAR Parts,
a division of PACCAR Inc, ("Genuine Parts and Accessories") in a
manner that will best serve the interests of PETERBILT, DEALER, other
authorized PETERBILT dealers, and owners of Vehicles and Genuine Parts
and Accessories (collectively called "PRODUCTS"). PETERBILT has
selected its dealers based on their experience and commitment to
provide adequate capital, equipment, personnel and facilities to sell
and service PRODUCTS in a manner which promotes and maintains customer
confidence and satisfaction and protects the reputation of PRODUCTS.
Both PETERBILT and DEALER agree to use the highest ethical business
standards in dealings with each other and with customers.
B. APPOINTMENT OF DEALER. Subject to the terms of this AGREEMENT,
PETERBILT hereby grants DEALER a nonexclusive right to buy PRODUCTS
identified in the attached Addendum A, to identify itself as an
authorized PETERBILT dealer and to use Trademarks in the promotion,
sale and servicing of PRODUCTS. PETERBILT reserves the right to revise
Addendum A from time to time. DEALER has paid no fee for this
AGREEMENT and no right granted by this AGREEMENT is a property right.
C. LOCATION OF DEALER FACILITY. DEALER will maintain a facility for the
sale and servicing of PRODUCTS at Dealer Location(s) identified in
Addendum B and in full compliance with all the requirements of
Addendum B including identifying the facility with a sign.
D. TERM OF THE AGREEMENT. This AGREEMENT will become effective on
___________ and will continue in effect for a period of Three (3)
year(s) to expire on _______________ unless terminated as provided in
Article VIII. This AGREEMENT may not be extended or renewed except in
writing signed by the General Manager or other authorized employee of
PETERBILT.
II. SALE OF PRODUCTS
A. DEALER RESPONSIBILITIES.
1. PRODUCT Sales. DEALER's fundamental obligation under this
AGREEMENT is to stock, sell at retail and service the PRODUCTS in
the area defined in Addendum C. DEALER agrees that PETERBILT may
add new dealers to, relocate dealers in, or make changes to the
area defined in Addendum C from time to time. DEALER expressly
agrees to develop the sales volume necessary to meet DEALER's
PERFORMANCE GOALS identified in Addendum C.
2. DEALER Performance Evaluation. PETERBILT and DEALER will meet
periodically, but not less than annually, to evaluate DEALER's
sales and service performance in the local market in accordance
with the criteria of Addendum C and this AGREEMENT. These
criteria include but are not limited to:
a. The achievement of reasonable sales objectives as PETERBILT
may establish, and as are set forth in Addendum C;
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b. Customer satisfaction with DEALER'S conduct, participation
or assistance in sales transactions, as may be determined by
PETERBILT through customer opinion polls, personal
interviews, letters from customers or otherwise;
c. The relationship of the registrations in the area defined in
Addendum C of new PETERBILT Vehicles sold by DEALER to the
total registrations in this same period of all new trucks of
the same class (for this purpose, trucks of the same class
will be those selected by PETERBILT for comparison which
shall be generally competitive with PETERBILT Vehicles);
d. DEALER'S performance under subparagraph c above, as compared
with the performance of dealers similarly situated and with
the national average for all PETERBILT dealers, and with the
regional and district averages for all PETERBILT dealers in
the region and district to which DEALER is assigned.
e. The trend of DEALER'S sales performance over a period of
time;
f. Conditions affecting the market for trucks;
g. DEALER'S participation in sales and promotional programs
offered by PETERBILT;
h. DEALER'S inventory and sale of Genuine Parts and Accessories
in relation to the population of PETERBILT Vehicles and
similar vehicles of the same class in the area defined in
Addendum C; and
i. DEALER's participation in, and use of, other programs,
products and services offered by PETERBILT or PETERBILT
affiliates.
3. Sales Operations and Product Promotion. DEALER agrees to
establish and maintain a sales organization in accordance with
the requirements for a minimum number of personnel and training
certification defined in Addendum C. DEALER agrees to conduct all
sales activities in full compliance with PETERBILT's sales
directives and to maintain a high standard of ethical sales
activity and advertising. Under no circumstances will DEALER
solicit or make sales through sub-dealers, agents, or
representatives without the prior written consent of PETERBILT.
DEALER acknowledges that PETERBILT may sell direct to major
customers from time to time. If such sales occur, PETERBILT may
compensate DEALER in a manner and an amount to be determined by
PETERBILT for the contribution of the DEALER to the sale. DEALER
further agrees to the following:
a. In order to maintain the confidence of the public in DEALER
and PRODUCTS, DEALER shall use its best efforts to sell each
customer PRODUCTS with specifications most appropriate to
the customer's application and will not mislead or deceive
its customers with respect to the specifications or
performance of PRODUCTS.
b. DEALER shall use its best efforts to promote the sale of
PRODUCTS in the area defined in Addendum C through
systematic contacts with owners and users and prospective
owners and users of PRODUCTS, and through such other means
as may be specified from time to time by PETERBILT in its
directives and suggestions.
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c. DEALER shall at all times carry in stock an adequate
inventory of unsold new PETERBILT Vehicles not ordered or
held for specific customers as may be sufficient to meet the
sales potential for PETERBILT Vehicles in the area defined
in Addendum C. DEALER shall also at all times carry in stock
an adequate inventory of Genuine Parts and Accessories as
may be required to meet the sales potential for Genuine
Parts and Accessories and the service needs of owners and
users of PETERBILT Vehicles in the area defined in Addendum
C.
d. In order to further sales of new PETERBILT Vehicles, DEALER
will engage in the purchase and sale of customer trade-ins
of used heavy-duty vehicles as may be required to
effectively compete in the area defined in Addendum C.
PETERBILT may from time to time provide DEALER with lists of
used heavy-duty vehicles available for sale. DEALER will use
its best efforts to market such used heavy-duty vehicles.
4. Sales Reporting. To assist PETERBILT in the evaluation of current
market trends, DEALER upon request will deliver a report in a
form prescribed by PETERBILT promptly upon delivery of new
vehicles to a customer. DEALER will also furnish other market
information reasonably requested by PETERBILT from time to time.
5. Purchase Orders. When placing orders for PRODUCTS, DEALER will
only use purchase order forms provided by PETERBILT. All orders
are subject to acceptance by PETERBILT. No order may be
cancelled, except in accordance with PETERBILT's standard policy
on order cancellation then in effect. PETERBILT will use its best
efforts to fill any orders it has accepted, but will not be
obligated to deliver to DEALER any particular number of PRODUCTS
over a specific period of time.
6. Prices and Payments. PETERBILT may change prices and terms of
sale from time to time. Unless otherwise agreed in writing,
payments for Vehicles purchased shall be by medium of payment
acceptable to PETERBILT against a wholesale line of credit
established by DEALER and expressly approved by PETERBILT as
provided for in Addendum D. PETERBILT will invoice DEALER for all
PRODUCT purchases in accordance with PETERBILT's standard policy.
In accordance with PETERBILT'S credit policy, PETERBILT may place
sales of Genuine Parts and Accessories on a payment in advance
basis. DEALER's right to return Genuine Parts and Accessories
shall be governed by the terms of PETERBILT's parts return policy
then in effect.
7. Payment Default. Should DEALER fail to pay for, or should any
applicable financing arrangement fail to provide credit for the
payment of, any PRODUCTS ordered by DEALER when payment is due,
PETERBILT may take any of the actions set forth in Addendum D.
8. Delivery. PETERBILT will select the distribution points, carriers
and modes of transportation for delivery of PRODUCTS to DEALER.
DEALER will reimburse PETERBILT for delivery, freight, and
related costs as set out on PETERBILT's invoice to DEALER. Unless
otherwise provided under PETERBILT's warranty procedures, DEALER
will file and pursue any claims against any carrier for loss or
damage during shipment. PETERBILT will not be liable for delay or
failure to fill orders that have been accepted where the failure
or delay is the result of any cause beyond PETERBILT's reasonable
control, including domestic or foreign laws, governmental
actions, war or civil disturbance, acts of God, interruptions of
navigation, shipwreck, strikes or other labor troubles, delays of
suppliers or carriers.
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9. Warranty. DEALER agrees that the only warranties that will be
applicable to each new PRODUCT will be the written limited
warranty furnished by PETERBILT to the first retail purchaser of
the PRODUCTS as it may be revised from time to time. DEALER is
not authorized to provide any additional warranties or assume any
additional obligations or liabilities on behalf of PETERBILT.
DEALER agrees that at the time the customer signs an order,
DEALER will explain the warranty to the customer and obtain the
customer's signature acknowledging receipt thereof.
10. PRODUCT Alterations. DEALER will not alter any PRODUCT, or change
or substitute any of its components as sold by PETERBILT, if it
might affect the safe mechanical operation, safety or structural
integrity of any PRODUCT.
B. ADVERTISING.
PETERBILT agrees to establish and maintain general advertising and
promotion programs for the PRODUCTS. DEALER agrees to actively
participate in cooperative advertising programs developed by PETERBILT
from time to time for all DEALERS and to follow PETERBILT advertising
guidelines in local advertising. DEALER also agrees to promote the
purchase of PRODUCTS through DEALER's own advertising and sales
promotion activities.
Neither PETERBILT nor DEALER will publish any advertising likely to
mislead or deceive the public or impair the good will of PETERBILT or
DEALER or the reputation of the PRODUCTS.
III. SERVICE AND PARTS
A. DEALER RESPONSIBILITIES. DEALER agrees to establish and maintain a
service and parts organization in accordance with the requirements for
a minimum number of personnel with training certification defined in
Addendum C. DEALER agrees to take all reasonable steps to provide
service and parts for all PRODUCTS, regardless of where purchased, and
whether or not under warranty, and to ensure that necessary repairs on
PRODUCTS are performed in accordance with the highest professional
standards and with the customer's consent.
1. Predelivery Service, Warranty Service, Campaign Inspections.
DEALER will perform predelivery service on each new Vehicle,
warranty service and recall campaign inspections and service in
accordance with PETERBILT procedures then in effect. DEALER will
procure special tools and service equipment as may be necessary
to meet DEALER's obligations under this paragraph.
2. Reimbursement Rates. PETERBILT agrees to compensate DEALER for
all warranty, and campaign inspection work related to recalls, in
accordance with PETERBILT procedures and applicable law. Warranty
service is provided for the benefit of customers and customers
will not be obligated to pay any charges for warranty work,
except as required by law.
3. Non-Genuine Parts or Accessories. DEALER has the right to sell,
install or use parts or accessories which are not Genuine Parts
and Accessories manufactured by or for PETERBILT. However, in
cases where DEALER does not sell, install or use Genuine Parts
and Accessories, DEALER will only use such other parts or
accessories as will not adversely affect the mechanical operation
or safety of the PRODUCTS being serviced or repaired, or will be
equivalent in quality and design to Genuine Parts and
Accessories.
If DEALER uses parts or accessories which are not Genuine Parts
and Accessories or are not approved by PETERBILT or the PACCAR
Parts division for use in PRODUCTS, DEALER does so at its own
risk and PETERBILT will not be responsible to DEALER or to any
third party for any products liability, warranty or other claim
which may arise as a consequence of the installation and/or use
of such parts.
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B. ASSISTANCE PROVIDED BY PETERBILT.
1. Customer Lists. PETERBILT may, from time to time, furnish DEALER
with a list of potential customers of PRODUCTS located in the
area defined in Addendum C. This will enable DEALER to maintain
regular and periodic contact with each such customer and make
every reasonable effort to sell PRODUCTS. Also, if available,
PETERBILT will furnish DEALER with a list of the owners of
Vehicles located in areas where such Vehicles could reasonably be
brought to the DEALER for service. This will enable DEALER to
maintain regular and periodic contact with each such Vehicle
owner and make every reasonable effort to see that every owner is
satisfied with their Vehicle(s).
2. Sales and Service Training Assistance. PETERBILT periodically
will offer general and specialized truck and parts sales, and
other service and technical training programs and materials.
DEALER agrees that its sales, service and/or parts personnel will
participate in these programs. Completion of training programs is
required to comply with training standards or recommendations set
out in Addendum C.
3. Service Manuals and Materials. PETERBILT agrees to make available
to DEALER copies of service manuals and bulletins, publications
and technical data as PETERBILT deems necessary for the effective
operation of DEALER's service and parts organization. PETERBILT
will use its best efforts to make available such data and
information before new PRODUCTS are introduced for sale. DEALER
agrees to keep these manuals, publications and data current and
available for use by its parts and service employees.
4. Field Sales and Service Personnel Assistance. PETERBILT agrees to
make available field personnel who will periodically advise
DEALER on sales, parts and service related subjects, including
fleet sales, product quality, technical adjustment, repair,
replacement and sale of PRODUCTS, customer relations, warranty
administration, and service and parts merchandising, training and
management.
IV. CAPITAL STANDARDS
A. NET WORKING CAPITAL. DEALER agrees to establish and maintain net
working capital in accordance with Addendum D. If at anytime DEALER's
net working capital falls below the minimum requirements as determined
by PETERBILT financial standards for dealership capitalization, DEALER
shall take all steps reasonably necessary to meet such minimum capital
requirements.
B. OWNERSHIP. Addendum D also sets forth the identity of all DEALER
owners and their respective ownership interests in DEALER (called
"DEALER PRINCIPAL(S)") and the principal managers, who may or may not
have ownership interests (called "OPERATING MANAGER(S)") of DEALER.
DEALER acknowledges that this is a personal service contract. The
effectiveness of DEALER is ultimately dependent upon the DEALER
PRINCIPAL(S) and OPERATING MANAGER(S) who must assume full managerial
authority and responsibility for DEALER business. No change in
ownership or change in DEALER PRINCIPAL(S) shall be made without first
consulting with and obtaining PETERBILT's prior written consent.
DEALER also agrees to notify PETERBILT of any changes in OPERATING
MANAGER(S). Any change approved by PETERBILT will be contained in a
new Addendum D.
V. ACCOUNTS, RECORDS AND REPORTS
A. UNIFORM ACCOUNTING SYSTEM. DEALER agrees to maintain a uniform
accounting system designated by PETERBILT, and in accordance with
PETERBILT policies, procedures and forms, as amended from time to
time. In addition, DEALER will furnish to PETERBILT, by the twentieth
of each month, in the manner set forth in the PETERBILT Accounting
Manual and in a format and on forms prescribed by PETERBILT, a
complete and accurate financial and operating statement covering the
preceding month and DEALER's fiscal year-to-date operations. DEALER
will also promptly furnish to PETERBILT a copy of any adjusted
financial or operating statement prepared by or for DEALER.
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B. AUDIT OF DEALER RECORDS. DEALER agrees that PETERBILT will have the
right, at all reasonable times and during DEALER's regular business
hours, to examine, audit and reproduce all records, accounts and other
data relating to the sale and service of PRODUCTS by DEALER. PETERBILT
will provide a copy of the report of the examination or audit to
DEALER upon request.
C. CONFIDENTIALITY. PETERBILT agrees that it will not provide any data or
documents submitted to PETERBILT pursuant to this Article V to any
independent third party, unless authorized by DEALER, required by law,
or otherwise pertinent to legal proceedings. DEALER agrees that
PETERBILT may provide such data to affiliated entities such as PACCAR
Financial Corp., provided that such entities have agreed to comply
with the terms of this provision governing confidentiality. DEALER
also agrees that PETERBILT may use such data or documents to generate
composite data which PETERBILT believes will be useful to share with
its dealers to assist them in improving operations. Such composite
data will not specifically identify any dealer.
VI. TRADEMARKS, SERVICE MARKS AND TRADE NAMES
A. USE BY DEALER. PETERBILT authorizes DEALER to use the trade names,
trademarks and logos of PETERBILT (hereinafter "Trademarks").
PETERBILT grants to DEALER the nonexclusive privilege of displaying or
otherwise using Trademarks solely in connection with the promotion and
sale of PRODUCTS from approved location(s).
DEALER agrees, however, that it will promptly discontinue the display
and use of any Trademarks, and will change the manner in which any
Trademarks are displayed and used when requested to do so by
PETERBILT. DEALER further agrees that it will do nothing to impair the
value of or contest PETERBILT's use or ownership of any trademark,
design xxxx, service xxxx or trade name at any time acquired, claimed
or adopted by PETERBILT. In addition, no company owned by or
affiliated with DEALER or any DEALER PRINCIPALS may use any Trademarks
or PRODUCT name without the prior written consent of PETERBILT.
B. DISCONTINUANCE OF USE. Upon termination, non-renewal or expiration of
this AGREEMENT, DEALER agrees that it will immediately discontinue all
use of the word "Peterbilt" and the Trademarks, or similar words and
cease representing itself as an authorized PETERBILT Dealer.
Thereafter DEALER will not use, either directly or indirectly, any
Trademarks, trademarks of affiliated companies, or any other similar
trademarks in a manner likely to cause confusion or mistake or to
deceive the public. In addition, DEALER will promptly remove all
PRODUCT signs bearing the word "Peterbilt" or the Trademarks from its
facilities at DEALER's sole cost and expense. In the event DEALER
fails to comply with its obligations herein within thirty (30) days of
termination, non-renewal or expiration, PETERBILT will have the right
to enter upon DEALER's premises and remove, without liability, all
signs bearing the word "Peterbilt" or using any Trademarks. DEALER
will reimburse PETERBILT for any costs and expenses incurred in
connection with the enforcement of this paragraph, including
reasonable attorney's fees.
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VII. DEALER'S REPRESENTATION OF COMPETING LINES
PETERBILT PRODUCTS have traditionally been sold primarily through
independently owned dealerships. Representing multiple lines of competing
truck manufacturers may create conflicts of interest resulting in
inadequate representation of PETERBILT PRODUCTS. Demands on capital,
personnel and other limited resources of a dealership may become
increasingly difficult to balance when they must be allocated among several
competing product lines. For these reasons, DEALER agrees not to enter into
a written agreement to sell and service the competitive vehicles of another
truck manufacturer without providing at least sixty (60) days prior written
notice to PETERBILT so that PETERBILT may evaluate and discuss with DEALER
the likely effect of such an action on DEALER, PETERBILT and other
PETERBILT dealers. In conducting its evaluation PETERBILT will consider and
discuss with DEALER the following:
a. Whether and to what degree the competing line competes with
PETERBILT's major product lines;
b. Whether DEALER already represents the competing line with the
acceptance or approval of PETERBILT;
c. Whether DEALER's representation of competing lines in another
PETERBILT dealer's marketing area is likely to cause competitive
injury to that dealer.
d. Whether DEALER's capital, personnel and management resources will be
adequate to represent more than one line; and
e. For non-exclusive facilities, whether the facility is adequate to
support an additional line.
VIII. TERMINATION OF AGREEMENT
This section explains the circumstances under which the AGREEMENT may be
terminated by either party, the procedure to be followed and the
consequences of termination. Identifying specific events which could result
in termination is intended to reduce the possibility of misunderstandings
between PETERBILT and DEALER.
A. TERMINATION BY DEALER. DEALER may voluntarily terminate this AGREEMENT
at any time by written notice to PETERBILT. Termination will be
effective thirty (30) days after PETERBILT receives such notice unless
otherwise mutually agreed in writing.
B. TERMINATION FOR CAUSE.
1. Immediate Termination. PETERBILT will have the right to terminate
this AGREEMENT immediately in any of the following situations:
a. Any misrepresentation to PETERBILT by DEALER or any Owner or
DEALER PRINCIPAL in applying for this AGREEMENT or for
approval as Owner or DEALER PRINCIPAL of DEALER;
b. If DEALER, or any Owner, officer, or DEALER PRINCIPAL of
DEALER, is convicted of any felony or of any violation of
law which in PETERBILT's sole opinion tends to adversely
affect the business or interests of DEALER or PETERBILT, or
to impair good will associated with the Trademarks;
c. Submission by DEALER to PETERBILT of: (i) false claims for
reimbursement, sales incentives, warranty claims, refunds,
rebates or credits; (ii) false financial information, sales
reports or other data required by PETERBILT; or (iii) false
statements relating to predelivery or warranty service,
campaign inspections, servicing, repairing, or maintenance
required by PETERBILT;
d. If DEALER is closed for a period of five (5) consecutive
days, except when due to an event beyond DEALER's reasonable
control such as acts of God, war or civil disturbance, labor
strikes or other labor trouble;
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e. Failure of DEALER to obtain or maintain any license, or the
suspension or revocation of any license, necessary for the
conduct by DEALER of its business pursuant to this
AGREEMENT; or
f. If DEALER becomes insolvent, as defined by the Uniform
Commercial Code, or files any voluntary petition under any
bankruptcy law, or executes an assignment for the benefit of
creditors, or any petition is filed by any third party to
have DEALER declared bankrupt or to appoint a receiver or
trustee, or another officer having similar power, and such
filing or appointment is not vacated within thirty (30) days
or there is any levy under attachment or execution or
similar process which is not vacated or removed by payment
or bonding within ten (10) days.
g. Any attempted or actual sale, transfer or assignment by
DEALER of this AGREEMENT, ownership interests in the DEALER,
or any of the rights granted DEALER under this AGREEMENT, or
any attempted or actual transfer, assignment or delegation
by DEALER of any of the responsibilities assumed by it under
the AGREEMENT, including but not limited to removal,
withdrawal or change of Owner or DEALER PRINCIPAL, without
the prior written consent of PETERBILT;
2. Termination Upon Sixty (60) Days Notice. If any of the following
events has occurred and PETERBILT determines that the matter may
require termination of this AGREEMENT, PETERBILT will so advise
DEALER in writing. If DEALER does not correct the condition
within thirty (30) days after notice is sent, PETERBILT will have
the right to terminate this AGREEMENT upon an additional sixty
(60) days notice, subject to DEALER's right to arbitrate under
Article IX. Events which may result in such termination include:
a. he conduct, directly or indirectly, of DEALER's operations
from a facility other than a facility and location
specifically approved in Addendum B, without the prior
written consent of PETERBILT;
b. Any sale or transfer, by operation of law or otherwise, of
any of the location(s) approved in Addendum B or of
substantially all of the assets required in the conduct of
DEALER's operations, without the prior written consent of
PETERBILT;
c. Any dispute, disagreement or controversy between or among
Owners, DEALER PRINCIPALS, officers or managers of DEALER
which, in the sole opinion of PETERBILT, adversely affects
the operations, management, reputation or business interests
of DEALER or PETERBILT or the reputation of PETERBILT's
PRODUCTS;
d. Any refusal to permit PETERBILT to examine or audit DEALER's
accounts and records as provided in Article V upon receipt
by DEALER of written notice from PETERBILT requesting such
permission or information;
e. Repeated failure of DEALER to furnish timely sales or
financial information and related data;
f. Failure of DEALER to establish or maintain required net
working capital or adequate wholesale credit lines;
g. Failure of DEALER to pay PETERBILT for any PRODUCTS in
accordance with the terms and conditions of sale;
h. Failure of DEALER to accept an amended form of the AGREEMENT
or renewal within thirty (30) days after its presentation to
DEALER if the AGREEMENT is substantially the same as offered
and accepted by a substantial majority of PETERBILT dealers
or if any applicable law or regulation, or any new
interpretation thereof indicates that a change in any of the
provisions of the AGREEMENT is necessary or desirable;
Page 8 of 13
14
i. Entry by DEALER into a written agreement to sell and service
vehicles for another truck manufacturer at an exclusive
facility identified in Addendum B;
j. Other than performance failures set out below in Article
VIII.B.3, any other failure to comply with material
provisions of the AGREEMENT and/or minimum standards set
forth in Addenda to the AGREEMENT.
3. Termination For Failure of Performance on Ninety (90) Days
Notice. If, upon evaluation of DEALER's performance pursuant to
Addenda B and C, PETERBILT determines that DEALER has failed to
perform adequately its sales responsibilities or to provide
adequate facilities, PETERBILT will review promptly with DEALER
the nature and extent of such failure(s). PETERBILT will notify
DEALER in writing of DEALER's failure of performance and will
grant DEALER one hundred eighty (180) days from the date of such
notice to correct such failure(s). If DEALER 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, PETERBILT may terminate this AGREEMENT upon ninety (90)
days notice.
4. Termination Based on Market Withdrawal. This AGREEMENT will
terminate upon the effective date of PETERBILT's ceasing to
manufacture or sell PRODUCTS subject to any notice requirements
under applicable federal or state laws.
5. Termination Upon Death or Incapacity. PETERBILT will have the
right to terminate this AGREEMENT in the event of the death or
incapacity of any Owner or DEALER PRINCIPAL identified in
Addendum D, upon ninety (90) days written notice to DEALER.
Notwithstanding its right to terminate under this paragraph 5,
PETERBILT agrees to permit succession to majority ownership or
DEALER PRINCIPAL by any person provided they are approved as an
Owner or DEALER PRINCIPAL by PETERBILT in accordance with the
then current policies and procedures of PETERBILT. Provided
DEALER is not then in default under any of the provisions of this
Article VIII, Company also will grant DEALER one hundred eighty
(180) days from the date of such death or incapacity to submit a
succession plan for PETERBILT's approval.
C. EFFECTIVE DATE OF TERMINATION. If any period of notice of termination
required under this Article VIII is less than that required by
applicable law, the period of notice required will be deemed to be the
minimum period required by such law.
D. EFFECT OF TERMINATION.
1. The Right to Purchase PRODUCTS. Upon sending any notice of
termination, expiration or non-renewal, PETERBILT will have no
further obligation to sell and DEALER will have no right to
purchase any PRODUCTS. Any decision to permit DEALER to purchase
PRODUCTS thereafter will be in PETERBILT's sole discretion and
will not be construed as a waiver of the termination or a
renewal, extension or continuation of this AGREEMENT. Upon the
expiration or prior termination of this AGREEMENT, PETERBILT will
have the right to cancel any and all pending requests by DEALER
to purchase PRODUCTS and any shipments scheduled for delivery to
DEALER.
Page 9 of 13
15
2. Repurchase of PRODUCTS.
a. PETERBILT's Obligations. Upon expiration, non-renewal or
termination of this AGREEMENT, PETERBILT will repurchase
from DEALER the following PRODUCTS which DEALER initially
purchased from PETERBILT or from a source designated by
PETERBILT:
(i) New, unused, unmodified and undamaged current model
PETERBILT Vehicles then in DEALER's inventory. The
repurchase price will be the original purchase price
paid by DEALER, less all prior refunds or other
allowances made by PETERBILT to DEALER with respect
to the original purchase (and less standard freight
charges).
(ii) New, unused and undamaged Genuine Parts and
Accessories then in DEALER's inventory which are in
good and saleable condition, provided that they are
listed in the then current PETERBILT Dealer Parts
Price List. The prices for such Genuine Parts and
Accessories will be the prices last established by
PETERBILT for dealers in the area in which DEALER is
located (less standard re-stocking and freight
charges).
(iii) Tools and equipment required by PETERBILT and then
owned by DEALER especially designed for servicing
PETERBILT Vehicles. The purchase prices for tools
and equipment will be the price paid by DEALER less
appropriate depreciation or such other price as the
parties may negotiate.
PETERBILT shall have no obligation to repurchase
PRODUCTS as provided herein in the event DEALER and
PETERBILT agree to renew this AGREEMENT.
b. DEALER's Responsibilities. DEALER's right to reimbursement
under Article VIII.D.2.a is contingent upon the following:
(i). Within thirty (30) days after the date of expiration
or the effective date of termination of this
AGREEMENT, DEALER will request PETERBILT in writing
to purchase the qualifying inventory and tools and
will provide PETERBILT with a detailed and accurate
list of such inventory and tools. After receiving
the list, PETERBILT may, in its discretion, enter
upon DEALER's premises to verify the inventory and
tools as qualifying under Article VIII.D.2.a.
(ii) DEALER agrees to execute and deliver to PETERBILT
instruments satisfactory to PETERBILT conveying good
and marketable title to the inventory and tools as
PETERBILT may require. If such property is subject
to any lien or charge of any kind, DEALER agrees to
secure the discharge and satisfaction thereof prior
to the repurchase of the inventory and tools.
(iii) DEALER agrees to allow PETERBILT to remove, at its
own expense, all signage bearing PETERBILT
Trademarks before DEALER is eligible for payment
hereunder.
c. Payment by PETERBILT. PETERBILT will make payment for all
repurchased items as soon as practicable upon DEALER's
compliance with the obligations set forth in Article
VIII.D.2.b, above. Any amount due DEALER at termination
shall be fully subject to set-off against any amounts owed
PETERBILT by DEALER.
Page 10 of 13
16
IX. VOLUNTARY ARBITRATION OF DISPUTES
In order to encourage DEALER and PETERBILT to resolve disputes in an
efficient and inexpensive manner, DEALER and PETERBILT may mutually agree
that any disputes, protests, controversies or claims, whether for damages,
stays of action or otherwise, ("Disputes"), may be resolved by arbitration.
If DEALER and PETERBILT agree to arbitrate a Dispute, it shall be subject
to arbitration under the following procedures:
A. FILING CLAIM. Unless otherwise agreed, arbitration may be initiated by
DEALER filing a written request therefor no later than sixty (60) days
after PETERBILT and DEALER have agreed to resolve the Dispute by
arbitration. DEALER's written request to arbitrate, together with the
appropriate filing fee, shall be filed by DEALER with the Office of
the American Arbitration Association located nearest to the DEALER,
which shall then become the site of the arbitration proceedings,
unless otherwise agreed between the parties. The arbitration request
should state clearly and completely the nature of DEALER's claim and
its basis, the amount involved, if any, and the remedies sought.
B. EXCLUSIVE REMEDY. Unless the parties specifically agree otherwise at
the time they elect to arbitrate the Dispute, arbitration shall be the
sole and exclusive remedy of DEALER for that Dispute, and the decision
and award of the arbitrator shall be final and binding on both
parties. At DEALER's request, PETERBILT will agree to mediation of the
Dispute prior to binding and final arbitration.
C. PROCEDURES. The arbitration and/or mediation will be conducted in
accordance with the Commercial Rules of the American Arbitration
Association then in effect (hereinafter referred to as the "Commercial
Rules"), except as modified by mutual agreement of the parties, and in
compliance with the United States Arbitration Act (9 U.S.C. Section 1,
et. seq.).
D. CHOICE OF ARBITRATOR. Unless the DEALER at its option requests three
(3) arbitrators, the arbitration shall be heard by a single arbitrator
mutually agreeable to the parties, who, unless the parties agree
otherwise, shall be an attorney at law admitted to practice for at
least ten (10) years with substantial commercial experience and
selected from a panel of American Arbitration Association arbitrators.
If the parties fail to reach agreement within fifteen (15) days of the
DEALER's request to arbitrate, an arbitrator (or three arbitrators, if
the DEALER so elects) meeting these qualifications shall be named by
the American Arbitration Association from such panel in accordance
with the Commercial Rules, provided that the arbitrator(s) selected
shall not have previously provided legal representation in litigation
between motor vehicle manufacturers and motor vehicle dealers.
E. ARBITRATOR'S AWARD. If the arbitrator finds that PETERBILT has acted
in accordance with provisions of this AGREEMENT, the standards set
forth in 15 U.S.C. Sections 1221-1225 (the "Dealer's Day in Court
Act"), and any applicable federal, state or local law, the arbitrator
shall render an award in favor of PETERBILT. If the award in favor of
PETERBILT relates to termination or nonrenewal of this AGREEMENT, the
termination or nonrenewal shall be expressly recognized by DEALER as
having been made without breach by PETERBILT of the AGREEMENT, the
Dealer's Day in Court Act, or any applicable federal, state or local
law. The termination or nonrenewal shall then become effective on the
date of the award. If the arbitrator renders an award in favor of
DEALER relating to a Dispute involving termination, PETERBILT's notice
of termination shall be void and shall not be deemed to constitute a
breach of this AGREEMENT. The arbitrator shall not have the authority
to award punitive damages for any Dispute or to impose remedies
unavailable in a court of law. The decision and award of the
arbitrator shall be conclusive as to all matters within the
arbitrator's jurisdiction in all other proceedings between parties,
their successors or assigns, and judgment upon the award may be
entered in any Court of competent jurisdiction.
Page 11 of 13
17
F. PAYMENT OF FEES. The parties agree to compensate the arbitrator
commensurate with the professional standing of the arbitrator and in
accordance with the Commercial Rules. The compensation of the
arbitrator, the administrative fees and charges of the American
Arbitration Association, and the other expenses of the arbitration
shall be borne equally by the parties and each party shall bear its
own legal fees, provided that in all cases in which the DEALER is
entitled to recovery of its legal fees under applicable state or
federal law, PETERBILT shall pay such fees.
G. TIME PERIOD. Unless PETERBILT and DEALER specifically agree to the
contrary, and subject to the Commercial Rules and the procedures of
the American Arbitration Association, the arbitration hearing shall be
concluded not more than one hundred and eighty (180) days after the
date of DEALER's written request to arbitrate.
X. DEFENSE AND INDEMNIFICATION BY PETERBILT
PETERBILT will assume the defense of DEALER and agrees to indemnify and
hold DEALER harmless in any legal proceeding naming DEALER as a defendant
and involving any PRODUCT when the proceeding involves allegations of:
breach of warranty, or a defect in manufacture or design; provided that
PETERBILT has available sufficient evidence to support the conclusion that
DEALER has not done or failed to do any act which would provide an
independent basis for any allegations of liability against DEALER. DEALER
agrees to cooperate fully in developing the facts necessary for defense of
the lawsuits whether or not DEALER remains a party. The obligations of the
parties set forth in this Article X shall survive the termination of this
AGREEMENT.
XI. MISCELLANEOUS PROVISIONS
A. ENTIRE AGREEMENT. This AGREEMENT and Addenda constitute the entire
AGREEMENT made by the parties and cancels and supersedes any and all
previous agreements relating to the subject matters covered herein.
B. AMENDMENT. No amendment of any portion of this AGREEMENT will be valid
or binding unless approved in writing by an authorized representative
of each of the parties.
C. COLLATERAL ASSIGNMENT. DEALER may not pledge, assign, hypothecate, or
grant a security interest in, this AGREEMENT or DEALER's right, title
or interest therein.
D. SEVERABILITY. If any term or provision of this AGREEMENT is adjudged
by any court or government agency to be invalid, void or
unenforceable, such term or provision will be deemed deleted from this
AGREEMENT and the remaining provisions thereof will continue in full
force and effect.
E. GOVERNING LAW. This AGREEMENT will be governed and construed according
to the laws of the state in which DEALER is located. To the extent a
valid law of any jurisdiction requires any obligations or rights under
this AGREEMENT to be exercised other than in accordance with this
AGREEMENT, the rights and obligations shall be exercised in accordance
with such law. All provisions of this AGREEMENT shall be construed in
light of this paragraph.
F. WAIVERS. Any failure of either party at any time to require
performance by the other party of any provision herein will not be
deemed to be a waiver by such party of any subsequent breach or
violation of the same or any other provision.
G. NOTICES. Any notice required to be given by either party to the other
under or in connection with this AGREEMENT will be in writing and
delivered personally or by certified mail, return receipt requested
and will be effective from the date of receipt.
Page 12 of 13
18
H. NEW AND SUPERSEDING DEALER AGREEMENTS. In the event any new and
superseding form of this AGREEMENT is offered by PETERBILT to all
authorized PETERBILT dealers at any time prior to the expiration of
the term of this AGREEMENT, and a substantial majority (no fewer than
sixty-five percent (65%) of PETERBILT dealers) accept it, PETERBILT
may, by written notice to DEALER, terminate this AGREEMENT and replace
it with a new AGREEMENT in the new and superseding form for a term not
less than the then unexpired term of this AGREEMENT. In that event,
such termination shall be effective, without further notice, upon the
earlier of: (1) execution of a new and superseding form of this
AGREEMENT by DEALER; or (ii) thirty (30) days after a new AGREEMENT is
offered and sent to DEALER for execution.
I. INDEPENDENT ENTITY. DEALER is not PETERBILT's agent in any respect and
has not been granted any express or implied authority to incur
obligations or make representations binding upon PETERBILT.
By their signatures hereto, PETERBILT and DEALER agree to abide by the terms and
conditions of this AGREEMENT in good faith and for their mutual benefit.
. PETERBILT MOTORS COMPANY
-----------------------------
By: By:
------------------------ ------------------------------
X.X. Xxxx XX Xxxxxxxx X. Xxxxx
Title: Chairman & CEO Title: General Manager
Date Date: October 5, 1997
-------------
Page 13 of 13
19
ADDENDUM A
PRODUCTS
--------------------------------------
-----------------
Effective ___________, DEALER has a non-exclusive right to buy the following
Vehicles:
Heavy Duty Models 320, 362, 357, 377, 378, 379, 385 and Medium Duty Model 330
trucks/tractors bearing the name "Peterbilt" and Genuine Parts and Accessories
consisting of new parts, components and accessories manufactured by or for
PETERBILT and/or the PACCAR Parts division of PACCAR Inc, designed primarily for
use on such Vehicles (the Vehicles and their Genuine Parts and Accessories are
referred to in the Dealer Sales and Service Agreement collectively as
"PRODUCTS").
This Addendum shall remain in full effect until superseded by a new Addendum A
furnished DEALER by PETERBILT. This Addendum A cancels and supersedes any
previous Addendum A.
PETERBILT MOTORS COMPANY
By:
------------------------------
Xxxxxxxx X. Xxxxx
Title: General Manager
Date: October 5, 1997
Page 1 of 1
20
ADDENDUM B
DEALERSHIP LOCATION AND FACILITY STANDARDS
----------------------.
PETERBILT has entered into this Agreement in reliance upon DEALER's
representation that it will establish and maintain DEALER facilities and
operations only at the following location(s) identified in this Addendum:
Main: _______________ Exclusive Heavy Duty Yes
____________________ Exclusive Medium Duty: Yes
Facility Type: Full Service
Moreover, it is the mutual desire of DEALER and PETERBILT that DEALER's
facilities reflect a premium image and distinctive appearance consistent with
all other duly authorized PETERBILT dealers. DEALER agrees that the facilities
will at all times be in compliance with standards set forth in this Addendum, as
amended from time to time.
DEALER further agrees to the following:
1. Operating Hours. DEALER will maintain its DEALER operations open for
business during 5.5 days per week and 16 hours per day which are customary
and lawful for truck dealers where DEALER is located.
2. Signs. Subject to applicable law, DEALER will erect and maintain at the
DEALER location(s), at DEALER's expense, standard product and service signs
owned by PETERBILT, as well as such other signs authorized by PETERBILT as
are necessary to identify the DEALER Operations effectively and as
recommended by PETERBILT. DEALER shall in no way alter or modify the signs
without obtaining prior written approval from PETERBILT.
3. Computer Systems. DEALER will acquire, install, maintain and upgrade at
DEALER's sole expense, standardized electronic data processing systems,
business systems, communication systems and appropriate software compatible
with PETERBILT's systems. The computer terminals for the system will be
installed and maintained by DEALER at location(s) identified herein.
Furthermore, DEALER will use the systems in accordance with PETERBILT's
instructions.
4. Evaluation of DEALER Facilities. PETERBILT will periodically evaluate
DEALER's facilities in accordance with the terms of this Addendum.
PETERBILT will provide DEALER with a written evaluation.
DEALER will maintain a facility which will reflect favorably upon and preserve
the goodwill of DEALER, PETERBILT and all other PETERBILT dealers and which will
meet PETERBILT's current minimum facilities standards as to size, cleanliness,
appearance, features, Peterbilt signage and corporate identity. DEALER shall use
the Peterbilt name in its legal name and/or a dba in a manner or form subject to
PETERBILT's prior approval. At such time as sales show the requirement for
additional facilities within the geographic area used by PETERBILT to establish
DEALER's sales quotas for Vehicles and Genuine Parts and Accessories, DEALER may
be expected to establish outlets in additional locations with the prior written
approval of PETERBILT.
It is agreed that each facility shall meet the following minimum standards:
(1) At least 20 service bays adequate for servicing heavy-duty trucks.
(2) 10,040 square feet for parts storage with adequate racking of which
800 square feet will be used for visual display.
(3) Adequate tools for heavy equipment maintenance including the
following: N/A.
Page 1 of 2
21
For facilities designated as "exclusive" in this Addendum, DEALER agrees that
the facility will be dedicated to selling and servicing PETERBILT PRODUCTS and
DEALER acknowledges that PETERBILT has entered into this AGREEMENT in reliance
on DEALER's representation to provide and maintain an exclusive facility which
will not be used by DEALER to represent competitive truck manufacturers.
For nonexclusive facilities approved by PETERBILT, DEALER recognizes that if it
engages in other business activities in the facilities and/or on the DEALER
location(s), the facilities necessary for the sale and servicing of PRODUCTS may
be adversely affected. For these reasons, DEALER agrees that it will not
substantially modify, relocate, change the usage of, reduce or expand the DEALER
location(s) or the facilities without PETERBILT's prior approval.
All changes in the DEALER location(s) and facilities that may be agreed upon by
DEALER and PETERBILT pursuant to this Addendum shall be reflected in a new
Addendum B which supersedes and cancels the existing Addendum B.
- PETERBILT MOTORS COMPANY
-----------------------------------
By: By:
------------------------------ ------------------------------
X.X. Xxxx XX Xxxxxxxx X. Xxxxx
Title: Chairman & CEO Title: General Manager
Date: October 5, 1997 Date: October 5, 1997
Page 2 of 2
22
ADDENDUM C
OPERATING REQUIREMENTS, PERFORMANCE GOALS AND SALES/SERVICE EVALUATION
OPERATING REQUIREMENTS. DEALER agrees to meet the following minimum operating
requirements to order, sell, and service PETERBILT Vehicles. DEALER will:
1. Employ at all times a minimum of 10 qualified salespeople who have
completed the training required to sell Vehicles and also employ a minimum
of 10 qualified and trained salespeople to sell other PRODUCTS.
2. Maintain a minimum inventory of at least 8 new and unused PETERBILT Heavy
Duty Vehicles and 2 new and unused PETERBILT Medium Duty Vehicles in stock
or on order for stock.
3. Employ at all times a minimum of 20 qualified service personnel who have
sufficient training to perform routine diesel truck maintenance and
overhaul procedures.
4. Purchase and maintain the recommended inventory of special tools necessary
for servicing the PETERBILT Vehicles.
5. Purchase and maintain a minimum parts inventory of PETERBILT Genuine Parts
and Accessories. The anticipated investment for these parts is
approximately $1,300,000. Inventory records will be maintained and
available to support this requirement.
Where this Dealer Sales and Service Agreement covers multiple locations, minimum
operating requirements for each location may be set forth in an attachment to
this Addendum.
PERFORMANCE GOALS, SALES AND SERVICE EVALUATIONS. PETERBILT will evaluate
DEALER's sales and service performance periodically and agrees to review such
evaluations with DEALER so that DEALER may take prompt action if necessary to
improve its sales and service performance. PETERBILT will provide DEALER with a
copy of such evaluation. PETERBILT will evaluate DEALER's performance based on
criteria set forth in Article II.A.2. of the Dealer Sales and Service Agreement
and this Addendum C, including but not limited to:
1. Achievement of fair and reasonable PERFORMANCE GOALS as PETERBILT may
establish at its discretion;
2. The trend of DEALER's sales and service performance over a reasonable
period of time;
3. The manner in which DEALER has conducted its sales and service operations,
including advertising, sales promotions and customer relations.
IT IS AGREED THAT DEALER'S PERFORMANCE GOALS FOR 2000 ARE:
HEAVY DUTY VEHICLES 2212
MEDIUM DUTY VEHICLES 360
PARTS TBD
These performance goals are established in reliance on the DEALER's commitment
to promote maximum sales in the non-exclusive area consisting of the following
counties in the State of _____.
For Medium Duty products these performance goals are established in reliance on
the DEALER'S commitment to promote maximum sales in the non-exclusive area
consisting of ______county _____.
Page 1 of 2
23
Upon providing DEALER one hundred and eighty (180) days prior written notice,
PETERBILT may in its sole discretion alter the area described above at any time
by written notice to DEALER and/or appoint additional dealers in the area
without altering the area.
DEALER may sell outside this area and other PETERBILT dealers may sell into the
area from approved locations. If PETERBILT uses this area in part or in whole to
establish performance goals for another PETERBILT dealer, the performance goals
established for DEALER in this AGREEMENT shall be adjusted accordingly.
In addition, DEALER agrees to take the following actions in the time period
stated below in order to improve dealership operations:
ACTION COMPLETION DATE
General: DEALER agrees the following counties will be deleted from
DEALER's area of primary marketing responsibility at the
sole discretion of PETERBILT to establish a Central Texas
primary marketing area: Xxxxxxxx, Brazos, Freestone,
Houston, Leon, Madison, and Xxxxxxxxx.
PETERBILT MOTORS COMPANY
---------------------------
By: By:
---------------------- ------------------------------
X.X. Xxxx XX Xxxxxxxx X. Xxxxx
Title: Chairman & CEO Title: General Manager
Date: January 4, 2000 Date: January 4, 2000
Page 2 of 2
24
ADDENDUM D
STATEMENT OF OWNERSHIP AND FINANCIAL AND MANAGEMENT STANDARDS
STATEMENT OF OWNERSHIP AND MANAGEMENT. This Addendum is executed effective as of
_____________ pursuant to Articles I and IV of the Agreement. PETERBILT enters
into the Agreement in reliance upon personnel qualifications, representations
and present financial condition of the persons identified below and upon
DEALER's assurances that the following persons and only the following persons
will be the owners of DEALER.
Name Title Percent Ownership
---- ----- -----------------
Rush Enterprises, Inc. *a Public Owned Corporation 100%
DEALER recognizes that the effective performance of its obligations require that
experienced DEALER management be actively involved in DEALER operations at all
times. PETERBILT enters into this DEALER Sales and Service Agreement in reliance
upon the qualifications of to participate actively in the daily operation and
management of DEALER and upon DEALER's assurance that such person(s), and no
other person(s), will at all times function as DEALER PRINCIPAL(S) and/or
OPERATING MANAGER(S) and be considered as the individual(s) with complete
authority to make all decisions on behalf of DEALER with respect to DEALER's
operations.
NET WORKING CAPITAL. DEALER agrees to establish and maintain actual net working
capital in an amount not less than the minimum net working capital requirements
as determined by PETERBILT financial standards for dealership capitalization.
DEALER further agrees to invest or obtain additional funds within a reasonable
period of time to meet such minimum net working capital requirements.
WHOLESALE CREDIT. DEALER recognizes that in order to operate successfully, it
must maintain flooring lines of credit adequate to meet its ongoing obligations.
Accordingly, DEALER agrees to obtain, maintain and increase as PETERBILT may
require, adequate flooring and lines of credit from reputable financial
institution(s) or other credit source expressly approved by PETERBILT.
DEFAULT IN PAYMENT. Should DEALER when payment is due fail to pay for, or fail
to obtain financing to pay for, any PRODUCTS ordered by DEALER, PETERBILT may,
with respect to any such PRODUCTS, take any of the following actions:
(a) Store them at the sole risk and expense of DEALER;
(b) Cause them to be shipped elsewhere (including returning the same to
PETERBILT) at DEALER's expense, including expenses for storing,
handling, and shipping; or
(c) Sell them directly to any other PETERBILT dealer or other party, all
expenses or losses occasioned thereby to be borne by DEALER.
FINANCIAL MANAGEMENT PERSONNEL ASSISTANCE. PETERBILT agrees to make available
field personnel who will periodically advise DEALER on subjects relating to
financial management of DEALER.
OTHER FINANCIAL STANDARDS. DEALER agrees to comply with all other PETERBILT
financial standards, including changes or additions thereto, published by
PETERBILT from time to time. PETERBILT agrees that DEALER will have a reasonable
period of time to comply with changes or additions to PETERBILT financial
standards.
PETERBILT MOTORS COMPANY
----------------------------------
By: By:
----------------------------- ------------------------------
X.X. Xxxx XX Xxxxxxxx X. Xxxxx
Title: Chairman & CEO Title: General Manager
Date: October 5, 1997 Date: October 5, 1997
Page 1 of 1
25
ADDENDUM E
RIGHT OF FIRST REFUSAL
This Addendum to the Dealer Sales and Service Agreement between PETERBILT and
DEALER is entered into as of the date set forth below.
WHEREAS, DEALER desires to have PETERBILT provide assistance in identifying
potential buyers in the event DEALER decides to sell its business, or any branch
thereof (and DEALER has not otherwise entered into an agreement with PETERBILT
governing succession); and
WHEREAS, PETERBILT desires to have an option to purchase and a right of first
refusal in the event DEALER decides to sell its business, or any branch thereof;
NOW, therefor, in consideration of the promises and mutual covenants of the
parties hereinafter set forth, it is agreed as follows:
1. DEALER shall give PETERBILT notice in writing before undertaking any
efforts to sell the dealership. The notice will contain a description of
the assets to be sold, the proposed selling price, and other terms relevant
to the sale. Upon request, PETERBILT agrees to provide assistance to DEALER
in locating buyer candidates acceptable to both PETERBILT and DEALER,
although DEALER shall independently negotiate any buy/sell agreement.
PETERBILT also agrees to make best efforts to conditionally approve
potential buyers to facilitate DEALER'S negotiations. Upon conditionally
approving a specific buyer, PETERBILT will waive its right of first refusal
as to that buyer.
2. In the event PETERBILT refuses to approve DEALER's proposed transfer or
sale of any ownership interest in the dealership, PETERBILT shall have
under Paragraph 4 herein, the right of first refusal in the event the
DEALER has entered into a written buy/sell agreement or, under Paragraph 5
herein, an option to purchase the dealership assets, including any
leasehold interest or realty, if the DEALER has not yet entered into such
an agreement.
3. If PETERBILT intends to exercise its right of first refusal and/or option
to purchase the dealership, it must so advise DEALER in writing of its
decision within thirty (30) days of receiving the DEALER'S written request
for approval of sale or transfer to a bona fide buyer identified in
DEALER's request. DEALER agrees that PETERBILT shall have the right to
assign its right to exercise its option to purchase or right of first
refusal to any third party it may select and PETERBILT hereby guarantees
the full payment of the purchase price by such assignee.
4. If PETERBILT has refused to approve the transfer or sale of DEALER'S
ownership or assets and DEALER has entered into a bona fide arms length
written agreement governing such transfer or sale, PETERBILT'S right under
this paragraph shall be a right of first refusal, permitting PETERBILT to
assume the buyer's rights and obligations under such written agreement. The
purchase price and other terms of sale shall be those set forth in such
agreement and any related documents. PETERBILT may request and DEALER
agrees to provide any and all supporting documents relating to the transfer
or sale which PETERBILT may require to assess the bona fides of the
agreement. Refusal to provide such documentation or to state that no such
documents exist shall create the presumption that the buy/sell agreement is
not a bona fide agreement.
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5. If PETERBILT has refused to approve the transfer or sale of DEALER'S
ownership or assets and DEALER has not entered into a bona fide arms length
written agreement governing such transfer or sale, then PETERBILT shall
have the option to purchase the principal tangible and intangible assets of
DEALER used in the dealership operations, including real estate and/or
leasehold interest, and to terminate the Dealer Sales and Service
Agreement. The purchase price for the dealership shall be the fair market
value of the business as negotiated by the parties.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the date set
forth below.
PETERBILT MOTORS COMPANY
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By: By:
----------------------------- -----------------------------------
X.X. Xxxx XX Xxxxxxxx X. Xxxxx
Title: Chairman & CEO Title: General Manager
Date: October 5, 1997 Date: October 5, 1997
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