1
Exhibit 10.38
[FORD LOGO] FORD MOTOR COMPANY
ATLANTA District
FORD SALES AND SERVICE AGREEMENT
AGREEMENT made as of the 3rd day of July , 1991,
------------- --------------------------- --
by and between Xxxx Xxxx Xxxxxx, Inc.
-----------------------------------------------------------------
A Corporation in Georgia
--------------------------------------------------------------------------------
(State whether an individual, (If the latter, show name of the
partnership or corporation) state in which incorporated)
doing business as Xxxx Xxxx of Buford
--------------------------------------------------------------
(Trade Name)
and with a principal place of business at 0000 Xxxxxxx 00
--------------------------------------
(Street Address)
Buford Xxxxxxxx Xxxxxxx 00000
--------------------------------------------------------------------------------
(CITY) (COUNTY) (STATE) (ZIP CODE)
(hereafter called the "Dealer") and Ford Motor Company, a Delaware corporation
with its principal place of business at Dearborn, Michigan (hereinafter called
the "Company").
PREAMBLE
The purpose of this agreement is to (i) establish the Dealer as an
authorized dealer in COMPANY PRODUCTS including VEHICLES (as herein defined),
(ii) set forth the respective responsibilities of the Company in producing and
selling those products to the Dealer and of the Dealer in reselling and
providing service for them and (iii) recognize the interdependence of both
parties in achieving their mutual objectives of satisfactory sales, service and
profits by continuing to develop and retain a broad base of satisfied owners of
COMPANY PRODUCTS.
In entering into this agreement, the Company and the Dealer recognize that
the success of the Company and of each of its authorized dealers depends largely
on the reputation and competitiveness of COMPANY PRODUCTS and dealers'
services, and on how well each fulfills its responsibilities under this
agreement.
It is the opinion of the Company that sales and service of COMPANY PRODUCTS
usually can best be provided to the public through a system of independent
franchised dealers, with each dealer fulfilling its responsibilities in a given
locality from properly located, adequate, well-equipped and attractive
dealerships, which are staffed by competent personnel and provided with the
necessary working capital. The Dealer recognizes that, in such a franchise
system, the Company must plan for the establishment and maintenance of the
numbers, locations and sizes of dealers necessary for satisfactory and proper
sales and service representation in each market area as it exists and as it
develops and changes. At the same time, the Company endeavors to provide each of
its dealers with a reasonable profit opportunity based on the potential for
sales and service of COMPANY PRODUCTS within its locality.
The company endeavors to make available to its dealers a variety of quality
products, responsive to broad wants and needs of the buying public, which are
attractively styled, of sound engineering
2
design and produced on a timely basis at competitive prices. The development,
production and sale of such products require that the Company and its
manufacturing sources make large continuing investments in plants, equipment,
tools and other facilities, engineering and styling research and development,
quality control procedures, trained personnel and marketing programs. Heavy
commitments must also be made in advance for raw materials and finished parts.
For purposes of making these investments and commitments, planning production
and estimating costs for setting prices, the Company assumes in advance an
estimated volume of sales for each of its products. Within each year, it
develops production schedules from orders submitted by its franchised dealers
and its and their best estimates of the market demand for COMPANY PRODUCTS.
In turn, each of the Company's franchised dealers makes important
investments or commitments in retail sales and service facilities and
equipment, in working capital, in inventories of vehicles, parts and
accessories, and trained sales and service personnel based on annual planning
volumes for their markets.
If satisfactory volumes for either the Company or a dealer are not
realized, each may suffer because of commitments already made and the cost of
manufacturing and of selling each product may be increased. Each dealer must
give the Company orders for the products needed to serve its market. The
Company seeks to adjust production schedules, to the extent feasible, to fill
dealer orders, and to allocate fairly any product in short supply, but
inevitably both the Company and its dealers suffer loss of profits to the
extent they cannot meet market demands. Thus, the automotive business is a
high risk business in which the Company, its manufacturing sources and its
dealers can succeed only through cooperative and competitive effort in their
respective areas of manufacturing, sales, service and customer satisfaction.
Because it is the dealer who deals directly with, and develops the sale of
COMPANY PRODUCTS to the consuming public, the Company substantially relies on
its dealers to provide successful sales and merchandising programs, competent
service operations and effective owner relations programs. To do this, dealers
must carry out their responsibilities of establishing and maintaining adequate
wholesale and retail finance plans, new and used vehicle sales programs, parts
and service sales programs, personnel training and supportive capitalization and
working capital. To assist its dealers in these responsibilities, the Company
establishes and periodically updates standards of operation and planning guides
based on its experience and current conditions. It also offers sales and service
training courses, advice as to facilities, counseling in the various phases of
new and used vehicle merchandising, parts and service merchandising, leasing,
daily rentals and facilities development. It also conducts national advertising,
promotional and other marketing programs and assists dealers in developing
complementary group and individual programs.
To enable the Company to provide such assistance, it requires dealers to
submit uniform and accurate sales, operating and financial reports from which
it can derive and disseminate analytical and comparative operating data and
advice to dealers. The Company also solicits dealers to bring to its attention
through their National Dealer Council organization any mutual dealer problems
or complaints as they arise.
Because the Company relies heavily on its dealers for success, it reserves
the right to cease doing business with any dealer who is not contributing
sufficiently to such success. Similarly, the Company recognizes that its
dealers look to it to provide competitive products and programs and that, if it
does not do so, any dealer may elect to cease doing business with the Company.
The Company has elected to enter into this agreement with the Dealer with
confidence in the Dealer's integrity and ability, its intention to carry out
its responsibilities set forth in this agreement, and its desire to provide
courteous, competent and satisfying sales and service representation to
consumers for COMPANY PRODUCTS, and in reliance upon its representations as to
the persons who will participate in the ownership and management of the
dealership.
The Dealer has elected to enter into this agreement with the Company with
confidence in its
ii
3
integrity and ability, its intention to provide competitive products and assist
the Dealer to market them successfully, and its desire to maintain high quality
dealers.
Both parties recognize the rights of the Dealer and the Company under this
agreement are defined and limited by the terms of this agreement and applicable
law. The Company and the Dealer further acknowledge that their methods of
operation and business practices have an important effect on the reputation of
the Dealer, the Company, COMPANY PRODUCTS and other franchised dealers of the
Company. The Company and the Dealer also acknowledge that certain practices
are detrimental to their interests, such as deceptive, misleading or confusing
advertising, pricing, merchandising or business practices, or misrepresenting
the characteristics, quality, condition or origin of any item of sale.
It is the expectation of each of the parties that by entering into this
agreement, and by the full and faithful observance and performance of its
duties, a mutually satisfactory relationship will be established and
maintained.
IN CONSIDERATION of the mutual agreements and acknowledgements hereinafter
made, the parties hereto agree as follows:
A. The Company hereby appoints the Dealer as an authorized dealer at
retail in VEHICLES and at retail and wholesale in other COMPANY PRODUCTS and
grants the Dealer the privilege of buying COMPANY PRODUCTS from the Company for
sale in its DEALERSHIP OPERATIONS (as herein defined). The Company also grants
to the Dealer the privilege of displaying, at approved locations(s), the
Company's trademarks and trade names applicable to COMPANY PRODUCTS. The
Dealer hereby accepts such appointment.
B. Subject to and in accordance with the terms and conditions of this
agreement, the Company shall sell COMPANY PRODUCTS to the Dealer and the Dealer
shall purchase COMPANY PRODUCTS from the Company.
C. The Ford Motor Company Ford Sales and Service Agreement Standard
Provisions (Form "FD925-A"), a duplicate original of which is attached to the
Dealer's duplicate original of this agreement, have been read and agreed to by
the Company and by the Dealer, and such Standard Provisions and any duly
executed and delivered supplement or amendment thereto, are hereby made a part
of this agreement with the same force and effect as if set forth herein in full.
D. This agreement shall bind the Company when it bears the facsimile
signature of General Manager, and the manual countersignature of the General
Sales Manager, Market Representation Manager, or a Regional or District Sales
Manager, of the Ford Division of the Company and a duplicate original thereof
is delivered personally or by mail to the Dealer or the Dealer's principal
place of business.
E. The Dealer acknowledges the (i) this agreement may be executed only in
the manner provided in paragraph D hereof, (ii) no one except the General
Manager, The General Sales Manager, or Market Representation Manager of the
Ford Division of the Company, or the Secretary or an Assistant Secretary of
the Company, is authorized to make or execute any other agreement relating to
the subject matter hereof on behalf of the Company, or in any manner to
enlarge, vary or modify the terms of this agreement, and then only by an
instrument in writing, and (iii) no one except the General Manager of the Ford
Division of the Company, or the Secretary or an Assistant Secretary of the
Company, is authorized to terminate this agreement on behalf of the Company,
and then only by an instrument in writing.
F. In view of the personal nature of this agreement and its objectives and
purposes, the Company expressly reserves to itself the right to execute a Ford
Sales and Service Agreement with individuals or other entities specifically
selected and approved by the Company. Accordingly, this agreement and the
rights and privileges conferred on the Dealer hereunder are not transferable,
assignable or salable by the Dealer and no property right or interest, direct
or indirect, is sold, conveyed or transferred to the Dealer under this
agreement. This agreement has been entered into by the
4
Company with the Dealer in reliance (i) upon the representation and agreement
that the following person(s), and only the following person(s) shall be the
principal owners of the Dealer:
NAME HOME PERCENTAGE
XXXXXXX XX XXXXXXXX
Xxxx X. Xxxxxx Xxxxxxx, XX 90%
-------------------------------------------------------------------------------
X. X. Xxxxxx Atlanta, GA 10%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(ii) upon the representation and agreement that the following person(s), and
only the following person(s), shall have full managerial authority for the
operating management of the Dealer in the performance of this agreement.
NAME HOME TITLE
XXXXXXX
Xxxx X. Xxxxxx Xxxxxxx, XX President
-------------------------------------------------------------------------------
X. X. Xxxxxx Atlanta, GA Vice President
-------------------------------------------------------------------------------
and (iii) upon representation and agreement that the following person(s), and
only the following person(s), shall be the remaining owners of the Dealer
NAME HOME PERCENTAGE
ADDRESS OF INTEREST
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
The Dealer shall give the Company prior notice of any proposed change in the
said ownership or managerial authority, and immediate notice of the death or
incapacity of any such person. No such change or notice, and no assignment of
this agreement or of any right or interest herein, shall be effective against
the Company unless and until embodied in an appropriate amendment to or
assignment of this agreement, as the case may be, duly executed and delivered
by the Company and by the Dealer. The Company shall not unreasonably withhold
its consent to any such change.
G. (Strike out either subparagraph (1) or (2) whichever is not applicable.)
(1) This agreement shall continue in force and effect from the date of its
execution until terminated by either party under the provisions of
paragraph 17 hereof.
(2) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
H. Both the Company and the Dealer assume and agree to carry out and
perform their respective responsibilities under this agreement.
The parties hereto have duly executed this agreement in duplicate as of
the day and year first above written.
[Ford Logo] Ford Motor Company Xxxx Xxxx of Xxxxxx
-------------------------------------------
(Dealer's Trade Name)
/s/ Xxxx X. Xxxxxxx
General Manager, Ford Division By /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Countersigned by (Title) President
----------------------------------------
????
-------------------------------
-------------------------------
5
[FORD LOGO] FORD MOTOR COMPANY
FORD 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,
(2) new trucks and chassis, excluding all diesel trucks and chassis
and all trucks and chassis of series 850 or higher designations,
and
(3) parts and accessories therefor,
as from time to time are offered for sale by the Company to all authorized Ford
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 the 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 "Ford",
to selected authorized Ford dealers or others under existing or separate new
agreements; provided, however, that the Company shall not franchise any such
new passenger car bearing the name "Ford" (other than the Ford script-in-oval
corporate form of trademark) to anyone who is not an authorized Ford dealer.
1.(b) "CAR" shall mean any passenger car, and "TRUCK" shall mean any truck
or chassis, included in this agreement pursuant to paragraph 1(a) above.
"VEHICLE" shall mean any CAR or TRUCK and "VEHICLES" shall mean CARS and TRUCKS.
1.(c) "COMPETITIVE CARS" and "COMPETITIVE TRUCKS" shall mean those new cars
and new trucks, respectively, not marketed by the Company which are selected by
the Company as generally comparable with CARS and TRUCKS, respectively, in price
and product characteristics.
1.(d) "INDUSTRY CARS" and "INDUSTRY TRUCKS" shall mean all new cars and
all new trucks, respectively, 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
6
1. DEFINITIONS (CONTINUED)
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 Ford 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 Ford
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 Ford 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 vehicles, 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) "CAR PLANNING VOLUME" and "TRUCK PLANNING VOLUME" shall mean the
average annual estimated sales base for CARS and TRUCKS, respectively,
established by the Company for the Dealer from time to time for planning
purposes under its standard procedures for authorized Ford dealers in single or
multiple DEALERS' LOCALITIES, as the case may be, based on historical sales and
registrations, and current trends, in CARS, TRUCKS, COMPETITIVE CARS and TRUCKS
and INDUSTRY CARS and TRUCKS 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 CAR
PLANNING VOLUME, and of the Dealer's TRUCK PLANNING VOLUME, to the total CAR
PLANNING VOLUMES and to the total TRUCK PLANNING VOLUMES, respectively, for all
authorized Ford dealers in the DEALER'S LOCALITY.
1.(p) "UIO" (units in operation) shall mean the CARS and TRUCKS 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.
2
7
1. DEFINITIONS (CONTINUED)
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 Ford dealers (i) for DEALERSHIP FACILITIES and equipment,
capitalization and net working capital based on such factors as CAR and TRUCK
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 CARS and
TRUCKS 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 of the Company's
advertising and sales promotion programs relating to VEHICLES.
The Dealer's performance of his sales responsibility for CARS shall be
measured by such reasonable criteria as the Company may develop from time to
time, including:
(1) Dealer's sales of CARS to private and fleet users located in the
DEALER's LOCALITY as a percentage of:
(i) all private and all fleet registrations of CARS in the DEALER'S
LOCALITY,
(ii) all private and all fleet registrations of COMPETITIVE CARS in
the DEALER'S LOCALITY,
(iii) all private and all fleet registrations of INDUSTRY CARS in the
DEALER'S LOCALITY, and
(iv) the private and fleet sales objectives for CARS established by
the Company for the Dealer from time to time.
(2) If the Dealer is not the only authorized dealer in CARS 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 CARS 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 CARS made by all authorized Ford 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 CARS and COMPETITIVE and INDUSTRY CARS 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 CARS shall be the total objectives
therefor of all authorized Ford 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 Ford 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 Ford
dealers combined in the DEALER'S LOCALITY.
3
8
2. RESPONSIBILITIES WITH RESPECT TO VEHICLES (CONTINUED)
(4) In evaluating any comparisons provided for in subparagraph 2(a)(3) above,
the Company shall give consideration to the availability of CARS to the
Dealer and other authorized Ford dealers and any special local marketing
conditions that might affect the Dealer's sales performance differently
from the sales performance of COMPETITIVE or INDUSTRY CAR dealers or other
authorized Ford 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 CARS 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 Dealer's performance of his sales responsibility for TRUCKS shall be
determined in the same manner as for CARS.
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.
4
9
2. RESPONSIBILITIES WITH RESPECT TO VEHICLES (Continued)
(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 CAR 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 CAR 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 "Owners 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 CAR or TRUCK
dealer 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 CAR or TRUCK dealer. 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").
5
10
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
limited 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 Ford
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
6
11
3. RESPONSIBILITIES WITH RESPECT TO GENUINE PARTS (CONT.)
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 Ford 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 sold by the Dealer, or presented by "visiting owners"
(those whose selling dealer has ceased to do business, or who are
travelling, or have moved a long distance from their selling dealer or
need emergency repairs), 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
7
12
4. RESPONSIBILITIES WITH RESPECT TO SERVICE (Continued)
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 ????????? 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.
8
13
5. RESPONSIBILITIES WITH RESPECT TO DEALERSHIP FACILITIES (CONTINUED)
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. The Dealer's net working capital
shall not be less than the amounts specified in the Net Working Capital
Agreement executed by the Dealer and the Company, as a part of and
simultaneously with this agreement, as modified or superseded from time to time.
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
9
14
6. OTHER DEALER AND COMPANY RESPONSIBILITIES (CONTINUED)
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
10
15
6. OTHER DEALER AND COMPANY RESPONSIBILITIES (CONTINUED)
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.
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.
DETERMINATION OF DEALER REPRESENTATION
9.(a) REPRESENTATION PLANNING. The Company reserves the right to
determine, from time to time, in its best judgment, the numbers, locations and
sizes of authorized dealers necessary for proper and satisfactory sales and
service representation for COMPANY PRODUCTS within and without the DEALER'S
LOCALITY. In making such determinations, the Company from time to time
conducts, to the extent deemed adequate by the Company and subject to the ready
availability of information, studies of the locality, including such factors as
its geographic characteristics, consumer shopping habits, competitive
representation patterns, sales and service requirements, convenience of
customers or potential customers and past and future growth and other trends in
marketing conditions, population, income, UIO, VEHICLE sales and registrations
and COMPETITIVE and INDUSTRY CAR and TRUCK registrations.
9.(b) INFORMATION TO DEALER. The Company will inform the Dealer of any
proposed change in the Company's market representation plans for the DEALER'S
LOCALITY, provided that if the Company's market representation plans do not
provide for the continuation of representation of COMPANY PRODUCTS from the
Dealer's DEALERSHIP FACILITIES (except for a relocation thereof), the Company
shall not be obligated to inform other dealers thereof, but shall give the
Dealer written notice thereof. If, in the Company's opinion, such changes should
be disclosed to other dealers in connection with the Company's market
representation plans for their respective DEALERSHIP OPERATIONS, the Company may
inform such other dealers thereof, without liability to the Dealer, no earlier
than thirty (30) days after such notice to the Dealer and shall inform such
other dealers that the Dealer may maintain his DEALERSHIP OPERATIONS for so long
as the Dealer desires and fulfills his responsibilities under this agreement.
11
16
DETERMINATION OF DEALER REPRESENTATION (CONTINUED)
9. (c) ADDITIONAL DEALERS. The Company shall have the right to appoint
additional dealers in VEHICLES within or without the DEALER'S LOCALITY except
that, if an additional dealer will be within the DEALER'S LOCALITY and within
ten (10) miles driving distance of the Dealer's principal place of business, the
Company shall not appoint the additional dealer unless a study made pursuant to
subparagraph 9(a) reasonably demonstrates, in the Company's opinion, that such
appointment is necessary to provide VEHICLES with proper sales and service
representation in such locality with due regard to the factors referred to above
in subparagraph 9(a). The Company by written notice to the Dealer will give the
Dealer thirty (30) days in which to review the applicable study (excluding
information regarding other dealers considered confidential by the Company), to
discuss such additional dealer with representatives of the Company and to give
the Company written notice of objection to the proposed addition. If the Dealer
fails to give such written notice by such time, he shall be deemed to have
consented to the proposed addition. The written notice by such time, he shall be
deemed to have consented to the proposed addition. The Company will give
consideration to any such written objection and advise the Dealer in writing of
its decision before any commitment is made or negotiations conducted with any
dealer prospect. If the Dealer appeals to the Dealer Policy Board within fifteen
(15) days of such decision, no action will be taken by the Company until the
Dealer Policy Board has rendered a decision on the matter.
9. (d) ESTABLISHED DEALER POINTS.
Nothing in this paragraph 9 shall restrict the right of the Company to
appoint a dealer in VEHICLES as a replacement for a dealer in VEHICLES, or to
fill an established open point for a dealer in VEHICLES, at or near a location
previously appointed by the Company.
PRICES AND CHARGES
10. Sales of COMPANY PRODUCTS by the Company to the Dealer hereunder will
be made in accordance with the prices, charges, discounts and other terms of
sale set forth in price schedules or other notices published by the Company to
the Dealer from time to time in accordance with the applicable VEHICLE TERMS OF
SALE BULLETIN or PARTS AND 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
12
17
11. TERMS AND TITLE (CONTINUED)
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
13
18
CHANGES IN COMPANY PRODUCTS (CONTINUED)
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 "Ford" 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 the
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.
14
19
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 terminating 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 provision 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.
15
20
TERMINATION OR NONRENEWAL OF AGREEMENT (CONTINUED)
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) CARS or TRUCKS 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. 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.
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
16
21
17. TERMINATION OR NONRENEWAL OF AGREEMENT (CONTINUED)
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 subparagraph 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 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
17
22
18. REQUIRED APPEAL TO POLICY BOARD - TERMINATIONS OR NONRENEWALS -
OPTIONAL ARBITRATION PLAN (CONTINUED)
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, Xxx Xxxxxxxx
Xxxx, Xxxxxxxx, 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 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 Chairman 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.
18
23
18. REQUIRED APPEAL TO POLICY BOARD--TERMINATIONS OR NONRENEWALS--OPTIONAL
ARBITRATION PLAN (CONTINUED)
(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 Ford 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
"Ford" 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
19
24
19. OBLIGATIONS UPON TERMINATION OR NONRENEWAL (CONT.)
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)
hereof, 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 subparagraph 17(d) 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 Ford 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
20
25
20. SUCCESSOR TO THE DEALER IN THE EVENT OF DEATH OR INCAPACITY (CONTINUED)
(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 interest in the successor dealership and, if the
successor dealership is offered a standard Sales and Service Agreement for
21
26
20. SUCCESS OR TO THE DEALER IN THE EVENT OF DEATH OR INCAPACITY
(CONTINUED)
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 its
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
22
27
21. REACQUISITION OF COMPANY PRODUCTS AND ACQUISITION OF THE DEALER'S
SIGNS, SPECIAL TOOLS AND EQUIPMENT, AND MAINTENANCE ITEMS (CONTINUED)
nonrenewal, provided such VEHICLE is in first-class salable condition, is of a
then current model, has not been altered outside the 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 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.
23
28
21. REACQUISITION OF COMPANY PRODUCTS AND ACQUISITION OF THE DEALER'S
SIGNS, SPECIAL TOOLS AND EQUIPMENT, AND MAINTENANCE ITEMS (CONTINUED)
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);
24
29
22. DEALERSHIP FACILITIES ASSISTANCE UPON NONRENEWAL OR CERTAIN
TERMINATIONS BY THE COMPANY (CONTINUED)
(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) 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
25
30
22. DEALERSHIP FACILITIES ASSISTANCE UPON NONRENEWAL OR CERTAIN
TERMINATIONS BY THE COMPANY (CONTINUED)
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.
26
31
DISPOSITION OF THE DEALER'S ASSETS
24. 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.
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.
ACKNOWLEDGEMENTS
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.
27
32
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 District Sales
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.
SEPARABILITY OR TERMINATION
33. If any provision of this agreement is invalid or unenforceable under
the law of the place where it is to be performed, the Company may elect either
to terminate this agreement in its entirety, or to consider this agreement
divisible as to such provision and such provision inoperative, and to continue
the remainder of this agreement in full force and effect as if such provision
had not been included herein.
28
