EXHIBIT 10.8.9.2 [LAND ROVER LOGO] LAND ROVER NORTH AMERICA, INC. DEALER AGREEMENT STANDARD TERMS AND CONDITIONS TABLE OF CONTENTS Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marque Values, Advertising and Promotions...
EXHIBIT 10.8.9.2
[LAND ROVER LOGO]
LAND ROVER NORTH AMERICA, INC.
DEALER AGREEMENT
STANDARD TERMS AND CONDITIONS
TABLE OF CONTENTS
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marque Values, Advertising and Promotions Trademarks . . . . . . . . . . . . .
Supply of Product. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Primary Area of Responsibility/Facilities. . . . . . . . . . . . . . . . . . .
Customer Relations and Retention . . . . . . . . . . . . . . . . . . . . . . .
Dealer Performance, Operations and Personnel . . . . . . . . . . . . . . . . .
Obligation of Company to Dealer. . . . . . . . . . . . . . . . . . . . . . . .
Ownership, Succession, Transfer and Assignment . . . . . . . . . . . . . . . .
Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communications and Disputes. . . . . . . . . . . . . . . . . . . . . . . . . .
Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Standard Terms and Conditions
LAND ROVER NORTH AMERICA, Inc.
ARTICLE 1 - DEFINITIONS
The following definitions shall apply in
this agreement. Any reference to the
singular shall, where appropriate,
include the plural and vice versa.
Agreement 1.1 "Agreement" means the combination
of the text of the Grant of the
Franchise executed by the parties
hereto, these Standard Terms and
Conditions and the Dealer Ownership and
Management Exhibit, Dealer Primary Area
of Responsibility Exhibit, Dealer
Facilities and Location Exhibit, Dealer
Financial Requirements Exhibit, Dealer
Succession Plan Exhibit together with
any other exhibit incorporated by
reference.
Company 1.2 "Company" means Land Rover North
America, Inc., a corporation organized
under the laws of the state of Delaware
with its principal place of business
located at 0000 Xxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000.
Commencement Date 1.3 "Commencement Date" means the
effective date of this Agreement as
specified in the Grant of the Franchise.
Dealer 1.4 "Dealer" means the business entity
together with the individual(s) and/or
organization(s) described in the Dealer
Ownership and Management Exhibit.
Dealer Premises 1.5 "Dealer Premises" means the
physical location described in the
Dealer Facilities and Location Exhibit
and none other.
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Dealer Principal 1.6 "Dealer Principal" means the person
designated as such in the Dealer
Ownership and Management Exhibit.
General Manager 1.7 "General Manager" means the
individual named as such in the Dealer
Ownership and Management Exhibit.
Manufacturer 1.8 "Manufacturer" means Rover Group
Limited, a corporation organized under
the laws of England under Registration
No. 48324 with its registered office at
Xxxxxxxxxxxxxx Xxxxxxx, Xxxxxxxx,
XX00XX, Xxxxxx Xxxxxxx.
Primary Area of
Responsibility 1.9 "Primary Area of Responsibility"
means the geographic area described in
the Dealer Primary Area of
Responsibility Exhibit.
Land Rover Centre 1.10 "Land Rover Centre" means a Dealer
Premises which is a free standing
facility designed and constructed in
accordance with Company guidelines
offering sales, service and parts
available to Customers and dedicated
exclusively to the sales and service of
Land Rover Products, with staff trained
in accordance with Company guidelines
and designated as a Centre by Company.
Such designation as a Centre may be
withdrawn by Company if Dealer fails to
maintain the requirements of a Centre.
Land Rover Vehicle 1.11 "Land Rover Vehicle" means a four
wheel drive vehicle assembled by
Manufacturer bearing the trademark Land
Rover and imported by Company.
Land Rover Parts
Accessories 1.12 "Land Rover Parts & Accessories"
means replacement parts and optional
equipment marketed by Company for Land
Rover Vehicles. The optional equipment
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will be referred to for marketing
purposes as "Gear", as "Land Rover Gear"
or "Vehicle Gear".
Land Rover Products 1.13 "Land Rover Products" means the
combination of Land Rover Vehicles and
Land Rover Parts and Accessories.
Warranty 1.14 "Warranty" means that certain
undertaking issued by Company which
describes the limited obligation of
Company with respect to repair and
service of Land Rover Vehicles in
accordance with the written terms of
such undertaking as described in Article
9.
Article 2 - Marque Values, Advertising
and Promotions Trademarks
----------------------------------------
Marque Values 2.1 Dealer and Company, as part of a
national Land Rover distribution system,
agrees to adhere to the Marque Values
and promote Land Rover Products and
conduct their operations in a manner
consistent with those values.
Advertising 2.2 Advertising will be done
consistently and regularly in compliance
with Company guidelines and Dealer will
correct and/or withdraw, as required by
Company, any advertising or promotional
material which Company, in its sole
opinion, deems objectionable.
Promotions 2.3 Dealer will conduct, on a regular
basis, promotional events such as off-
road events, service clinics, lifestyle
and press events and support local civic
and cultural events, all to further
enhance the image of the Dealer and
other Land Rover dealers.
Signs 2.4 Dealer will purchase, illuminate,
promptly repair and maintain at the
Dealer Premises, signs and displays of
the type developed by Company as well as
such other types of signs necessary
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to effectively identify the Dealer and
the Dealer Premises. The parties will
cooperate so as to adhere to local laws
and ordinances which relate to the
placement, size and general appearance
and control of signs. Dealer will
provide Company with sufficient
information concerning local laws and
ordinances to allow for proper design
and placement of signs.
Advertising Groups 2.5 To the maximum extent permitted by
law, Dealer will participate in
promotional, advertising and public
relations programs and groups developed
by Company and will further develop and
actively utilize programs for the
advertising, promotion and media
coverage of Land Rover Products.
Use of Trademark 2.6 Dealer will not use or display any
Company trademark except in the
following fashion:
2.6.1 In connection with the
promotion, sale and service
of Land Rover Products
exclusively; and
2.6.2 Only in such manner and for
such purposes incident to
such promotion, sale, and
service as Company may
specify from time-to-time.
Limitation 2.7 Dealer agrees not to use any word,
symbol or abbreviation which is similar
to, or may be confused with Company's
trademark. Dealer may use the
designations "Land Rover Authorized
Dealer," "Land Rover Genuine Parts," and
"Land Rover Authorized Service" and the
vehicle names "Range Rover",
"Discovery", "Defender 90" and "Defender
110". No Company trademark may be used
except in the color, size, form and
style as
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uniformly approved by Company. Dealer
is not authorized to offer any resale
items displaying Company's trademark
except those items offered by Company.
Infringement 2.8 The parties agree to cooperate with
each other in preventing any acts of
trademark infringement or misuse.
Dealer will advise Company of any
potential non-compliance which comes to
Dealer's attention and Company will
properly address any violation or
infringement or perceived infringement
in order to assure the integrity and
values of the Land Rover marque.
Article 3 - Supply of Product
----------------------------------------
New Vehicle Order 3.1 Subject to their availability,
Company will sell and deliver Land Rover
Products to Dealer in accordance with
the terms of this Agreement. Dealer
will place orders in accordance with
procedures established by the Company.
All orders are subject to acceptance by
Company and may be accepted in whole or
in part. Orders will be accepted by
formal notice or by shipment. All
orders are deemed firm except Dealer may
cancel all or part of its order by
notice, if such notice is received by
Company prior to notice of acceptance
being issued by Company or prior to
shipment of the order if shipment is
used by Company as the method of
acceptance of Dealer's order. If such
notice of cancellation is issued orally,
it shall be immediately confirmed in
writing.
Delivery 3.2 Company will select the
distribution point for delivery. Dealer
shall be responsible for the costs of
shipping from the Company nominated
distribution point on a nationwide
equalized cost basis. If diversions are
made at Dealer's request, or as a result
of Dealer's failure or refusal to accept
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delivery, except as provided in section
3.7 below, all costs of such diversion
shall be for Dealer's account and shall
be paid promptly.
Dealer Cost 3.3 All acceptances of Dealer's orders
will be at the prevailing Company price.
Company retains the right, subject to
notice, to revise prices from time to
time. Such revised prices shall be
effective as of the date stated and will
apply to all unfilled orders of Land
Rover Products which have not yet been
shipped to Dealer. Company will protect
retail Customers with orders in place
secured by deposits from price increases
in accordance with local law. In
agreeing to provide such protection,
Company retains the right to set
reasonable requirements on such orders
(including methods of reporting and
accepting deposits) to audit all such
claims for price protection and to
recharge Dealer for any price protection
given to a Customer that is not
subsequently substantiated. The amount
recharged will be the difference between
the price to the Customer as represented
and what the price would have been but
for the protection.
Payment 3.4 Dealer will pay for Land Rover
Products in cash, by electronic funds
transfer, by sight draft, on an account
maintained by Dealer for such purpose,
or in such other manner as specified by
Company at the time and upon the
conditions specified in terms of payment
established by Company. Delivery of
checks or of instruments other than cash
will not constitute payment until cash
has actually been collected. All
collection charges, transfer charges and
exchange costs, if any, together with
attorney fees, shall be for Dealer's
account.
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Title 3.5 Title to all Land Rover Products
will pass to Dealer upon full payment by
Dealer. Dealer will execute and
deliver, and authorizes Company to
execute on its behalf, any financing
statements or other documents necessary
to evidence its ownership. Company may
take possession of any Land Rover
Product to which it has title. Company
is entitled to all the rights and
remedies of a secured party under the
provisions of the Uniform Commercial
Code in addition to its rights under
this Agreement.
Risk of Loss 3.6 Risk of Loss to all Land Rover
Products shall pass to Dealer at the
same time as their delivery to Dealer at
Company's distribution point or to a
carrier at the place of delivery
specified in Company's terms of
delivery. Dealer will promptly advise
Company of any damage incurred in
transit on unloading Land Rover
Vehicles. In order to receive payment
for any transit damage, Dealer will
adhere to carrier and insurance company
requirements with respect to inspection
and documentation to assure proper
reporting of any damage. Company will
handle all claims for transit damage
with the relevant insurance carrier and
turn over to Dealer all amounts, if any,
collected upon receipt by Company. No
Land Rover Products will be sold by
Dealer in a damaged condition under any
circumstances.
Repair/Replacement 3.7 Dealer will promptly repair any
transportation damage to a Land Rover
Vehicle. In the event damage is in
excess of six percent (6%) of the
Manufacturer's Suggested Retail Price,
exclusive of glass, tires, wheels and
lighting components, or has sustained
damage which under applicable state law
requires disclosure by Dealer to
Customer, Dealer may, at its discretion,
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return the vehicle to Company and
Company may either substitute a
different vehicle or credit Dealer's
account for the cost of the unit.
Distribution 3.8 Company retains the right to
distribute Land Rover Vehicles in
accordance with its best judgment for
maximum sales benefit, will at all times
make the distribution fair and equitable
and will consider Dealer preferences
recognizing the variances in regional
sales performance and taking into
consideration Dealer investment and
performance. Company will provide
Dealer with a written explanation of the
allocation methods. Dealer agrees that
distribution includes Dealer accepting a
representative selection of all Company
models and color and trim specifications
for all Land Rover Vehicles.
Inventory 3.9 Subject to Company's ability to
deliver, Dealer will maintain a pre-
agreed level of inventory of Land Rover
Vehicles amounting to sixty (60) days
sales of each model based on Dealer's
annual objective. The parties agree
that such inventory is reasonable in the
circumstances. Such inventory level
will be subject to adjustment based on
actual sales and projections made by the
Company.
Demonstrators 3.10 Dealer will maintain a specific
number of Land Rover Vehicles for
demonstration purposes and shall at all
times keep such vehicles in clean,
first-class working condition and shall
register such vehicle as demonstrator
with Company. The specific number
required will be based on volume and
subject to adjustment annually. One (1)
vehicle for each model must be available
at Dealer's Premises during normal
business hours.
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ARTICLE 4 - PRIMARY AREA OF
RESPONSIBILITY/FACILITIES
Description 4.1 Dealer and Company have agreed that
Dealer is responsible for actively
marketing, promoting, selling and
servicing Land Rover Products in a
professional manner, that will enhance
the image and reputation of Land Rover
Products and all dealers of Land Rover
Products, within a geographic territory
referred to as the Dealer's Primary Area
of Responsibility ("PAR"). Dealer's
PAR, more fully described in attached
Primary Area of Responsibility Exhibit,
contains sufficient potential for sales
and service of Land Rover Products to
justify the investment Dealer has made
and agrees to continue to make to
profitably develop the market. Dealer
agrees to devote the necessary
resources, including advertising, market
research, promotional events and sales
and service activities to the
development of this market. In the case
of a Land Rover Centre, Dealer will
devote all of its resources to the
development of the PAR.
Exclusivity of Territory 4.2 In consideration of Dealer's
devoting and continuing to devote the
resources necessary to develop the
Primary Area of Responsibility, Company
agrees that it will not locate another
dealer of Land Rover Products within
Dealer's Primary Area of Responsibility.
In the event Dealer fails to develop the
Primary Area of Responsibility, or to
complete any remodeling or expansion to
the Dealer Premises, or addition of
other facilities, as agreed to meet
demand and achieve and maintain customer
satisfaction, or reduces the amount of
the Dealer Premises described in the
Dealer Facilities and Location Exhibit
dedicated to Land Rover Products or, in
the case of a Land Rover Centre, begins
conducting any other
9
type of business at the premises other
than that devoted to Land Rover Products
exclusively, Company may, at its sole
option, either terminate this Agreement,
or reallocate the Primary Area of
Responsibility to match Dealer's
Premises as they have been revised or
reduced.
Facilities Location 4.3 Dealer Premises requirements and
location(s) are more fully described in
the attached Dealer Facilities and
Location Exhibit. Dealer agrees to
conduct operations from such facilities
and none other.
Facilities Design 4.4 Dealer fully recognizes and agrees
that part of the success of the sale of
Land Rover Products is the provision of
a unique retail experience to Owners and
Customers. This unique experience,
while made up of many elements, is
symbolized by a consistent, recognizable
design and layout. The overall approach
to the design and its elements have been
jointly developed by Company and Dealers
to be instantly recognizable as a
facility that is customer friendly and
yet efficient to operate. Therefore,
Dealer agrees not to alter the design,
layout, space allocation or other part
of the retail environment from that
described in the Dealer Facilities and
Location Exhibit unless specifically
agreed with Company in advance and
further agrees to develop future
facilities in accordance with the plans
and specifications provided by Company
recognizing local restrictions as to
signage, design, building
specifications, etc.
ARTICLE 5 - CUSTOMER RELATIONS AND
RETENTION
Satisfaction 5.1 Customer satisfaction is the key to
the development and maintenance of a
unique retail
10
environment. Dealer will provide
prompt, professional, considerate
service to all Owners of Land Rover
Products, regardless of the selling
dealer and recognizes that Dealer's
obligations of training, supply of spare
parts and service capacity are the
foundation to satisfactory Customer
relations. Dealer agrees to participate
in Company's programs to measure and
improve Customer Satisfaction.
Dealer Complaint Resolution 5.2 Dealer will investigate and resolve
in a manner satisfactory to Company all
complaints by Owners of Land Rover
Vehicles in a prompt and businesslike
fashion. Any complaint which Dealer
cannot remedy promptly shall be reported
to Company and Dealer will keep Company
informed of progress on its resolution
of such problems. Dealer will at all
times of operation designate one
employee at the Dealer Premises whose
responsibility shall be Customer
relations and will serve as the
interface with the Company on the
resolution of any Customer complaints.
Dealer and Company will develop remedial
programs as necessary to improve Dealer
rating in Customer satisfaction and
Dealer will implement these Programs.
ARTICLE 6 - DEALER PERFORMANCE,
OPERATIONS AND PERSONNEL
Performance 6.1 On an annual basis, Company and
Dealer will agree on sales, service and
customer satisfaction goals and
objectives for Dealer. The parties
intent in setting such goals and
objectives is to provide a continuing
incentive to achieve the highest
standard of excellence among all dealers
of Land Rover Products and to reconfirm
on an ongoing basis Company's and
Dealer's joint commitments to
maintaining those high standards in all
aspects of Dealer's operations. The
criteria for setting the goals
11
and objectives will include comparisons
with other dealers of Land Rover
Products and dealers of competing
models.
Reports 6.2 Dealer agrees to maintain books and
records of account in accordance with
accepted accounting principles and
provide Company with financial
statements and other operating reports
in a format supplied by Company. Dealer
will transmit such accounts and records
on the data processing system selected
by Company separate from the accounts,
reports, etc., required by any
organization with which Dealer may have
a relationship, so as to reflect Land
Rover business on a stand alone basis.
At a minimum a Dealer operating a shared
facility will report Land Rover revenues
separately and by category and allocate
expenses on a reasonable and consistent
basis which will be described to
Company.
Time of Reporting 6.3 Dealer will deliver on or before
the tenth (10th) day of each calendar
month the required financial statements
for the preceding month and year-to-
date, and within ninety (90) days of the
close of Dealer's fiscal year, a
consolidated balance sheet and a profit
and loss statement for the Dealer as a
whole and for Land Rover Products.
Company may require such year-end
statement to be certified by a Certified
Public Accountant, at Dealer's expense,
and will notify Dealer of such
requirement at least thirty (30) days
prior to the close of such fiscal year.
Financial Requirements 6.4 Dealer agrees to maintain and
employ in its operation at all times
financial resources sufficient to enable
Dealer to perform Dealer's obligations
under this Agreement. The resources
shall include the amounts of
12
working capital, debt to equity ratio,
minimum net worth, new vehicle financing
and other financial resources which
Company requires. Company and Dealer
have reached agreement on certain
minimum acceptable financial
requirements applicable to Dealer and
such minimum standards are contained in
the Dealer Financial Requirements
Exhibit. The minimum requirements are
subject to adjustment from time to time
by Company on the basis of Dealer
performance.
General Manager 6.5 Dealer agrees to employ at all
times a fully qualified and trained
General Manager having principal
responsibility for the overall
management of Dealer to oversee the day-
to-day operations and designated as such
in the Dealer Ownership and Management
Exhibit. This person shall devote full
time and attention to the management of
Dealer's overall operation and shall
have full authority to make decisions
and act on behalf of Dealer with
Company. In the case of a Land Rover
Centre, the General Manager shall be
referred to as the Centre Manager and
his/her efforts will be directed
exclusively to the operation of the
Dealer's Land Rover Centre. Dealer
agrees to inform Company in writing of
any change in the name of the person
having such responsibility and
authority. No change shall be made or
be effective without the prior written
consent of Company, which consent will
not be unreasonably withheld. The
Dealer Principal may be designated
General Manager if he/she devotes full
time to the Dealer operations.
Sales Personnel 6.6 Dealer shall at all times employ a
sufficient number of fully trained and
qualified personnel to allow Dealer to
fulfill its sales obligations. At a
minimum, Dealer will continuously employ
one (1)
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fully trained sales representative for
Land Rover Vehicles who is acceptable to
Company and shall primarily sell Land
Rover Vehicles. The Land Rover Products
Sales Manager shall be authorized to
order Land Rover Products and approve
all transactions with customers in the
absence of the General Manager. The
total number of sales personnel employed
and their training requirements will be
determined by Company, based on sales
history and planning volumes.
Service Personnel 6.7 Dealer shall at all times employ a
sufficient number of fully qualified and
trained technicians, service advisers,
and other required personnel to fulfill
its service and customer relations and
customer retention obligations. Dealer
will continuously employ at a minimum,
one (1) factory trained technician, such
technician having attended training
courses conducted by Manufacturer at its
assembly plant at Solihull, England,
U.K., to repair and service Land Rover
Vehicles. The total number of service
personnel employed will be determined by
Company based on Dealer's sales history
and the number of other types of
vehicles the service personnel are to be
competent to repair.
Training 6.8 Dealer shall, at its own expense,
have its employees attend and complete
Company and Manufacturer provided
training courses in sales, service,
parts, warranty and computer systems
which shall be conducted from time to
time.
Parts Sales 6.9 Dealer will use its best efforts to
promote the sale of Land Rover Parts and
Accessories in Dealer's Primary Area of
Responsibility.
Parts Inventory 6.10 Dealer will maintain a three (3)
month supply of Land Rover
14
Parts and Accessories at the Dealer
Premises in storage areas maintained
exclusively for such purpose. The
parties agree that such inventory level
is reasonable in the circumstances. The
adequacy of the supply of spare parts
and of the storage area will be
determined by Company.
Genuine Parts 6.11 In the performance of Warranty
service, Dealer will only use genuine
Land Rover Parts and Accessories
together with parts that have been
approved by Company so as not to
jeopardize the Owner's Warranty. Dealer
will maintain all required records so as
to track all repairs and warranty
service performed on a Land Rover
Vehicle. Dealer will not sell, offer
for sale or represent as genuine, Land
Rover Parts and Accessories which are
not in fact new, genuine Land Rover
Parts and Accessories.
Systems 6.12 Dealer will purchase, maintain and
upgrade as required a data processing
system, together with related software
and telecommunications as specified by
Company for use exclusively with Land
Rover Products. Dealer will employ
fully qualified data entry and operating
personnel to update all information as
required, adhere to Company provided
operating practices and procedures, and
generally employ the system to the
maximum effective advantage of Company
and Dealer. The system called for will
serve as Dealer's primary link with
Company and be used for vehicle and
parts ordering, warranty claims
processing, filing of reports,
information storage and retrieval, sales
reporting, etc. The purchase will be
made from Company to assure uniformity
of hardware and software throughout
Company's network of Dealers. Dealer
will at all times keep the system
confidential
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including the software and data stored
therein.
Compliance with Law 6.13 Dealer will, at all times,
maintain current and valid all licenses
required for operation of the Dealer and
occupancy of the Dealer Premises and
will adhere to all applicable laws,
rules, regulations and codes relating to
the conduct of the business. In
addition, Dealer will comply with all
applicable provisions of the National
Traffic and Motor Vehicle Safety Act of
1966, the Federal Clean Air Act and
Xxxxxxxxx-Xxxx Warranty Act, all as
amended including regulations issued
thereafter, together with any other
Federal, state and local and vehicle
emission, safety and warranty
legislation.
Operating Hours 6.14 Dealer will open the Dealer
Premises for business during such hours
as other dealerships in the vicinity are
customarily open.
Service 6.15 Dealer will designate a separate
service area for the repair and service
of Land Rover Vehicles, including the
installation of special lifting
device(s), and keep and make use of a
full complement of Company specified
tools and equipment. The size of the
service area dedicated to Land Rover
Products will be a function of Dealer's
sales and service volumes. All Company
required shop manuals and training
manuals shall be complete and up-to-date
at all times.
Vehicle Inspection 6.16 Company will specify a system of
inspection and services to be completed
on all Land Rover Vehicles sold by the
Dealer prior to their delivery to the
Owner and Dealer will keep records
required by Company to establish the
performance of such inspection and
services.
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ARTICLE 7 - OBLIGATION OF COMPANY TO
DEALER
Sales and Service Support 7.1 To assist Dealer in the promotion,
sales and service of Land Rover
Products, Company will provide, or cause
to be provided to the Dealer the
following:
7.1.1 General and specialized
product information and trained
field assistance to respond to
inquiries, train Dealer sales
personnel and provide special
advice and counsel with respect to
sales and marketing strategies,
techniques and organizations.
7.1.2 Trained field assistance to
respond to inquiries, train Dealer
service personnel and provide
advice and counsel with respect to
maintenance and repair of Land
Rover Vehicles and operations and
managerial advice and assistance on
parts and service organizations.
7.1.3 A spare parts supply depot.
Supply of Materials 7.2 At reasonable cost to Dealer,
Company will also provide:
7.2.1 Sales training courses for
Dealer personnel and refresher
courses for previously trained
Dealer personnel as well as updates
on product development.
7.2.2 Service and maintenance
training courses for Dealer
personnel in all aspects of
inspection and preparation prior to
sale, Warranty claims and repairs
and other service and repairs
including training
17
at the Manufacturer's facilities
together with refresher and
supplemental training courses at
Company's facilities.
7.2.3 Manuals on operating
procedures, including updates on
service and parts information.
Brochures, special tools and
equipment and other data on Land
Rover Products as required for
performing the Dealer obligations
are under.
7.2.4 A data processing system to
communicate and transmit
information, orders, reports,
claims, etc., between Dealer and
Company in a timely fashion.
National Advertising 7.3 Company will develop a marketing
program for each model of Land Rover
vehicles that will position each product
in the market place and provide
consistent high quality advertising on a
national level, as well as materials
useful for the individual Dealers at the
local Level.
ARTICLE 8 - OWNERSHIP, SUCCESSION,
TRANSFER AND ASSIGNMENT
Ownership 8.1 Dealer has provided Company with a
description of the ownership of Dealer,
including names, addresses, percentage
of ownership and description of holdings
of all individuals and/or business
entities (corporation, partnership,
etc.) with direct ownership in Dealer
and said information is contained in the
Dealer Ownership and Management Exhibit.
Dealer recognizes that Company has
entered into this Agreement on the basis
of and in reliance on the
representations contained in such
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Exhibit. Dealer will not make or agree
to any changes in ownership from that
described in such Exhibit, except in the
instances of 8.2 and 8.3 below.
Death of the Dealer
Principal 8.2 Upon the death of the Dealer
Principal:
8.2.1 If the ownership interest of
the Dealer Principal in Dealer
passes as specified in a written
succession agreement previously
approved by Company in writing and
the management of Dealer remains in
the persons named in the Dealer
Ownership and Management Exhibit,
or in such written succession
agreement, Company will enter into
a new Dealer Agreement with such
named approved successor and the
process of 8.2 will not apply; or
8.2.2 If no written succession
agreement has been approved by
Company but the ownership interest
in Dealer of such Dealer Principal
passes directly to the surviving
spouse and the children, or any of
them, of the Dealer Principal and,
either Dealer's General Manager
remains as stated in the Dealer
Ownership and Management Exhibitor,
or within ninety (90) days after
the death of such Dealer Principal,
a successor General Manager is
appointed in accordance with
Article 6.5 and the other
management of Dealer remains as
stated in the Dealer Ownership and
Management Exhibit, then Company
will enter into a new Dealer
Agreement with Dealer for a period
of twelve (12)
19
months. After the expiration of
this twelve (12) month period,
Company will review with Dealer the
changes, if any, in the management
or equity interest of Dealer
required by Company as a condition
of entering into a new Dealer
Agreement with Dealer.
8.2.3 Any new Dealer Agreement
entered into pursuant to this
paragraph will be in substantially
the same form as the Dealer
Agreement then currently offered by
Company to its other dealers.
8.2.4 Unless one of the above
provisions is complied with, the
death of the Dealer Principal will
result in the immediate termination
of the Dealer Agreement and the
provisions of Article 13, Effects
of Termination, will apply.
Company's Right of First
Refusal 8.3.1 Upon completion and signature of
any buy/sell or other transfer
agreement, Dealer will provide a copy of
the complete buy/sell documentation to
Company. Such buy/sell documentation
should contain all the necessary terms
and conditions to effect a complete,
enforceable contract with the
prospective purchaser. The Company will
have thirty (30) days from the receipt
of such full buy/sell documentation to
advise Dealer if it intends to exercise
its right of first refusal.
8.3.2 In the event Company elects to
exercise its right of first refusal, the
purchase price shall be that amount
contained in the
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buy/sell agreement, subject to any
adjustments for inventory and other
offsets plus any offsets that are
Company specific. Company shall
reimburse Dealer for any brokerage
commission contractually incurred by
Dealer in securing the prospective
purchaser and shall reimburse Dealer for
any other cost reasonably incurred by
Dealer in the negotiation of the
buy/sell agreement. Such costs may
include attorney's fees, accounting fees
and appraisal fees incurred by the
prospective buyer, so long as such
services benefit company in the
evaluation of the transaction, and any
other services which Company would have
otherwise had to perform and is not
obligated to re-perform and which Dealer
remains obligated to pay if Company does
not exercise the right of first refusal.
8.3.3 Once Company has elected to
exercise its right of first refusal, it
may assign such right to another.
However, Company shall remain
responsible to guarantee such assignee's
performance of the buy/sell agreement.
8.3.4 This provision will not apply to
a disposition with a member of the
Dealer Principal's immediate family
(spouse, child, brother, sister,
parent), to an individual named in the
succession addendum prepared pursuant to
the provisions of the Transfer in the
Event of Death of the Dealer provisions
in Article 8.2.1 of this Agreement, or
to an individual listed in the Ownership
and Management Exhibit who has been so
listed for the three previous years and
who is otherwise qualified to be a
Dealer Principal.
8.3.5 Company's rights under this
provision shall survive the filing of
any bankruptcy or insolvency proceeding
contemplated by section 12.5 hereof.
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Assignment 8.4 This Agreement may be freely
assigned by Company. This Agreement may
not be assigned or transferred in whole
or in part by Dealer.
ARTICLE 9 - WARRANTY
Company Warranty 9.1 The only warranty applicable to
Land Rover Products will be the written
Warranty as may be furnished by Company.
Except for the express liability
undertaken under such written Warranty,
Company neither assumes nor authorizes
any other person or party to assume any
other obligation or liability in
connection with Land Rover Products.
Provision of Warranty 9.2 Company will supply Dealer with a
copy of such written Warranty and Dealer
will supply a copy of such Warranty to
each customer of Land Rover Vehicles or
Land Rover Parts and Accessories as
applicable at the time of sale. Dealer
will also maintain a supply of Warranty
booklets to provide to Customers at
their request. Dealer will make all
sales in a manner so that Owner acquires
all rights under the Warranty and Dealer
will incorporate the terms of the
Warranty as part of each order form and
other contract for sale of Land Rover
Products by Dealer.
Delivery to Customer 9.3 Upon delivery to an Owner of a Land
Rover Vehicle, Dealer will also deliver
a completed Warranty booklet, supplied
by Company with each Land Rover Vehicle.
Upon presentation of a Warranty booklet
by an Owner, Dealer will perform the
required warranty services for the
appropriate Warranty period and properly
document its performance in the Owner's
Warranty booklet as well as in the
Dealer's own record.
Warranty Services 9.4 Dealer will perform repairs and
service required by Company's
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Warranty on any and all Land Rover
Vehicles for which a Manufacturer's
Certificate of Origin is issued by
Company, whether such vehicle was
purchased from Dealer or another Company
dealer. Dealer will perform all its
Warranty obligations hereunder in
accordance with the Company's then
current policy on Warranty and service
procedures. Dealer further agrees to
perform any and all recall and product
improvement services in compliance with
instructions and directions issued by
Company on such vehicle.
Payment for Warranty
Services 9.5 Company will compensate Dealer for
the labor and parts used by Dealer in
performing its Warranty obligations and
in connection with any recall, product
improvement or product update campaign
which Company may require Dealer to
perform. Such compensation shall be in
reasonable amounts as published from
time to time by Company in accordance
with industry practices and based on
warranty labor rates and hours and parts
prices determined by Company to perform
such work.
Limited Warranty 9.6 EXCEPT AS EXPRESSLY STATED IN THIS
ARTICLE 9, COMPANY MAKES NO WARRANTIES
WHATSOEVER, EXPRESS OR IMPLIED, AS TO
PERFORMANCE, CHARACTERISTICS,
SPECIFICATIONS, OR CONDITION OF LAND
ROVER PRODUCTS TO BE SUPPLIED BY IT TO
THE DEALER, INCLUDING BUT NOT LIMITED
TO, THE MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE AND ASSUMES NO
LIABILITY WHATSOEVER WHETHER FOR DIRECT,
INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
IN ANY OTHER WAY IN CONNECTION WITH SUCH
PERFORMANCE, CHARACTERISTICS,
SPECIFICATIONS OR CONDITION AND
COMPANY'S MAXIMUM LIABILITY IS TO REPAIR
OR, AT COMPANY'S OPTION, REPLACE THE
LAND ROVER PRODUCT.
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ARTICLE 10 - INDEMNIFICATION
Indemnity by
Company 10.1 Company will indemnify and hold
Dealer harmless against any judgment,
which may be rendered against Dealer,
including court costs and reasonable
attorney fees in any litigation
commenced by third parties seeking
monetary damages naming Dealer as a
defendant concerning,
(i) breach of any Company Warranty on
any Land Rover Product;
(ii) bodily injury, death or property
damage claimed to be caused by a defect
in the design, manufacture or assembly
of a Land Rover Product prior to
delivery thereof to Dealer (except a
defect which could have been detected by
Dealer on a reasonable inspection);
(iii) a misrepresentation or misleading
statement made by Company;
(iv) a failure by Company to comply in
whole or in part with any obligation
assumed by Company pursuant to the
Agreement.
10.2 Company will not be obligated to
indemnify Dealer if the above conditions
apply but in addition:
(i) Dealer error or omission in
servicing (including but not limited to
Dealer not having performed recalls of
which Dealer had notice) if the defect
subject to the recall is alleged or
contended to be a contributing cause to
the breach of warranty, injury, death or
property damage which is the subject
matter of the litigation;
(ii) the subject Land Rover Product has
been altered by or for Dealer in a
manner using components not approved by
Company and the
24
alteration, in whole or in part,
contributes to the incident or injury
that results in the litigation; or
(iii) the alleged defect should have
been detected by Dealer, either as a
result of the Pre-Delivery inspection
called for under this Agreement, or upon
a reasonable inspection.
10.3 Dealer will refund to Company any
amount previously paid by Company for
providing a defense, or any indemnity
payment, if after undertaking to provide
a defense or indemnity, the facts
described in 10.2 are disclosed.
Notification of Claim 10.4 Dealer will promptly notify Company
of any claim within the provision of
10.1 above which Dealer asserts Company
must defend. Dealer will take steps
necessary to protect its own interests
until Company assumes the defense of
Dealer. Upon assuming the defense,
Company will retain and direct counsel
of its own choosing and Dealer will
cooperate in all matters during the
course of the defense.
Indemnity by Dealer 10.5 Dealer will indemnify and hold
Company harmless against any judgment
which may be rendered against Company,
including court cost and reasonable
attorney fees, in any litigation
commenced by third parties seeking
monetary damages, naming Company
concerning:
(i) a failure by Dealer to comply in
whole or in part with any obligation
assumed by Dealer pursuant to this
Agreement;
(ii) Dealer's negligent or improper
repair or service of a Land Rover
Vehicle, including the use of non-
genuine Land Rover Products;
25
(iii) Dealer's breach of any agreement
between Dealer and Dealer's Customer;
(iv) Dealer's misrepresentation or
misleading statement to any Customer.
(v) the breach of any warranty, service,
financing or other agreement provided by
Dealer to an Owner and to which Company
is not a party or the provider.
ARTICLE 11 - COMMUNICATIONS AND
DISPUTES
Communications 11.1 The parties agree that in order to
perform at their utmost capability and
to complete effectively in the
marketplace with other manufacturers and
dealers of motor vehicles and provide
the level of Customer satisfaction and
Owner experience that is desired, it is
imperative that Dealer and Company
maintain an open forum with respect to
communications. Company agrees to keep
Dealer advised of plans for future
product and development of the franchise
on an ongoing basis and to address
itself to Dealer concerns. Dealer
agrees to apprise Company of any concern
Dealer has with respect to the ongoing
business and seek to resolve any
concerns or issues by direct, open
communication.
Disputes Resolution 11.2 While the parties agree to seek to
resolve any dispute that may arise
between them at the operational level,
nonetheless the parties recognize that
disputes may arise concerning compliance
with the Agreement and the rights and
obligations of the parties under this
Agreement. The parties agree to attempt
to resolve all such disputes and
differences through good faith
negotiation. However, in the event the
dispute cannot be resolved, the parties
agree to submit such dispute to the
Dispute
26
Resolution Process ("Process"). This
will be an ongoing, developing Process
prepared and revised jointly by Company
and Dealer on a continuing basis so as
to provide an efficient method, both in
terms of time and expense, of resolving
disputes. The Process will include the
services of a third party facilitator
and the parties agree to share the costs
of the facilitator and to share the
expense of any non parties who agree to
assist in mediating the dispute,
including other dealers and employees of
Company. The parties agree that
referral of any dispute to the Dispute
Resolution Process is mandatory.
However, the outcome of the Process is
not binding except that the parties may
agree to accept all or part of the
results of the Process as a settlement
at any time during the course of the
Process.
ARTICLE 12 - TERMINATION
By Agreement 12.1 This Agreement may be terminated at
any time by the mutual agreement of the
parties.
By Dealer 12.2 Dealer may terminate this Agreement
by giving to the Company prior written
notice specifying the effective date of
termination, provided that the effective
date of such termination shall not be
earlier than thirty (30) days after such
notice of termination has been received.
By Company on Fifteen
(15) Days Notice 12.3 Company may terminate this
Agreement on fifteen (15) days written
notice to Dealer upon the occurrence of
any of the following events:
12.3.1 Dealer's relocation of the
Dealer Premises without the prior
written approval of Company.
27
12.3.2 Dealer's attempted
assignment or transfer of the
Agreement in violation of
Article 8.1.
12.3.3 The purported transfer of
any ownership interest in violation
of Article 8.4.
12.3.4. Cancellation, suspension
or revocation of any license,
permit, etc., necessary for the
operation of Dealer's business at
the Dealer Premises or Dealer's
failure to secure or renew such
license, permit, etc., within the
above period of time.
12.3.5 Failure of the Dealer
Premises to operate as a going
concern during the normal business
hours customary for automobile
dealerships in the Primary Area of
Responsibility for a period of
seven (7) consecutive business
days, so long as such failure is
not due to causes enumerated in
Article 14.8.
12.3.6 The making of any material
misrepresentation in Dealer's
application for the right to sell
Land Rover Products or relating to
ownership of Dealer.
12.3.7 The submission to Company of
any false or misleading financial
statement, sales report, Warranty
claim, sales incentive or promotion
payments or other request for
reimbursement or payment or any
other form or status report
required by Company's business
practices.
12.3.8 Conviction of Dealer or any
of the individuals named in the
Dealer Ownership and Management
Exhibit of any criminal offense
which, in the sole opinion of
Company, xxxxx
28
the business image of Land Rover
Products, or adversely affects
Dealer operations.
12.3.9 Cancellation, without
concurrent replacement, of any
credit line, floor plan financing
or other financing facility.
By Company on Ninety
(90) Days Notice 12.4 Company may terminate this
Agreement upon ninety (90) days written
notice if, after receipt of such notice,
Dealer has not corrected the failure(s)
stated in such notice within the ninety
(90) day period or, if not capable of
correction within such period, commenced
and diligently prosecuted a remedy to
correct such failure satisfactory to the
Company for any of the following events:
12.4.1 The failure by Dealer to
provide the level of
representation, promotion, sales or
service of Land Rover Products
required under the terms of this
Agreement.
12.4.2 Dealer's use of deceptive or
misleading practices in the sale of
Land Rover Products as the supply
of service to customers.
12.4.3 The failure to maintain
and/or to improve the Dealer
Premises as reasonably required by
Company to enhance the sales and/or
service capability of Dealer for
Land Rover Products or Dealers
reducing the space in the Dealer
Premises from that described in the
Dealer Facilities and Location
Exhibit without Company's prior
written agreement.
12.4.4 The failure to maintain or
restore working capital or other
financial criteria to
29
amounts and ratios required by
Company.
12.4.5 Use of unauthorized
advertising as prohibited herein.
12.4.6 Late or incorrect submission
of reports required herein.
12.4.7 Excessive turnover of
personnel in any department in
Dealer's operations for Land Rover
Products resulting in, or likely to
result in, deterioration of
Customer relations or service.
12.4.8 The existence of any dispute
amongst Dealer's owners and/or
management personnel which, in
Company's sole opinion, could
impair, or has impaired, the
operations of Dealer with
consequent adverse effect on
relations with Customers of or for
Land Rover Products.
12.4.9 The failure of Dealer to
adhere to the legal requirements
called for in Article 6.11 hereof.
12.4.10 The importation,
distribution or sale of Land Rover
Vehicles not originally
manufactured or designed for use in
the United States.
12.4.11 Any breach of another
material obligation of this
Agreement.
12.4.12 Termination of Company's
distributorship agreement with
Manufacturer, or Company's decision
to cease distribution of Land Rover
Products.
12.4.13 Withdrawal of Company from
the market area
30
designated as Dealer's Primary Area
of Responsibility.
Immediate Termination 12.5 Company may terminate this
agreement automatically and without
notice upon any act acknowledging the
insolvency or bankruptcy of the Dealer,
or any assignment for the benefit of
creditors or the filing of any
bankruptcy, reorganization or insolvency
proceedings, either voluntarily or
involuntarily, or the appointment of a
receiver of Dealer or the Dealer
Premises which is not removed within
(30) days of such filing or appointment.
Death of
Dealer Principal 12.6 Death of the Dealer Principal named
in the Dealer Ownership and Management
Exhibit will result in the immediate
termination of this agreement unless the
provisions of Article 8.2 apply.
ARTICLE 13 - EFFECTS OF TERMINATION
Cessation 13.1 Upon receipt of Company's notice of
termination, or the mailing of Dealer's
notice of termination to Company, or
upon expiration of the term of this
Agreement without renewal, Dealer will
immediately cease to be, or act as an
authorized dealer of Land Rover
Products, will no longer make use of any
Land Rover trademark and will
immediately remove all signs, displays,
etc., advertising itself as such.
Non-use of Land Rover
Identification 13.2 Dealer will inventory, package and
ship all Land Rover books, manuals,
etc., to Company at Dealer's expense and
will destroy any and all Dealer
letterhead, business cards, business
forms, etc., indicating Dealer's
previous status as a Dealer of Land
Rover Products.
Outstanding Orders 13.3 The Company may cancel any unfilled
orders for Land Rover Products upon its
receipt of
31
Dealer's notice of termination even if
previously accepted by Company. The
Company may, at its sole option, accept
orders or conduct business with Dealer
after the effective date of termination.
All such orders or business operations
will be under the same terms and
conditions as this Agreement. The
conduct of any business after
termination or expiration shall not
serve as a waiver or modification of the
termination, or serve to extend the term
of this Agreement.
Repurchase 13.4 Company, subject to Dealer
fulfilling its obligations under this
Article 13, will repurchase form Dealer:
(a) all current model, new, unused,
undamaged Land Rover Vehicles at the net
cost of that vehicle to the Dealer less
the cost of freight, insurance, etc., or
transfer the subject vehicles(s) to
Company or another dealer; (b) all
current, new, properly packaged and
itemized Land Rover Parts and
Accessories at Dealer's net cost of the
item(s), less freight, insurance, etc.,
to Company's warehouse and less a
restocking charge of twenty percent
(20%); (c) special tools, equipment and
signs for Land Rover Products properly
maintained in good working order and
repair, less than five (5) years old at
Dealer's cost less straight line
depreciation of five (5) years useful
life.
Transfer of Title 13.5 Dealer is to take all such action
as may be necessary to: (a) convey good
and marketable title to all such
property to the Company, (b) comply with
the requirements of any applicable state
law relating to bulk sales or transfers
and (c) satisfy and discharge any liens
or encumbrances on the property prior to
delivery to Company.
Inventory 13.6 Within fifteen (15) days of the
receipt by Dealer of the notice of
termination by Company, or
32
Dealer's issuance of a notice of
termination to Company, or the
expiration of this Agreement, Dealer
will deliver to Company a complete
inventory of all the above items, or
reimburse Company for the cost of
Company preparing such an inventory.
Reconciliation 13.7 As a condition of repurchase,
payments will first be applied against
any money owed by Dealer to Company.
All payment due from Company to Dealer
pursuant to any provisions of this
Agreement or in connection with the
termination of this Agreement will be
made by Company after receipt of the
goods to be repurchased and after all
debits and credits have been ascertained
and applied to Dealer's account and
Dealer has delivered to Company the
Manufacturer's Certificate of Origin or
other document of title for repurchase.
In the event it is found that a balance
is due from Dealer to Company, Dealer
will pay such sum within ten (10) days
of written notice of such Balance.
ARTICLE 14 - MISCELLANEOUS
Independent
Contractor 14.1 Dealer, for all purposes of this
Agreement, is an independent contractor
and Dealer is not the agent or
representative of Company or its
affiliates for any purpose. No other
contractual relationship exists between
Dealer and Company and Dealer have no
contractual relationship with
Manufacturer. 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 Company or
to bind Company in any manner
whatsoever.
Applicable Law 14.2 This Agreement shall be deemed to
be executed by the parties in the state
where the Dealer Premises is located and
the rules of law of that
33
state govern all questions regarding its
construction and interpretation except
to the extent that stated public policy
of the state where the Dealer Premises
is located shall prohibit any particular
provisions, in which event Article 14.3
shall apply.
Severability 14.3 In the event any provision of this
Agreement is declared unenforceable
under laws of any state, or federal law
enforceable at the time of the execution
of this Agreement, or requires a longer
notice period than called for herein,
the offending provision shall be
reformed in a manner consistent with
such law to the minimum extent required
while continuing to reflect the
allocation of risks and obligations of
the parties hereto. Such declaration
shall not impair or affect the validity
of any other provision in this Agreement
and all such other provisions shall
remain valid and in full force and
effect.
Entire Agreement 14.4 This Agreement contains the entire
agreement between Dealer and Company and
Dealer acknowledges that no
representation or statement has been
made by Company, or anyone acting or
purporting to act for Company that in
any way modifies or changes any terms of
this Agreement and acknowledges that
there is no other agreement or
understanding between the parties,
except as stated herein. This Agreement
cancels, supersedes and annuls any prior
contract, agreement or understanding
between Company and Dealer.
Modification 14.5 No provision of this Agreement may
be changed, amended or deleted except by
the written agreement of authorized
officers of the parties hereto. Without
limiting the foregoing, no course of
dealing will alter the terms of this
Agreement.
34
Waivers 14.6 The waiver by either party of any
breach of this Agreement, or the failure
of either party to require performance
by the other party of any provision
herein shall not affect the rights of
either party to require performance at
any time thereafter, nor be deemed a
waiver of a subsequent breach of the
same or another provision.
Notices 14.7 Any notice, notification, etc.,
made pursuant to this Agreement shall be
directed to the address of the principal
place of business of the respective
parties of this Agreement. All notices
required will be sent certified mail,
return receipt requested, to the address
reflected in the Agreement for each
party.
Force Majeure 14.8 Performance by each party of their
respective obligations under this
Agreement is subject to those
contingencies which are beyond the
reasonable control of the parties,
including labor disputes or work
stoppage, product delivery delays,
governmental action or inaction, acts of
God and events of force majeure. The
obligations of the party prevented from
performing by virtue of the above shall
be suspended during such contingency
without liability to the other for any
direct or indirect damage and without
extending the term of this Agreement.
Continuity of Supply 14.9 Nothing in this Agreement shall
give Dealer the right to continue to be
supplied with Land Rover Products, which
may at any time be withdrawn or
suspended from importation and sale into
the United States without any obligation
or liability on the part of Company by
reason thereof. Nothing in this
Agreement gives Dealer the right to sell
any products other than Land Rover
Products.
35
Additional Dealers 14.10 Subject to the provisions of
Article 4 hereof, Company reserves the
right to appoint additional dealers upon
making a survey of marketing factors in
the area of a potential new dealer
location. The final decision whether to
establish an additional dealer shall be
made solely by Company pursuant to its
own business judgment, and nothing in
this Agreement shall be construed to
require Dealer's consent to the
establishment of an additional dealer.
Titles 14.11 Titles and headings appearing in
this Agreement are for convenience only
and shall not affect the construction or
interpretation of any provisions of this
Agreement.
36
