EXHIBIT 10.6.5
FORD MOTOR COMPANY
MERCURY SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
DEFINITIONS
1. As used herein, the following terms shall have the following meanings,
respectively:
1. (a) "COMPANY PRODUCTS" shall mean such
(1) new passenger cars OR OTHER NEW PASSENGER VEHICLES, and
(2) parts and accessories therefor,
as from time to time are offered for sale by the Company to all authorized
Mercury Dealers as such for resale, plus such other products as may be offered
for sale by the Company to the Dealer from time to time. The Company reserves
me right to offer any new, different and differently designated passenger car,
truck or chassis, and any other product, bearing any trademarks or brand names
used or claimed by the Company or any of its subsidiaries, including the name
"Mercury", to selected authorized Mercury Dealers or others under existing or
separate new agreements; provided, however, that the Company shall not franchise
any such new passenger car OR OTHER NEW PASSENGER VEHICLE bearing the name
"Mercury" to anyone who is not an authorized Mercury Dealer.
1. (b) "VEHICLE" shall mean any passenger car OR OTHER NEW PASSENGER
VEHICLE, INCLUDING THE MERCURY VILLAGER, included in this agreement pursuant to
paragraph 1(a) above.
1. (c) "COMPETITIVE VEHICLES" shall mean those new cars OR OTHER NEW
PASSENGER VEHICLES not marketed by the Company which are selected by the Company
as generally comparable with VEHICLES in price and product characteristics.
1. (d) "INDUSTRY VEHICLES" shall mean all new cars AND OTHER NEW
COMPETITIVE VEHICLES of all manufacturers to the extent data therefor are
reasonably available.
1. (e) "GENUINE PARTS" shall mean such parts, accessories and equipment for
VEHICLES as are offered for sale by the Company from time to time to the Dealer.
1. (f) "DEALER PRICE" shall mean, with respect to each COMPANY PRODUCT to
which it refers, the price to the Dealer for such product, as from time to time
established by the Company, before deduction of any cash or other discount
applicable thereto. It shall not include any amount in the nature of a
predelivery or other holdback deposit or charge, any dealer association
collection, any charge by the Company for distribution, delivery or taxes, or
any other charge for special items or services.
1. (g) "VEHICLE TERMS OF SALE BULLETIN" shall mean the latest VEHICLE TERMS
OF SALE BULLETIN and amendments thereto furnished to the Dealer from time to
time by the Company setting forth the terms of sale and ordering procedures
applicable to sales of VEHICLES to authorized Mercury dealers.
1. (h) "PARTS AND ACCESSORIES TERMS OF SALE BULLETIN" shall mean the latest
PARTS AND ACCESSORIES TERMS OF SALE BULLETIN and amendments thereto furnished to
the Dealer from time to time by the Company setting forth the terms of sale and
ordering procedures applicable to sales of GENUINE PARTS to authorized Mercury
dealers.
1. (i) "CUSTOMER SERVICE BULLETIN" shall mean the latest CUSTOMER SERVICE
BULLETIN and amendments thereto furnished to the Dealer from time to time by the
Company establishing standards for authorized Mercury Dealers with respect to
service personnel, training, tools and equipment, for customer handling
procedures and for evaluating the Dealer's service performance.
1. (j) "DEALER'S LOCALITY" shall mean the locality designated in writing to
the Dealer by the Company from time to time as the area of the Dealer's sales
and service responsibility for COMPANY PRODUCTS.
1. (k) "DEALERSHIP LOCATION" shall mean the place or places of business of
the Dealer for carrying out this agreement which are approved by the Company as
provided in paragraph 5 of this agreement.
1. (l) "DEALERSHIP FACILITIES" shall mean the land areas, buildings and
improvements established at the DEALERSHIP LOCATION in accordance with the
provisions of paragraph 5 of this agreement.
1. (m) "DEALERSHIP OPERATIONS" shall mean the sale of COMPANY PRODUCTS and
used vehicle service operations and (if the Dealer so elects) rental or leasing
of VEHICLES, conducted by the Dealer at or from the DEALERSHIP FACILITIES.
1. (n) "PLANNING VOLUME" shall mean the average annual estimated sales base
for VEHICLES established by the Company for the Dealer from time to time for
planning purposes under its standard procedures for authorized Mercury Dealers
in single or multiple DEALERS' LOCALITIES, as the case may be, based on
historical sales and registrations, and current trends, in VEHICLES, COMPETITIVE
VEHICLES and INDUSTRY VEHICLES in the DEALER'S LOCALITY. Consideration shall
also be given to the environs of the DEALERSHIP LOCATION and market trends
therein, consumer shopping habits, demographic factors and other appropriate
data
to the extent available and pertinent. Such terms shall not represent the
actual sales volumes to be achieved by the Dealer to meet his responsibilities
under paragraph 2 of this agreement.
1. (o) "PERCENT RESPONSIBILITY" shall mean the ratio of the Dealer's
PLANNING VOLUME to the total PLANNING VOLUMES for all authorized Mercury Dealers
in the DEALER'S LOCALITY.
1. (p) "UIO" (units in operation) shall mean the VEHICLES of the next
preceding three or more model years (as determined by the Company from time to
time) licensed within the DEALER'S LOCALITY at a given time multiplied by the
Dealer's PERCENT RESPONSIBILITY therefor.
1. (q) "GUIDES" shall mean such reasonable standards as may be established
by the Company for the Dealer from time to time under its standard procedures
for authorized Mercury Dealers (i) for DEALERSHIP FACILITIES and equipment,
capitalization and net working capital based on such factors as PLANNING
VOLUMES, UIO, the DEALER'S LOCALITY and (ii) for inventories, personnel,
demonstrators and other elements of DEALERSHIP OPERATIONS based on such factors
as sales and service volumes.
RESPONSIBILITIES WITH RESPECT TO VEHICLES
2. (a) SALES. The Dealer shall promote vigorously and aggressively the sale
at retail (and, if the Dealer elects, the leasing and rental) of VEHICLES to
private and fleet customers within the DEALER'S LOCALITY, and shall develop
energetically and satisfactorily the potentials for such sales and obtain a
reasonable share thereof; but the Dealer shall not be limited to the DEALER'S
LOCALITY in making sales. To this end, the Dealer shall develop, maintain and
direct a trained, quality vehicle sales organization and shall conduct
throughout each model year aggressive advertising and sales promotion
activities, making use to the greatest feasible extent the Company's advertising
and sales promotion programs relating to VEHICLES.
The Dealer's performance of his sales responsibility for VEHICLES shall be
measured by such reasonable criteria as the Company may develop from time to
time, including:
(1) The Dealer's sales of VEHICLES to private and fleet users located in
the DEALER'S LOCALITY as a percentage of:
(i) all private and all fleet registrations of VEHICLES
in the DEALER'S LOCALITY,
(ii) all private and all fleet registrations of
COMPETITIVE VEHICLES in the DEALER'S LOCALITY,
(iii) all private and all fleet registrations of INDUSTRY VEHICLES
in the
DEALER'S
LOCALITY,
and
(iv) the private and fleet sales objectives for VEHICLES established
by the Company for the Dealer from time to time.
(2) If the Dealer is not the only authorized dealer in VEHICLES in the
DEALER'S LOCALITY, the following factors shall be used in computing
percentages pursuant to 2(a) (1) above:
(i) The Dealer's sales of VEHICLES to users located in the DEALER'S
LOCALITY shall be deemed to be the total registrations thereof
in the DEALER'S LOCALITY multiplied by the Dealer's percent of
sales of all VEHICLES made by all authorized Mercury Dealers
located in the DEALER'S LOCALITY unless the Dealer or the
Company shows that the Dealer actually has made a different
number of such sales,
(ii) The registrations of VEHICLES and COMPETITIVE and INDUSTRY
VEHICLES in the DEALER'S LOCALITY against which the Dealer shall be measured
shall be the total thereof multiplied by the Dealer's PERCENT RESPONSIBILITY,
and
(iii) The Dealer's objectives for VEHICLES shall be the total
objectives therefor of all authorized Mercury Dealers in the DEALER'S LOCALITY
multiplied by the Dealer's PERCENT RESPONSIBILITY.
(3) A comparison of each such percentage with percentages similarly
obtained for all other authorized Mercury Dealers combined in the
Company's sales zone and district in which the Dealer is located, and
where subparagraph 2(a) (2) applies, for all other authorized Mercury
Dealers combined in the DEALER'S LOCALITY.
(4) In evaluating any comparisons provided for in subparagraph 2(a) (3)
above, the Company shall give consideration to the availability of
VEHICLES to the Dealer and other authorized Mercury Dealers and any
special local marketing conditions that might affect the Dealer's
sales performance differently from the sales performance of
COMPETITIVE or INDUSTRY VEHICLE Dealers or other authorized Mercury
Dealers.
(5) The sales and registration data referred to in this subparagraph 2(a)
shall include sales to and registrations in the name of leasing and
daily rental operations and shall be those utilized in the Company's
records or in reports furnished to the Company by independent sources
selected by
it and generally available for such purpose in the automotive
industry. In the event such reports of the registrations and/or sales
of INDUSTRY or COMPETITIVE VEHICLES in the DEALER'S LOCALITY are not
generally available, the evaluation of the Dealer's sales performance
shall be based on such registrations and/or sales or purchase data as
can be reasonably obtained by the Company.
The Company will provide to the Dealer an evaluation of his performance
under this subparagraph 2(a) from time to time as initiated by the Company, or
not more than once a month upon the written request of the Dealer.
2. (B) ORDERS.
(1) To enable the Company to plan for and establish, and its manufacturing
sources to carry out, production schedules, the Dealer shall, on the
dates and forms provided by the Company, furnish the Company basic
orders for types of VEHICLES and specific orders for individual
VEHICLES against the applicable basic order as specified in the
applicable VEHICLE TERMS OF SALE BULLETIN.
(2) The Company is authorized to have installed on any VEHICLE ordered by
the Dealer any equipment or accessory required by any applicable
federal, state or local law, rule, or regulation.
(3) Any order for a VEHICLE not shipped during the month for which
delivery was scheduled will remain in effect unless cancelled by the
Dealer or the Company by written notice to the other. An order for an
"off standard" VEHICLE may be cancelled only by or with the consent of
the Company. Any VEHICLE which differs from the Company's standard
specifications, or which incorporates special equipment, shall be
considered an "off standard" VEHICLE.
(4) The Dealer shall not be liable to the Company for any failure to
accept shipments of VEHICLES ordered from the Company where such
failure is due to any labor difficulty at the DEALERSHIP LOCATION or
to any cause beyond the Dealer's control or without the Dealer's fault
or negligence.
2. (C) CONSIDERATION OF ORDERS.
(1) The Company may reject orders not submitted in accordance with
subparagraph 2(b) (1) above. The Company shall make reasonable
efforts to fill each order of the Dealer that is accepted by the
Company. During any period of shortage of any VEHICLE, the Company
shall be entitled to give priority to accepted orders for such
VEHICLES for resale to users residing within the DEALER'S LOCALITY of
the ordering dealer.
(2) The Company shall not be liable to the Dealer in any respect for
failure to ship or for delay in shipment of accepted orders for
VEHICLES where such failure or delay is due wholly or in part to (i)
shortage or curtailment of material, labor, transportation, or utility
services, (ii) any labor or production difficulty in any of its own or
any of its suppliers' locations, (iii) any governmental action, or
(iv) any cause beyond the Company's control or without its fault or
negligence.
2. (D) STOCKS. The dealer shall maintain stocks of current models of such
lines or series of VEHICLES, of an assortment and in quantities as are in
accordance with Company GUIDES therefor, or adequate to meet the Dealer's share
of current and anticipated demand for VEHICLES in the DEALER'S LOCALITY. The
Dealer's maintenance of VEHICLE stocks shall be subject to the Company's filling
the Dealer's orders therefor.
2. (E) DEMONSTRATORS. The Dealer shall maintain at all times in good
condition and running order for demonstration and loan to prospective
purchasers, such numbers of the latest model of such lines or series of VEHICLES
as are in accordance with Company GUIDES therefor.
2. (F) FACTORY SUGGESTED PRICE LABELS. If any VEHICLE is delivered by the
Company to the Dealer with an incorrect label, or without a completed label,
affixed thereto pursuant to the Federal Automobile Information Disclosure Act,
the Dealer shall promptly complete and affix to such VEHICLE a correct label on
the form and in accordance with the directions furnished by the Company.
2. (G) OWNER LITERATURE. The Dealer shall, in accordance with the
Company's instructions, complete, execute and deliver to each retail purchaser
of a VEHICLE from him the Company's then current publications for owners with
respect to the operation, maintenance and warranty of that VEHICLE (hereinafter
called "Owner's Literature"). The Dealer shall fulfill promptly all dealer
responsibilities under each piece of the Owner's Literature delivered by him.
The Company may specify in the Owner's Literature that the Dealer will perform
certain inspections of the VEHICLE. The Dealer authorizes the Company to charge
his account for work done by another Company authorized dealer in VEHICLES under
the Owner's Literature delivered by the Dealer, and to credit his account for
work done by him under Owner's Literature delivered by another Company
authorized dealer in VEHICLES. The charge or credit shall be in the amount
specified by the Company from time to time.
2. (H) REBATES AND ALLOWANCES. The Dealer shall be entitled to such
rebates and allowances from the Company on VEHICLES and factory installed
options, subject to such conditions and procedures, as may be specified in the
applicable VEHICLE TERMS OF SALE BULLETIN or other notice pertaining thereto
sent to the Dealer by the Company, provided that any change in the model
close-out allowance shall be announced to the Dealer prior to the Company's
solicitation of the build-out order.
2. (i) WARRANTY. The company shall from time to time establish, by notice
to the Dealer, the warranty to the owner applicable to each VEHICLE. There
shall be NO OTHER WARRANTY, express or implied, including any warranty of
MERCHANTABILITY OR FITNESS, or any other obligation of the Company to the Dealer
or the owner with respect to the VEHICLE or any part thereof except the warranty
established pursuant to this subparagraph. The Dealer shall expressly
incorporate such warranty as a part of each buyer's order form or other contract
for the sale of a VEHICLE and shall deliver a copy of the warranty, in the form
furnished by the Company, to the owner at the time the VEHICLE is delivered to
the owner, all in accordance with instructions set forth in the Company's then
current Warranty and Policy Manual and supplements thereto (hereinafter called
"Warranty Manual").
RESPONSIBILITIES WITH RESPECT TO GENUINE PARTS
3. (a) SALES. The Dealer shall promote vigorously and aggressively the
sale of GENUINE PARTS to service, wholesale and other customers within the
DEALER'S LOCALITY, and shall develop energetically and satisfactorily the
potentials for such sale and obtain a reasonable share thereof; but the Dealer
shall not be linked to the DEALER'S LOCALITY in making sales. To this end, the
Dealer shall develop, maintain and direct a trained quality parts sales
organization and shall conduct aggressive advertising and sales promotion
activities, making use to the greatest feasible extent of the Company's
advertising and sales promotion programs relating to GENUINE PARTS. The Dealer
shall not sell or offer for sale or use in the repair of any COMPANY PRODUCT, as
a GENUINE PART, any part or accessory that is not in fact a GENUINE PART.
The Dealer's performance of his sales responsibility for GENUINE PARTS
shall be measured by such reasonable criteria as the Company may develop from
time to time including:
(1) His sales as a percentage of the sales objectives established for him
by the Company from time to time, and his sales per UIO, and
(2) A comparison of such percentage and sales per UIO with the percentage
similarly obtained and sales per UIO of all other authorized Mercury
Dealers combined in one or more of the following: (i) the DEALER'S
LOCALITY, (ii) the Company's sales or service zone, and (iii) the
district in which the Dealer is located, as the Company may determine.
3. (b) ORDERS.
(1) Stock orders for the Dealer's requirements of GENUINE PARTS shall be
furnished to the Company by the Dealer in accordance with the
applicable PARTS AND ACCESSORIES TERMS OF SALE BULLETIN.
(2) Any order for a GENUINE PART not shipped in accordance with normal
shipping schedules will remain in effect unless cancelled by the
Dealer or the Company by written notice to the other.
(3) The Dealer shall not be liable to the Company for any failure to
accept shipment of GENUINE PARTS ordered from the Company where such
failure is due to any labor difficulty in the Dealer's place of
business or to any cause beyond the Dealer's control or without the
Dealer's fault or negligence.
3. (C) CONSIDERATION OF ORDERS.
(1) The Company shall make reasonable efforts to fill each order of the
Dealer that is accepted by the Company.
(2) The Company shall not be liable to the Dealer in any respect for
failure to ship or for delay in shipment of accepted orders for
GENUINE PARTS where such failure or delay is due wholly or in part to
(i) shortage or curtailment of material, labor, transportation or
utility services, (ii) any labor or production difficulty in any of
its own or any of its suppliers' locations, (iii) any governmental
action or (iv) any cause beyond the Company's control or without its
fault or negligence.
3. (D) STOCKS. The Dealer shall maintain a stock of parts, including
GENUINE PARTS, in accordance with Company GUIDES therefor, and of an assortment
in quantities adequate to meet the current and anticipated demand therefor. The
Dealer's maintenance of stocks of GENUINE PARTS shall be subject to the
Company's filling the Dealer's orders therefor.
3. (E) RETURNS AND ALLOWANCES. The Dealer shall be entitled to such
allowances, discounts, incentives and return privileges from the Company on
GENUINE PARTS subject to such conditions and procedures as may be specified in
the applicable PARTS AND ACCESSORIES TERMS OF SALE BULLETIN or other notice
pertaining thereto sent to the Dealer by the Company.
3. (F) WARRANTY. The Company shall from time to time establish, by notice
to the Dealer, the warranty applicable to each GENUINE PART. There shall be NO
OTHER WARRANTY, express or implied, including any warranty of MERCHANTABILITY OR
FITNESS, or any other obligation of the Company to the Dealer or the customer
with respect to any GENUINE PART or any part thereof except the warranty
established pursuant to this subparagraph. The Dealer shall expressly
incorporate such warranty as a part of each sale of a GENUINE PART, in
accordance with instructions set forth in the Warranty Manual.
RESPONSIBILITIES WITH RESPECT TO SERVICE
4. The Dealer shall develop, maintain and direct a trained, quality service
organization and render at the DEALERSHIP FACILITIES prompt, workmanlike,
courteous and willing service to owners and users of COMPANY PRODUCTS, in
accordance with the standards and procedures set forth in the applicable
CUSTOMER SERVICE BULLETIN, including without limitation all service to which a
purchaser of a COMPANY PRODUCT from any authorized Mercury Dealer may be
entitled.
4. (a) PREDELIVERY SERVICE. The Dealer shall perform or be responsible for
the performance of such inspection, conditioning and repair of each VEHICLE
before delivery as may be prescribed for such VEHICLE in the Company's
applicable predelivery inspection and conditioning schedules furnished by the
Company to the Dealer. The Dealer shall maintain or be responsible for the
maintenance of adequate records of all predelivery inspection, conditioning and
repair work performed by or for the Dealer.
4. (b) WARRANTY AND POLICY AND CAMPAIGN SERVICE.
(1) The Dealer shall perform all warranty and policy service on each
COMPANY PRODUCT it is certified to sell and service, presented by
owners, in accordance with the warranty and policy applicable thereto
and the applicable provisions of the Warranty Manual and CUSTOMER
SERVICE BULLETIN.
(2) The Dealer shall perform campaign inspections and/or corrections for
owners and users of all VEHICLES, subject to the campaign instructions
issued by the Company from time to time and the applicable provisions
of the Warranty Manual. The Company may ship parts in quantity to the
Dealer to effect such campaign work and if such parts are in excess of
the Dealer's requirements, the Dealer may return unused parts to the
Company for credit after completion of the campaign.
(3) The Dealer shall use only GENUINE PARTS in performing warranty, policy
and campaign work, except as otherwise provided in the Warranty
Manual, CUSTOMER SERVICE BULLETIN or campaign instructions, and shall
give precedence to all such work over other service work if the use of
the vehicle is impaired. The Dealer shall promptly report to the
Company, and seek the Company's assistance with respect to, any
warranty or policy or campaign work which cannot be performed to the
owner's or the Dealer's satisfaction. The Company shall give
precedence to such requests over other service assistance. The Dealer
shall provide the owner with a copy of the repair order for such work
itemizing the work performed. The Dealer shall have such repair order
signed by the owner except in unusual circumstances where it is not
feasible to obtain such signature.
(4) The Dealer shall submit claims to the Company for reimbursement for
the parts and labor used in performing warranty, policy and campaign
work and the Company shall reimburse the Dealer therefor, in
accordance with the provisions of the Warranty Manual or campaign
instructions and the Dealer's approved warranty labor rate. The
Dealer shall maintain adequate records and documents supporting such
claims in accordance with the provisions of the Warranty Manual.
4. (c) MAINTENANCE AND REPAIR SERVICE. The Dealer shall perform all other
maintenance and repair services, including, where feasible, body repair
services, reasonably required by owners and users of VEHICLES and shall provide
each customer a copy of the repair order itemizing the work performed and the
charges therefor. The Dealer shall have the customer sign such repair order
except in unusual circumstances where it is not feasible to obtain such
signature.
4. (d) SERVICE TOOLS AND EQUIPMENT. The Dealer shall acquire and maintain
for use in DEALERSHIP OPERATIONS such diagnostic equipment and other tools,
equipment and machinery, comparable to the type and quality recommended by the
Company from time to time, as are necessary to meet the Dealer's service
responsibilities hereunder and substantially in accordance with Company GUIDES
therefor and the applicable CUSTOMER SERVICE BULLETIN.
RESPONSIBILITIES WITH RESPECT TO DEALERSHIP FACILITIES
5. (a) LOCATIONS AND FACILITIES. The Dealer shall establish and maintain
at the DEALERSHIP LOCATION approved by the Company DEALERSHIP FACILITIES of
satisfactory appearance and condition and adequate to meet the Dealer's
responsibilities under this agreement. The DEALERSHIP FACILITIES shall be
substantially in accordance with the GUIDES therefor established by the Company
from time to time.
5. (b) DEALERSHIP FACILITIES SUPPLEMENT. The Dealer and the Company have
executed, as a part of and simultaneously with this agreement, a Dealership
Facilities Supplement which includes a description of all of the DEALERSHIP
LOCATION and FACILITIES, the GUIDES therefor as of the date of this agreement
and the purpose for which each shall be used.
5. (c) CHANGES AND ADDITIONS. The Dealer shall not move or substantially
modify or change the usage of any of the DEALERSHIP LOCATION or FACILITIES for
COMPANY PRODUCTS, nor shall the Dealer or any person named in subparagraphs F(i)
or F(ii) hereof directly or indirectly establish or operate in whole or in part
any other locations or facilities for the sale or service of COMPANY PRODUCTS or
the sale of used vehicles without the prior written consent of the Company. Any
such change shall be evidenced by a new Dealership Facilities Supplement
executed by the Dealer and the Company. To ensure that all data included on the
Dealership
Facilities Supplement are reasonably accurate, the Company and the Dealer shall
execute a new Dealership Facilities Supplement at least once every five (5)
years.
5. (d) COMPANY ASSISTANCE. To assist the Dealer in planning, establishing
and maintaining DEALERSHIP LOCATION and FACILITIES in accordance with his
responsibilities under this agreement, the Company will make available, at the
request of the Dealer, and at a mutually convenient time and place, personnel to
provide counsel and advice regarding location and facility planning, including
layout and design.
5. (e) FULFILLMENT OF RESPONSIBILITY. The Dealer shall be deemed to be
fulfilling his responsibilities under this paragraph 5 when and as long as the
DEALERSHIP LOCATION is approved by the Company and the DEALERSHIP FACILITIES are
substantially in accordance with the current GUIDES therefor. The execution of
this agreement or of any Dealership Facilities Supplement shall not of itself be
construed as evidence of the fulfillment by the Dealer of his responsibilities
to provide adequate DEALERSHIP LOCATION and FACILITIES.
OTHER DEALER AND COMPANY RESPONSIBILITIES
6. (a) SIGNS. The Dealer shall install and maintain at the DEALERSHIP
LOCATION signs of good appearance and adequate to identify such locations as (1)
authorized sales and service establishments for VEHICLES and other COMPANY
PRODUCTS identifying such products as products of the Company, (2) authorized
sales locations for used vehicles and (3) authorized locations for the leasing
or rental of vehicles, as the case may be. Each sign shall be compatible with
the design standards established by the Company from time to time and shall be
subject to the Company's approval with respect to any display of any trademark
or trade name used or claimed by the Company or any of its subsidiaries.
Fulfillment of any separate Dealership Identification Agreement between the
Dealer and the Company shall be deemed fulfillment of this subparagraph 6(a).
The Company will make available, at the request of the Dealer, and at a mutually
convenient time and place, personnel to provide counsel and advice regarding
dealership signs and identification.
6. (b) PERSONNEL. The dealer shall employ and train such numbers and
classifications of competent personnel of good character including, without
limitation, sales, parts service, owner relations and other department managers,
salesmen and service technicians, as will enable the Dealer to fulfill all his
responsibilities under this agreement. The Company shall provide assistance to
the Dealer in determining personnel requirements. In response to the training
needs of the Dealer's personnel, the Dealer at his expense shall cause his
personnel to attend training schools or courses conducted by the Company from
time to time.
6. (c) DEALER RESIDENCE. Effective operation of the Dealer's business is
dependent in large part on the Dealer's management becoming a part of and
accepted within his local community. Accordingly, each person named in
subparagraph F(ii) hereof shall (unless otherwise approved in writing by the
Company because of individual circumstances) reside within the DEALER'S
LOCALITY.
6. (d) CAPITAL. The Dealer shall at all times maintain and employ in
connection with his DEALERSHIP OPERATIONS separately from any other business of
the Dealer, such total investment, net working capital, adequate lines of
wholesale credit and competitive retail financing plans for VEHICLES as are in
accordance with Company GUIDES therefor and will enable the Dealer to fulfill
all his responsibilities under this agreement.
6. (e) ACCOUNTING SYSTEM. It is in the mutual interests of the Dealer and
the Company that uniform accounting systems and practices be maintained by the
Company's authorized dealers in order that the Company may develop and
disseminate helpful information, evaluate the relative operating performance of
each dealer and develop criteria that will enable the Company to formulate plans
and policies in the interests of its dealers and the Company and that will
assist each dealer to obtain satisfactory results from his dealership
operations. Accordingly, the Dealer shall install and use in his DEALERSHIP
OPERATIONS, whether conducted as one or several business entities, an accounting
system, not exclusive of any other system the Dealer may wish to use, in
accordance with the Company's Manual of Dealer Accounting Procedures as amended
from time to time.
6. (f) FINANCIAL REPORTS. In furtherance of the mutual interests set forth
in paragraph 6(e) hereof, the Dealer shall furnish to the Company each month, at
the time and on the forms prescribed by the Company, a complete statement
reflecting the true financial condition and the month and year-to-date operating
results of his DEALERSHIP OPERATIONS as of the end of the preceding month. The
Dealer also shall promptly furnish to the Company a copy of any adjusted annual
statement that may be prepared by or for the Dealer. All such statements,
reports and data shall be based whenever applicable upon the accounting system
installed and used by the Dealer in accordance with subparagraph 6(e).
Financial information furnished by the Dealer shall be handled on a confidential
basis by the Company and, unless authorized by the Dealer or required by law, or
offered in evidence in judicial or arbitration proceedings, shall not be
furnished, except as an unidentified part of a composite or coded report, to any
party outside of the Company.
6. (g) DELIVERY AND SALES REPORTS. To assist the Company in evaluating
current sales and market trends, in advising its manufacturing sources of
adjustments desired in production and distribution schedules, and in providing
the type of information necessary to provide assistance and counsel to the
Dealer, the Dealer shall (1) accurately complete the information prescribed on
the vehicle delivery card and forward such card to the Company at or as soon as
reasonably possible after the end of the day on which the new VEHICLE is
delivered or sold, whichever shall occur first, to the private or fleet customer
or to rental or leasing operations, if any, conducted or controlled by the
Dealer, and (2) furnish the Company with accurate and complete delivery or sales
reports and data relating to the Dealer and his DEALERSHIP OPERATIONS at the
times and on such forms as the Company may specify from time to time.
6. (h) CUSTOMER HANDLING. The Dealer shall cooperate with Company
programs, and develop and maintain his own programs, designed to develop good
relationships between the Dealer and the public. The Dealer shall promptly
investigate and handle all matters brought to his attention by the Company or
the public relating to the sale or servicing of COMPANY PRODUCTS in the DEALER'S
LOCALITY, in accordance with procedures set forth in the applicable CUSTOMER
SERVICE BULLETIN, so as to develop public confidence in the Dealer, the Company
and COMPANY PRODUCTS. The Dealer shall report promptly to the Company the
details of each inquiry or complaint received by the Dealer relating to any
COMPANY PRODUCT which the Dealer cannot handle satisfactorily. The Dealer shall
not make, directly or indirectly, any false or misleading statement or
representation to any customer as to any VEHICLE, GENUINE PART or other COMPANY
PRODUCT as to the source, condition or capabilities thereof, or the Dealer's or
the Company's prices or charges therefor or for distribution, delivery, taxes or
other items.
6. (i) BUSINESS PRACTICES, ADVERTISING AND PROGRAMS. The Dealer shall
conduct DEALERSHIP OPERATIONS in a manner that will reflect favorably at all
times on the reputation of the Dealer, other Company authorized dealers, the
Company, COMPANY PRODUCTS and trademarks and trade names used or claimed by the
Company or any of its subsidiaries. The Dealer shall avoid in every way any
"bait", deceptive, misleading, confusing or illegal advertising or business
practice. The Company shall not publish or employ any such advertising or
practice or encourage any dealer or group of dealers to do so.
6. (j) COMPLIANCE WITH LAWS, RULES AND REGULATIONS. The Dealer shall
comply with all applicable federal, state, and local laws, rules and regulations
in the ordering, sale and service of COMPANY PRODUCTS and the sale and service
of used vehicles, including without limitation those related to motor vehicle
safety, emissions control and customer service. The Company shall provide the
Dealer, and the Dealer shall provide the Company, such information and
assistance as may be reasonably requested by the other in connection with the
performance of obligations under such laws, rules and regulations.
6. (k) INDEMNIFICATION BY THE COMPANY. The Company shall defend,
indemnify, hold harmless and protect the Dealer from any losses, damages or
expense, including costs and attorney's fees, resulting from or related to
lawsuits, complaints or claims commenced against the Dealer by third parties
concerning:
(1) Property damage to a COMPANY PRODUCT or bodily injury or property
damage arising out of an occurrence caused solely by a "production
defect" in that product (i.e., due to defective materials or
workmanship utilized or performed at the factory), except for any
"production defect" in tires and diesel engines made by others,
provided, however, that the "production defect" could not have been
discovered by the Dealer in the reasonable pre-delivery inspection of
the VEHICLE as recommended by the Company.
(2) Property damage to a COMPANY PRODUCT or bodily injury or property
damage arising out of an occurrence caused solely by a defect in the
design of that product, except for a defect in the design of tires or
diesel engines made by others.
(3) Any damage occurring to a new VEHICLE and repaired by the Company
(excluding removal and replacement of an entire component with a like
component where no welding, riveting or painting is involved), from
the time the VEHICLE leaves the Company's assembly plant or warehouse
to the time it is delivered to the Dealer's designated location,
provided the Company failed to notify the Dealer in writing of such
damage and repair in transit prior to delivery of the VEHICLE to the
first retail customer.
In the event that any legal action arising out of any of these causes is brought
against the Dealer, the Company shall undertake, at its sole expense, to defend
said action on behalf of the Dealer when requested to do so by the Dealer,
provided that the Dealer promptly notifies the Company in writing of the
commencement of the action against the Dealer and cooperates fully in the
defense of the action in such manner and to such extent as the Company may
reasonably require (provided, however, that the Company shall have the right to
continue the suit in the name of the Dealer, if the Company deems such action to
be necessary). Should the Company refuse to undertake the defense on behalf of
the Dealer, or fail to undertake an adequate defense, the Dealer may conduct its
own defense and the Company shall be liable for the cost of such defense,
including reasonable attorney's fees, together with any verdict, judgment or
settlement paid by the Dealer (provided, however, that the Dealer shall notify
the Company within a reasonable period of any such settlement).
(4) Personal injury or property damage arising solely out of a negligent
or improper act of an employee of the Company.
DEALER'S RESPONSIBILITIES WITH RESPECT TO HOURS OF BUSINESS
7. To the end that the needs of customers and owners served by the Dealer
are fulfilled properly, the Dealer shall maintain DEALERSHIP OPERATIONS open for
business during all hours and days which are customary in the trade and lawful
for such operations in the DEALER'S LOCALITY.
PURCHASES FROM OTHERS AND SALES TO OTHERS
8. The Dealer reserves the right to make purchases from others without
obligation or liability of any kind to the Company, provided that the Dealer
shall not be relieved of any responsibility assumed by the Dealer under this
agreement; and, except as otherwise expressly provided herein, the Company
reserves the right to make sales to others (including without limitation to
other dealers) without obligation or liability of any kind to the Dealer.
[MISSING SECTIONS 9 AND 10; PAGE 12 MISSING FROM ORIGINAL]
ACCESSORIES TERMS OF SALE BULLETIN. Except as otherwise specified in writing by
the Company, such prices, charges, discounts and terms of sale shall be those in
effect, and delivery to the Dealer shall be deemed to have been made and the
order deemed to have been filled on the date of delivery to the carrier or the
Dealer, whichever occurs first. The Company has the right at any time and from
time to time to change or eliminate prices, charges, discounts, allowances,
rebates refunds or other terms of sale affecting COMPANY PRODUCTS by issuing a
new VEHICLE or PARTS AND ACCESSORIES TERMS OF SALE BULLETIN, new price schedules
or other notices. In the event the Company shall increase the DEALER PRICE for
any COMPANY PRODUCT, the Dealer shall have the right to cancel, by notice to the
Company within ten (10) days after receipt by the Dealer of notice of such
increase, any orders for such product placed by the Dealer with the Company
prior to receipt by the Dealer of notice of such increase and unfilled at the
time of receipt by the Company of such notice of cancellation.
TERMS AND TITLE
11. (a) PAYMENT. Payment by the Dealer for each COMPANY PRODUCT shall be
in accordance with the terms and conditions set forth in the applicable VEHICLE
or PARTS AND ACCESSORIES TERMS OF SALE BULLETIN.
11. (b) TITLE. Title to each COMPANY PRODUCT purchased by the Dealer shall
(unless otherwise provided in the applicable VEHICLE or PARTS AND ACCESSORIES
TERMS OF SALE BULLETIN) pass to the Dealer, or to such financing institution or
other party as may have been designated to the Company by the Dealer, upon
delivery thereof to the carrier or to the Dealer, whichever occurs first, but
the Company shall retain a security interest in and right to repossess any
product until paid therefor.
11. (c) RISK OF LOSS AND CLAIMS. The Company shall assume all risk of loss
or damage to any VEHICLE purchased by the Dealer from the Company which is not
borne by the carrier while the VEHICLE is in the possession of the carrier
provided the Dealer properly inspects and records any loss or damage of the
VEHICLE upon receipt thereof. The Dealer shall cooperate with the Company in
processing all claims for loss or damage of the VEHICLE in accordance with the
Company's then current procedures.
11. (d) DEMURRAGE AND DIVERSION LIABILITY. The Dealer shall be responsible
for and pay any and all demurrage, storage and other charges accruing after
arrival of any shipment at its destination. In the event the Dealer shall fail
or refuse for any reason (other than labor difficulty in the Dealer's place of
business or any cause beyond the Dealer's control or without the Dealer's fault
or negligence) to accept delivery of any COMPANY PRODUCT ordered by the Dealer,
the Dealer shall also pay the Company the amount of all expenses incurred by the
Company in shipping such product to the Dealer and in returning such product to
the original shipping point or diverting it to another destination; but in no
event shall the Dealer pay the Company more for any such diversion than the
expense of returning the product to its original shipping point.
11. (e) STATE AND LOCAL TAXES. The Dealer hereby represents and warrants
that all COMPANY PRODUCTS purchased from the Company are purchased for resale in
the ordinary course of the Dealer's business. The Dealer further represents and
warrants that the Dealer has complied with all requirements for his collection
and/or payment of applicable sales, use and like taxes, and has furnished or
will furnish evidence thereof to the Company. These representations and
warranties shall be deemed a part of each order given by the Dealer to the
Company.
The Dealer agrees that, as to any COMPANY PRODUCT put to a taxable use by
the Dealer, or in fact purchased by the Dealer other than for resale, the Dealer
shall make timely and proper return and payment of all applicable sales, use and
like taxes, and shall hold the Company harmless from all claims and demands
therefor.
RECORDS, INSPECTIONS AND TESTS
12. (a) RECORD RETENTION. The Dealer shall retain for at least two (2)
years all records and documents, including journals and ledgers, which relate in
any way, in whole or in part, to DEALERSHIP OPERATIONS, except for records used
as a basis for submission of warranty and policy claims, which shall be retained
for at least one (1) year.
12. (b) INSPECTIONS AND TESTS. The Dealer shall allow persons designated
by the Company, at reasonable times and intervals and during normal business
hours, to examine the DEALERSHIP FACILITIES and OPERATIONS, the Dealer's stocks
of COMPANY PRODUCTS and used vehicles and vehicles at the DEALERSHIP FACILITIES
for service or repair, to test the Dealer's equipment, to check and instruct the
Dealer and his employees in the proper handling of warranty and other repairs
and claims based thereon, and to examine, copy and audit any and all of the
Dealer's records and documents. The Company may charge back to the Dealer all
payments or credits made by the Company to the Dealer pursuant to such claims or
otherwise which were improperly claimed or paid.
CHANGES IN COMPANY PRODUCTS
13. The Company may change the design of any COMPANY PRODUCT, or add any
new or different COMPANY PRODUCT or line, series or body style of VEHICLES, at
any time and from time to time, without notice or obligation to the Dealer,
including any obligation with respect to any COMPANY PRODUCT theretofore ordered
or purchased by or delivered to the Dealer. Such changes shall not be
considered model year changes as contemplated by the provisions of any VEHICLE
TERMS OF SALE BULLETIN. The Company may discontinue any VEHICLE or other
COMPANY PRODUCT at any time without liability to the Dealer.
DEALER NOT AGENT OF THE COMPANY
14. This agreement does not in any way create the relationship of principal
and agent between the Company and the Dealer and under no circumstances shall
the Dealer be considered to be an agent of the Company. The Dealer shall not
act or attempt to act, or represent himself, directly or by implication, as
agent of the Company or in any manner assume or create any obligation on behalf
of or in the name of the Company.
TRADEMARKS AND TRADE NAMES
15. (a) USE IN FIRM NAME. The Dealer may not use any trademark or trade
name used or claimed by the Company or any of its subsidiaries in the Dealer's
firm name or trade name except with the Company's prior written approval. If,
after such approval, the Company should at any time so request, the Dealer shall
promptly discontinue such use and take all steps necessary or appropriate in the
opinion of the Company to eliminate such trademark or trade name from the
Dealer's firm name or trade name.
15. (b) LIMITATIONS ON USE. The Dealer shall not use any trademark or
trade name used or claimed by the Company or any of its subsidiaries, or coined
words or combinations containing the same or parts thereof, in connection with
any business conducted by the Dealer other than in dealing in COMPANY PRODUCTS
to which such trademark or trade name refers and then only in the manner and
form approved by the Company; provided that the word "Mercury" may be used in
connection with a business operated by or affiliated with the Dealer as the
Dealer's used vehicle outlet if the Dealer obtains the Company's prior written
approval, which may be revoked at any time, and if the Dealer retains the right
to require any such affiliated business to discontinue such use at any time the
Dealer may direct. The Dealer shall direct such discontinuance on request of
the Company at any time.
The Dealer shall not contest the right of the Company to exclusive use of
any trademark or trade name used or claimed by the Company or any of its
subsidiaries.
REPORTS TO FORD MOTOR COMPANY'S DEALER POLICY BOARD
16. In the interest of maintaining harmonious relationships between the
parties to this agreement, the Dealer shall report promptly in writing to Ford
Motor Company's Dealer Policy Board (hereafter called "Policy Board") any act or
failure to act on the part of the Company or any of its representatives which
the Dealer believes was not in accordance with this agreement or was not
reasonable, fair, for good cause or provocation or in good faith as to the
Dealer. For the purposes of this agreement, the term "good faith" shall mean
the Company and its representatives acting in a fair and equitable manner toward
the Dealer so as to guarantee the Dealer freedom from coercion or intimidation
from the Company. It is the purpose of the Policy Board to receive, carefully
evaluate and, to the extent possible, resolve any such claim to the mutual
satisfaction of the parties. Any decision of the Policy Board shall be binding
on the Company but shall not be binding on the Dealer.
TERMINATION OR NONRENEWAL OF AGREEMENT
17. (a) BY DEALER. The Dealer may terminate or not renew this agreement at
any time at will by giving the Company at least thirty (30) days prior written
notice thereof.
17. (b) BY COMPANY DUE TO EVENTS CONTROLLED BY DEALER. The following
represent events which are substantially within the control of the Dealer and
over which the Company has no control, and which are so contrary to the intent
and purpose of this agreement as to warrant its termination or nonrenewal:
(1) Any transfer or attempted transfer by the Dealer of any interest in,
or right, privilege or obligation under this agreement; or transfer by
operation of law or otherwise, of the principal assets of the Dealer
that are required for the conduct of DEALERSHIP OPERATIONS; or any
change, however accomplished, without the Company's prior written
consent, which consent shall not be unreasonably withheld, in the
direct or indirect ownership or operating management of the Dealer as
set forth in paragraph F.
(2) Any misrepresentation in applying for this agreement by the Dealer or
any person named in paragraph F; or submission by the Dealer to the
Company of any false or fraudulent application or claim, or statement
in support thereof, for warranty, policy or campaign adjustments, for
wholesale parts or VEHICLE sales incentives or for any other refund,
credit, rebate, incentive, allowance, discount, reimbursement or
payment under any Company program; or acceptance by the Dealer of any
payment for any work not performed by the Dealer in accordance with
the provisions of this agreement, the Warranty Manual or any
applicable CUSTOMER SERVICE BULLETIN.
(3) Insolvency of the Dealer, inability of the Dealer to meet debts as
they mature, filing by the Dealer of a voluntary petition under any
bankruptcy or receivership law, adjudication of the Dealer as a
bankrupt or insolvent pursuant to an involuntary petition under any
such law, appointment by a court of a temporary or permanent receiver,
trustee or custodian for the Dealer or the Dealer's assets, or
execution of an assignment by the Dealer for the benefit of creditors;
dissolution of the Dealer; or failure of the Dealer for any reason to
function in the ordinary course of business, or to maintain the
DEALERSHIP OPERATIONS open for business during and for not less than
the hours customary in the trade and lawful in the DEALER'S LOCALITY
as set forth in paragraph 7.
(4) Conviction in a court of original jurisdiction of the Dealer or any
person named in paragraph F for any violation of law, or any conduct
by any such person unbecoming a reputable businessman,
or disagreement between or among any persons named in paragraph F,
which in the Company's opinion tends to affect adversely the operation
or business of the Dealer or the good name, goodwill or reputation of
the Dealer, other authorized dealers of the Company, the Company, or
COMPANY PRODUCTS.
(5) The Dealer shall have engaged, after written warning by the Company,
in any advertising or business practice contrary to the provisions of
subparagraph 6(i) of this agreement.
(6) Failure of the Dealer to fulfill any provisions of paragraph 10 (as to
prices or charges), or paragraph 11 (as to terms and title, including
payment for COMPANY PRODUCTS), or paragraph 15 (as to trademarks or
trade names), or to pay the Company any sum due pursuant to any
agreement, including any purchase or lease agreement, between the
Company and the Dealer.
Upon occurrence of any of the foregoing events, the Company may terminate this
agreement by giving the Dealer at least fifteen (15) days prior written notice
thereof.
17. (c) BY COMPANY FOR NONPERFORMANCE BY DEALER OF SALES, SERVICE,
FACILITIES OR OTHER RESPONSIBILITIES. If the Dealer shall fail to fulfill any of
his responsibilities with respect to:
(1) VEHICLES under the provisions of paragraph 2 of this agreement,
(2) GENUINE PARTS under the provisions of paragraph 3 of this agreement,
(3) SERVICE under the provisions of paragraph 4 of this agreement,
(4) DEALERSHIP LOCATION or FACILITIES under the provisions of paragraph 5
of this agreement, or
(5) Other responsibilities under the provisions of subparagraphs 6(a)
through 6(h) (as to signs, personnel, residence, capital, accounting
system, financial reports, delivery or sales reports or customer
handling), subparagraph 6(j) (as to laws, rules or regulations),
paragraph 12 (as to records, inspections and tests) or paragraph 14
(as to the Dealer not being an agent of the Company) of this
agreement,
the Company shall notify the Dealer in writing of such failure or failures, will
offer to review promptly with the Dealer the reasons which, in the Company's or
Dealer's opinion, account for such failure or failures and will provide the
Dealer with a reasonable opportunity to cure the same. If the Dealer fails or
refuses to cure the same within a reasonable time after such notice, the Company
may terminate or not renew this agreement by giving the Dealer at least ninety
(90)days prior written notice thereof.
17. (d) BY COMPANY OR DEALER BECAUSE OF DEATH OR PHYSICAL OR MENTAL
INCAPACITY OF ANY PRINCIPAL OWNER. Since this agreement has been entered into by
the Company in reliance upon the continued participation in the ownership of the
Dealer by the persons named in subparagraph F(i) hereof, the Company or the
Dealer may (subject to the provisions of paragraph 20 hereof) terminate or not
renew this agreement, by giving the other at least fifteen (15) days prior
written notice thereof, in the event of the death or physical or mental
incapacity of any owner of the Dealer named in subparagraph F(i); provided,
however, that in order to facilitate orderly termination and liquidation of the
dealership, the Company shall defer for a period of three (3) months to one (1)
year, as the Company may determine, the exercise of its right to terminate in
such event if the executor or representative of such deceased or incapacitated
owner shall so request and shall demonstrate the ability to carry out the terms
and conditions of this agreement.
17. (e) BY COMPANY OR DEALER FOR FAILURE OF DEALER OR COMPANY TO BE
LICENSED. If the Company or the Dealer requires a license for the performance
of any responsibility under this agreement in any jurisdiction where this
agreement is to be performed and if either party shall fail to secure and
maintain such license, or if such license is suspended or revoked, irrespective
of the cause or reason, either party may terminate or not renew this agreement
by giving the other at least fifteen (15) days prior written notice thereof.
17. (f) BY COMPANY AT WILL OR UPON FAILURE TO HOLD OTHER COMPANY DOMESTIC
AGREEMENTS.
(1) If this agreement is not for a stated term specified in paragraph G of
this agreement, the Company may terminate this agreement at will at
any time by giving the Dealer at least one hundred and twenty (120)
days prior written notice thereof.
(2) The Dealer acknowledges that, where the Company has issued the Dealer
more than one domestic vehicle sales and service agreement, the
Company, in order to be fully competitive, must have the right to
terminate or not renew, in the event the Dealer ceases for any reason
to hold any one of such sales and service agreements with the Dealer.
Accordingly, the Dealer agrees that, in the event the Dealer for any
reason shall give or be given notice of termination or nonrenewal of
any other domestic vehicle sales and service agreement with the
Company at any DEALERSHIP LOCATION or FACILITIES established by the
Dealer under paragraph 5 of this agreement, the Company, within a
reasonable time thereafter, may terminate or not renew this agreement
by written notice given to the Dealer, effective after fifteen (15)
days or upon the same date as the effective date of such other notice
of termination or nonrenewal, whichever is later.
17. (g) BY COMPANY UPON THE OFFER OF A NEW AGREEMENT. The Company may
terminate this agreement at any time by giving the Dealer at least thirty (30)
days prior written notice thereof in the event the Company offers a new or
amended form of agreement to its authorized dealers in COMPANY PRODUCTS.
17. (h) ACTS IN GOOD FAITH.
(1) The Dealer acknowledges that each of his responsibilities under this
agreement is reasonable, proper and fundamental to the purpose of this
agreement and that (i) his failure to fulfill any of them would
constitute a material breach of this agreement, (ii) the occurrence of
any of the events set forth in subparagraph 17(b), 17(c), or 17(e)
would seriously impair fundamental considerations upon which this
agreement is based, and (iii) the rights of termination or nonrenewal
reserved in the events specified in subparagraphs 17(f) (2) or 17(g)
are necessary to permit the Company to remain competitive at all
times. The Dealer acknowledges that any such failure, occurrence or
event constitutes a reasonable, fair, good, due and just cause and
provocation for termination or nonrenewal of this agreement by the
Company.
(2) The Dealer agrees that if the Company or any of its representatives
(i) requests the Dealer to fulfill any of such responsibilities, (ii)
believes that any such failure, occurrence or event is occurring or
has occurred and advises the Dealer that unless remedied, such
failure, occurrence or event may result in Company termination or
nonrenewal of this agreement, (iii) gives the Dealer notice of
termination or nonrenewal, or terminates or fails to renew this
agreement, because of any such failure, occurrence or event, then such
request, advice, notice, termination or nonrenewal shall not be
considered to constitute or be evidence of coercion or intimidation,
or threat thereof, or to be unreasonable, unfair, undue or unjust, or
to be not in good faith.
REQUIRED APPEAL TO POLICY BOARD - TERMINATIONS OR NONRENEWALS - OPTIONAL
ARBITRATION PLAN
18. (a) ARBITRATION PLAN. The Company has adopted the Ford Motor Company
Plan and Rules of Arbitration ("Arbitration Plan"), effective June 1, 1972, a
copy of which was delivered to the Dealer with this agreement. The Company
reserves the right to terminate, change or modify the Arbitration Plan at any
time upon notice to the Dealer. Any arbitration pursuant to the Arbitration
Plan shall be governed by the terms of the Arbitration Plan in effect on the
date such arbitration is commenced.
18. (b) APPEAL TO POLICY BOARD. Any protest, controversy or claim by the
Dealer (whether for damages, stay of action or otherwise) with respect to any
termination or nonrenewal of this agreement by the Company or the settlement of
the accounts of the Dealer with the Company after any termination or nonrenewal
of this agreement by the Company or the Dealer has become effective, shall be
appealed by the Dealer to the Policy Board within fifteen (15) days after the
Dealer's receipt of notice of termination or nonrenewal, or, as to settlement of
accounts after termination or nonrenewal, within one (1) year after the
termination or nonrenewal has become effective. Appeal to the Policy Board
shall be a condition precedent to the Dealer's right to pursue any other remedy
available under this agreement or otherwise available under law. The Company,
but not the Dealer, shall be bound by the decision of the Policy Board.
18. (c) OPTIONAL ARBITRATION. If the Dealer is dissatisfied with the
decision of the Policy Board in a case referred to in subparagraph 18(b), the
Dealer may, at his option, elect to arbitrate in accordance with the Arbitration
Plan or elect not to arbitrate and retain the right to pursue whatever other
remedies may be available, provided that:
(1) The Dealer's election to arbitrate shall be made by filing an
Arbitration Demand with the Secretary appointed under the Arbitration
Plan within thirty (30) days after receipt by the Dealer of a decision
by the Policy Board. The Arbitration Demand shall set forth a clear
and complete statement of the nature of the Dealer's claim and the
basis thereof, the amount involved, if any, and the remedy sought.
The Arbitration Demand shall be in writing and shall be given by
personal delivery or sent by registered or certified mail, postage
prepaid, to the Secretary, Arbitration Panel, Ford Motor Company, 000
Xxxxxxxxxxx Xxxxxx, X.X. Xxx 00000, Xxxxxxx, Xxxxxxxx 00000.
(2) If the Dealer, by filing a timely Arbitration Demand, elects to
arbitrate, arbitration shall be the sole and exclusive remedy of the
Dealer in such cases, and the decision and award of the Arbitration
Panel provided for in the Arbitration Plan shall be final and binding
on both parties.
(3) If the Dealer elects to arbitrate, either party may enjoin the other
from pursuing any other remedy in such cases, except that either party
may xxx to enforce any order or award of the Arbitration Panel and
judgment upon such order or award may be entered by any court having
jurisdiction.
18. (d) LIMITATION OF ACTIONS. If the Dealer elects not to arbitrate by
failing to file a timely Arbitration Demand, all causes of action at law or in
equity and all rights and remedies before federal, state, or local
administrative agencies, departments or boards shall be forever barred unless
commenced or instituted within one (1) year after the date of the decision of
the Policy Board.
18. (e) EXPENSES OF ARBITRATION. During the first quarter of each calendar
year, the Company and the Chairmen of the Ford and Lincoln-Mercury National
Dealer Councils ("Dealer Council Chairmen") shall jointly establish a budget for
that calendar year for the retainer fees, daily fees, clerical costs, travel
expenses and living allowances ("Compensation") of the Arbitrator selected by
the Dealer Council Chairmen, for one-half of the
Compensation of the Arbitrator selected as Chairman of the Arbitration Panel,
and for one-half of the cost of outside services employed by the Arbitration
Panel, pursuant to the Arbitration Plan.
(1) The amount of such budget shall be advanced by the Company to a
Trustee selected by the Company and the Dealer Council Chairmen. The
Trustee shall pay the Compensation of the Arbitrator selected by the
Dealer Council Chairmen, one-half of the Compensation of the Chairman
of the Arbitration Panel, and one-half of the cost of outside services
employed by the Arbitration Panel, as statements are rendered
therefor, from and to the extent of such advance. All other costs of
the Arbitration Panel for that calendar year shall be borne by the
Company except as hereinafter provided. Any unexpended portion of
such budget shall be carried forward to the next calendar year.
(2) The amount of such budget shall be spread in equal amounts among all
dealerships then having valid and outstanding Ford, Mercury or Lincoln
Sales and Service Agreements with the Company ("Authorized Dealers").
Such equal amount shall be charged to each Authorized Dealer. The
Dealer shall promptly pay the amount so charged.
(3) Each party shall pay and bear all costs of any witness called or other
evidence adduced by that party, of any attorney, accountant or other
person retained by that party and of any transcript ordered by that
party in connection with any arbitration under the Arbitration Plan.
(4) The Arbitration Panel, as a part of any award, may assess, against any
party or parties to an arbitration under the Arbitration Plan, all or
any part of the costs of any witness called, any other evidence
adduced, or any outside service employed, at the direct request of any
Arbitrator.
OBLIGATIONS UPON TERMINATION OR NONRENEWAL
19. Upon termination or nonrenewal of this agreement by either party, the
Dealer shall cease to be an authorized Mercury Dealer; and:
19. (a) SUMS OWING THE COMPANY. The Dealer shall pay to the Company all
sums owing to the Company by the Dealer.
19. (b) DISCONTINUANCE OF USE OF TRADEMARKS AND TRADE NAMES. The Dealer
shall at his own expense (1) remove all signs erected or used by the Dealer, or
by any business associated or affiliated with the Dealer, and bearing the name
"Mercury" or any other trademark or trade name used or claimed by the Company or
any of its subsidiaries (except signs owned by the Company and except as such
use may be permitted under other agreements relating to products of the Company
other than COMPANY PRODUCTS) or any word indicating that the Dealer is an
authorized dealer with respect to any COMPANY PRODUCT, (2) erase or obliterate
all such trademarks, trade names and words from stationery, forms and other
papers used by the Dealer, or any business affiliated with the Dealer, (3)
discontinue all advertising of the Dealer as an authorized dealer in COMPANY
PRODUCTS, (4) discontinue any use of any such trademark, trade name or word in
the Dealer's firm or trade name and take all steps necessary or appropriate in
the opinion of the Company to change such firm or trade name to eliminate any
such trademark, trade name or word therefrom, and (5) refrain from doing
anything whether or not specified above that would indicate that the Dealer is
or was an authorized Dealer in COMPANY PRODUCTS.
If the Dealer fails to comply with any of the requirements of this
subparagraph 19(b), the Dealer shall reimburse the Company for all costs and
expenses, including reasonable attorney's fees, incurred by the Company in
effecting or enforcing compliance.
19. (c) WARRANTY WORK. The Dealer shall cease to be eligible to receive
reimbursement from the Company with respect to any work thereafter performed or
part thereafter supplied under any warranty or policy applicable to any COMPANY
PRODUCT, unless specifically authorized by the Company in writing to perform
such work and then only in the manner and for the period of time set forth in
such authorization.
19. (d) SERVICE RECORDS. The Dealer shall deliver to the Company or its
nominee all of the Dealer's records with respect to predelivery, warranty,
policy, campaign and other service work of the Dealer.
19. (e) ORDERS AND CUSTOMER DEPOSITS. The Dealer shall assign to the
Company or its nominee all customer orders for COMPANY PRODUCTS which the Dealer
has not filled and which the Company is not obligated by subparagraph 19(f) to
supply to the Dealer, and all customer deposits made thereon; and deliver to the
Company or its nominee the names and addresses of the Dealer's existing and
prospective customers for COMPANY PRODUCTS.
19. (f) DELIVERIES AFTER TERMINATION OR NONRENEWAL. If this agreement
shall be terminated or not renewed by the Company (1) because of the death or
physical or mental incapacity of any principal owner of Dealer pursuant to
subparagraph 17(d) hereof, or (2) at will pursuant to subparagraph 17(f)(1)
hereof, or (3) pursuant to subparagraph 17(f)(2) hereof because another domestic
sales agreement between the Dealer and the Company has been terminated either at
will or by reason of the death or physical or mental incapacity of a principal
owner of the Dealer, the Company shall use its best efforts to fill the Dealer's
bona fide orders for COMPANY PRODUCTS outstanding on the effective date of
termination or nonrenewal. The Company's fulfillment of such orders for
VEHICLES, however, may be limited to the number and type of VEHICLES delivered
to the Dealer by the COMPANY during the ninety (90) days immediately preceding
such date, or the number and type of bona fide retail orders for VEHICLES
accepted by the Dealer and unfilled on such date, whichever is smaller.
Deliveries under this subparagraph shall be made in substantial accord with the
Company's normal delivery schedules for the area, unless the Company elects to
make all such deliveries within thirty (30) days after the effective date of
termination.
The Dealer shall inspect, condition and repair such VEHICLES in the manner
specified in this agreement and in accordance with procedures outlined by the
Company from time to time.
Except for deliveries required by this subparagraph 19(f), each order for a
COMPANY PRODUCT received by the Company from the Dealer and unfilled on the
effective date of termination or expiration of this agreement shall be deemed
cancelled.
SUCCESSOR TO THE DEALER IN THE EVENT OF DEATH OR INCAPACITY
20. In the event of termination or nonrenewal of this agreement by the
Company pursuant to subparagraphs 17(d) or 17(f)(2) because of the death or
physical or mental incapacity of a principal owner of the Dealer named in
subparagraph F(i) hereof:
20. (a) INTERIM AGREEMENT. The Company, subject to the other provisions of
this paragraph, shall offer an Interim Mercury Sales and Service Agreement for
COMPANY PRODUCTS
(1) To a successor dealership composed of the last person nominated by
such principal owner as his successor, together with any other
principal and remaining owners named in subparagraphs F(i) and F(iii)
(hereafter called "Other Owners") hereof, provided that:
(i) The nomination had been submitted to the Company in
writing on the form supplied by the Company with the
consent of the Other Owners prior to such death or the
occurrence of such incapacity, and
(ii) The Company, upon receipt of the nomination had accepted
the nominee as then being qualified (or as capable of
becoming qualified in five (5) years), and at the time the
notice of termination or nonrenewal is given approves the
nominee as then being qualified, to assume full managerial
authority for the DEALERSHIP OPERATIONS, which acceptance
or approval shall not be unreasonably withheld, and
(iii) The nominee has been named as a manager of, and has been
actively participating in the general management of, the
Dealer or a satisfactorily performing automotive or
comparable retail business for a reasonable period of time
prior to the time of the notice of termination or
nonrenewal, and
(iv) The successor dealership, at the time the Interim
Agreement is to be offered, has capital and facilities
substantially in accordance with Company GUIDES therefor,
and
(v) In the event more than one nominee fulfills the above
conditions, the Company, in its discretion, shall determine
which nominee or nominees, together with the Other Owners,
shall compose the successor dealership to which such
Interim Agreement shall be offered;
(2) To a successor dealership, in the event that such principal owner has
notified the Company in writing that the spouse or another relative or
heir of such principal owner shall retain or acquire a financial
interest in the successor dealership and the Company has approved such
spouse, relative or heir for such financial interest which approval
shall not be unreasonably withheld. Such successor dealership shall
be composed of such spouse, relative or heir, together with the Other
Owners and any nominee or nominees approved and qualified pursuant to
subparagraph 20(a)(1) hereof, provided that:
(i) The Other Owners and any nominees and such spouse, relative
or heir agree in writing how each of them shall participate
in the ownership and management of the successor
dealership, and
(ii) Managerial authority and responsibility of the successor
dealership shall be vested in a nominee approved and
qualified pursuant to subparagraph 20(a)(1) hereof, or in a
person or persons who have been named in subparagraph F(ii)
of this agreement and have been actually participating in
the general management of the Dealer for a reasonable period
of time prior to the notice of termination or nonrenewal or
in another person or persons qualified to assume managerial
authority and responsibility and approved by the Company to
be so named, which approval shall not be unreasonably
withheld, and
(iii) The successor dealership, at the time the Interim Agreement
is to be offered, has capital and facilities substantially
in accordance with Company GUIDES therefor;
(3) To a successor dealership, in the event that the deceased or
incapacitated principal owner has neither nominated a successor
pursuant to subparagraph 20(a)(1) hereof, nor notified the Company of
a retained or acquired financial interest pursuant to subparagraph
20(a)(2) hereof, which successor dealership shall be composed of the
Other Owners; provided that the Other Owners agree in writing how each
of them shall participate in the ownership and management of the
successor dealership and the successor dealership fulfills the
conditions set forth in subparagraphs 20(a)(2)(ii) and (iii) of this
agreement.
20. (b) BUY-OUT. The successor dealership named in such Interim Agreement
shall arrange in writing, subject to the approval of the Company which shall not
be unreasonably withheld, for one or more persons named in subparagraph F(ii) of
the Interim Agreement to have the right to acquire during its term at least a
20% ownership interests in the successor dealership and, if the successor
dealership is offered a standard Sales and Service Agreement for COMPANY
PRODUCTS at the expiration of the Interim Agreement, to have the right to
acquire additional ownership interests therein during the first five (5) years
of such standard agreement and, at the end of such five (5) years, to acquire
the entire ownership interest therein.
20. (c) TERM/CONTINUATION. Any Interim Agreement offered pursuant to this
paragraph 20 shall be in the form in effect between the Company and is
authorized dealers in COMPANY PRODUCTS at the time of such offer, and the term
of such Interim Agreement shall be for twenty-four (24) months, or such longer
term as the Company shall determine to be reasonable to permit the person or
persons named in subparagraph F(ii) thereof to acquire a 20% ownership interest
in the successor dealership pursuant to subparagraph 20(b) of this agreement,
subject to termination during such term as provided in such Interim Agreement.
At least ninety (90) days prior to the end of the term of such Interim
Agreement, the Company shall determine whether or not the person or persons
composing the successor dealership with which such Interim Agreement shall have
been executed possess the qualifications with respect to management, capital and
facilities necessary to fulfill the responsibilities of an authorized dealer in
COMPANY PRODUCTS and, if the Company shall determine that they do possess the
same, which determination shall not be unreasonably made, the Company shall
offer to such successor dealership, upon the expiration of the term of the
Interim Agreement, a standard Sales and Service Agreement for COMPANY PRODUCTS
in the form then in effect.
20. (d) LIMITATION OF OFFER. Notwithstanding anything stated or implied to
the contrary in this paragraph 20, the Company shall not be obligated to offer
an Interim Agreement to any successor dealership if the Company has notified the
Dealer in writing prior to such death or physical or mental incapacity that the
Company's market representation plans do not provide for continuation of
representation from the DEALERSHIP FACILITIES as determined by the Company under
paragraph 9 of this agreement. If such market representation plans provide for
the relocation of the Dealer to another location, however, the Company shall
offer an Interim Agreement subject to the condition that the successor
dealership relocate within a reasonable time to such other location in
facilities approved by the Company.
20. (e) LIMITATION FOR ACCEPTANCE. In the event that the person or persons
composing a proposed successor dealership to which any offer of an Interim
Agreement or standard Sales and Service Agreement for COMPANY PRODUCTS shall
have been made pursuant to this paragraph 20 shall not accept the same within
thirty (30) days after notification to them of such offer, such offer shall
automatically expire.
REACQUISITION OF COMPANY PRODUCTS AND ACQUISITION OF THE DEALER'S SIGNS,
SPECIAL TOOLS AND EQUIPMENT, AND MAINTENANCE ITEMS
21. Upon termination or nonrenewal of this agreement by the Company, the
Dealer may elect as provided in paragraph 23 or, upon termination or nonrenewal
of this agreement by the Dealer, the Dealer may demand in his notice of
termination or nonrenewal, to have the Company purchase or accept upon return
from the Dealer, in return for his general release specified in paragraph 23:
21. (a) VEHICLES. Each unused, undamaged and unsold VEHICLE (together with
all factory-installed options thereon) in the Dealer's stock on the effective
date of such termination or nonrenewal, provided such VEHICLE is in first-class
salable condition, is of a then current model, has not been altered outside Ford
Motor Company's factory, and was purchased by the Dealer from the Company or
another authorized dealer in VEHICLES prior to giving or receiving notice of
such termination or nonrenewal. The price for such VEHICLE shall be its DEALER
PRICE, plus the Company's charges for distribution, delivery and taxes, at the
time it was purchased from the Company, less all allowances paid or applicable
allowances offered thereon by the Company.
21. (b) GENUINE PARTS. Each unused, undamaged and unsold GENUINE PART, and
each unopened item of appearance and maintenance materials and paints
(hereinafter called "maintenance items") in the Dealer's stock on the effective
date of such termination or nonrenewal, provided such GENUINE PART or
maintenance item is offered for sale by the Company to authorized dealers in
VEHICLES in the Company's then current Parts and Accessories Price Schedules, is
in first-class salable condition including reasonably legible and usable
packaging and was purchased by the Dealer from the Company or another Company
authorized dealer in normal volume prior to giving or receiving notice of such
termination or nonrenewal. Notwithstanding the foregoing, the repurchase of
such GENUINE PARTS identified by the Company as accessories shall be limited to
those so purchased by the Dealer within twelve (12) months preceding such date,
or those sold to the Dealer by the Company for use in a VEHICLE that is a
current model on such effective date. The price for each such GENUINE PART or
maintenance item shall be its DEALER PRICE in effect on the effective date of
termination or nonrenewal, less all allowances paid or applicable allowances
offered thereon by the Company. The Dealer, at his own expense, shall carefully
pack and box such of the eligible GENUINE PARTS and maintenance items as the
Company may direct, and the Company shall pay the Dealer an additional five
percent (5%) of the DEALER PRICE of the eligible GENUINE PARTS and maintenance
items so packaged and boxed.
21. (c) DEALER'S SIGNS. Each sign at the DEALERSHIP LOCATION which bears a
trademark or trade name used or claimed by the Company or any of its
subsidiaries, is owned by the Dealer on the effective date of termination or
nonrenewal, was approved by the Company pursuant to subparagraph 6(a) and, if
requested by the Company, is removed by the Dealer at his expense. The price
for each such sign shall be its fair market value on such effective date as
agreed by the Company and the Dealer, or, if they cannot agree, as determined by
a qualified independent appraiser selected by the Company and the Dealer.
21. (d) SPECIAL TOOLS AND EQUIPMENT. All special tools and automotive
service equipment owned by the Dealer on the effective date of termination or
nonrenewal which were designed especially for servicing VEHICLES, which are of
the type recommended in writing by the Company and designated as "special" tools
and equipment in the applicable CUSTOMER SERVICE BULLETIN or other notice
pertaining thereto sent to the Dealer by the Company, which are in usable and
good condition except for reasonable wear and tear, and which were purchased by
the Dealer within the three (3) year period preceding the effective date of
termination or nonrenewal. The price for each special tool and item of
automotive service equipment shall be its fair market value on such effective
date as agreed by the Company and the Dealer, or, if they cannot agree, as
determined by a qualified independent appraiser selected by the Company and the
Dealer.
21. (e) PROCEDURES, DELIVERY AND TITLE. The Dealer shall return all
property to be purchased or acquired by the Company pursuant to this paragraph
21 in accordance with the procedures and timetables then established by the
Company, shall deliver such property at the DEALERSHIP FACILITIES unless the
Company directs otherwise (in which event the Company shall pay transportation
costs to the place of delivery), shall and hereby does warrant good clear title
to all such property, and shall furnish to the Company evidence satisfactory to
the Company that the Dealer has complied with all applicable bulk sales laws and
that such property is free and clear of all claims, liens and encumbrances.
21. (f) PAYMENT. The Company shall pay the Dealer for the property
purchased or acquired by it pursuant to this paragraph 21 within a reasonable
time following the Dealer's fulfillment of all of the Dealer's obligations under
paragraph 19 and this paragraph 21 subject to the Dealer's tender of a general
release as specified in paragraph 23, and further subject to offset of any
obligations owing by the Dealer to the Company. If the Company has not paid the
Dealer the net amount due the Dealer for such property within a period of two
(2) months after the Dealer has fulfilled his obligations under this paragraph
21 and provided the Dealer has fully complied with paragraphs 19 and 23, the
Company will, at the Dealer's request, advance the Dealer seventy-five percent
(75%) of the estimated amount due the Dealer net of any monies owed to the
Company by the Dealer. The Company will pay the balance of such amount as soon
as practical thereafter.
21. (g) ASSIGNMENT OF BENEFITS. As an assist to the Dealer in effecting an
orderly transfer of his assets to a replacement dealer and to minimize possible
interruptions in customer convenience and service, in the event of termination
or nonrenewal by either party, any rights or benefits with respect to
subparagraphs 21(a), 21(b), 21(c) and 21(d), herein may be assigned by the
Dealer to anyone to whom the Dealer has agreed to sell the respective property
and whom the Company has approved as a replacement for the Dealer. Such
assignments will be subject to Dealer's fulfillment of his obligations under
paragraph 19 and this paragraph 21 and subject to the Dealer's tender of a
general release as specified in paragraph 23.
DEALERSHIP FACILITIES ASSISTANCE UPON NONRENEWAL OR CERTAIN TERMINATIONS BY
THE COMPANY
22. (a) DEALER ELIGIBILITY. The Dealer may elect, as provided in paragraph
23, to have the Company assist the Dealer with respect to the Dealer's Eligible
Facilities (as herein defined), in return for the Dealer's general release as
specified in paragraph 23, upon nonrenewal of this agreement by the Company, or
upon termination of this agreement by the Company, for the following reasons:
(1) Because of disagreement among persons named in paragraph F pursuant to
subparagraph 17(b)(4) or because of the Dealer's failure with respect
to prices or charges, terms or title or trademarks or trade names, or
other sums due the Company pursuant to subparagraph 17(b)(6);
(2) Because of the Dealer's nonperformance of his responsibilities set
forth in paragraphs 2, 3, 4 or 6 pursuant to subparagraph 17(c);
(3) Because of the death or physical or mental incapacity of a principal
owner named in subparagraph F(i) pursuant to subparagraph 17(d)
providing that a successor dealership is not appointed as provided
under paragraph 20;
(4) Because of failure of the Dealer or the Company to be licensed
pursuant to subparagraph 17(e); or
(5) At will pursuant to subparagraph 17(f)(1) if this agreement is not for
a stated term specified in paragraph G of this agreement.
22. (b) ELIGIBLE FACILITIES. "Eligible Facilities" are hereby defined as
only those DEALERSHIP FACILITIES which are listed in the Dealership Facilities
Supplement in effect at the time of such nonrenewal or termination, are approved
by the Company pursuant to paragraph 5, are owned or leased by the Dealer and
are being used by the Dealer solely for fulfilling his responsibilities under
this agreement (or under this agreement and one or more other vehicle sales
agreements with the Company which are not renewed or are terminated by the
Company at the same time as this agreement) at the time the Dealer received
notice of such nonrenewal or termination.
22. (c) COMPANY'S OBLIGATION. Subject to the provisions of subparagraph
22(d) hereof, if neither the Dealer nor the Company can arrange with a third
party within ninety (90) days after the effective date of such termination or
nonrenewal:
(1) In the case of Eligible Facilities which are owned by the Dealer,
either a lease for one year commencing within such ninety (90) days at
fair rental value or a sale within such ninety (90) days at fair
market value; or
(2) In the case of Eligible Facilities which are leased by the Dealer,
either an assignment of lease, or a sublease for one year (or for the
balance of the term of the Dealer's lease if that is shorter)
commencing within such ninety (90) days at the Dealer's rental rate
(or, if the facilities are owned by an affiliate of the Dealer at fair
rental value, if that is different);
the Company shall offer either to make monthly payments to the Dealer,
commencing with the ninety-first day, pursuant to subparagraph 22(e) hereof, or
to make a lump sum payment to the Dealer pursuant to said subparagraph 22(e), or
to accept for itself on the ninety-first day such a lease or sale from the
Dealer-owner or such an assignment or sublease from the Dealer-lessee.
For the purpose of this subparagraph 22(c), fair market or fair rental
value shall mean value based on the use of the facilities in the conduct of
DEALERSHIP OPERATIONS. In the event the Dealer and the Company are unable to
agree on the fair market or rental value of any Eligible Facilities, such value
shall be determined by an independent real estate appraiser selected by the
Dealer and the Company.
22. (d) LIMITATIONS ON COMPANY'S OBLIGATION. The Company's obligation with
respect to any Eligible Facilities shall be limited to those expressly set forth
in this paragraph 22. The Company shall be released from all obligations with
respect to any Eligible Facilities if (1) the Dealer fails to give the Company,
within thirty (30) days after the Company shall have sent him a tender of
benefits as provided in paragraph 23, a written request for assistance pursuant
to this paragraph 22, accompanied by a written representation by the Dealer that
the Dealer and each owner named in subparagraph F(i) is, for a period of at
least one (1) year, retiring from the business of selling new and used passenger
cars and trucks in the general area of the DEALER'S LOCALITY, (2) the Dealer
fails to make diligent efforts to obtain from third parties an offer to
purchase, lease, sublease or take an assignment of lease described in
subparagraph 22(c), or refuses, or within a reasonable time fails to accept,
such an offer from a third party; (3) the Dealer does not accept any offer with
respect to Eligible Facilities made by the Company in accordance with
subparagraph 22(c) within thirty (30) days after receiving it; (4) the Dealer or
anyone else occupies such facilities for any purpose for a period of more than
ninety (90) days following the effective date of such termination or nonrenewal;
or (5) the Company arranges a cancellation of the lease of any leased facilities
without cost to the Dealer or the Dealer fails or refuses to execute an
agreement covering such cancellation.
22. (e) SATISFACTION OF COMPANY'S OBLIGATION. The Company may satisfy all
of its obligations under this paragraph 22 with respect to any Eligible
Facilities by paying to the Dealer (1) if the facilities are owned by the
Dealer, the difference, each month for twelve months (or until facilities are
sold if that is earlier), between any lesser rentals received by the Dealer for
such facilities for such month and the fair rental value of such facilities for
such month, or (2) if the facilities are leased by the Dealer, the difference,
each month for twelve months (or until the expiration of the lease if that is
earlier) between any lesser rentals received by the Dealer for such facilities
for such month and the rental paid by the Dealer (or, if the facilities are
owned by an affiliate of the Dealer, the fair rental value if that is different)
for such facilities for such month, or (3) at the election of the Company, a
lump sum equal to the total payments contemplated in items (1) or (2) of this
subparagraph 22(e), or such lesser sum as may be agreed upon between the Dealer
and the Company, or by paying any lease cancellation cost negotiated by the
Dealer or the Company not to exceed the total of the Company's obligations under
subparagraphs 22(c) and 22(e).
TERMINATION BENEFITS FULL COMPENSATION; GENERAL RELEASE
23. In the event of termination or nonrenewal of this agreement by the
Company, the Company, within thirty (30) days after the effective date thereof,
shall submit to the Dealer (1) a written tender of the benefits provided for in
paragraph 21 (and in paragraph 22 where applicable) and (2) a form for the
Dealer to use to elect either to reject all of such benefits or to accept one or
more of them as full and complete compensation for such nonrenewal or
termination. The Dealer shall have thirty (30) days after receipt of such form
to return the same to the Company evidencing his election. If the Dealer fails
to return the form stating such election within such thirty (30) days, the
Dealer shall be deemed to have elected to accept such benefits. Upon the
Dealer's election to accept any of such benefits, or upon the Dealer's demand of
any such benefits upon any termination or nonrenewal by the Dealer, the Company
shall be released from any and all other liability to the Dealer with respect to
all relationships and actions between the Dealer and the Company, however
claimed to arise, except any liability that the Company may have under
subparagraph 19(f) and said paragraphs 21 and 22, and except for such amounts as
the Company may have agreed in writing to pay to the Dealer. Simultaneously
with the receipt of any benefits so elected or demanded, the Dealer shall
execute and deliver to the Company a general release with exceptions, as above
described, satisfactory to the Company.
DISPOSITION OF THE DEALER'S ASSETS; RIGHT OF FIRST REFUSAL
24. (a) COMPANY RIGHT TO APPROVE CHANGE IN OWNERSHIP. In view of the
nature, purposes and objectives of the Company's Dealer Sales and Service
Agreements, and the differences in operating requirements among dealerships of
differing sizes and types of markets, the Company expressly reserves the right
to select the dealers with whom it will enter into such agreements so as to
maintain as high quality a dealer organization as possible. In the event this
agreement is terminated or not renewed by either party or if the Dealer plans to
terminate or not renew this agreement, the Company acknowledges that the Dealer
has the right to negotiate for the sale of the assets of the Dealer at such
price as may be agreed upon by the Dealer and the prospective purchaser. In
turn, the Dealer acknowledges that the Company has the right to approve or
decline to approve any prospective purchaser as to his
character, automotive experience, management, capital and other qualifications
for appointment as an authorized dealer in COMPANY PRODUCTS for the DEALERSHIP
OPERATIONS involved. Approval by the Company of the prospective purchaser shall
not, however, be unreasonably withheld. If, in the opinion of the Company, the
price to be paid for such assets appears, on the basis of the average operating
results of other dealers, to result in an unsatisfactory return on investment so
that such prospective purchaser (1) may not remain as a dealer, or (2) may be
impelled to sell COMPANY PRODUCTS at high noncompetitive prices with a probable
reduction in sales volume, the Company may without liability to the Dealer,
counsel with such prospective purchaser regarding such opinions.
24. (b) COMPANY RIGHT OF FIRST REFUSAL TO PURCHASE. (1) In the event the
Dealer proposes a change in stock ownership or transfer by sale or otherwise of
the dealership business or its principal assets to any person or entity
conditioned upon the Company entering into a Sales and Service Agreement with
that person or entity, the Company shall have a Right of First Refusal to
Purchase the stock or assets on the same terms and conditions offered or agreed
to with such person, regardless of whether the proposed buyer is qualified to be
a dealer.
(2) To exercise its Right of First Refusal, the Company must notify the
Dealer in writing within thirty days of its receipt of the completed
proposal for the proposed sale or transfer.
(3) Upon the Company's request the Dealer shall provide all documents
relating to the transfer. The Company shall have the right to inspect
the assets, including real estate, before exercising its Right of
First Refusal.
(4) The Company's Right of First Refusal under this section may be
assigned to any third party ("Assignee"). If there is an assignment,
Company will guarantee full payment of the purchase price by the
Assignee. The Company shall have the opportunity to discuss the terms
of the buy/sell agreement with any potential Assignee.
(5) The Company's rights hereunder are binding on and enforceable against
any successor in interest of the Dealer or purchaser of the Dealer's
assets. When the proposed change of ownership involves a transfer by
the Dealer solely to a member or members of his or her immediate
family, or to a qualifying member of Dealer management, the Company's
Right of First Refusal will not apply. An "immediate family member"
shall be the spouse, child, grandchild, spouse of a child or
grandchild, brother, sister or parent of the Dealer owner. A
"qualifying member of the Dealer's management" shall be an individual
who has been employed by the Dealer in the dealership for at least
four years and is otherwise qualified as a dealer operator.
(6) The Company agrees to pay the reasonable expenses, including
attorney's fees which do not exceed the usual, customary, and
reasonable fees charged for similar work done for other clients,
incurred by the proposed new owners and transferee prior to the
Company's exercise of its Right of First Refusal in negotiating and
implementing the contract for the proposed sale or transfer of the
Dealer or Dealer's assets.
(7) Notwithstanding the foregoing, no payment of such expenses and
attorney's fees shall be required if the Dealer has not submitted or
caused to be submitted an accounting of those expenses within thirty
days of the Dealer's receipt of the Company's written request for such
an accounting. Such accounting may be requested before the exercise
by the Company of its Right of First Refusal.
NEW AGREEMENT
25. The termination or nonrenewal of this agreement by the Company in
connection with the offer by the Company of a new sales and service agreement
for one or more COMPANY PRODUCTS to the Dealer or the Dealer's successor in
interest shall not give rise to the rights and obligations provided in
paragraphs 19, 21 and 22 with respect to the COMPANY PRODUCTS included in such
new agreement, unless otherwise specified by the Company in writing.
ACKNOWLEDGMENTS
26. This agreement terminates and supersedes all other agreements
concerning the DEALERSHIP OPERATIONS and constitutes the entire agreement
between the parties with respect to the subject matter hereof. Each party
acknowledges that, except as expressly set forth herein, no representation,
understanding or presumption of law or fact has been made or relied upon (1)
which has induced the execution of this agreement or would in any way modify any
of its provisions, or (2) with respect to the effectiveness or duration of this
agreement or the sales or profit expectancy of the DEALERSHIP OPERATIONS. The
Dealer further acknowledges that he has voluntarily entered into this agreement
without coercion or intimidation or threats thereof from the Company, and that
each of its provisions is reasonable, fair and equitable.
NO IMPLIED WAIVERS
27. Except as expressly provided in this agreement, the waiver by either
party, or the failure by either party to claim a breach, of any provision of
this agreement shall not constitute a waiver of any subsequent breach, or affect
in any way the effectiveness, of such provision.
RELATIONS AFTER TERMINATION NOT A RENEWAL
28. In the event that, after termination or nonrenewal of this agreement,
either party has any business relations with the other party with respect to any
COMPANY PRODUCT, such relations shall not constitute either a renewal of this
agreement or a waiver of such termination or nonrenewal, but all such relations
shall be governed by terms identical with the provisions of this agreement
unless the parties execute a new and different agreement.
LIMITATION OF THE COMPANY'S LIABILITY
29. This agreement contemplates that all investments by or in the Dealer
shall be made, and the Dealer shall purchase and resell COMPANY PRODUCTS, in
conformity with the provisions hereof, but otherwise in the discretion of the
Dealer and the Dealer's owners. Except as herein specified, nothing herein
contained shall impose any liability on the Company in connection with the
DEALERSHIP OPERATIONS or otherwise or for any expenditure made or incurred by
the Dealer in preparation for performance or in performance of the Dealer's
responsibilities under this agreement.
NOTICES
30. Any notice required or permitted by this agreement, or given in
connection herewith, shall be in writing and shall be given by personal delivery
or by first-class or certified or registered mail, postage prepaid. Notices to
the Company shall be delivered to or addressed to the Regional Manager of the
area in which the Dealer is located except notices given by the Dealer either to
the Policy Board or pursuant to the Arbitration Plan. Notices to the Dealer
shall be delivered to any person designated in paragraph F(ii) of this agreement
or directed to the Dealer at the Dealer's principal place of business as
described herein.
AMENDMENT
31. Notwithstanding anything in this agreement to the contrary, the Company
shall have the right to amend, modify or change this agreement in case of
legislation, government regulation or changes in circumstances beyond the
control of the Company that might affect materially the relationship between the
Company and the Dealer.
MICHIGAN AGREEMENT
32. This agreement has been signed by the Dealer and sent to the Company in
Michigan for final approval and execution and has there been signed and
delivered on behalf of the Company. The parties intend this agreement to be
executed as a Michigan Agreement and to be construed in accordance with the laws
of the State of Michigan.
CONFLICT WITH STATUTE
33. If performance under this Agreement is illegal under a valid law of any
jurisdiction where such performance is to take place, the performance will be
modified to the minimum extent necessary to comply with any such law as was
effective on the date of execution of this Agreement.
