SUBARU [LOGO]
[LOGO]
DEALERSHIP
AGREEMENT
CAMP AUTOMOTIVE, INC.
1. PARTIES TO THIS AGREEMENT is made the 16th day of OCTOBER, 1998,
AGREEMENT by and between SUBARU OF AMERICA, INC./WESTERN REGION, a NJ
corporation ("Distributor"), having a place of business
at 0000 XXXXX 00 XXXX, XXXXXX XXXX, XX 00000, and CAMP
AUTOMOTIVE, INC. ("Dealer"),
[x] a Oregon corporation [] a partnership [] an individual
Doing or intending to do business as CAMP SUBARU, having its
principal place of business at E. 000 XXXXXXXXXX XXXXXX,
XXXXXXX, XX 00000
2. STANDARD The Subaru Dealership Agreement Standard Provisions booklet,
PROVISIONS marked MSA No. 732-C 4/88 (hereinafter the "Standard
Provisions") is incorporated by reference as part of this
Agreement with the same force and effect as if all of the
definitions and provisions contained in the Standard
Provisions were fully set forth in this Agreement. The
definition of the term "Fuji" appearing in Paragraph 2.1 of
the Standard Provisions is amended by adding the following
sentence at the end of that definition: "For purposes of this
Agreement, the term "Fuji" shall also include Subaru-Isuzu
Automotive, Inc,, an Indiana Corporation." The conduct of
business by Dealer under this Agreement is expressly subject
to the Standard Provisions and all the documents referred to,
or incorporated by reference in, the Standard Provisions.
Dealer hereby acknowledges receipt of a copy of this Agreement
and of the Standard Provisions without any addition to, or
modification of, the printed text of either, except as may be
set forth in any other written documents agreed upon between
Distributor and Dealer, which documents are attached hereto
and identified as follows (or if none, so state below):
(a) RIGHT TO FIRST ADDENDUM TO SUBARU DEALERSHIP AGREEMENT
(b) HOLDING COMPANY ADDENDUM
(c) NONE
3. APPOINTMENT Distributor hereby appoints Dealer as an authorized dealer of
AND Subaru Products and Dealer accepts the appointment under the
ACCEPTANCE terms and conditions of this Agreement.
4. AREA OF Dealer assumes responsibility for the promotion, sale and
RESPONSIBILITY service of Subaru Products within the area (hereinafter
referred to as the "Area of Responsibility") consisting of the
following post office communities:
SPOKANE/WEST, WA PRIMARY MARKET AREA OF RESPONSIBILITY
#14-303B. REFER TO THE ATTACHED SUBARU ZIP STRUCTURE LIST
DATED 10/98.
The Area of Responsibility described above is not necessarily
exclusive to Dealer and one or more other authorized Subaru
dealers may share the same Area of Responsibility because of
its size and market potential, the appointment of any
additional dealers being subject in all events to the
requirements of applicable law. If other Subaru dealers do
share the same Area of Responsibility, Dealer's responsibility
for the Area of Responsibility shall be determined from time
to time on a proportionate basis by Distributor after
reviewing in consultation with Dealer relevant statistics and
available information concerning population size,
demographics, consumer shopping habits, traffic patterns, and
other geographical factors applicable to the Area of
Responsibility.
5. OWNERSHIP Dealer represents and Distributor enters into this Agreement
in reliance upon the representation that the following
individuals are the sole record and beneficial owners of
Dealer and own Dealer in the following percentages:
Percentage Of Name of Each Respective
Names Of Beneficial Record Owner, If Different
Beneficial Owners Interest From Beneficial Owner
LITHIA MOTORS, INC. 100.00% LITHIA HOLDING COMPANY, LLC
(SEE ATTACHED OWNERSHIP CHART)
6. CHANGE IN This is a personal service agreement. There shall be no change
OWNERSHIP in the beneficial ownership of Dealer, or transfer of any
OR TRANSFER rights or obligations under this Agreement, without the prior
OF AGREEMENT written consent of Distributor, which consent (except as
provided in Section 18.4 of the Standard Provisions) shall not
be unreasonably withheld. Any Significant Change of Ownership
Interest (as defined in Section 2.11 of the Standard
Provisions) will also require the consent of SOA under
Paragraph 14 of this Agreement.
LITHIA MOTORS, INC.
-------------------
POST-IPO Structure
XXXXXX X. XXXXXX
53.639% Beneficial Interest
M.L. XXXX XXXXXXX XXXXXX INSURANCE, LLC
34.875% Beneficial Interest 3.761% Beneficial Interest
X. XXXXXXXX XXXX XXX & XXXXX XXXXXX FOUNDATION
7% Beneficial Interest .725% Beneficial Interest
XXXXXX X. XXXXXX
100% Voting
Managing Member
LITHIA HOLDING COMPANY, LLC THE PUBLIC
35.5% of shares (or more) 64.4% of shares (or less) Class "A"
Class "B" Common Common
10 Votes per share 1 vote per share
84.7% Control 15.3% Control
Tax ID 00-0000000
LITHIA MOTORS, INC.
-------------------
100% Control
100 Shares Each
Tax ID 00-0000000
CAMP AUTOMOTIVE, INC.
DBA CAMP SUBARU
LITHIA STOCK HOLDING VOTES
-------------------- -----
Class A Shares 2,925,550 25.362% 2,925,550 6.029%
Class A Employee Authorized Stock Options* 1,049,450 9.098% 1,049,450 2.163%
Class A Secondary Issue 3,000,00 26.008% 3,000,000 6.182%
Class A Secondary Issue Over-Allotment 450,00 3.901% 450,000 0.927%
Total Class A Shares 7,425,00 64.369% 7,425,000 15.301%
Class B Restricted Shares** 4,110,000 35.361% 41,100,000 84.699%
Total Shares Outstanding 11,535,000 100.000% 48,525,000 100.000%
*All employee stock options may not currently be issued
rev: 08/04/98
7. EXECUTIVE Dealer represents and Distributor enters into this Agreement
MANAGEMENT in reliance upon the representation that the following
persons, and no other persons, shall constitute the executive
management of Dealer:
TITLE OR OFFICE NAME
---------------
PRESIDENT XXXXXX X. XXXXXX
VICE PRESIDENT (IF ANY) M.L. XXXX XXXXXXX
VICE PRESIDENT (IF ANY)
TREASURER XXXXXX X. XXXXXX
SECRETARY XXXXXX X. XXXXXX
GENERAL MANAGER XXXXXX X. XXXX
OTHER OFFICERS (IF ANY)
OTHER OFFICERS (IF ANY)
Dealer further represents that, unless otherwise indicated at
the end of this sentence, any member of executive management,
as well as Dealer's Sales, Service and Parts Managers, may
transact business with Distributor on behalf of Dealer and
that in so doing each such person shall legally bind Dealer:
Dealer recognizes and agrees that retention of a qualified
and experienced General Manager is required if other
full-time member of executive management do not possess, in
the sole discretion of Distributor, the qualifications and
experience necessary to adequately supervise the general
management of the dealership.
8. CHANGE IN There shall be no charge in Dealer executive management
MANAGEMENT without the prior written consent of distributor which
consent shall not be unreasonably withheld. With respect to
all other changes in management personnel, Dealer agrees to
give notice to Distributor upon the occurrence of any such
change.
9. FACILITIES Distributor approved the following facilities, containing the
areas specified below, which Dealer will Provide and use
exclusively for Dealer's Subaru operations:
New Car Showroom
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 1,280 sq. ft.
Sales and General Office Area
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 880 sq. ft.
Parts Facility
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 1,600 sq. ft.
Service Facility
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 4,000 sq. ft.
New Car Outside Display and Storage
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 22,280 sq. ft.
Used Vehicle Display and Storage
Address: E. 000 XXXXXXXXXX XXXXXX, XXXXXXX, XX 00000
Exclusive Subaru Area: 12,680 sq. ft.
10. TERM AND The term of this Agreement begins on the 16TH day of OCTOBER,
RENEWAL 1998, and ends on the 15TH day of OCTOBER, 1999. (THE TERM
OF THIS AGREEMENT SHALL NOT BE FOR A PERIOD LONGER THAN
THIRTY-SIX (36) MONTHS.) The expiration or prior termination
of this Agreement shall not affect or extinguish any
unsatisfied account balances between Distributor and Dealer,
any claims for indemnification under Sections 10.5, 13.2,
13.4, 17.1 or 17.2 of the Standard Provisions, any claims
asserted in legal actions or proceedings then pending and
involving the parties hereto, or the respective rights and
obligations of Dealer and Distributor under Article 16 of the
Standard Provisions. Any renewal of this Agreement must be
formally entered into by means of a fully executed Subaru
Dealership Agreement in the form then current, incorporating
the Subaru Dealership Agreement Standard Provisions in the
form then current.
11. PRIOR Dealer may terminate this Agreement prior to the expiration
TERMINATION date by giving at least sixty (60) days prior written notice
to Distributor by certified or registered mail. Distributor
may, prior to the expiration date, terminate this Agreement
for cause as set forth in Article 15 of the Standard
Provisions. This Agreement shall automatically terminate upon
notice to Dealer of the termination, expiration or
relinquishment of Distributor's authority to act as a
distributor of Subaru Products for the Area of Responsibility.
12. CAPITALIZATION Dealer agrees to establish and maintain adequate Net Cash,
Net Working Capital, Total Net Worth and Operating
Investment, in accordance with all applicable Minimum
Standards, so as to effectively perform its obligations
under this Agreement. If this Agreement is for the
appointment of a New Dealer Candidate, then Dealer hereby
represents that it now possesses the initial required
amounts of capitalization indicated below, available
exclusively for Subaru operations. In all other cases,
Dealer hereby represents that it now possesses in its total
operations the amounts of capitalization indicated below:
Net Cash: $10,684,787 Total Net Worth: $9,935,330
Net Working Capital: $13,721,272 Operating Investment: $16,424,996
13. CREDIT Dealer agrees to make arrangements for and to maintain,
ARRANGEMENTS throughout the term of this Agreement, a committed floor
plan line of credit in an amount adequate to fulfill the
requirements set forth in the applicable Minimum Standards
and adequate to finance Dealer's anticipated inventory of
Cars. Whenever required by Distributor, Dealer shall
furnish Distributor with documentation that such committed
floor plan line of credit is available from a financial
institution approved by and in a form acceptable to
Distributor for use in connection with Dealer's purchases
of, and carrying of inventory in, Cars. Dealer hereby
represents that it now possesses a committed floor plan
line of credit, from a financial institution approved by
Distributor, available exclusively for Subaru operations,
in the initial required amount of $2,000,000.
14. SOA The consent of SOS is required for the appointment of a
CONSENT New Dealer Candidate, for a Significant Change of Ownership
Interest, or for a relocation of facilities in addition to
those identified in Paragraph 9 of this Agreement SOA's
decision to grant or withhold consent shall be communicated
to the Distributor in writing and the Distributor will in
turn promptly notify the New Dealer Candidate, the proposed
transferee of the Interest to be transferred, or the dealer
as the case may be. If a New Dealer Candidate engages in
any Subaru operation prior to SOA's consent, or if a
Significant Change of Ownership Interest or a change in
facilities location is effectuated prior to SOA's consent,
such consent may be denied notwithstanding the
qualifications of the New Dealer Candidate or proposed
transferee, notwithstanding the condition of the new
facility and notwithstanding any contrary representations
which may have been made by Distributor, SOA consent also
may be defined in the 'event that SOA determines, in its
sole discretion, that either: (a) the agreement and related
documents when presented to SOA for review are not fully
and properly completed or do not conform to the requirement
set forth in the then current Subaru Dealer Appointment
Procedures Manual; (b) the New Dealer Candidate, proposed
transferee or proposed new facility does not meet or
fulfill the standards set forth in the then current Subaru
Dealer National Operating Standards Manual, including the
Subaru Dealership National Minimum Standards; or (c) the
New Dealer Candidate or proposed transferee does not
evidence the honesty, integrity, sales and service energy
or proven sales, market penetration and service
performance, and skills, experience or cooperative attitude
which are likely to promote the long term success and
reputation of Subaru Products. If applicable law requires
that a New Dealer Candidate or proposed transferee be
approved or disapproved within a prescribed time period,
such time period shall be calculated from and after the
date upon which the agreement and all related documents are
first presented for review by Distributor to SOA.
15. DEALER'S Effective for the term of this Agreement only, Dealer's
MINIMUM Planning Volume shall be 359 Cars per year and the number
STANDARDS of Units in Operation ("UIO") assigned to Dealer is
LEVEL 1,822, so that UIO plus one (1) year's Planning Volume
equals 2,181 and UIO plus three (3) years' Planning Volume
equals 2,899 If this Agreement is renewed or if Dealer
relocates its facilities or if there is a change in
the percentage share of responsibility for Dealer's Area of
Responsibility, both Planning Volume and UIO will be
re-evaluated by Distributor at the time of such renewal,
relocation or percentage change, and Dealer will be
required to comply with the Minimum Standards in effect at
that time for the re-evaluated Planning Volume and UIO
levels.
The parties hereto, intending to be legally bound, have
executed this Agreement, or have caused this Agreement to
be executed by their proper and duly authorized officers,
on the date and year first above written.
SUBARU OF AMERICA, INC/WESTERN REGION CAMP AUTOMOTIVE INC.
BY: /s/ Xxx Xxxxxxxx BY: /s/ Xxxxxx X. XxXxxx
--------------------------------- ----------------------------------
Xxx Xxxxxxxx Xxxxxx X. XxXxxx
Regional Vice President
BY: /s/ Xxxxx Xxxxx TITLE President
---------------------------------
Xxxxx Xxxxx
Regional Market Development Manager
WITNESS OR
ATTEST: /s/
---------------------------------
[LETTERHEAD]
RIGHT OF FIRST REFUSAL ADDENDUM TO SUBARU DEALERSHIP AGREEMENT
This addendum is made this 16th day of October, 1998, by and between Camp
Automotive, Inc. ("Dealer") and Subaru of America, Inc./Western Region
("Distributor").
WHEREAS, Dealer's Subaru Dealership Agreement and Standard Provisions
("Agreement") commenced on October 16, 1998, which Agreement is incorporated
herein by reference as though set forth at length; and
WHEREAS, Dealer and Distributor desire to amend the Agreement to provide
Distributor a right of first refusal should a proposal be submitted by Dealer
under article six (6) of the Dealership Agreement.
NOW THEREFORE, in consideration of these premises, Dealer and Distributor
agree as follows:
1. Distributor may elect to exercise its purchase right by written notice to
Dealer within thirty (30) calendar days after Dealer has furnished to
Distributor all applications and information reasonably requested by
Distributor to evaluate Dealer's proposal. If Dealer's proposed sale or
transfer was to a successor approved in advance by Distributor, then Dealer
may reject Distributor's exercise to purchase.
2. If Dealer's proposed sale or transfer was to Dealer's nominee, to any of
Dealer's owners, to Dealer's employees as a group, or to Dealer's spouse,
children or heirs, other than a successor approved in advance by Distributor,
then Dealer may withdraw its proposal within thirty (30) calendar days
following receipt of Distributor's notice of election of its purchase right.
3. Distributor's right under this Addendum shall be a right of first refusal,
permitting Distributor to (a) assume the proposed transferee's rights and
obligations under its Agreement with Dealer and (b) cancel this Agreement and
all rights granted Dealer hereunder. Except to the extent specifically
inconsistent with the terms of this Agreement, the price and all other terms
of Distributor's purchase shall be as set forth in any bonafide written
purchase and sale agreement between Dealer and its proposed transferee and
in any related documents.
4. Dealer shall furnish to Distributor an itemized fair market valuation for
all of the Subaru assets to be purchased, copies of all applicable liens,
mortgages, encumbrances, leases, easements, licenses or other documents
affecting any of the property to be transferred and shall assign to
Distributor and permit or license as necessary for the continued conduct of
Dealer's operation.
5. Distributor may assign each right of first refusal to any party it chooses,
but in that event Distributor will remain primarily liable for payment of the
purchase price to Dealer.
6. If Distributor exercises its purchase right, Distributor will reimburse
Dealer's proposed transferee for reasonable documented actual expenses which
such proposed transferee incurred through the date of such exercise which are
directly and solely attributable to the transaction Dealer proposed.
[LETTERHEAD]
RIGHT OF FIRST REFUSAL ADDENDUM TO SUBARU DEALERSHIP AGREEMENT
PAGE 2
7. Nothing contained in this Addendum shall require Distributor to exercise its
right of first refusal in any case, nor restrict any right Distributor may
have to refuse to approve Dealer's proposed transfer.
8. This Addendum is not intended to confer any right, benefit or claim upon any
person or entity other than Dealer or Distributor.
9. Except as modified by this Addendum, all terms, conditions and provisions of
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF the parties have hereunto set their signatures on the date
first hereinabove written.
SUBARU OF AMERICA, INC./ CAMP AUTOMOTIVE, INC.
XXXXXXX XXXXXX XXXXXXX, XX
By: By:
/s/ Xxx Xxxxxxxx /s/ Xxxxxx X. XxXxxx
-------------------------------- --------------------------------
Xxx Xxxxxxxx Xxxxxx X. XxXxxx
Regional Vice President President
Witness: Witness:
/s/ Xxxxx Xxxxx /s/
-------------------------------- --------------------------------
Xxxxx Xxxxx Name/Title
Regional Market Development Manager
[LETTERHEAD]
HOLDING COMPANY ADDENDUM TO SUBARU DEALERSHIP AGREEMENT
This Addendum is made this 16th day of October, 1998, by and between Camp
Automotive, Inc. ("Dealer") and Subaru of America, Inc./Western Region
("Distributor").
WHEREAS, Dealer has submitted to Distributor an application for the
Subaru Dealership Agreement and Standard Provisions ("Agreement") in order to
operate as an authorized Subaru dealer;
WHEREAS, Dealer is a wholly-owned subsidiary of Lithia Motors, Inc.
("Parent Company"), an Oregon corporation, which is a wholly-owned subsidiary
of Lithia Holding Company, LLC ("Holding Company"), an Oregon limited
liability company;
WHEREAS, Dealer desires to operate as an authorized Subaru dealer and
has designated Xxxxxx X. XxXxxx as Dealer Principal and Xxxxxx X. Xxxx as
General Manager.
NOW THEREFORE in consideration of these premises, Dealer, Parent Company, and
Holding Company acknowledge that Dealer must notify Distributor in writing
prior to any change in the ownership of Dealer and/or Parent Company and
prior to any change in Dealer Principal and/or General Manager.
Definition: Dealer Principal - The individual designated by Dealer, as
approved by Distributor, to have sole authority and responsibility in the
conduct of all Subaru business dealings between Dealer and Distributor.
Definition: General Manager - The individual designated by Dealer, as
approved by Distributor, to conduct the day-to-day operations of Dealer.
1. Following notification to Distributor of proposed changes, Distributor will
require certain documentation for its review and approval of any change.
Distributor will reasonably provide approval of changes following
satisfactory receipt and review of the required documentation. Changes in
Dealer Principal or General Manager must satisfy Distributor's then current
requirements for a new dealer applicant.
2. Furthermore, Parent Company and/or Holding Company agree never to seek or
obtain:
More than two (2) Agreements within the same Nielsen Station Index
Designated Market Area as defined by the X.X. Xxxxxxx Company; or
More than four (4) Agreements within the same Distributor; or
More than twelve (12) Agreements within SOA's entire area of
distribution.
3. Dealer, Parent Company, and Holding Company agree that their failure to
abide by one or more of the requirements set forth in paragraphs 1 and 2
of this Addendum shall constitute a material breach of the Agreement.
[LETTERHEAD]
HOLDING COMPANY ADDENDUM TO SUBARU DEALERSHIP AGREEMENT
PAGE 2
4. Dealer agrees to voluntarily terminate the Agreement, in writing,
immediately upon Distributor's determination of Dealer's material breach
of the Agreement. If Distributor does not find sufficient cause to permit
Dealer to immediately correct a material breach of the Agreement, Dealer
will surrender all Subaru assets to Distributor at acquisition cost within
a period of no more than thirty (30) days following Distributor's
acceptance of Dealer's resignation.
5. This Addendum is not intended to confer any right, benefit or claim upon
any person or entity other than Dealer or Distributor.
6. Except as modified by this Addendum, all terms, conditions and provisions
of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF the parties have hereunto set their signatures on the date
first herein above written.
SUBARU OF AMERICA, INC./ CAMP AUTOMOTIVE, INC.
XXXXXXX XXXXXX XXXXXXX, XX
By: By:
/s/ Xxx Xxxxxxxx /s/ Xxxxxx X. XxXxxx
-------------------------------- --------------------------------
Xxx Xxxxxxxx Xxxxxx X. XxXxxx
Regional Vice President President
Witness: Witness:
/s/ Xxxxx Xxxxx /s/
-------------------------------- --------------------------------
Xxxxx Xxxxx Name/Title
Regional Market Development Manager