EX-10
Exhibit 10.15.2 Nissan Standard Provisions
EXHIBIT 10.15.2
NISSAN
DEALER SALES & SERVICE AGREEMENT
The following Standard Provisions have by reference been incorporated
in and made a part of the Nissan Dealer Sales & Service Agreement which they
accompany and which has been executed on behalf of Seller and Dealer.
1. Definitions
Seller and Dealer agree that the following terms, as used in this
Agreement, shall be defined exclusively as set forth below.
A. "Authorized Nissan Dealers" shall mean dealers located in the
Territory that are authorized by Seller to conduct Dealership Operations in
connection with the sale of Nissan Products, pursuant to a duly executed
Nissan Dealer Sales and Service Agreement.
B. "Nissan Cars" shall mean the new passenger cars specified in the
current Product Addendum.
C. "Nissan Trucks" shall mean the new trucks, cab and chassis,
utility vehicles, buses or vans specified in the current Product Addendum.
D. "Nissan Vehicles" shall mean Nissan Cars and Nissan Trucks.
E. "Genuine Nissan Parts and Accessories" shall mean such parts,
accessories and other products for Nissan Vehicles as are from time to time
offered for sale by Seller to Authorized Nissan Dealers for resale under this
Agreement.
F. "Nissan Products" shall mean Nissan Vehicles and Genuine Nissan
Parts and Accessories.
G. "Competitive Vehicles" shall mean those new vehicles which are
considered by Seller to be directly competitive with Nissan Vehicles.
H. "Industry Cars" shall mean all new cars of all manufacturers
which are sold and distributed within the United States, to the extent data
relating to registration thereof are reasonably available.
I. "Competitive Truck Segment" shall include all compact pickup
trucks, compact utility vehicles, and compact buses of all manufacturers
which are sold and distributed within the United States, to the extent data
relating to registration thereof are reasonably available.
J. "Dealership Location" shall mean the place or places of business
of Dealer established and described in accordance with Section 2 of this
Agreement.
K. "Dealership Facilities" shall mean the land areas at the
Dealership Location and the buildings and improvements erected thereon
provided by Dealer in accordance with Section 2 of this Agreement.
L. "Dealership Facilities Addendum" shall mean the addendum executed
by Seller and Dealer pursuant to Section 2 of this Agreement.
M. "Dealership Operations" shall mean all dealer functions
contemplated by this Agreement including, without limitation, sale and
servicing of Nissan Products, use and display of Nissan Marks and Nissan
Products, rental and leasing of Nissan Vehicles, sales of used vehicles, body
shop work, financing or insurance services and any other activities
undertaken by Dealer in connection with Nissan Products whether conducted
directly or indirectly by Dealer.
N. "Primary Market Area" shall mean the geographic area which is
designated from time to time as the area of Dealer's sales and service
responsibility for Nissan Products in a Notice of Primary Market Area issued
by Seller to Dealer. Seller reserves the right, in its reasonable
discretion, to issue new, superseding "Notices of Primary Market Area" to
Dealer from time to time. Such geographic area may at any time be applicable
to Dealer and to other Authorized Nissan Dealers.
O. "Principal Owner(s)" shall mean the person(s) named as Principal
Owner(s) in the Final Article of this Agreement upon whose personal
qualifications, expertise, reputation, integrity, experience, ability and
representations concerning the management and operation of Dealer, Seller has
relied in entering this Agreement.
1
P. "Other Owner(s)" shall mean the person(s) named as Other Owner(s)
in the Final Article of this Agreement who will not be involved in the
operation or management of Dealer.
Q. "Executive Manager" shall mean the person named as Executive
Manager in the Final Article of this Agreement upon whose personal
qualifications, expertise, reputation, integrity, experience, ability and
representations that he or she shall devote his or her primary efforts to and
have full managerial authority and responsibility for the day-to-day
management and performance of Dealer, Seller has relied in entering into this
Agreement.
R. "Successor Addendum" shall mean the Successor Addendum, if any,
executed by Seller and Dealer pursuant to Section 14 of this Agreement.
S. "Guides" shall mean such reasonable standards as may be
established by Seller for Authorized Nissan Dealers from time to time under
its standard procedures with respect to such matters as dealership
facilities, tools, equipment, financing, capitalization, inventories,
operations and personnel. The execution of this Agreement or of any addenda
hereto (including, without limitation, any Dealership Facilities Addendum)
shall not, however, be construed as evidence of Dealer's fulfillment of or
compliance with said Guides or of Dealer's fulfillment of its
responsibilities under this Agreement.
T. "Warranty Manual" shall mean the publication or publications of
Seller, as the same may from time to time be amended, revised or
supplemented, which set forth Seller's policies and procedures concerning the
administration of Seller's warranties and related matters.
U. "Nissan Marks" shall mean those trademarks, service marks, names,
logos and designs that Seller may, from time to time, use or authorize for
use by Dealer in connection with Nissan Products or Dealership Operations
including, without limitation, the name "Nissan."
V. "Seller's Manuals and Instructions" shall mean those bulletins,
manuals or instructions issued by Seller to all Authorized Nissan Dealers
advising them of Seller's policies or procedures under this Agreement
including, without limitation, the Parts and Accessories Policy and
Procedures Manual and the Nissan Dealer Accounting System Manual.
W. "Territory" shall mean the geographic area in which Seller has
been authorized by Manufacturer to distribute Nissan Products.
X. "Product Addendum" shall mean the Product Addendum issued by
Seller to Dealer which specifies those Nissan Vehicles which shall be offered
for sale by Seller to Dealer for resale. Seller reserves the right, in its
sole discretion, to issue new, superseding Product Addenda to Dealer from
time to time.
Y. "Dealer Identification Addendum" shall mean the Dealer
Identification Addendum executed by Seller and Dealer pursuant to Section 6.C
of this Agreement.
2. Dealership Location and Dealership Facilities
A. Location and Facilities. Dealer shall provide, at the Dealership
Location approved by Seller in accordance with Section 2.B hereof, Dealership
Facilities that will enable Dealer to effectively perform its
responsibilities under this Agreement and which are reasonably equivalent to
those maintained by Dealer's principal competitors in the geographic area in
which Dealer's Primary Market Area is located. In addition, the Dealership
Facilities shall be satisfactory in space, appearance, layout, equipment,
signage and otherwise be substantially in accordance with the Guides therefor
established by Seller from time to time. Dealer shall conduct its Dealership
Operations only from the Dealership Location specified in the Dealership
Facilities Addendum. If the Dealership Location is comprised of more than
one place of business, Dealer shall use each such place of business only for
the purposes specified therefor in the current Dealership Facilities Addendum.
B. Dealership Facilities Addendum. Dealer and Seller will execute a
Dealership Facilities Addendum which will include a description of the
Dealership Location and the Dealership Facilities, the approved use for each
such place of business and facility, and the current Guides therefor.
C. Changes and Additions. Dealer shall not move, relocate, or
change the usage of the Dealership Location or any of the Dealership
Facilities, or substantially modify any of the Dealership Facilities, nor
shall Dealer or any person named in the Final Article of this Agreement
2
directly or indirectly establish or operate any other locations or facilities
for the sale or servicing of Nissan Products or for the conduct of any other
of the Dealership Operations contemplated by this Agreement, without the
prior written consent of Seller. Any changes in the Dealership Location or
the Dealership Facilities that may be agreed to by Seller and Dealer shall be
reflected in a new, superseding Dealership Facilities Addendum executed by
Seller and Dealer.
D. Assistance Provided by Seller. To assist Dealer in planning,
establishing and maintaining the Dealership Facilities, Seller, at the
request of Dealer, will from time to time make its representatives available
to Dealer to provide standard building layout plans, facility planning
recommendations, and counsel and advice concerning location and facility
planning.
E. Evaluation of Dealership Facilities and Location. Seller will
periodically evaluate Dealer's performance of its responsibilities under this
Section 2. In making such evaluations, Seller will give consideration to:
the actual land and building space provided by Dealer for the performance of
its responsibilities under this Agreement; the current Guides established by
Seller for the Dealership Facilities; the appearance, condition and layout of
the Dealership Facilities; the location of the Dealership Facilities relative
to the sales opportunities and service requirements of the Primary Market
Area; equivalence with facilities maintained by Dealer's principal
competitors; and such other factors, if any, as may directly relate to
Dealer's performance of its responsibilities under this Section 2.
Evaluations prepared pursuant to this Section 2.E will be discussed with and
provided to Dealer, and Dealer shall have an opportunity to comment, in
writing, on such evaluations, and Seller will consider Dealer's comments.
Dealer shall promptly take such action as may be required to correct any
deficiencies in Dealer's performance of its responsibilities under this
Section 2.
3. Vehicle Sales Responsibilities of Dealer
A. General Obligations of Dealer. Dealer shall actively and
effectively promote through its own advertising and sales promotion
activities the sale at retail (and if Dealer elects, the leasing and rental)
of Nissan Vehicles to customers located within Dealer's Primary Market Area.
Dealer's Primary Market Area is a geographic area which Seller uses as a tool
to evaluate Dealer's performance of its sales obligations hereunder. Dealer
agrees: that it has no right or property interest in any such geographic area
which Seller may designate; that, subject to Section 4 of this Agreement,
Seller may add, relocate or replace dealers in Dealer's Primary Market Area;
and that Seller may, in its reasonable discretion, change Dealer's Primary
Market Area from time to time.
B. Sales of Nissan Cars and Nissan Trucks. Dealer's performance of
it sales responsibility for Nissan Cars and Nissan Trucks will be evaluated
by Seller on the basis of such reasonable criteria as Seller may develop from
time to time, including for example:
1. Achievement of reasonable sales objectives which may be
established from time to time by Seller for Dealer as standards for
performance;
2. Dealer's sales of Nissan Cars and Nissan Trucks in Dealer's
Primary Market Area and/or the metropolitan area in which Dealer is located,
as applicable, or Dealer's sales as a percentage of:
(i) registrations of Nissan Cars and Nissan Trucks;
(ii) registrations of Competitive Vehicles;
(iii) registrations of Industry Cars;
(iv) registrations of vehicles in the Competitive Truck
Segment;
3. A comparison of Dealer's sales and/or registrations to
sales and/or registrations of all other Authorized Nissan Dealers combined in
Seller's Sales Region and District in which Dealer is located and, where
Section 3.C applies, for all other Authorized Nissan Dealers combined in the
metropolitan area in which Dealer is located; and
4. A comparison of sales and/or registrations achieved by
Dealer to the sales or registrations of Dealer's competitors.
The sales and registration data referred to in this Section 3 shall be
those utilized in Seller's records or in reports furnished to Seller by
independent sources selected by it and generally available for such purpose
in the automotive industry. If such reports of registration and/or sales are
not generally available, Seller may rely on such other registration and/or
sales data as can be reasonably obtained by Seller.
3
C. Metropolitan Markets. If Dealer is located in a metropolitan or
other marketing area where there are located one or more Authorized Nissan
Dealers other than Dealer, the combined sales performance of all Nissan
Dealers in such metropolitan or other marketing area may be evaluated as
indicated in Sections 3.B.2 and 3.B.3 above, and Dealer's sales performance
may also be evaluated on the basis of the proportion of sales and potential
sales of Nissan Vehicles in the metropolitan or other marketing area in which
Dealer is located for which Dealer fairly may be held responsible.
D. Additional Factors for Consideration. Where appropriate in
evaluating Dealer's sales performance, Seller will take into account such
reasonable criteria as Seller may determine from time to time, including, for
example, the following: the Dealership Location; the general shopping habits
of the public in such market area; the availability of Nissan Vehicles to
Dealer and to other Authorized Nissan Dealers; any special local marketing
conditions that would affect Dealer's sales performance differently from the
sale performance of other Authorized Nissan Dealers; the recent and long term
trends in Dealer's sales performance; the manner in which Dealer has
conducted its sales operations (including advertising, sales promotion, and
treatment of customers); and the other factors, if any, directly affecting
Dealer's sales opportunities and performance.
E. Used Motor Vehicle Sales. Dealer shall engage in used motor
vehicle operations as and to the extent reasonably required for Dealer to
effectively perform its responsibilities for the sale of Nissan Vehicles.
Subject to requirements and guidelines established by Seller, Dealer shall be
entitled to identify such used motor vehicle operations as a part of its
Dealership Operations and to apply the Nissan Marks relating to used motor
vehicle operations.
F. Dealer Sales Personnel. Dealer shall organize and maintain a
sales organization that includes a sufficient number of qualified and trained
sales managers and sales people to enable Dealer to effectively fulfill its
responsibilities under this Section 3. Seller may, from time to time,
comment on or advise Dealer concerning the qualifications, performance and
ability of Dealer's sales personnel as the same affect Dealer's performance
of its obligations under this Section 3.
G. Assistance Provided by Seller.
1. Sales Training Courses. Seller will offer from time to
time sales training courses for Dealer sales personnel. Based on its need
therefor, Dealer shall, without expense to Seller, have members of Dealer's
sales organization attend such training courses and Dealer shall cooperate in
such courses as may from time to time be offered by Seller.
2. Sales Personnel. To further assist Dealer, Seller will
provide to Dealer advice and counsel on matters relating to new vehicle
sales, sales personnel training and management, merchandising, and facilities
used for Dealer's vehicle sales operations.
H. Evaluation of Dealer's Sales Performance. Seller will
periodically evaluate Dealer's performance of its responsibilities under this
Section 3. Evaluations prepared pursuant to this Section 3.H will be
discussed with and provided to Dealer, and Dealer shall have an opportunity
to comment, in writing, on such evaluations. Dealer shall promptly take such
action as may be required to correct any deficiencies in Dealer's performance
of its responsibilities under this Section 3.
4. Determination of Dealer Representation
A. Development of Market Studies. Seller may, from time to time and
in its sole discretion, conduct studies of various geographic areas to
evaluate market conditions. Such market studies may, where appropriate, take
into account such factors as geographical characteristics, consumer shopping
patterns, existence of other automobile retail outlets, sales opportunities
and service requirements of the geographic area in which Dealer's Primary
Market Area is located, trends in marketing conditions, current and
prospective trends in population, income, occupation, and such other
demographic characteristics as may be determined by Seller to be relevant to
its study. Such studies will make recommendations concerning the market, the
Dealership Facilities, and the Dealership Location. Prior to conducting a
study which includes the geographic are in which Dealer's Primary Market Area
is located, Seller will notify Dealer of its intention to conduct such a
study. Dealer will be given the opportunity to present to Seller such
information pertaining to such study as Dealer believes may be relevant.
Seller will consider all relevant information timely provided by Dealer
before concluding its study.
4
B. Appointment of New Authorized Nissan Dealers to Fill Open
Points.
1. If any study conducted pursuant to Section 4.A recommends
that an open point be established at a location that is within ten (10) miles
driving distance, by the shortest publicly traveled route, of Dealer's main
Dealership Location, Seller will so notify Dealer. Dealer will have thirty
(30) days from Dealer's receipt of notice of the recommendations of the study
in which to object to them. Upon Dealer's request, Seller will review the
results of the study with Dealer (excluding information considered by Seller
to be confidential). Seller will consider all objections to the recommended
open point timely made by Dealer. Prior to entering into a Nissan Dealer
Sales and Service Agreement with a New Authorized Nissan Dealer filling such
an open point, Seller will give Dealer written notice of its intent to fill
the open point (hereinafter the "Notice of Appointment"). If Dealer timely
files a Notice of Appeal (as defined in Section 16.B hereof) with the Policy
Review Board (as defined in Section 16.A hereof) in accordance with the
procedures established in Section 16.B therefor, Seller will not enter into a
Nissan Dealer Sales and Service Agreement appointing such New Authorized
Nissan Dealer until the Policy Review Board has rendered its decision on the
matter.
2. Nissan reserves the right to sell Nissan Products to others
to appoint Authorized Nissan Dealers within and outside the ten (10) miles
driving distance described above. However, Seller agrees that it will not
enter into a Nissan Dealer Sales and Service Agreement appointing a New
Authorized Nissan Dealer filling an open point which is located within the
ten (10) miles driving distance described above unless the study made
pursuant to Section 4.A demonstrates in Seller's good faith opinion that the
declaration of an open point is warranted by market or economic conditions.
3. Nothing in this Agreement shall be construed to require
Dealer's consent to the appointment of a New Authorized Nissan Dealer at a
location that is within the ten (10) miles driving distance described above.
Nothing in this Agreement shall be construed to grant Dealer any rights in
connection with the appointment of an Authorized Nissan Dealer at a location
that is not within the ten (10) miles driving distance described above. In
addition, this Section 4.B does not apply to, nor shall it be construed to
grant Dealer any rights in connection with any of the events or transactions
excluded from the definition of "New Authorized Nissan Dealer" in Section
4.B.4(a), (b) or (c) below.
4. "New Authorized Nissan Dealer" shall mean an Authorized
Nissan Dealer that has not previously executed a Nissan Dealer Sales and
Service Agreement or done business as an Authorized Nissan Dealer; provided,
however, that "New Authorized Nissan Dealer" shall not include an Authorized
Nissan Dealer who: (a) is a Successor Dealer appointed pursuant to Section
14, (b) is a purchaser or transferee of the assets of or ownership interests
in an Authorized Nissan Dealer that is appointed as an Authorized Nissan
Dealer pursuant to Section 15, or (c) who is approved as a Nissan Dealer
following or resulting from:
(i) a change in name or form of an Authorized Nissan
Dealer;
(ii) any other sale, exchange or other transfer of any
ownership interests in or any assets of any other Authorized Nissan Dealer,
by operation of law or otherwise and whether voluntary and involuntary;
(iii) an assignment, sale or other transfer of any interest
in a Nissan Dealer Sales and Service Agreement, by operation of law or
otherwise and whether voluntary or involuntary;
(iv) the relocation of an existing Authorized Nissan
Dealer; or
(v) the replacement of a former Authorized Nissan Dealer
where the appointment of such replacement Dealer takes place within two (2)
years of the date on which the former Dealer ceased doing business and where
such replacement Dealer's main Dealership Location is located within a five
(5) mile driving distance by the shortest publicly traveled route of the
former Dealer's main Dealership Location;
regardless of whether any of the foregoing actions, individually or
collectively, result in the appointment of an Authorized Nissan Dealer at a
location that is within or without the ten (10) miles driving distance
described above.
5. Responsibilities of Dealer with Respect to Service and Parts
A. General Service Obligations of Dealer. Dealer understands and
acknowledges that future sales of Nissan Products depend, in part, upon the
satisfaction of Dealer's customers with its servicing of such Products.
Dealer further recognizes that Seller has entered into this Agreement in
5
reliance upon Dealer's representations concerning its ability and commitment
to fair dealing and professional servicing. Accordingly, Dealer shall
develop and maintain a quality service organization and shall render at the
Dealership Facilities prompt, efficient and courteous service to owners and
users of Nissan Products, regardless of the origin of purchase, including,
without limitation, the specific obligations described in Section 5.B. In
this regard, Dealer shall take all reasonable steps to insure that: the
service needs of its customer's Nissan Vehicles are accurately diagnosed;
Dealer's customers are advised of such needs and that each customer's consent
is obtained prior to initiation of any repairs; necessary repairs and
maintenance are professionally performed; and Dealer's customers are treated
courteously and fairly.
B. Specific Service Obligations of Dealer.
1. Pre-Delivery Inspections and Service. Dealer shall perform
or be responsible for the performance of pre-delivery inspections and service
on each Nissan Vehicle prior to sale and delivery thereof by Dealer, in
accordance with the standards and procedures relating thereto set forth in
the applicable pre-delivery inspection schedules furnished by Seller to
Dealer from time to time. The completion of such inspection and service
shall be verified by Dealer on forms supplied or approved by Seller for this
purpose. Dealer shall retain the original or a legible copy of each such
form in its records and shall furnish a copy to the purchaser.
2. Warranty Repairs and Goodwill Adjustments. Dealer shall
promptly, courteously and efficiently perform: (i) warranty repairs on each
Nissan Product which qualifies for such repairs under the provisions of any
warranty furnished therewith by Seller, Manufacturer or the manufacturer of
the Product; and (ii) such other inspections, repairs or corrections on
Nissan Products as may be approved or authorized by Seller to be made at
Seller's expense (hereinafter referred to as "goodwill adjustments"). Dealer
shall perform such repairs and service on each such Nissan Product as and
when required and requested by the owner or user (or in the case of goodwill
adjustments when requested by Seller), without regard to its origin of
purchase and in accordance with the provisions relating thereto set forth in
the Warranty Manual or in Seller's Manuals or Instructions issued to Dealer
from time to time. In performing such repairs and service on Nissan Products
for which Seller has agreed to reimburse Dealer, Dealer shall use Genuine
Nissan Parts and Accessories unless Dealer receives prior authorization from
Seller to use non-genuine parts or accessories. Dealer will provide to each
owner or user of a Nissan Product upon which any such repairs or service are
performed a copy of the repair order reflecting all services performed.
3. Campaign Inspection and Corrections. Dealer shall
promptly, courteously and efficiently perform such campaign inspections
and/or corrections for owners and users of Nissan Products, regardless of
their origin of purchase, as are (i) described in owner notifications and
recall campaigns conducted by Seller in furtherance of any federal or state
law, regulation, rule, or order; or (ii) requested by Seller on Nissan
Products that qualify for such inspections and/or corrections. Once Dealer
has been notified that a recall or service campaign affects a particular
class or type of Nissan Product, Dealer shall perform such campaign
inspections and/or corrections on all affected Nissan Products then in or
which thereafter come into Dealer's inventory or which are delivered to
Dealer for repair or service. Dealer shall inquire, through the Nissan
Datanet system or otherwise, with respect to each such Nissan Product to
determine whether all applicable campaign inspections and/or corrections have
been performed on such Nissan Product and, if they have not been performed,
Dealer shall perform them.
Dealer shall advise Seller as and when such campaign inspections
and/or corrections are performed, in accordance with Seller's Manuals or
Instructions relating thereto and in accordance with the provisions relating
thereto set forth in the Warranty Manual. To enable Dealer to perform
required corrections as promptly as practicable, parts and/or other materials
required for each such campaign may be shipped in quantity and billed to
Dealer. Dealer shall accept and retain such parts and/or other materials for
use in such campaign. Upon completion of the campaign program, Dealer shall
have the right to return excess parts shipped by Seller to Dealer for such
campaign, but only to the extent that Dealer has not ordered and received
additional parts from Seller, such a return of parts shall be apart from any
other parts return policies or programs which may be instituted by Seller.
In performing such campaign corrections for which Seller has agreed to
reimburse Dealer for parts and materials used in making such corrections,
Dealer shall use Genuine Nissan Parts and Accessories unless Dealer receives
prior authorization from Seller to use non-genuine parts and accessories.
4. Maintenance and Repair Service. Dealer shall promptly,
courteously and efficiently maintain and repair Nissan Products as and when
required and requested by the owner or user thereof, without regard to their
origin of purchase. Dealer shall provide all owners and users for whom
Dealer provides maintenance and repair service itemized invoices reflecting
all the services performed. In connection with its sale or offering for sale
6
of any maintenance services recommended by Seller for the maintenance of a
Nissan Product, Dealer shall advise each customer requesting such recommended
maintenance service of: (i) a description of the items included in
maintenance recommended by Seller and Dealer's price therefor; and (ii) the
price and description of such additional maintenance or repair being sold or
recommended by Dealer which are in addition to that recommended by Seller in
published owner's manual.
5. Payments by Seller to Dealer. For pre-delivery inspections
and service, warranty repairs, goodwill adjustments, and campaign inspections
and corrections performed by Dealer in accordance with this Section 5.B,
Seller shall fairly and adequately reimburse Dealer for the parts and/or
other materials (or shall provide Dealer with the parts and/or other
materials) and the labor required and used in connection therewith in
accordance with the provisions relating thereto set forth in the Warranty
Manual. Dealer understands and acknowledges that such repairs are provided
for the benefit of owners and users of Nissan Products, and Dealer shall not
impose any charge on such owners or users for parts, materials, or labor for
which Dealer has received or will receive compensation from Seller hereunder.
Dealer shall comply with the disposition instructions contained
in the Warranty Manual with respect to any genuine Nissan Parts or
Accessories acquired by Dealer as a result of its performance of warranty
repairs, goodwill adjustments and campaign adjustments and/or corrections.
C. Service Operations of Dealer.
1. Dealer Personnel. Dealer shall organize and maintain,
substantially in accordance with Seller's Guides, a complete service
organization that includes a competent, trained service manager and a
sufficient number of trained service and customer relations personnel to
enable Dealer to fulfill its responsibilities for service and customer
relations under this Section 5. Dealer shall designate at least one member
of its staff who shall be responsible for resolving consumer complaints on
behalf of Dealer. Dealer shall, without expense to Seller, have members of
Dealer's service organization attend training courses offered by Seller and
Dealer shall cooperate with and participate in such training courses as may
from time to time be offered by Seller. Dealer agrees that its personnel
will meet such educational, management and technical training standards as
Seller may establish or approve. Seller may, from time to time, comment on
or advise Dealer concerning the qualifications, performance and ability of
Dealer's service personnel as the same affect Dealer's performance of its
obligations under this Section 5.
2. Compliance with Laws. In performing the maintenance and
service obligations specified in Section 5.B, Dealer shall comply with all
applicable provisions of federal, state and local laws, ordinances, rules,
regulations and orders affecting Nissan Products including, but not limited
to, laws relating to safety, emissions control, noise control and customer
service. Seller shall provide to Dealer, and Dealer shall provide to Seller,
such information and assistance as may be reasonably requested by the other
in connection with the performance of obligations of the parties under such
laws, ordinances, rules, regulations and orders. If applicable law requires
the installation or supply of equipment not installed or supplied as standard
equipment by Seller or the manufacturer of a Nissan Vehicle, Dealer shall,
prior to its sale of the Nissan Vehicles on or for which such equipment is
required, install or supply such equipment at its own expense and in
conformance with such standards as may be adopted by Seller. Dealer shall
comply with all applicable laws pertaining to the installation or supply of
such equipment including, without limitation, the reporting thereof.
3. Tools and Equipment. Dealer shall provide for use in its
service operations such service equipment and special tools, comparable to
the type and quality recommended by Seller from time to time, as are
necessary to meet Dealer's service responsibilities hereunder and as are
substantially in accordance with Seller's Guides. In addition, Dealer shall
obtain and maintain for use in its service operations all tools which are
essential to the proper service, repair and maintenance of Nissan Vehicles
and are identified by Seller as essential tools. Seller shall ship such
essential tools to Dealer as required due to new model and component
introductions and Dealer shall pay Seller therefor as invoiced. If Dealer is
in possession of a tool equivalent to any essential tool shipped by Seller,
Dealer may so notify Seller and Seller will exempt Dealer from purchasing
such essential tool from Seller upon Seller's determination that Dealer's
tool will satisfy the need for the specific repair procedure or procedures
for which the essential tool is intended. Dealer shall maintain all such
equipment and tools in good repair and proper calibration so as to enable
Dealer to meet its service responsibilities under this Section 5.
7
4. Owner Relations. In providing service on Nissan Products,
Dealer shall make every effort to build and maintain good relations between
Dealer and owners and users of Nissan Products. Dealer shall promptly
investigate and handle all matters brought to its attention by Seller, owners
or users of Nissan Products, or any public or private agency, relating to the
sale or servicing of Nissan Products, so as to develop and maintain owner and
user confidence in Dealer, Seller and Nissan Products.
Dealer shall promptly report to Seller the details of each
inquiry or complaint received by Dealer relating to any Nissan Product which
Dealer cannot handle promptly and satisfactorily. Dealer will take such
other steps with respect to such customer complaints as Seller may reasonably
require. Dealer will do nothing to affect adversely Seller's rights or
obligations under applicable laws, rules and/or regulations. Furthermore,
Dealer shall participate in and cooperate with such dispute resolution
procedures as Seller may designate from time to time and such other
procedures as may be required by law.
Seller will promptly investigate all matters brought to its
attention by Dealer, owners or users of Nissan Products, or any public or
private agency, relating to the design, manufacture or sale by Seller of
Nissan Products, and Seller will take such action as it may deem necessary or
appropriate so as to develop and maintain owner confidence in Seller, Dealer
and Nissan Products.
D. Parts Operations of Dealer
1. Parts Sales Responsibility of Dealer. Dealer shall
actively and effectively promote through its own advertising and sales
promotion activities the sale of Genuine Nissan Parts and Accessories to
service, wholesale, retail and other customers within Dealer's Primary Market
Area.
2. Dealer Personnel. Dealer shall organize and maintain,
substantially in accordance with Seller's recommendations with respect
thereto, a complete parts organization that includes a competent, trained
parts manager and a sufficient number of trained parts personnel to enable
Dealer to fulfill its responsibilities under this Section 5. Based on its
need therefor, Dealer shall, without expense to Seller, have members of
Dealer's parts organization attend training courses offered by Seller and
Dealer shall cooperate in such training courses as may from time to time be
offered by Seller. Seller may, from time to time, comment on or advise
Dealer concerning the qualifications, performance and ability of Dealer's
parts personnel as the same affect Dealer's performance of its obligations
under this Section 5.
3. Inventories of Parts and Accessories. Dealer shall
maintain at all times a stock of parts and accessories which is adequate to
meet its service and wholesale and retail parts sales responsibilities under
this Section 5. Dealer shall also maintain, subject o the ability of Seller
to supply the products ordered by Dealer, a stock of Genuine Nissan Parts and
Accessories of an assortment and in quantities adequate to meet customer
demand and for warranty repairs, goodwill adjustments and campaign
corrections made pursuant to this Section 5.
E. Assistance Provided by Seller
1. Service and Parts Manuals. Seller will make available to
Dealer, for use by Dealer's service and parts personnel, Seller's Manuals or
Instructions concerning Dealer's service and parts operations and other
sources of information and technical data as Seller deems necessary to permit
Dealer to perform its service and parts responsibilities under this Section
5. Dealer shall keep such information and data current and available for
consultation by Dealer's service and parts employees.
2. Service and Parts Field Personnel. To further assist
Dealer, Seller will provide to Dealer the advice and counsel of its service
and parts field personnel on matters relating to service, parts and
accessories, including technical diagnosis, service and parts management,
merchandising, personnel training, owner relations, and facilities used for
Dealer's service and parts operations.
F. Evaluation of Dealer's Service and Parts Performance. Dealer's
performance of its service and parts responsibilities will be evaluated by
Seller on the basis of such reasonable criteria as Seller may develop from
time to time, including for example:
1. Dealer's performance in building and maintaining consumer
confidence in Dealer and in Nissan Products as measured by surveys or indices
of consumer satisfaction as compared with performance levels achieved by
8
other Authorized Nissan Dealers in Seller's Region or District in which
Dealer is located or such other means as may be deemed appropriate by Seller;
2. Reasonable parts purchase or sales performance objectives
which may be established from time to time by Seller for Dealer;
3. Dealer's advertising and promotion of its parts and service
operations;
4. Dealer's performance of it service responsibilities and
Dealer's conduct of its service operations including, without limitation, the
financial results of its service operations, labor sales, warranty claims
practices training of service personnel, qualification, performance and
ability of service personnel, and inventory of special and essential tools
and service equipment, as compared with Seller's Guides therefor where such
have been established and/or as compared with performance levels achieved by
other Authorized Nissan Dealers in Seller's Region or District in which
Dealer is located;
5. Dealer's performance of its parts sales responsibilities
and Dealer's conduct of its parts operations including, without limitation,
the financial results of its parts operations, training of parts personnel,
and inventory of parts, as compared with Seller's Guides therefor where such
have been established and/or as compared with performance levels achieved by
other Authorized Nissan Dealers in Seller's Region or District in which
Dealer is located; and
6. Evaluation reports resulting from any audit or review of
Dealer's service or parts operations by Seller's representatives.
Seller will periodically evaluate Dealer's performance of its
responsibilities under this Section 5. Evaluations prepared pursuant to this
Section 5 will be discussed with and provided to Dealer, and Dealer shall
have an opportunity to comment, in writing, on such evaluations. Dealer
shall promptly take such action as may be required to correct any
deficiencies in Dealer's performance of its responsibilities under this
Section 5.
6. Other Seller and Dealer Responsibilities
A. Advertising and Promotion
1. Advertising Standards. Both Seller and Dealer recognize
the need for maintaining the highest standards of ethical advertising which
is of a quality and dignity consonant with the reputation and standing of
Nissan Products. Accordingly, neither Seller nor Dealer shall publish or
cause to be published any advertising relating to Nissan Products that is not
in compliance with all applicable federal, state and local laws, ordinances,
rules, regulations and orders or that is likely to mislead, confuse or
deceive the public or impair the goodwill of Manufacturer, Seller or Dealer
or the reputation of Nissan Products or the Nissan Marks.
2. Display by Dealer. Dealer shall prominently state upon its
stationery and other printed matter that it is an Authorized Nissan Dealer.
3. Sales Promotion. Seller will establish and maintain
comprehensive advertising programs to promote the sale of Nissan Vehicles and
will from time to time offer advertising, sales promotion and sales campaign
materials to Dealer. In addition, to effectively promote the sale of Nissan
Products and the availability of service for Nissan Vehicles, Dealer shall
establish and maintain its own advertising and sales promotion programs
including, but not limited to, effective showroom displays, and Dealer will
have available in showroom ready condition at least one vehicle in each model
line of Nissan Vehicles for purposes of demonstration to potential customers.
B. Dealer Disclosures and Representations Concerning Nissan Products
and Other Products or Services. Dealer understands and acknowledges that it
is of vital importance to Seller that Nissan Products are sold and serviced
in a manner which promotes consumer satisfaction and which meet the high
quality standards associated with Seller, Manufacturer, the Nissan Marks and
Nissan Products in general. Accordingly, Dealer shall fully and accurately
disclose to its customers all material information concerning the products
and services sold by Dealer and the terms of purchase and sale including,
without limitation: the items making up the purchase price; the source of
products sold; and all warranties affecting products sold. Dealer shall not
make any misleading statements or misrepresentations concerning the products
sold by Dealer, the terms of sale, the warranties applicable to such
products, the source of the products, or the recommendations or approvals of
Seller or Manufacturer.
9
Nothing in this Agreement shall limit or be construed to limit the
products or services which Dealer may sell to its customers. Seller
acknowledges that Dealer is free to sell whatever products or services Dealer
may choose in connection with its sale and servicing of Nissan Products,
subject to Dealer obligations under Section 5 and 6 of this Agreement.
C. Signs. Dealer shall, at its expense, display at its Dealership
Location, in such number and at such locations as Seller may reasonably
require, signs which are compatible with the design standards established by
Seller and published in Seller's Manuals or Instructions from time to time.
Dealer's use and operation of signs displayed by Dealer at the Dealership
Location and Dealer's display of any Nissan Xxxx shall be subject to Seller's
approval and shall be in accordance with the terms and conditions of Section
6.K and the Dealership Identification Addendum.
D. Hours of Operations. Dealer recognizes that the service and
maintenance needs of the owners of Nissan Products and Dealer's own
responsibilities to actively and effectively promote the sale of Nissan
Products can be met properly only if Dealer keeps its Dealership Facilities
open and conducts all of its Dealership Operations required by this Agreement
during hours which are reasonable and convenient for Dealer's customers.
Accordingly, Dealer shall maintain its Dealership Facilities open for
business and shall conduct all Dealership Operations required under this
Agreement during such days and hours as automobile dealers' sales and service
facilities are customarily and lawfully open in Dealer's Primary Market Area
or in the metropolitan area in which Dealer is located.
E. Capital and Financing. Dealer recognizes that its ability to
conduct its Dealership Operations successfully on a day-to-day basis and to
effectively perform its other obligations under this Agreement including,
without limitation, its obligations with respect to Dealership Facilities,
new vehicle sales, and service and parts sales, depends to a great extent
upon the adequate capitalization of Dealer, including its maintaining
sufficient net working capital and net worth and employing the same in its
Dealership Operations. Dealer shall at all times maintain and employ such
amount and allocation of net working capital and net worth as are
substantially in accordance with Seller's Guides therefor and which will
enable Dealer to fulfill all of its responsibilities under this Agreement.
Dealer shall at all times during the term of this Agreement have flooring
arrangements (wholesale financing) satisfactory to Seller, in an amount
substantially in accordance with Seller's Guide therefor, with a financial
institution acceptable to Seller, and which will enable Dealer to fulfill its
obligations under this Agreement.
F. Accounting System. It is in the mutual interest of Seller and
Dealer that all Authorized Nissan Dealers install and maintain uniform
accounting systems and practices, so that Seller can develop standards of
operating performance which will assist Dealer in obtaining satisfactory
results from its Dealership Operations and which will assist Seller in
formulating policies in the interests of Seller and all Authorized Nissan
Dealers. Accordingly, Dealer shall install and maintain an accounting
system, not exclusive of any other system, in accordance with Seller's Nissan
Dealer Accounting System Manual, as the same may from time to time be
amended, revised or supplemented.
G. Records and Reports
1. Financial Statements. Dealer shall furnish to Seller, on
or before the tenth (10th) day of each month, in a manner acceptable to
Seller, complete and accurate financial and operating statements which fairly
present, in accordance with generally accepted accounting principles,
Dealer's financial condition as of the end of the preceding month and the
results of Dealer's Dealership Operations for the preceding month and for
that portion of Dealer's fiscal year then ended. Dealer shall also furnish
for such periods reports of Dealer's sales and inventory of Nissan Products.
Dealer shall also promptly furnish to Seller a copy of any adjusted annual
financial or operating statement prepared by or for Dealer.
2. Sales Records and Reports. Dealer shall prepare and retain
for a minimum of two (2) years, complete and up-to-date records covering its
sales of Nissan Products. To assist Seller in evaluating, among other
things, current market trends, to provide information for use in the
adjustment of production and distribution schedules, to provide information
used by Seller in providing Nissan Vehicles to Dealer, and to provide Seller
with accurate records of the ownership of Nissan Vehicles for various
purposes including warranty records and ownership notification, Dealer shall
accurately submit to Seller such information with respect to Dealer's sales
of Nissan Products as Seller may reasonably require as and in the form or
manner specified by Seller, at or as soon as possible after the close of each
business day on which such Nissan Products are sold by Dealer. If Dealer
becomes aware that any information submitted by Dealer to Seller hereunder is
or has become inaccurate, Dealer will immediately take all steps necessary to
10
advise Seller of and to correct such inaccuracy. Should Seller determine or
discover that any report submitted hereunder by Dealer is or has become
inaccurate, Seller may take any steps it deems necessary or appropriate to
correct such inaccuracy and to adjust its records, calculations or procedures
with respect to Dealer's reported sales to correct the effect of such
inaccuracy or to prevent additional inaccurate reports from being made.
3. Service Records. Dealer shall prepare and retain for a
minimum of two (2) years, in accordance with the procedures specified in the
Warranty Manual: records in support of applications for payment for
pre-delivery inspection and service, warranty repairs and goodwill
adjustments, and campaign inspections and corrections performed by Dealer;
claims for parts compensation; and applications for discounts, allowances,
refunds or credits.
4. Other Reports. Dealer shall furnish to Seller such other
records or reports concerning its Dealership Operations as Seller may
reasonably require from time to time.
H. Nissan Datanet System. Seller has developed the Nissan Datanet
system, which is an electronic data communication and processing system
designed to facilitate accurate and prompt reporting of dealership
operational and financial data, submission of parts orders and warranty
claims and processing of information with respect to the Dealership
Operations. Such data is used by Seller, among other things, to develop
composite operating statistics which are useful to Dealer and Seller in
assessing Dealer's progress in meeting its obligations under this Agreement,
to provide a basis for recommendations which Seller may make to Dealer from
time to time to assist Dealer in improving Dealership Operations, to assist
Seller in developing standards of operating performance which will assist
Dealer in obtaining satisfactory results from its Dealership Operations, to
assist Seller in formulating policies in the interest of Seller and all
Authorized Nissan Dealers, and to provide sales reporting information relied
upon by Seller in providing Nissan Vehicles to Dealer. Accordingly, Dealer
shall install and maintain electronic data processing facilities which are
compatible with the Nissan Datanet system.
I. Right of Inspection. Seller shall have the right, at all
reasonable times during regular business hours, to inspect the Dealership
facilities and to examine, audit and make and take copies of all records,
accounts and supporting data relating to the sale, sales reporting, service
and repair of Nissan Products by Dealer. When practicable, Seller shall
attempt to provide Dealer with advance notice on an indealership audit of
Dealer's records or accounts.
J. Confidentiality. Seller will not furnish to any third party
financial statements or other confidential data, excluding sales records or
reports, submitted by Dealer to Seller, except as an unidentified part of a
composite or coded report, unless disclosure is authorized by Dealer or is
required by law, or unless such information is pertinent to judicial or
governmental administrative proceedings or to proceedings conducted pursuant
to Section 16 of this Agreement.
K. Use of Nissan Marks. Seller grants Dealer the non-exclusive
right to identify itself as an Authorized Nissan Dealer and to display at the
Dealership Location and use, in connection with the sale and service of
Nissan Products, the Nissan Marks. The Nissan Marks may not be used as part
of Dealer's name or trade name without Seller's written consent. No entity
owned by or affiliated with Dealer or any of its owners may use any Nissan
Xxxx without Seller's prior written consent. Dealer shall not make any use
of any Nissan Xxxx which is inconsistent with Seller's policies concerning
trademark use. Dealer may not, either directly or indirectly, display any
Nissan Marks at any location of facility other than those identified in the
Dealership Facilities Addendum to this Agreement, without the prior written
consent of Seller. Except as authorized herein, Dealer shall not make use of
any Nissan Xxxx, and Dealer shall neither have nor claim any rights in
respect of any Nissan Xxxx. Dealer shall comply with any of Seller's Manuals
or Instructions regarding the use of Nissan Marks as may be issued to Dealer
from time to time. Dealer shall promptly change or discontinue its use of
any Nissan Marks upon Seller's request. Any authorization granted may be
withdrawn by Seller at any time and, in any event, shall cease immediately
upon the effective date of termination of this Agreement.
If Seller institutes litigation to effect or enforce compliance with
this Section 6.K, the prevailing party in such litigation shall be entitled
to reimbursement for its costs and expenses in such litigation, including
reasonable attorney's fees.
11
7. Purchase and Delivery
A. Dealer Purchases
1. Nissan Vehicles. From time to xxxx Xxxxxx will advise
Dealer of the number and model lines of Nissan Vehicles which Seller has
available for sale to Dealer and, subject to this Section 7, Dealer shall
have the right to purchase such Nissan Vehicles. Seller will distribute
Nissan Vehicles to Authorized Nissan Dealers in accordance with Seller's
written distribution policies and procedures as the same may be in effect
from time to time. Seller will provide to Dealer an explanation of the
method used by Seller to distribute Nissan Vehicles to Authorized Nissan
Dealers. Dealer recognized that there are numerous factors which affect the
availability of Nissan Vehicles to Seller and to Dealer including, without
limitation, production capacity, sales potential in Dealer's and other
Primary Market Areas, varying consumer demand, weather and transportation
conditions, and state and federal government requirements. Since such
factors may affect individual dealers differently, Seller reserves to itself
sole discretion to distribute Nissan Vehicles in a fair and consistent
manner, and its decisions in such matters shall be final.
2. Genuine Nissan parts and Accessories. Dealer shall submit
to Seller firm orders for Genuine Nissan Parts and Accessories in such
quantity and variety as are reasonably necessary to fulfill Dealer's
obligations under this Agreement. All orders shall be submitted by Dealer in
the manner specified by Seller and in accordance with Seller's Parts and
Accessories Policy and Procedures Manual, may be accepted in whole or in part
by Seller, and shall be effective only upon acceptance thereof by Seller at
its home office in California (but without necessity of any notice of
acceptance by Seller to Dealer). Such orders shall not be cancellable by
Dealer after acceptance and shipment by Seller, except in accordance with
Section 8 of this Agreement.
B. Delays in Delivery. Seller shall not be liable for failure or
delay in delivery to Dealer of Nissan Products which Seller has previously
agreed to deliver to Dealer where such failure or delay is due to cause or
causes beyond the control or without the fault or negligence of Seller.
C. Shipment of Nissan Products
1. Nissan Vehicles. Seller will ship Nissan Vehicles to
Dealer by whatever mode of transportation, by whatever route, and from
whatever point Seller may select. Dealer shall pay to Seller in connection
with Nissan Vehicles delivered to Dealer the applicable destination charges
that are established for Dealer by Seller and that are in effect at the time
of shipment. Dealer shall bear the risk of loss and damage to Nissan
Vehicles during transportation from the point of shipment; however, Seller
will, if requested by Dealer in such manner and within such time as Seller
shall from time to time specify, prosecute claims for loss of or damage to
Nissan Vehicles during said transportation against the responsible carrier
for and on behalf of Dealer.
2. Genuine Nissan Parts and Accessories. Seller will ship
Genuine Nissan Parts and Accessories to Dealer by whatever mode of
transportation, by whatever route, and from whatever point Seller may
select. Dealer shall bear the risk of loss and damage to Genuine Nissan
Parts and Accessories during transportation from the point of shipment.
D. Passage of Title. Title to each Nissan Product shall pass from
Seller to Dealer, or to the financial institution designated by Dealer, upon
delivery of said Product to Dealer or to a carrier for transportation to
Dealer, whichever occurs first.
E. Security Interest
1. Grant of Security Interest. As security for the full
payment of all sums from time to time owed by Dealer to Seller under this
Agreement, whether such sums are now, or hereafter become, due and owing,
Dealer hereby grants to Seller a security interest in the following
(collectively referred to as "Collateral"):
(i) All non-vehicle inventory of Dealer including,
without limitation, all Genuine Nissan Parts and Accessories delivered by
Seller to Dealer hereunder on account (all such inventory hereinafter
referred to collectively as "Inventory" and individually as "Item of
Inventory"); and
(ii) All proceeds from any of the foregoing including,
without limitation, insurance payable by reason of the loss, damage or
destruction of any Item of Inventory; and all accounts and chattel paper of
Dealer arising from sale, lease, or other disposition of Inventory now
existing or hereafter arising, and all liens, securities, guarantees,
remedies and privileges pertaining thereto, together with all rights and
liens of Dealer relating thereto.
12
2. Default in Payment. Dealer shall be in default of this
Section 7 if: (i) Dealer shall fail to pay any amounts secured hereby when
due or fail to perform any obligations under this Section 7 in a timely
manner; (ii) there shall occur any material adverse change in the financial
condition of Dealer; (iii) Dealer shall dissolve or become insolvent or
bankrupt; or (iv) Seller shall have determined in good faith that the
prospect of such payment or performance is impaired; and in any such case
Seller may declare all sums secured by this Section 7.E immediately due and
payable and Seller shall have all rights and remedies afforded to a secured
party after default under the Uniform Commercial Code or other applicable law
in effect on the date of this Agreement.
3. Assembly of Collateral, Payment of Costs, Notices. Dealer
shall, if requested by Seller upon the occurrence of any default under the
foregoing Section 7.E.2 assemble the Collateral and make it available to
Seller at a place or places designated by Seller. Dealer also shall pay all
costs of Seller including, without limitation, attorneys' fees incurred with
respect to the enforcement of any of Seller's rights under this Section 7.
4. Recording, Further Assurances. Dealer shall execute and
deliver such financing statements and such other instruments or documents and
take any other action as Seller may request in order to create or maintain
the security interest intended to be created by this Section 7.E or to enable
Seller to exercise and enforce its rights hereunder. A carbon, photographic
or other reproduction of this Agreement shall be sufficient as a financing
statement and may be filed in lieu of a financing statement in any and all
jurisdictions which accept such reproductions.
5. Records and Schedules of Inventory. Dealer shall keep
accurate records itemizing and describing the kind, type and quantity of
Inventory and shall furnish to Seller within five (5) days of receipt of
Seller's request therefor, with a current schedule of inventory in form and
substance satisfactory to Seller ("Schedule of Inventory"), which shall be
true and accurate in all respects. A physical inventory shall be conducted
no less than annually in connection with preparation of year-end financial
statements of Dealer and, at Seller's request, a report of such inventory
shall be promptly provided to Seller.
F. Charges for Storage and Diversions. Dealer shall be responsible
for and shall pay all charges for demurrage, storage and other expense
accruing after shipment to Dealer or to a carrier for transportation to
Dealer. If diversions of shipments are made upon Dealer's request or are
made by Seller as a result of Dealer's failure or refusal to accept shipments
made pursuant to Dealer's orders, Dealer agrees to pay all additional charges
and expenses incident to such diversion.
G. Changes in Nissan Products. Seller shall have the right in its
sole discretion to discontinue the supply, or make changes in the design or
component materials, of any Nissan Product at any time. Seller shall be
under no liability to Dealer on account of any such changes and shall not be
required as a result of any such changes to make any changes to Nissan
Products previously purchased by Dealer. No change shall be considered a
model year change unless so specified by Seller.
8. Pricing
A. Nissan Vehicles. At any time prior to shipment (or delivery to a
carrier for transportation to Dealer) of any Nissan Vehicle, Seller may,
without prior notice and without incurring any liability to Dealer or anyone
else, including any customer of Dealer, change at any time and from time to
time the price, discount, allowance or other terms of sale of any Nissan
Vehicle offered for sale by Seller. Except with respect to the establishment
of initial prices for a new model year vehicle or for any new model or body
type, Seller will notify Dealer by mailgram or other acceptable means of any
such change in price as soon as reasonably practicable, and Dealer may, by
notice to Seller within ten (10) days after such notification, cancel any
offer to purchase Nissan Vehicles affected by such change, provided that
Seller has not notified Dealer of its acceptance of Dealer's offer on or
prior to the date such notification by Dealer is received by Seller.
B. Genuine Nissan Parts and Accessories. Seller may, without prior
notice and without incurring any liability to Dealer or anyone else,
including any customer of Dealer, change at any time and from time to time
the price, discount, allowance or other terms of sale of any Genuine Nissan
Part or Accessory offered for sale by Seller, and any such change in price,
discount, allowance or other terms of sale shall apply to all such Genuine
Nissan Parts and Accessories whether or not an order has been submitted by
Dealer, but not by Genuine Nissan Parts and Accessories for which Seller has
accepted and processed Dealer's order prior to the effective date of such
change. Seller will notify Dealer of any such change in price as soon as is
reasonably practicable. Dealer may, by notice to Seller, cancel any order
for Genuine Nissan Parts and Accessories affected by such change which was
placed before such notification was given, provided that such Genuine Nissan
Parts and Accessories have not been shipped to Dealer or delivered to a
carrier for transportation to Dealer on or prior to the date such
notification by Dealer is received by Seller.
13
9. Payment
A. Payment for Vehicles. Payment by Dealer for Nissan Vehicles must
be made in accordance with the applicable prices, charges, discounts,
allowances and other terms of sale established by Seller either: (i) in
accordance with the wholesale financing arrangements that at the time of
delivery to Dealer or to a carrier for transportation to Dealer of such
Nissan Vehicles, whichever shall first occur, are in effect between Seller,
Dealer and a financing institution; or (ii) prior to delivery to Dealer or to
a carrier for transportation to Dealer, whichever shall first occur, by cash
or such other medium of payment as Seller may agree to accept.
B. Payment for Parts and Accessories. Parts, equipment, accessories
and other products and services will normally be billed by Seller to Dealer
on Seller's invoices which shall be due the tenth (10th) of the month
following the month of shipment of such products and services; provided,
however, Seller reserves the right to place any and all sales of such items
on a C.O.D. or cash in advance basis, without notice; provided further,
however, that Seller will endeavor to provide Dealer with prior notice if in
Seller's sole judgement such notice would be practicable.
C. Accounts Payable.
1. Right of Set Off. In addition to any right of set off
provided by law, all sums due Dealer shall be considered net of indebtedness
of Dealer to Seller, and Seller may deduct any amounts due or to become due
from Dealer to Seller or any amounts held by Seller from any sums or accounts
due from Seller to Dealer.
2. Liquidated Damages.
(i) Liquidated Damages for Delinquent Payments. In the
event that Dealer fails to pay Seller in full any amounts owed by Dealer or
Seller when due, Dealer shall pay Seller a delinquency charge of one percent
(1%) per month of such amount or amounts to compensate Seller for its costs
of carrying and collection; provided, however, that Seller agrees that it
will not assess any delinquency charge on an overdue account which has a
total outstanding balance of less than $1,000.00, unless such account is more
than ninety (90) days overdue. Dealer and Seller agree that such charge is
to be assessed not as a penalty, but as liquidated damages under California
Civil Code s. 1671(b) based on Seller's reasonable estimate of the losses
which will be suffered by Seller as a result of such delinquent payment or
payments. The imposition of such delinquency charges shall not imply or
constitute any agreement to forbear collection of a delinquent account.
(ii) Liquidated Damages for Improper Payments to Dealer.
Seller may, from time to time, conduct audits or reviews of Dealer's books
and records pursuant to Section 6.I of this Agreement. If any such audit or
review results in a determination by Seller that Dealer was or is not
entitled to received payment from Seller, Seller may debit Dealer's account
in such amounts as Seller shall determine were improperly paid to Dealer.
Such a determination may be based on Dealer's failure to comply with
applicable rules or procedures or on Dealer's submission of false or
inaccurate information to Seller. In addition, Seller may assess and, if it
does, Dealer will pay a delinquency charge of one percent (1%) per month of
such amount or amounts improperly paid by Seller to Dealer to compensate
Seller for its costs of auditing, loss of funds and collection. Dealer and
Seller agree that such charge is to be assessed not as a penalty, but as
liquidated damages under California Civil Code s. 1671(b) based on Seller's
reasonable estimate of the losses which will be suffered by Seller as a
result of such improper payment or payments. The imposition of such
delinquency charges shall not imply or constitute any agreement to forbear
collection of a delinquent account.
D. Collection of Taxes by Dealer. Dealer hereby represents and
warrants that all Nissan Products purchased from Seller are purchased for
resale in the ordinary course of Dealer's business. Dealer further
represents and warrants that Dealer has obtained all licenses and complied
with all other requirements to collect sales, use and or other taxes incurred
in any such resale transaction, and that Dealer will furnish evidence thereof
to Seller, at Seller's request. If Dealer purchases any Nissan Products
other than for resale, or puts any Nissan Products to a taxable use, Dealer
shall pay directly to the appropriate taxing authority any sales, use or
similar taxes incurred as a result of such use or purchase, to file any tax
returns required in connection therewith and to hold Seller harmless from any
claims or demands with respect thereto.
14
10. Warranties
The only warranties that shall be applicable to Nissan Products (or any
components thereof) shall be such written warranty or warranties as may be
furnished by Seller and as stated in the Warranty Manual or Seller's Parts
and Accessories Policy and Procedures Manual, as the same may be revised from
time to time. Except for its express limited liability under such written
warranties, neither Manufacturer nor Seller assumes, or authorizes any other
person or party including, without limitation, Dealer, to assume on their
behalf any other obligation or liability in connection with any Nissan
Product (or component thereof). Any obligations or liabilities assumed by
Dealer which are in addition to Seller's written warranties shall be solely
the responsibility of Dealer. Dealer shall expressly incorporate in full and
without modification any warranty furnished by Seller with a Nissan Vehicle
as a conspicuous part of each order form or other contract for the sale of
such Nissan Vehicle by Dealer to any buyer. Dealer shall make available to
the buyer of each Nissan Product prior to the purchase of such Nissan
Product, copies of such applicable warranties as may be furnished by Seller.
Dealer shall also provide to the buyer of each Nissan Product, in full and
without modification, any owner's manual, warranty booklet or other owner
information which Seller may provide to Dealer for delivery with such Nissan
Product. Dealer agrees to abide by and implement in all other respects
Seller's warranty procedures then in effect.
11. Indemnification
A. Indemnification of Dealer. Subject to Section 11.C, and upon
Dealer's written request, Seller shall:
1. Defend Dealer against any and all claims that during the
term of this Agreement may arise, commence or be asserted against Dealer in
any action concerning or alleging:
(a) Bodily injury or property damage arising out of an
occurrence caused solely by a manufacturing defect or alleged manufacturing
defect in a Nissan Product supplied by Seller, except for any manufacturing
defect in tires, provided that the defect could not have reasonably been
discovered by Dealer during the pre-delivery inspection of the product
required by Section 5.B.1 of this Agreement;
(b) Bodily injury or property damage arising out of an
occurrence caused solely by a defect or alleged defect in the design of a
Nissan Product supplied by Seller, except for a defect or alleged defect in
the design of tires; and
(c) Any substantial damage occurring to a new Nissan
Product and repaired by Seller from the time the product left the
manufacturer's assembly plant to the time it was delivered to Dealer's
designated location or to a carrier for transportation to Dealer, whichever
occurred first, provided Seller failed to notify Dealer of such damage and
repair prior to delivery of the product to the first retail customer; and
(d) Breach of Seller's warranty of a Nissan Product which
is not, in whole or part, the result of Dealer's sales, service or repair
practices or conduct; and
2. Indemnify and hold Dealer harmless from any and all
settlements made which are approved by Seller and final judgments rendered
with respect to any claims described in Section 11.A.1; provided, however,
that Seller shall have no obligation to indemnify or hold Dealer harmless
unless Dealer: (i) promptly notifies Seller of the assertion of such claim
and the commencement of such action against Dealer; (ii) cooperates fully in
the defense of such action in such manner and to such extent as Seller may
reasonably require; (iii) consents to the employment of attorneys selected by
Seller and agrees to waive any conflict of interest then existent or which
may later arise, thereby enabling Seller's selected attorneys to represent
Seller and/or the manufacturer of a Nissan Product throughout the defense of
the claim; and (iv) withdraws any actions (including cross-claims) filed
against Seller or the manufacturer of a Nissan Product arising out of the
circumstances for which Dealer seeks indemnity. Dealer shall pay all costs
of its own defense incurred prior to Seller's assumption of Dealer's defense
and thereafter to the extent that Dealer employs attorneys in addition to
those selected by Seller.
3. Seller may offset any recovery on Dealer's behalf against
any indemnification that may be required under this Section 11 including,
without limitation, attorneys' fees paid by Seller pursuant to this Section
11.A and the amount of any settlement or judgment paid by Seller.
B. Indemnification of Seller. Subject to Section 11.C and upon
Seller's written request, Dealer shall:
1. Defend Seller against any and all claims that during the
term of this Agreement may arise, commense or be asserted against Seller in
any action concerning or alleging:
15
(a) Dealer's failure to comply, in whole or in part, with
any obligation of Dealer under this Agreement;
(b) Any negligence, error, omission or act of Dealer in
connection with the preparation, repair or service (including warranty
service, goodwill adjustments, and campaign inspections and corrections) by
Dealer of Nissan Products;
(c) Any modification or alteration made by or on behalf
of Dealer to a Nissan Product, except those made pursuant to the express
written instruction or with the express written approval of Seller;
(d) Dealer's breach of any agreement between Dealer and
Dealer's customer or other third party;
(e) Misleading, libelous or tortious statements,
misrepresentations or deceptive or unfair practices by Dealer, directly or
indirectly, to Seller, a customer or other third party including, without
limitation, Dealer's failure to comply with Section 6.B of this Agreement;
(f) Dealer's breach of any contract or warranty other
than a contract with or warranty of Seller or the manufacturer of a Nissan
Product; or
(g) Any change in the employment status or in the terms
of employment of any officer, employee or agent of Dealer or of any Principal
Owner, Other Owner or Executive Manager including but not limited to, claims
for breach of employment contract, wrongful termination or discharge,
tortious interference with contract or economic advantage, and similar
claims; and
2. Indemnify and hold Seller harmless from any and all
settlements made and final judgments rendered with respect to any claims
described in Section 11.B.1; provided, however, that Dealer shall have no
obligation to indemnify or hold Seller harmless unless Seller: (i) promptly
notifies Dealer of the assertion of such claim and the commencement of such
action against Seller; (ii) cooperates fully in the defense of such action in
such manner and to such extent as Dealer may reasonably required; (iii)
consents to the employment of attorneys selected by Dealer and agrees to
waive any conflict of interest then existent or which may later arise,
thereby enabling Dealer's selected attorneys to represent Dealer throughout
the defense of the claim; and (iv) withdraws any actions (including
cross-claims) filed against Dealer arising out of the circumstances for which
Seller seeks indemnity. Seller shall pay all costs of its own defense
incurred prior to Dealer's assumption of Seller's defense and thereafter to
the extent that Seller employs attorneys in addition to those selected by
Dealer.
C. Conditions and Exceptions to Indemnification.
1. If the allegations asserted in any action or if any facts
established during or with respect to any action would require Seller to
defend and indemnify Dealer under Section 11.A and Dealer to defend and
indemnify Seller under Section 11.B, Seller and Dealer shall each be
responsible for its own defense in such an action and there shall be no
obligation or responsibility in connection with any defense, judgment,
settlement or expenses of such action as between Seller and Dealer.
2. In undertaking its obligations to defend and/or indemnify
each other, Dealer and Seller may make their defense and/or indemnification
conditional not be continued existence of the state of facts as then known to
such party and may provide for the withdrawal of such defense and/or
indemnification at such time as facts arise which, if known at the time of
the original request for a defense and/or indemnification, would have caused
either Dealer or Seller to refuse such request. In the event that subsequent
developments in a case make clear that the allegations which initially
justified acceptance of a request for a defense and/or indemnification are no
longer at issue therein or that the claims no longer meet the description of
those for which indemnification is required hereunder, any party providing a
defense and/or indemnification hereunder may terminate such defense and/or
indemnification of the other party. The party withdrawing from its defense
and/or indemnification to defend and/or indemnify shall give notice of its
withdrawal to the indemnifying party. Moreover, the withdrawing party shall
be responsible for all costs and expenses of defense up to the date of the
other party's receipt of the notice of withdrawal.
16
12. Termination
A. Termination Due to Certain Acts or Events. The following
represent events which are within the control of or originate from actions
taken by Dealer or its management or owners and which are so contrary to the
intent and purpose of this Agreement that they warrant its termination:
1. Any actual or attempted sale, transfer, assignment or
delegation,whether by operation of law or otherwise, by Dealer of an interest
in or right, privilege or obligation under this Agreement, or of the
principal assets necessary for the performance of Dealer's responsibilities
under this Agreement, without, in either case, the prior written consent of
Seller having been obtained, which consent shall not be unreasonably withheld;
2. Subject to the provisions of Section 14 hereof, a change,
by operation of law or otherwise, in the direct or indirect ownership of
Dealer, whether voluntary or involuntary, from that set forth in the Final
Article of this Agreement, except as expressly permitted herein, without the
prior written consent of Seller having been obtained, which consent shall not
be unreasonably withheld;
3. Removal, resignation, withdrawal or elimination from Dealer
for any reason of the Executive Manager of Dealer; provided, however, Seller
shall give Dealer a reasonable period of time within which to replace such
person with an Executive Manager satisfactory to Dealer and Seller in
accordance with Article Fourth of this Agreement; or the failure of Dealer to
retain an Executive Manager who, in accordance with Article Fourth of this
Agreement, in Seller's reasonable opinion, is competent, possesses the
requisite qualifications for the position, and who will act in a manner
consistent with the continued best interests of both Seller and Dealer;
4. The failure of Dealer to maintain the Dealership Facilities
open for business or to conduct all the Dealership Operations required by
this Agreement during and for not less than the hours customary and lawful in
Dealer's Primary Market Area or in the metropolitan area in which Dealer is
located for seven (7) consecutive days, unless such failure is caused by
fire, flood, earthquake or other act of God;
5. Any undertaking by Dealer to conduct, directly or
indirectly, any of the Dealership Operations at a location or facility other
than that which is specified in the current Dealership Facilities Addendum
for that Dealership Operation;
6. The failure of Dealer to establish or maintain wholesale
financing arrangements which are in accordance with Seller's Guides and which
are reasonably acceptable to Seller with banks or other financial
institutions approved by Seller of ruse in connection with Dealer's purchase
of Nissan Vehicles, unless Seller shall have agreed to accept another medium
of payment;
7. Insolvency of Dealer; voluntary institution by Dealer of
any proceeding under the federal bankruptcy laws or under any state
insolvency law; institution against Dealer of any proceeding under the
federal bankruptcy laws or under any state insolvency law which is not
vacated within thirty (30) days from the institution thereof; appointment of
a receiver, trustee or other officer having similar powers for Dealer or
Dealer's business, provided such appointment is not vacated within thirty
(30) days of the date of such appointment; execution by Dealer of an
assignment for the benefit of creditors; or any levy under attachment,
foreclosure, execution or similar process whereby a third party acquires
rights to a significant portion of the assets of Dealer necessary for the
performance of Dealer's responsibilities under this Agreement or to the
operation or ownership of Dealer, which is not within thirty (30) days from
the date of such levy vacated or removed by payment or bonding;
8. Any material misrepresentation by Dealer or any person
named in the Final Article of this Agreement as to any fact relied on by
Seller in entering into, amending or continuing with this Agreement
including, without limitation, any representation concerning the ownership,
management or capitalization of Dealer;
9. The conviction in a court of original jurisdiction of
Dealer or of any Principal Owner of Executive Manager of a crime affecting
the Dealership Operations or of any felony; provided, however, that a
convicted Executive Manager's ownership interest in Dealer shall not be an
event warranting termination of this Agreement if the individual is no longer
employed by Dealer or involved in any way in the management or operation of
Dealer and Dealer has made reasonable efforts to obtain the individual's
divestiture of his ownership interest in Dealer; or any willful failure of
Dealer to comply with the provisions of any laws, ordinances, rules,
regulation, or orders relating to the conduct of its Dealership Operations
including, without limitation, the sale and servicing of Nissan Products.
17
10. Knowing submission by Dealer to Seller of: (i) a false or
fraudulent report or statement; (ii) a false or fraudulent claim (or
statement in support thereof), for payment, reimbursement or for any
discount, allowance, refund, rebate, credit or other incentive under any plan
that may be offered by Seller, whether or not Dealer offers or makes
restitution; (iii) false financial information; (iv) false sales reporting
date; or (v) any false report or statement relating to pre-delivery
inspection, testing, warranties, service, repair or maintenance required to
be performed by Dealer.
Upon the occurrence of any of the foregoing events, Seller may
terminate this Agreement by giving Dealer notice thereof, such termination to
be effective upon the date specified in such notice, or such later date as
may be required by any applicable statute.
B. Termination by Seller for Non-Performance by Dealer.
1. If, based upon the evaluations thereof made by Seller,
Dealer shall fail to substantially fulfill its responsibilities with respect
to:
a. Sales of new Nissan Vehicles and the other
responsibilities of Dealer set forth in Section 3 of this Agreement;
b. Maintenance of the Dealership Facilities and the
Dealership Location set forth in Section 2 of this Agreement;
c. Service of Nissan Vehicles and sale and service of
Genuine Nissan Parts and Accessories and the other responsibilities of Dealer
set forth in Section 5 of this Agreement;
d. The other responsibilities assumed by Dealer in this
Agreement including, without limitation, Dealer's failure to:
(i) Timely submit accurate sales, service and
financial information concerning its Dealership Operations, ownership or
management and related supporting data, as required under this Agreement or
as may be reasonably requested by Seller;
(ii) Permit Seller to make an examination or audit
of Dealer's accounts and records concerning its Dealership Operations after
receipt of notice from Seller requesting such permission or information;
(iii) Pay Seller for any Nissan Products or any other
products or services purchased by Dealer from Seller, in accordance with the
terms and conditions of sale; or
(iv) Maintain net worth and working capital
substantially in accordance with Seller's Guides therefor; or
2. In the event that any of the following occur:
(i) any dispute, disagreement or controversy between or
among Dealer and any third party or between or among the owners or management
personnel of Dealer relating to the management or ownership of Dealer
develops or exists which, in the reasonable opinion of Seller, tends to
adversely affect the conduct of the Dealership Operations or the interests of
Dealer or Seller; or
(ii) any other act or activity of Dealer, or any of its
owners or management occurs, which substantially impairs the reputation or
financial standing of Dealer or of any of its management subsequent to the
execution of this Agreement.
Seller will notify Dealer of such failure and will review with Dealer
the nature and extent of such failure and the reasons which, in Seller's or
Dealer's opinion, account for such failure.
Thereafter, Seller will provide Dealer with a reasonable opportunity to
correct the failure. If Dealer fails to make substantial progress towards
remedying such failure before the expiration of such period, Seller may
terminate this Agreement by giving Dealer notice of termination, such
termination to be effective at least ninety (90) days after such notice is
given.
18
During such period Dealer will commence such actions as may be
necessary so that the termination obligations of Seller and Dealer set forth
in this Agreement may be fulfilled as promptly as practicable.
C. Termination Because of Death or Physical or Mental Incapacity of
Principal Owner. This Agreement is a personal services agreement and has
been entered into by Seller in reliance on Dealer's being owned by the
Principal Owner(s). Seller (subject to Section 14 hereof) may terminate this
Agreement by giving notice to Dealer upon the death of any of the Principal
Owner(s) or if Seller in good faith determines that any Principal Owner is so
physically or mentally incapacitated as to be unable to discharge his or her
responsibility to the operating management of Dealer. Unless deferred as
hereinafter provided, the effective date of such termination shall be not
less than ninety (90) days from the date of such notice is given to Dealer.
To facilitate the orderly termination of the business relationship
between Seller and Dealer and of the Dealership Operations, Seller may, in
its sole discretion, defer the effective date of such termination and
continue to operate with Dealer under the terms of this Agreement for a
period of time, to be determined by Seller, of up to one (1) year from the
date such notice of termination is given it within sixty (60) days from the
date of said notice, the executor or representative of the deceased or
incapacitated Principal Owner or a surviving Principal Owner shall give to
Seller written request for such deferment. This Agreement shall
automatically terminate without further notice or action by Seller upon the
expiration of any such deferment.
D. Termination for Failure of Seller or Dealer to be Licensed. If
Seller or Dealer shall fail to secure or maintain any license, permit or
authorization required by either of them for their performance of any
obligation under or in connection with this Agreement, or if such license,
permit or authorization is suspended or revoked, irrespective of the cause,
and such suspension or revocation continues for a period of seven (7) days,
either party may immediately terminate this Agreement by giving notice to the
other party.
E. Termination by Dealer. Dealer has the right to terminate this
Agreement at any time by giving notice to Seller, such termination to be
effective thirty (30) days after the giving of such notice (unless the thirty
(30) day notice period is waived in writing by Seller) or on such other date
as may be mutually agreed to in writing by Seller and Dealer.
F. Termination by Seller Because of a Change of Seller's Method of
Distribution or Decision by Seller to Cease Distribution of Nissan Vehicles.
If Seller should elect or be required to discontinue its present method of
distributing Nissan Vehicles, or if Seller should elect or be required to
cease selling or distributing Nissan Vehicles, Seller may terminate this
Agreement by giving Dealer notice and such termination will be effective not
less than one (1) year after such notice is given.
G. Termination Upon Entering Into a New Sales and Service
Agreement. Seller may terminate this Agreement at any time by giving Dealer
at lease ninety (90) days prior notice thereof and offering to enter into a
new or amended form of Agreement with Dealer in a form being offered
generally to Authorized Nissan Dealers.
Unless otherwise agreed in writing, the rights and obligations of
Dealer that may otherwise become applicable upon termination or expiration of
the term of this Agreement shall not be applicable if Seller and Dealer enter
into a new or superseding Dealer Sales and Service Agreement, and the rights
and obligations of the parties hereunder shall continue under the terms and
provisions of the new agreement.
Dealer's performance under any prior agreement may be considered by
Seller in evaluating Dealer's performance under this, or any succeeding,
agreement.
13. Rights and Liabilities Upon Termination
A. Termination Procedures
1. Upon termination of this Agreement by either Seller or
Dealer for any reason, Dealer shall cease to be an Authorized Nissan Dealer,
and Dealer shall: (i) immediately discontinue the distribution and sale of
Nissan Products as an Authorized Nissan Dealer; and (ii) at its own expense
(a) erase or obliterate all Nissan Marks and any word or words indicating
that Dealer is an Authorized Nissan Dealer from the stationery, forms and
other papers used by Dealer or any business associated or affiliated with
Dealer; (b) discontinue all advertising of Dealer as an Authorized Nissan
Dealer; (c) take all steps necessary to remove any listing in any telephone
directory yellow pages advertisement indicating that Dealer is an Authorized
Nissan Dealer; (d) discontinue any use of any Nissan Xxxx in Dealer's firm or
19
trade name and take all steps necessary or appropriate in the opinion of
Seller to change such firm or trade name to eliminate any Nissan Xxxx
therefrom; (e) discontinue or cause to be discontinued all other use of the
Nissan Marks; (f) refrain from doing anything,whether or not specified above,
that would indicate that Dealer is or was an Authorized Nissan Dealer; and
(g) refrain from using, either directly or indirectly, any Nissan Marks or
any other confusingly similar marks, names, logos or designs in a manner
likely to cause confusion or mistake or to deceive the public. If Dealer
fails to comply with any requirement of this Section 13.A.1, Dealer shall
reimburse Seller for all costs and expenses, including reasonable attorney's
fees, incurred by Seller in effecting or enforcing compliance;
2. Termination of this Agreement will not release Dealer or
Seller from the obligation to pay any amounts owing the other;
3. Subject to Section 13.E, Seller shall process all claims
and make all payments due for all labor provided and all parts and/or other
materials used by Dealer pursuant to Sections 5.B.2 and 5.B.3 prior to the
effective date of termination as provided in the Warranty Manual. Dealer
shall cease, as of the effective date of termination, to be eligible to
receive reimbursement for any work thereafter performed or parts thereafter
supplied under any warranty, campaign inspections or corrections and any
other adjustment previously authorized by Seller.
4. Dealer shall, upon Seller's request, deliver to Seller or
its designee copies of Dealer's records with respect to pre-delivery,
warranty, goodwill campaign and other service work of Dealer.
B. Repurchases by Seller Upon Termination. Upon termination other
than pursuant to a sale or transfer, Seller shall buy from Dealer and Dealer
shall sell to Seller, within ninety (90) days after the effective date of
termination:
1. All new, unused, undamaged, unlicensed, then current and
immediate previous model year Nissan Vehicles which were purchased by Dealer
from Seller and are then the unencumbered property of and in the possession
of Dealer or Dealer's flooring and/or financing institution. The price for
such vehicles shall be the invoice price previously paid by Dealer therefor,
less Seller's destination charges, all allowances paid or applicable
allowances offered thereon by Seller, any amount paid by Seller to Dealer for
pre-delivery inspection and service with respect to such vehicles pursuant to
Section 5.B, any dealer association collection, and any other charge for
taxes or special items or service. Seller shall also repurchase Genuine
Nissan Accessories which have been installed in such Nissan Vehicles which
accessories are listed in the current parts and accessories price list
(except those items marked "not eligible") at the prices set forth on
Seller's then current parts and accessories price list.
2. Subject to Section 13.C, all new, unused, undamaged and
resalable Genuine Nissan Parts and Accessories which are still in the
original undamaged packages, were purchased from Seller, are listed in the
current parts and accessories price list (except those items marked "not
eligible"), and are then the unencumbered property of and in the possession
of Dealer. The prices for such Genuine Nissan Parts and Accessories shall be
the prices set forth on Seller's then current parts and accessories price
list.
3. Subject to Section 13.C, all special tools and equipment
owned by Dealer and which are unencumbered and in the possession of Dealer on
the effective date of termination which were designed especially for
servicing Nissan Vehicles, are of the type recommended in writing by Seller
and designated as "essential" tools in accordance with Seller's Guides or
other notices pertaining thereto from Seller, are in usable and good
condition, except for reasonable wear and tear, and were purchased by Dealer
from Seller with the three (3) year period preceding the date of
termination. Seller's purchase provide for such essential tools shall be
calculated at Dealer's purchase price reduced by straight-line depreciation
on the basis of a useful life of thirty-six (36) months.
Dealer's and Seller's obligations with respect to the signs
located at the Dealership Facilities shall be determined in accordance with
the Dealership Identification Addendum between Seller and Dealer.
C. Dealer's Responsibilities with Respect to Repurchase. Seller's
obligation to repurchase Genuine Nissan Vehicles, Genuine Nissan Parts and
Accessories, and essential tools from Dealer is conditioned on Dealer's
fulfilling its responsibilities under this Section 13.C as follows:
1. Immediately following the effective date of termination of
this Agreement, Dealer shall furnish to Seller a list of vehicle
identification numbers and such other information and documents as Seller may
require pertaining to the Nissan Vehicles subject to the repurchase
obligations of Section 13.B.1. Dealer shall deliver all such vehicles in
accordance with Seller's instructions.
20
2. Within thirty (30) days after the effective date of
termination of this Agreement, Dealer shall deliver or mail to Seller a
detailed inventory of all of the items referred to in Sections 13.B.2 and
13.B.3. Within thirty (30) days of its receipt of such inventory, Seller
shall provide Dealer with instructions as to the procedures to be followed in
returning such items to Seller. Dealer shall, at its expense, tag, pack and
deliver all such items to Seller at Seller's designated parts distribution
center in accordance with such instructions.
Should Dealer fail to comply with the responsibilities listed above,
Seller shall have no obligation to repurchase any such items from dealer;
provided, however, that Seller shall have the right, but no obligation, to
enter into the Dealership Facilities for the purpose of compiling an
inventory, tagging, packing and shipping such items to Seller's designated
parts distribution center. If Seller undertakes any such responsibilities of
Dealer, the repurchase prices of such items shall be fifteen percent (15%)
less than the repurchase prices otherwise applicable under Section 13.B.
D. Title to Repurchased Property. With respect to any items of
property repurchased by Seller pursuant to this Section 13, Dealer shall take
such action and shall execute and deliver such instruments as may be
necessary: (i) to convey good and marketable title to all such items of
property; (ii) to comply with the requirements of any applicable law relating
to bulk sales and transfers; and (iii) to satisfy and discharge any liens or
encumbrances on such items of property prior to delivery thereof to Seller.
E. Payment. Seller shall make all payments to Dealer pursuant to
this Section 13 within ninety (90) days after Seller's receipt of all items
to be repurchased by it and provided Dealer has fulfilled all of its
obligations under this Section 13; provided, however, that Seller shall be
entitled to offset against such payments any and all indebtedness or other
obligations of Dealer to Seller. Seller may make any payment for any
property repurchased pursuant to this Section 13 directly to anyone having a
security or ownership interest therein.
F. Cancellation of Deliveries. Upon termination of this Agreement
Seller shall have the right to cancel all shipments of Nissan Products
scheduled for delivery to Dealer. After the effective date of termination,
if Seller shall voluntarily ship any Nissan Products to Dealer, or otherwise
transact business with Dealer, all such transactions will be governed by the
same terms provided in this Agreement, insofar as those terms would have been
applicable had the Agreement not been terminated. Nevertheless, neither the
shipping of such Nissan Products nor any other acts by Seller shall be
construed as a waiver of the termination or a renewal or extension of this
Agreement.
14. Establishment of Successor Dealer
A. Because of Death of Principal Owner. If Seller shall terminate
this Agreement pursuant to Section 12.C because of the death of a Principal
Owner, the following provisions shall apply:
1. Subject to the other provisions of this Section 14, Seller
shall offer a two (2) year Term Sales and Service Agreement to a successor
dealership ("Successor Dealership") comprised of the person nominated by such
deceased Principal Owner as his or her successor, together with the other
Principal Owner(s) and Other Owner(s), provided that:
(a) The nomination was submitted to Seller on a Successor
Addendum, was consented to by the remaining Principal Owner(s) and Other
Owner(s), and was approved by Seller prior to the death of such Principal
Owner;
(b) Either (i) there has been no change in the Executive
Manager of Seller; or (ii) Seller has approved a candidate for Executive
Manager having the required qualifications, expertise, integrity, experience
and ability to successfully operate the dealership and perform Dealer's
obligations under this Agreement; and
(c) The Successor Dealership has capital and facilities
substantially in accordance with Seller's Guides therefor at the time the
Term Sales and Service Agreement is offered.
2. If the deceased Principal Owner has not nominated a
successor in accordance with Section 14.A.1(a) above, but all of the
beneficial interest of the deceased Principal Owner has passed by will or the
laws of intestate succession directly to the deceased Principal Owner's
spouse and/or children or to one (1) or more other Principal Owners who each
held not less than a twenty-five percent (25%) beneficial ownership interest
in the dealership prior to the death of the deceased Principal Owner
21
(collectively "proposed New Owners"), subject to the other provisions of this
Section 14, Seller shall offer a two (2) year Term Sales and Service
Agreement to a Successor Dealership composed of the Proposed New Owner(s),
together with the other Principal Owner(s) and Other Owner(s), provided that:
(a) Either (i) there has been no change in the Executive
Manager of Dealer; or (ii) Seller has approved a candidate for Executive
Manager having the required qualifications, expertise, integrity, experience
and ability to successfully operate the dealership and perform Dealer's
obligations under this Agreement; and
(b) The Successor Dealership has capital and facilities
substantially in accordance with Seller's Guides therefor at the time the
Term Sales and Service Agreement is offered.
B. Consideration of Successor Addendum. To be named in the
Successor Addendum, a proposed Principal Owner or Executive Manager must (i)
be employed by Dealer or a comparable automotive dealership as his principal
place of employment; (ii) be already qualified as a Principal Owner or
Executive Manager, as the case may be; and (iii) otherwise be acceptable to
Seller as provided below.
Upon receipt of a request from Dealer that one or more individuals be
named in a Successor Addendum, Seller shall request those named to submit an
application and to provide all personal and financial information that Seller
may reasonably and customarily require in connection with the review of such
applications. Seller, upon the submission of all requested information, will
determine whether to consent to a Successor Addendum naming such individuals
by applying its criteria for considering the qualifications of Principal
Owners or Executive Managers, as the case may be.
C. Termination of Successor Addendum. Dealer may, at any time,
withdraw a nomination of a Successor even if Seller previously has qualified
the candidate, or cancel an executed Successor Addendum by giving notice to
Seller of such withdrawal at any time prior to the death or incapacity of any
Principal Owner named in this Agreement. Seller may cancel an executed
Successor Addendum only if the proposed Principal Owner or Executive Manager
no longer complies with the requirements of this Section 14.
D. Evaluation of Successor Dealership. During the term of the Term
Sales and Service Agreement, Seller will evaluate the performance of the
Successor Dealership and periodically review with the new Dealer this
evaluation. If the Successor Dealership's performance is deemed to be
satisfactory to Seller during the Term Sales and Service Agreement, Seller
will give first consideration to such Successor Dealership with respect to a
new Sales and Service Agreement.
E. Termination of Market Representation. Notwithstanding anything
stated or implied to the contrary in this Section 14, Seller shall not be
obligated to offer a Term Sales and Service Agreement to any Successor
Dealership if Seller notified Dealer prior to the event causing the
termination of this Agreement that Seller's market representation plans do
not provide for continuation of representation in Dealer's Primary Market
Area.
F. Termination of Offer. If the person or persons comprising a
proposed Successor Dealership to which any offer of a Term Sales and Service
Agreement for Nissan Products shall have been made pursuant to this Section
14 do not accept same within thirty (30) days after notification to them of
such offer, such offer shall automatically expire.
15. Sale of Assets or Ownership Interests in Dealer.
A. Sale or Transfer. Article Third of this Agreement provides that
neither this Agreement nor any right or interest herein may be assigned
without the prior written consent of Seller. However, during the term of
this Agreement, Dealer may negotiate for the sale of the assets of Dealer, or
the owners of Dealer may negotiate the sale of their ownership interests in
Dealer, upon such terms as may be agreed upon by them and the prospective
purchaser. With respect to any sale or transfer which requires Seller's
prior written consent under Article Third of this Agreement, Dealer shall
notify Seller prior to any closing of this transaction called for by the
purchase and sale agreement, and the prospective purchaser shall apply to
Seller for a Sales and Service Agreement.
B. Seller's Evaluation. Seller is responsible for establishing and
maintaining an effective body of Authorized Nissan Dealers to promote the
sale and servicing of Nissan Products. Accordingly, Seller has the right and
obligation to evaluate each prospective dealer, its owner(s) and executive
manager, the dealership location and the dealership facilities to ensure that
each of the foregoing is adequate to enable Dealer to meet its
responsibilities hereunder. Seller will evaluate each prospective
purchaser's qualifications and proposal for the conduct of the Dealership
22
Operations by applying the standards set forth or referred to in this
Agreement. In determining whether it shall consent to such a sale or
transfer, Seller will take into account factors such as the personal,
business and financial qualifications, expertise, reputation, integrity,
experience and ability of the proposed Principal Owner(s) and Executive
Manager as referred to in Articles Third and Fourth of this Agreement, the
capitalization and financial structure of the prospective dealer, the
prospective purchaser's proposal for conducting the Dealership Operations,
and Seller's interest in promoting and preserving competition.
In evaluating the prospective purchaser's application for a Sales and
Service Agreement, Seller may, without liability to Dealer, Dealer's Owners
or the prospective purchaser, consult with the prospective purchaser
regarding any matter relating to the proposed dealership.
Seller shall notify Dealer of Seller's consent or refusal to consent to
Dealer's proposed sale or transfer within sixty (60) days after Seller has
received from Dealer (i) Dealer's written request for Seller's approval; and
(ii) all applications and information customarily or reasonably requested by
Seller to evaluate such a proposal including without limitation, information
concerning each proposed owner's and/or the replacement dealer's identity,
character, business affiliations, business experience, financial
qualifications and proposals for conducting the Dealership Operations. Any
material change in such a proposal including, without limitation, any change
in the financial terms or in the proposed ownership or management of any
proposed replacement dealer, shall be treated as a new proposal for purposes
of this Section 15.B. If Seller does not consent to Dealer's proposed sale
or transfer, Seller will specify in its notice to Dealer the reasons for its
refusal to consent.
If Seller determines that the proposed dealership would not, at the
commencement of its operations, have capital or facilities in accordance with
Seller's Guides therefor and otherwise satisfactory to Seller, or if Seller
reasonably determines that the proposed dealership might not meet Seller's
performance standards in sales or service, Seller may, in its sole discretion
and in lieu of refusing to consent to the proposed sale or transfer, agree to
enter into a Term Sales and Service Agreement with the prospective
purchaser. If Seller has recommended, pursuant to a market study conducted
in accordance with Section 4.A, that Dealer relocate its Dealership
Facilities, Seller may offer to the proposed dealer a Term Sales and Service
Agreement subject to the condition that its Dealership Facilities shall be
relocated within a reasonable time to a location and in facilities acceptable
to Seller and in accordance with the market study recommendations.
Notwithstanding anything stated or implied to the contrary in this
Section 15, Seller shall not be obligated to enter into a Sales and Service
Agreement with any purchaser of the assets or ownership interests of Dealer
if Seller has notified Dealer prior to its having received notice of the
proposed sale or transfer that Seller's market representation plans do not
provide for continuation of representation in Dealer's Primary Market Area.
C. Effect of Termination. This Agreement shall end on the effective
date of termination and, except as otherwise set forth in Section 13, all
rights, obligations, duties and responsibilities of Dealer and Seller under
this Agreement shall cease as of the effective date of termination. No
assignment, transfer or sale of Dealer's right or interest in this Agreement
shall have the effect of granting the assignee, transferee or buyer any right
or interest in this Agreement that is greater than or in addition to that
then held by Dealer. Any such assignment, transfer or sale shall be subject
to the terms of any written notice of deficiency under Section 12.B or any
written notice of termination under Sections 12.A, 12.B, 12.C, 12.D, 12.E or
12.F that was previously received by Dealer, including but not limited to
Dealer's obligation to correct any failure before the expiration date of any
period established in any such notice of deficiency. No such assignment,
transfer or sale shall correct any such deficiency or extend the effective
date of termination specified in any written notice of termination.
16. Policy Review Board
A. Establishment of Policy Review Board. In the interest of
maintaining harmonious relations between Seller and Dealer and to provide for
the resolution of certain protests, controversies and claims with respect to
or arising out of Section 4, Section 12 or Section 13 of this Agreement,
Seller has established the Nissan Motor Corporation in U.S.A. Policy Review
Board ("Policy Review Board"). The procedures of the Policy Review Board, as
they may be revised by Seller from time to time, are incorporated herein by
reference. At the time of execution of this Agreement, Seller will have
furnished to Dealer such procedures, and Seller will furnish to Dealer a copy
of each revision or modification that Seller may thereafter make to such
procedures. Any decision of the Policy Review Board shall represent the
independent decision of Seller and shall be binding on Seller but not on
Dealer.
23
B. Appeal of Dealer Appointment to Policy Review Board. Any
objections by Dealer to the proposed appointment of an additional Nissan
dealer within the ten (10) mile driving distance described in Section 4.B
shall be appealed to the Policy Review Board by filing a Notice of Appeal in
accordance with the procedures established therefor within thirty (30) days
from the date of Dealer's receipt of the Notice of Appointment.
C. Appeal of a Termination to Policy Review Board. Any protests,
controversies or claims by Dealer (whether for damages, stay of action, or
otherwise) with respect to any termination of this Agreement or the
settlement of the accounts of Dealer with Seller after termination of this
Agreement has become effective shall be appealed to the Policy Review Board
by filing an appeal in accordance with the procedures established therefor
within thirty (30) days after Dealer's receipt of notice of termination or,
as to settlement of accounts after termination, within one (1) year after the
termination has become effective.
D. Effect of Other Proceedings. Because the purpose of the Policy
Review Board is to assist in resolving issues between Seller and Dealer in a
non-adversarial setting and to avoid litigation, if Dealer institutes or
seeks any relief or remedy through legal, administrative or other proceedings
as to any matter that is or could be the subject of an appeal to the Policy
Review Board, then the Policy Review Board may, in its sole discretion, elect
to refuse to consider any appeal to the Policy Review Board then pending or
thereafter filed by Dealer relating to such subject matter.
Dealer further agrees that Dealer's seeking such relief or remedy shall
constitute a waiver of any right to an appeal to the Policy Review Board with
respect to such subject matter and Seller and the Policy Review Board shall
be forever released from any obligation that might otherwise have had to
conduct any proceedings, render any decision or take any other action in
connection with such subject matter.
17. General
A. Notices. All notices or notifications required or permitted to
be given by this Agreement to either party shall be sufficient only if given
in writing and delivered personally or by mail to Dealer at the address set
forth on the Dealership Facilities Addendum to this Agreement and to Seller
at its national headquarters, or at such other address as the party to be
addressed may have previously designated by written notice to the other
party. Unless otherwise specified in the Notice, such notices shall be
effective upon receipt.
B. No Implied Waivers. The waiver by either party, or the delay or
failure by either party to claim a breach, of any provision of this Agreement
shall not affect the right to require full performance thereafter, nor shall
it constitute a wavier of any subsequent breach, or affect in any way the
effectiveness of such provision.
C. No Agency. Dealer is an independently operated business entity
in which Seller has no ownership interest. This Agreement does not
constitute Dealer the agent or legal representative of Seller or Manufacturer
for any purpose whatsoever. Dealer is not granted any express or implied
right or authority to assume or create any obligation on behalf of or in the
name of Seller or Manufacturer or to bind Seller or Manufacturer in any
manner or thing whatsoever.
D. Limitations of Seller's Liability. This Agreement contemplates
that all investments by or in Dealer shall be made, and Dealer shall purchase
and resell Nissan Products, in conformity with the provisions hereof, but
otherwise in the discretion of Dealer. Except as herein specified, nothing
herein contained shall impose any liability on Seller in connection with the
business of Dealer or otherwise or for any expenditures made or incurred by
Dealer in preparation for performance or in performance of Dealer's
responsibilities under this Agreement.
E. Entire Agreement. This agreement contains the entire
understanding of the parties hereto with respect to the subject matter
contained herein and may be amended only by a written instrument executed by
each of the parties or their respective personal representatives, successors
and/or assigns. This Agreement supersedes any and all prior agreements with
respect to the subject matter hereof, and there are no restrictions,
promises, warranties, covenants or undertakings between the parties other
than those expressly set forth in this Agreement, provided, however, Seller
shall have the right to amend, modify or change this Agreement in case of
legislation, government regulations or changes in circumstances beyond the
control of Seller that might affect materially the relationship between
Seller and Dealer as further provided in Section 17.G.
24
F. California Law. This Agreement shall be deemed to have been
entered into in the State of California, and all questions concerning the
validity, interpretation or performance of any of its terms or provisions, or
of any rights or obligations of the parties hereof, shall be governed by and
resolved in accordance with the internal laws of the State of California
including, without limitation, the statute of limitations.
G. Changes Required by Law. Should Seller determine that any
federal or state legislation or regulation or any condition referred to in
Section 17.E requires a change or changes in any of the provisions of this
Agreement, Seller may offer to Dealer an amendment or an amended Agreement
embodying such change or changes. If Dealer shall fail to execute such
amendment or amended Agreement and return it to Seller within thirty (30)
days after it is offered Dealer, Seller may terminate this Agreement by
giving notice to Dealer, such termination to effective upon receipt by Dealer
of such notice.
H. Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be
found to be invalid, void or unenforceable, the remaining provisions and any
application thereof shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.
I. Assignment. Dealer shall not transfer or assign any right or
transfer or delegate any obligation of Dealer under this Agreement without
the prior written approval of Seller. Any purported transfer, assignment or
delegation made without the prior written approval of Seller shall be null
and void.
J. No Franchise Fee. Dealer represents and warrants that it has
paid no fee, nor has it provided any goods or services in lieu of a fee, as
consideration for Seller's entering into this Agreement and that the sole
consideration for Seller's entering into this Agreement was Dealer's
Principal Owners' and Executive Manager's abilities, integrity, assurances of
personal services and expressed intention to deal fairly and equitably with
Seller and the public and any other promises recited in this Agreement.
K. Captions. The captions of the sections of this Agreement are for
convenience and reference only and shall in no way be construed to explain,
modify, amplify, or aid in the interpretation, construction or meaning of the
provisions of this Agreement or to be a part of this Agreement.
L. Benefit. This Agreement is entered into by and between Seller
and Dealer for their sole and mutual benefit. Neither this Agreement nor any
specific provision contained in it is intended or shall be construed to be
for the benefit of any third party.
25
