EXHIBIT 10.2.7
[TOYOTA LOGO]
AUTOMOTIVE DEALER
SALES AND SERVICE
AGREEMENT
TOYOTA DEALER AGREEMENT
This is an Agreement between __________________________________________________
(DISTRIBUTOR), and ____________________________________________________________
(DEALER), a(n) [ ] individual, [ ] partnership, [ ] corporation. If a
corporation, DEALER is duly incorporated in the State of_______________________
and doing business as ________________________________________________________.
PURPOSES AND OBJECTIVES OF THIS AGREEMENT
DISTRIBUTOR sells Toyota Products which are manufactured or approved by Toyota
Motor Corporation (FACTORY) and imported and/or sold to DISTRIBUTOR by Toyota
Motor Sales, U.S.A., Inc. (IMPORTER). It is of vital importance to DISTRIBUTOR
that Toyota Products are sold and serviced in a manner which promotes consumer
confidence and satisfaction and leads to increased product acceptance.
Accordingly, DISTRIBUTOR has established a network of authorized Toyota dealers,
operating at approved locations and pursuant to certain standards, to sell and
service Toyota Products. DEALER desires to become one of DISTRIBUTOR's
authorized dealers. Based upon the representations and promises of DEALER, set
forth herein, DISTRIBUTOR agrees to appoint DEALER as an authorized Toyota
dealer and welcomes DEALER to DISTRIBUTOR's network of authorized dealers of
Toyota Products.
This Agreement sets forth the rights and responsibilities of DISTRIBUTOR as
seller and DEALER as buyer of Toyota Products. DISTRIBUTOR enters into this
Agreement in reliance upon DEALER's integrity, ability, assurance of personal
services, expressed intention to deal fairly with the consuming public and with
DISTRIBUTOR, and promise to adhere to the terms and conditions herein. Likewise,
DEALER enters into this Agreement in reliance upon DISTRIBUTOR's promise to
adhere to the terms and conditions herein. DISTRIBUTOR and DEALER shall refrain
from conduct which may be detrimental to or adversely reflect upon the
reputation of the FACTORY, IMPORTER, DISTRIBUTOR, DEALER or Toyota Products in
general. The parties acknowledge that the success of the relationship between
DISTRIBUTOR and DEALER depends upon the mutual understanding and cooperation of
both DISTRIBUTOR and DEALER.
Dealer Code________________
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I. RIGHTS GRANTED TO THE DEALER
Subject to the terms of this Agreement, DISTRIBUTOR hereby grants DEALER
the non-exclusive right:
A. To buy and resell the Toyota Products identified in the Toyota Product
Addendum hereto which may be periodically revised by IMPORTER;
B. To identify itself as an authorized Toyota dealer utilizing approved
signage at the location(s) approved herein;
C. To use the name Toyota and the Toyota Marks in the advertising,
promotion, sale and servicing of Toyota Products in the manner herein
provided.
DISTRIBUTOR reserves the unrestricted right to sell Toyota Products and to
grant the privilege of using the name Toyota or the Toyota Marks to other
dealers or entities, wherever they may be located.
II. RESPONSIBILITIES ACCEPTED BY THE DEALER
DEALER accepts its appointment as an authorized Toyota dealer and agrees
to:
A. Sell and promote Toyota Products subject to the terms and conditions
of this Agreement;
B. Service Toyota Products subject to the terms and conditions of this
Agreement;
C. Establish and maintain satisfactory dealership facilities at the
location(s) set forth herein; and
D. Make all payments to DISTRIBUTOR when due.
III. TERM OF AGREEMENT
This Agreement is effective this _____________ day of ______________,
______________, and shall continue for a period of ____________________,
and shall expire on _______________, unless ended earlier by mutual
agreement or terminated as provided herein. This Agreement may not be
continued beyond its expiration date except by written consent of
DISTRIBUTOR and IMPORTER.
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IV. OWNERSHIP OF DEALERSHIP
This Agreement is a personal service Agreement and has been entered into by
DISTRIBUTOR in reliance upon and in consideration of DEALER's representation
that only the following named persons are the Owners of DEALER, that such
persons will serve in the capacities indicated, and that such persons are
committed to achieving the purposes, goals and commitments of this
Agreement:
OWNERS' PERCENT OF
NAMES TITLE OWNERSHIP
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
V. MANAGEMENT OF DEALERSHIP
DISTRIBUTOR and DEALER agree that the retention of qualified management is
of critical importance to satisfy the commitments made by DEALER in this
Agreement. DISTRIBUTOR, therefore, enters into this Agreement in reliance
upon DEALER's representation that_______________________________________ ,
and no other person, will exercise the function of General Manager, be in
complete charge of DEALER's operations, and will have authority to make all
decisions on behalf of DEALER with respect to DEALER's operations. DEALER
further agrees that the General Manager shall devote his or her full
efforts to DEALER's operations.
VI. CHANGE IN MANAGEMENT OR OWNERSHIP
This is a personal service contract. DISTRIBUTOR has entered into this
Agreement because DEALER has represented to DISTRIBUTOR that the Owners and
General Manager of DEALER identified herein possess the personal
qualifications, skill and commitment necessary to ensure that DEALER will
promote, sell and service Toyota Products in the most effective manner,
enhance the Toyota image and increase market acceptance of Toyota Products.
Because DISTRIBUTOR has entered into this Agreement in reliance upon these
representations and DEALER's assurances of the active involvement of such
persons in DEALER operations, any change in ownership, no matter what the
share or relationship between parties, or any changes in General Manager
from the person specified herein, requires the prior written consent of
DISTRIBUTOR, which DISTRIBUTOR shall not unreasonably withhold.
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DEALER agrees that factors which would make DISTRIBUTOR's withholding of
consent reasonable would include, without limitation, the failure of a new
Owner or General Manager to meet DISTRIBUTOR'S standards with regard to
financial capability, experience and success in the automobile dealership
business.
VII. APPROVED DEALER LOCATIONS
In order that DISTRIBUTOR may establish and maintain an effective network
of authorized Toyota dealers, DEALER agrees that it shall conduct its
Toyota operation only and exclusively in facilities and at locations
herein designated and approved by DISTRIBUTOR. DISTRIBUTOR hereby
designates and approves the following facilities as the exclusive
location(s) for the sale and servicing of Toyota Products and the display
of Toyota Marks:
New Vehicle Sales and Showroom Used Vehicle Display and Sales
Sales and General Office Body and Paint
Parts Service
Other Facilities
DEALER may not, either directly or indirectly, display Toyota Marks or
establish or conduct any dealership operations contemplated by this
Agreement, including the display, sale and servicing of Toyota Products,
at any location or facility other than those approved herein without the
prior written consent of DISTRIBUTOR. DEALER may not modify or change the
usage or function of any location or facility approved herein or otherwise
utilize such locations or facilities for any functions other than the
approved function(s) without the prior written consent of DISTRIBUTOR.
VIII. PRIMARY MARKET AREA
DISTRIBUTOR will assign DEALER a geographic area called a Primary Market
Area ("PMA"). The PMA is used by DISTRIBUTOR to evaluate DEALER's
performance of its obligations,
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among other things. DEALER agrees that it has no exclusive right to any
such PMA. DISTRIBUTOR may add new dealers, relocate dealers, or adjust
DEALER's PMA as it reasonably determines is necessary. DEALER's PMA is set
forth on the PMA Addendum hereto.
Nothing contained in this Agreement, with the exception of Section XIV(B),
shall limit or be construed to limit the geographical area in which, or
the persons to whom, DEALER may sell or promote the sale of Toyota
products.
IX. STANDARD PROVISIONS
The "Toyota Dealer Agreement Standard Provisions" are incorporated herein
and made part of this Agreement as if fully set forth herein.
X. ADDITIONAL PROVISIONS
In consideration of DISTRIBUTOR's agreement to appoint DEALER as an
authorized Toyota dealer, DEALER further agrees:
5 Dealer Initials __________
XI. EXECUTION OF AGREEMENT
Notwithstanding any other provision herein, the parties to this Agreement,
DISTRIBUTOR and DEALER, agree that this Agreement shall be valid and
binding only if it is signed:
A. On behalf of DEALER by a duly authorized person;
B. On behalf of DISTRIBUTOR by the President and/or an authorized General
Manager, if any, of DISTRIBUTOR; and
C. On behalf of IMPORTER, solely in connection with its limited
undertaking herein, by President of IMPORTER.
XII. CERTIFICATION
By their signatures hereto, the parties agree that they have read and
understand this Agreement, including the Standard Provisions incorporated
herein, are committed to its purposes and objectives and agree to abide
by all of its terms and conditions.
__________________________________________________________________ DEALER
(Dealer Entity Name)
Date: ______________ By:______________________ _________________________
Signature Title
Date: ______________ By:______________________ _________________________
Signature Title
Date: ______________ By:______________________ _________________________
Signature Title
_____________________________________________________________ DISTRIBUTOR
(Distributor Name)
Date: ______________ By:______________________ _________________________
Signature Title
Date: ______________ By:______________________ _________________________
Signature Title
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Undertaking by IMPORTER: In the event of termination of this Agreement by virtue
of termination or expiration of DISTRIBUTOR's contract with IMPORTER, IMPORTER,
through its designee, will offer DEALER a new agreement of no less than one
year's duration and containing the terms of the Toyota Dealer Agreement then
prescribed by IMPORTER.
TOYOTA MOTOR SALES, U.S.A., INC.
Date: ______________ By:____________________________ _________________________
Signature Title
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[TOYOTA LOGO]
DEALER AGREEMENT
STANDARD PROVISIONS
TOYOTA DEALER AGREEMENT
TABLE OF CONTENTS
PURPOSES AND OBJECTIVES OF THIS AGREEMENT .............................................................................1
I. RIGHTS GRANTED TO THE DEALER .....................................................................................2
II. RESPONSIBILITIES ACCEPTED BY THE DEALER ..........................................................................2
III. TERM OF AGREEMENT ................................................................................................2
IV. OWNERSHIP OF DEALERSHIP ..........................................................................................3
V. MANAGEMENT OF DEALERSHIP .........................................................................................3
VI. CHANGE IN MANAGEMENT OR OWNERSHIP ................................................................................3
VII. APPROVED DEALER LOCATIONS ........................................................................................4
VIII. PRIMARY MARKET AREA ..............................................................................................4
IX. STANDARD PROVISIONS ..............................................................................................5
X. ADDITIONAL PROVISIONS ............................................................................................5
XI. EXECUTION OF AGREEMENT ...........................................................................................6
XII. CERTIFICATION ....................................................................................................6
XIII. ACQUISITION, DELIVERY AND INVENTORY OF TOYOTA PRODUCTS
A. Acquisition of Toyota Products ................................................................................8
B. Availability and Allocation of Product ........................................................................8
C. Prices and Terms of Sale ......................................................................................8
D. Mode, Place and Charges for Delivery of Products ..............................................................9
E. Inventory Damage Claims and Liability .........................................................................9
▇. ▇▇▇▇▇ or Failure of Delivery ..................................................................................9
G. Diversion Charges .............................................................................................9
H. Changes of Design, Options or Specifications .................................................................10
I. Discontinuance of Manufacture or Importation .................................................................10
J. Minimum Vehicle Inventories ..................................................................................10
K. Product Modifications ........................................................................................10
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XIV. DEALER MARKETING OF TOYOTA PRODUCTS
A. DEALER's Sales Responsibilities ..............................................................................10
B. Export Prohibition ...........................................................................................11
C. Used Vehicles ................................................................................................11
D. Assistance Provided by DISTRIBUTOR ...........................................................................11
1. Sales Training Assistance .................................................................................11
2. Sales Promotion Assistance ................................................................................12
3. Field Sales Personnel Assistance ..........................................................................12
XV. DEALER SERVICE OBLIGATIONS
A. Customer Service Standards ...................................................................................12
B. New Motor Vehicle Pre-Delivery Service .......................................................................13
C. Warranty and Policy Service ..................................................................................13
D. Use of Parts and Accessories in Non-Warranty Servicing .......................................................13
E. Warranty Disclosures as to Non-Genuine Parts and Accessories .................................................14
F. Service Campaign Inspections and Corrections .................................................................14
G. Compliance With Safety and Emission Control Requirements .....................................................14
H. Compliance With Consumer Protection Statutes, Rules and Regulations ..........................................15
XVI. SERVICE AND PARTS OPERATIONS
A. Organization and Standards ...................................................................................15
B. Service Equipment and Special Tools ..........................................................................16
C. Parts Inventory ..............................................................................................16
D. Assistance Provided by DISTRIBUTOR ...........................................................................16
1. Service Training Assistance ...............................................................................16
2. Manuals and Materials .....................................................................................16
3. Field Personnel Assistance ................................................................................16
XVII. CUSTOMER SATISFACTION RESPONSIBILITIES ..........................................................................17
XVIII. DEALERSHIP FACILITIES AND IDENTIFICATION
A. Facilities ...................................................................................................17
B. DEALER's Operating Hours .....................................................................................18
C. Signs ........................................................................................................18
D. Use of Toyota Marks ..........................................................................................18
1. Use by DEALER .............................................................................................18
2. Discontinuance of Use .....................................................................................19
XIX. EVALUATION OF DEALER'S PERFORMANCE
A. Sales Performance Evaluation .................................................................................20
B. Service Performance Evaluation ...............................................................................20
C. Parts Performance Evaluation .................................................................................20
D. Customer Satisfaction Performance Evaluation .................................................................20
E. Dealership Facilities Evaluation .............................................................................21
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XX. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS
A. Net Working Capital ..........................................................................................21
B. Flooring Line ................................................................................................21
C. Payment Terms and Settlement of Accounts .....................................................................22
D. Uniform Accounting System ....................................................................................22
E. Records Maintenance ..........................................................................................23
F. Examination of Dealership Accounts and Records ...............................................................23
G. Taxes ........................................................................................................23
H. Confidentiality ..............................................................................................23
I. Information Communication Systems ............................................................................24
J. Sales Reporting ..............................................................................................24
XXI. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
A. Rights Granted ...............................................................................................24
B. Exercise of DISTRIBUTOR's Rights .............................................................................24
C. Right of First Refusal .......................................................................................25
D. Option to Purchase ...........................................................................................25
E. DEALER's Obligations .........................................................................................25
F. No Applicability to Nominated Successor ......................................................................26
XXII. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY
A. Succession to Ownership After Death of Owner .................................................................26
B. Incapacity of Owner ..........................................................................................27
C. Nomination of Successor Prior to Death or Incapacity of Owner ................................................27
XXIII. TERMINATION
A. Voluntary Termination by DEALER ..............................................................................28
B. Termination for Cause ........................................................................................28
1. Immediate Termination .....................................................................................28
2. Termination Upon Sixty Days Notice ........................................................................29
3. Termination for Failure of Performance ....................................................................30
4. Termination Upon Death or Incapacity ......................................................................30
C. Notice of Termination ........................................................................................31
D. Continuance of Business Relations ............................................................................31
E. Repurchase Provisions ........................................................................................31
1. DISTRIBUTOR's Obligations .................................................................................31
2. Responsibilities of DEALER ................................................................................32
3. Payment by DISTRIBUTOR ....................................................................................32
XXIV. MANAGEMENT OF DISPUTES
A. Alternative Dispute Resolution Programs ......................................................................33
B. Applicable Law ...............................................................................................33
C. Mutual Release ...............................................................................................33
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XXV. DEFENSE AND INDEMNIFICATION
A. Defense and Indemnification by DISTRIBUTOR ...................................................................34
B. Defense and Indemnification by DEALER ........................................................................34
C. Conditional, Defense and/or Indemnification ..................................................................35
XXVI. GENERAL PROVISIONS
A. Notices ......................................................................................................36
B. No Implied Waivers ...........................................................................................37
C. Sole Agreement of the Parties ................................................................................37
D. Dealer Not an Agent or Representative ........................................................................37
E. Assignment of Rights or Delegation of Duties .................................................................38
F. No Franchise Fee .............................................................................................38
G. Severability .................................................................................................38
H. New and Superseding Dealer Agreements ........................................................................38
I. Benefit ......................................................................................................38
J. No Fiduciary Relationship ....................................................................................39
K. No Joint Employment ..........................................................................................39
L. Consent of DISTRIBUTOR .......................................................................................39
M. DISTRIBUTOR's Policies .......................................................................................39
XXVII. DEFINITIONS
A. Owner ........................................................................................................40
B. General Manager ..............................................................................................40
C. Dealer Facilities ............................................................................................40
D. Approved Location(s) .........................................................................................40
E. Toyota Marks
F. Toyota Products ..............................................................................................40
G. Toyota Motor Vehicles ........................................................................................40
H. Genuine Toyota Parts and Accessories .........................................................................40
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TOYOTA DEALER AGREEMENT
STANDARD PROVISIONS
The following Standard Provisions are expressly incorporated in and made a
part of the Toyota Dealer Agreement.
XIII. ACQUISITION, DELIVERY AND INVENTORY OF TOYOTA PRODUCTS
A. ACQUISITION OF TOYOTA PRODUCTS
DEALER shall have the right to purchase Toyota Products from
DISTRIBUTOR in accordance with the provisions set forth herein and
such other requirements as may be established from time to time by
DISTRIBUTOR.
B. AVAILABILITY AND ALLOCATION OF PRODUCT
DISTRIBUTOR agrees to use its best efforts to provide Toyota
Products to DEALER in such quantities and types as may be required
by DEALER to fulfill its obligations with respect to the sale and
servicing of Toyota Products under this Agreement, subject to
available supply from IMPORTER, DISTRIBUTOR's requirements, and any
change or discontinuance with respect to any Toyota Product.
DISTRIBUTOR will endeavor to allocate Toyota Products among its
dealers in a fair and equitable manner, which it shall determine in
its sole discretion. DISTRIBUTOR agrees to provide DEALER with an
explanation of the method used to distribute such products and, upon
written request, will advise DEALER of DISTRIBUTOR's total wholesale
sales of new motor vehicles, by series, in DISTRIBUTOR's area and to
DEALER individually, for a reasonable time frame.
C. PRICES AND TERMS OF SALE
DISTRIBUTOR shall have the right to establish and revise prices and
other terms for the sale of Toyota Products to DEALER. Ownership and
title of Toyota Products sold by DISTRIBUTOR to DEALER shall pass
upon payment therefor by DEALER to DISTRIBUTOR and DEALER shall have
no ownership interest in such Products until such payment is
received. Risk of loss for Toyota Products sold by DISTRIBUTOR to
DEALER shall pass upon delivery of such Products to DEALER. Revised
prices and terms shall apply to any Toyota Products not invoiced to
DEALER by DISTRIBUTOR at the time the notice of such change is given
to DEALER (in the case of Toyota Motor Vehicles), or upon issuance
of a new or modified Parts Price List or through change notices,
letters, bulletins, or revision sheets (in the case of parts,
options and accessories), or at such other times as may be
designated in writing by DISTRIBUTOR.
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Payment for all Toyota Products shall be made when billed, unless
other terms are established by DISTRIBUTOR in writing.
D. MODE, PLACE AND CHARGES FOR DELIVERY OF PRODUCTS
DISTRIBUTOR shall designate the distribution points and the mode of
transportation and shall select carrier(s) for the transportation of
Toyota Products to DEALER. DEALER shall pay DISTRIBUTOR such charges
as DISTRIBUTOR in its sole discretion establishes for such
transportation services.
E. INVENTORY DAMAGE CLAIMS AND LIABILITY
DEALER shall promptly notify DISTRIBUTOR of any damage occurring
during transit and shall, if so directed by DISTRIBUTOR, file
claims on DISTRIBUTOR's behalf against transportation carrier for
damage. DEALER agrees to assist DISTRIBUTOR in obtaining recovery
against any transportation carrier or insurer for loss or damage to
Toyota Products shipped hereunder.
To the extent required by law, DEALER shall notify the purchaser of
a vehicle of any damage sustained by such vehicle prior to sale.
DEALER shall indemnify and hold DISTRIBUTOR harmless from any
liability resulting from DEALER's failure to so notify such
purchasers.
▇. ▇▇▇▇▇ OR FAILURE OF DELIVERY
DISTRIBUTOR shall not be liable for delay or failure to deliver
Toyota Products which it has previously agreed to deliver, where
such delay or failure to deliver is the result of any event beyond
the control of DISTRIBUTOR, IMPORTER or FACTORY, including but not
limited to fire, floods, storms or other acts of God, any law or
regulation of any governmental entity, foreign or civil wars,
riots, interruptions of navigation, shipwrecks, strikes, lockouts or
other labor troubles, embargoes, blockades, or delay or failure of
FACTORY to deliver Toyota Products.
G. DIVERSION CHARGES
If after delivery DEALER fails or refuses to accept Toyota Products
that it has agreed to purchase, DEALER shall pay all charges
incurred by DISTRIBUTOR as a result of such refusal. Such charges
shall not exceed the charge of returning any such product to the
point of original shipment by DISTRIBUTOR plus all charges for
demurrage, storage or other charges related to such refusal.
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DEALER also agrees to assume responsibility for, and shall pay any
and all reasonable charges for, demurrage, storage or other charges
accruing after arrival of shipment at the point of original
shipment.
H. CHANGES OF DESIGN, OPTIONS OR SPECIFICATIONS
DISTRIBUTOR, IMPORTER or FACTORY may change the design or
specifications of any Toyota Product or the options in any Toyota
Product and shall be under no obligation to provide notice of same
or to make any similar change upon any product previously purchased
by or shipped to DEALER. No change shall be considered a model year
change unless so specified by DISTRIBUTOR.
I. DISCONTINUANCE OF MANUFACTURE OR IMPORTATION
FACTORY, IMPORTER and/or DISTRIBUTOR may discontinue the
manufacture, importation or distribution of all or part of any
Toyota Product, whether motor vehicle, parts, options, or
accessories, including any model, series, or body style of any
Toyota Motor Vehicle at any time without any obligation or liability
to DEALER by reason thereof.
J. MINIMUM VEHICLE INVENTORIES
Subject to the ability of DISTRIBUTOR to supply Toyota Motor
Vehicles to DEALER, DEALER agrees that it shall, at all times,
maintain at least the minimum inventory of Toyota Motor Vehicles as
may be established by DISTRIBUTOR from time to time. DEALER also
agrees that it shall have available at all times, for purposes of
display and demonstration, the number of Toyota Motor Vehicles of
the most current models as may be established by DISTRIBUTOR from
time to time, and shall, at all times, maintain such Motor Vehicles
in showroom ready condition.
K. PRODUCT MODIFICATIONS
DEALER agrees that it will not make any modifications to Toyota
Products that may impair or adversely affect a vehicle's safety,
emissions or structural integrity.
XIV. DEALER MARKETING OF TOYOTA PRODUCTS
A. DEALER'S SALES RESPONSIBILITIES
DEALER recognizes that customer satisfaction and the successful
promotion and sale of Toyota Products are significantly dependent on
DEALER's advertising and sales promotion activities. DEALER shall
actively and effectively promote, through DEALER's own
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advertising and sales promotion activities, the purchase of Toyota
Products by customers. Therefore, DEALER at all times shall:
1. Actively and effectively advertise, merchandise, promote and
sell Toyota Products;
2. Maintain an adequate, stable and trained sales organization,
and, to that end, make all reasonable efforts to ensure that its
sales personnel attend all sales training courses prescribed by
DISTRIBUTOR at DEALER's expense;
3. Maintain high standards of ethics in advertising, promoting and
selling Toyota Products and avoid engaging in any
misrepresentation or unfair or deceptive practices; and
4. Accurately represent to customers the total selling price of
Toyota Products. DEALER agrees to explain to customers of Toyota
Products the items that make up the total selling price and to
give the customers itemized statements and all other information
required by law. DEALER understands and hereby acknowledges that
it may sell Toyota Products at whatever price DEALER desires.
B. EXPORT PROHIBITION
DEALER is authorized to sell Toyota Motor Vehicles only to customers
located in the continental United States. DEALER agrees that it will
not sell Toyota Motor Vehicles for resale or use outside the
continental United States. DEALER agrees to abide by any export
policy established by DISTRIBUTOR.
C. USED VEHICLES
DEALER agrees to display, promote and sell used vehicles at the
Approved Location. DEALER shall maintain for resale an inventory of
used vehicles.
D. ASSISTANCE PROVIDED BY DISTRIBUTOR
1. SALES TRAINING ASSISTANCE
To assist DEALER in the fulfillment of its sales responsibilities
under this Agreement, DISTRIBUTOR agrees to offer general and
specialized sales management and sales training programs for the
benefit and use of DEALER's sales organization. When requested by
DISTRIBUTOR, DEALER's personnel shall participate in such programs
at DEALER's expense.
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2. SALES PROMOTION ASSISTANCE
In order that authorized Toyota dealers may be assured of the
benefits of comprehensive advertising and promotion of Toyota
Products, DISTRIBUTOR agrees to establish and maintain general
advertising and promotion programs and win from time to time make
sales promotion and campaign materials available to DEALER to
promote the sales of such Toyota Products at a reasonable charge
where applicable.
3. FIELD SALES PERSONNEL ASSISTANCE
To assist DEALER in handling its sales responsibilities under this
Agreement, DISTRIBUTOR agrees to provide trained field sales
personnel to advise and counsel DEALER on sales-related subjects,
including merchandising, training and sales management.
XV. DEALER SERVICE OBLIGATIONS
A. CUSTOMER SERVICE STANDARDS
DEALER and DISTRIBUTOR agree that the success and future growth of
DISTRIBUTOR and DEALER are substantially dependent upon the
customer's ability to obtain high-quality vehicle servicing.
Therefore, DEALER agrees to:
1. Take all reasonable steps to provide service of the highest
quality for all Toyota Motor Vehicles, regardless of where
purchased and whether or not under warranty;
2. Ensure that the customer is advised of the necessary repairs and
that his or her consent is obtained prior to the initiation of
any repairs;
3. Ensure that problems on Toyota Motor Vehicles are accurately
diagnosed and repairs are promptly and professionally performed;
and
4. Ensure that the customer is treated courteously and fairly at
all times.
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B. NEW MOTOR VEHICLE PRE-DELIVERY SERVICE
DEALER agrees that prior to delivery of a new Toyota Motor Vehicle
to a customer it shall perform, as directed by DISTRIBUTOR,
pre-delivery service on each Toyota Motor Vehicle in accordance with
Toyota standards. DISTRIBUTOR shall pay DEALER for such pre-delivery
service according to such directives and the applicable provisions
of the Toyota Warranty Policy and Procedures Manual.
C. WARRANTY AND POLICY SERVICE
DEALER acknowledges that the only warranties of DISTRIBUTOR or
FACTORY applicable to Toyota Products shall be the New Vehicle
Limited Warranty or such other written warranties that may be
expressly furnished or sold by DISTRIBUTOR or FACTORY. Except for
its limited liability under such written warranty or warranties,
DISTRIBUTOR and FACTORY do not assume any other warranty obligation
or liability. DEALER is not authorized to assume any additional
warranty obligations or liabilities on behalf of DISTRIBUTOR,
IMPORTER or FACTORY. Any such additional obligations assumed by
DEALER shall be the sole responsibility of DEALER. Any extended
service contract sold by IMPORTER, DISTRIBUTOR or Toyota-affiliated
entity shall be governed by its own terms.
DEALER shall perform warranty service specified by DISTRIBUTOR in
accordance with the Toyota Warranty Policy and Procedures Manual.
DISTRIBUTOR agrees to compensate DEALER for all warranty work,
including labor, diagnosis and Genuine Toyota Parts and Accessories,
in accordance with procedures and at rates to be announced from time
to time by DISTRIBUTOR. Unless otherwise approved in writing in
advance by DISTRIBUTOR, DEALER shall use only Genuine Toyota Parts
and Accessories when performing Toyota warranty repairs. Warranty
service provided for the benefit of customers and DEALER agrees
that the customer shall not be obligated to pay any charges for
warranty work or any other services for which DEALER is reimbursed
or paid by DISTRIBUTOR.
D. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICING
Subject to the provisions set forth below, DEALER has the right to
sell, install or use, for making non-warranty repairs, products that
are not Genuine Toyota Parts or Accessories.
DEALER acknowledges, however, that its customers expect that any
parts or accessories that DEALER sells, installs or uses in the
sale, repair or servicing of Toyota Motor Vehicles are, or meet the
high quality standards of, Genuine Toyota Parts or
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Accessories. DEALER agrees that in sales, repairs or servicing where
DEALER does not use Genuine Toyota Parts or Accessories, DEALER will
only utilize such other parts or accessories that will not adversely
affect the mechanical operation of the Toyota Motor Vehicle being
sold, repaired or serviced, and that are equivalent in quality and
design to Genuine Toyota Parts or Accessories.
E. WARRANTY DISCLOSURES AS TO NON-GENUINE PARTS AND ACCESSORIES
In order to avoid confusion and to minimize potential customer
dissatisfaction, in any instance where DEALER sells, installs or
uses other than Genuine Toyota Parts or Accessories, DEALER shall
disclose such fact to the customer and shall advise the customer
that these items are not included in warranties furnished by
DISTRIBUTOR. Such disclosure shall be written, conspicuous and
stated on the customer's copy of the service or repair order or sale
document. In addition, DEALER will clearly explain to the customer
the extent of any warranty covering the parts or accessories
involved and will deliver a copy of the warranty to the customer.
F. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS
DEALER agrees to perform service campaign inspections and/or
corrections for owners or users of all Toyota Products that qualify
for such inspections and/or corrections. DEALER further agrees to
comply with all DISTRIBUTOR's directives and with the applicable
procedures in the Toyota Warranty Policy and Procedures Manual
relating to those inspections and/or corrections. DISTRIBUTOR agrees
to reimburse DEALER for all replacement parts and/or other materials
required and used in connection with such work and for labor
according to such directives and the applicable provisions of the
Toyota Warranty Policy and Procedures Manual.
G. COMPLIANCE WITH SAFETY AND EMISSION CONTROL REQUIREMENTS
DEALER agrees to comply and operate consistently with all applicable
provisions of the National Traffic and Motor Vehicle Safety Act of
1966 and the Federal Clean Air Act, as amended, including applicable
rules and regulations issued from time to time thereunder, and all
other applicable federal, state and local motor vehicle safety and
emission control statutes, rules and regulations.
In the event that the laws of the state in which DEALER is located
require motor vehicle dealers or distributors to install in new or
used motor vehicles, prior to their retail sale, any safety devices
or other equipment not installed or supplied as standard equipment
by FACTORY, then DEALER, prior to the sale of any Toyota Motor
Vehicle on which such
14
installations are required, shall properly install such devices or
equipment on such Toyota Motor Vehicles. DISTRIBUTOR agrees to
reimburse DEALER for all parts and/or other materials required and
used in connection with such work and for labor according to the
applicable provisions of the Toyota Warranty Policy and Procedures
Manual. DEALER shall comply with state and local laws pertaining to
the installation and reporting of such equipment.
In the interest of motor vehicle safety and emission control,
DISTRIBUTOR and DEALER agree to provide to each other such
information and assistance as may reasonably be requested by the
other in connection with the performance of obligations imposed on
either party by the National Traffic and Motor Vehicle Safety Act of
1966 and the Federal Clean Air Act, as amended, and their rules and
regulations, and all other applicable federal, state and local motor
vehicle safety and emissions control statutes, rules and
regulations.
H. COMPLIANCE WITH CONSUMER PROTECTION STATUTES, RULES AND REGULATIONS
Because certain customer complaints may impose liability upon
DISTRIBUTOR under various repair or replace laws or other consumer
protection laws and regulations, DEALER agrees to provide prompt
notice to DISTRIBUTOR of such complaints and take such other steps
as DISTRIBUTOR may reasonably require. DEALER will do nothing to
affect adversely DISTRIBUTOR's rights under such laws and
regulations. Subject to any law or any regulation to the contrary,
DEALER shall be liable to DISTRIBUTOR for any refunds or vehicle
replacements provided to customer where DISTRIBUTOR reasonably
establishes that DEALER failed to carry out vehicle repairs in
accordance with DISTRIBUTOR's written published policies and
procedures or its express oral instructions subsequently confirmed
in writing. DEALER also agrees to provide applicable required
customer notifications and disclosures as prescribed by repair or
replacement laws or other consumer laws or regulations.
XVI. SERVICE AND PARTS OPERATIONS
A. ORGANIZATION AND STANDARDS
DEALER agrees to organize and maintain an adequate, stable and
trained service and parts organization of the highest quality,
including a qualified Service Manager and a qualified Parts Manager,
and a number of competent customer relations, service and parts
personnel sufficient to meet the needs of the marketplace in the
reasonable opinion of DISTRIBUTOR. DEALER's personnel will meet the
educational, management and technical training standards established
by DISTRIBUTOR.
15
B. SERVICE EQUIPMENT AND SPECIAL TOOLS
DEALER agrees to acquire and properly maintain adequate service
equipment and such special service tools and instruments as are
specified by DISTRIBUTOR.
C. PARTS INVENTORY
DEALER and DISTRIBUTOR recognize that the owners and users of Toyota
Motor Vehicles may reasonably expect that DEALER will have Genuine
Toyota Parts or Accessories immediately available for purchase or
installation. DEALER, therefore, agrees to carry in stock at all
times during the term of this Agreement an adequate inventory of
Genuine Toyota Parts or Accessories, as listed in DISTRIBUTOR's
current inventory guide, to enable DEALER to meet its customers'
needs and to fulfill its service responsibilities under this
Agreement.
D. ASSISTANCE PROVIDED BY DISTRIBUTOR
1. SERVICE TRAINING ASSISTANCE
To assist DEALER in fulfilling its service and parts
responsibilities under this Agreement, DISTRIBUTOR agrees to offer
general and specialized service and parts training programs for the
benefit and use of DEALER's service and parts organizations. When
requested by DISTRIBUTOR, DEALER's personnel shall participate in
such programs at DEALER's expense.
2. MANUALS AND MATERIALS
DISTRIBUTOR agrees to make available to DEALER, at DEALER's expense,
copies of such dealer manuals, catalogs, bulletins, publications and
technical data as DISTRIBUTOR shall deem to be necessary for the
needs of DEALER's service and parts organization. DEALER shall be
responsible for keeping such manuals, publications and data current
and available for consultation by its employees.
3. FIELD PERSONNEL ASSISTANCE
To assist DEALER in handling its parts and service responsibilities
under this Agreement, DISTRIBUTOR agrees to make available qualified
field parts and service personnel who will, from time to time,
advise and counsel DEALER on parts and service-related subjects,
including parts and service policies, product quality, technical
adjustments, repair and replacement of product components, customer
relations,
16
warranty administration, service and parts merchandising, and
personnel/management training.
XVII. CUSTOMER SATISFACTION RESPONSIBILITIES
A goal of DISTRIBUTOR and DEALER is to be recognized as marketing the
finest products and providing the best service in the automobile
industry. The Toyota name should be synonymous with the highest level
of customer satisfaction. DEALER will take all reasonable steps to
ensure that each customer is completely satisfied with his or her
Toyota Products and the services and practices of DEALER.
Whenever requested by DISTRIBUTOR, DEALER shall:
A. Designate an employee responsible for customer satisfaction
commensurate with the needs of the marketplace; and
B. Provide a detailed written plan of DEALER's customer satisfaction
program to DISTRIBUTOR and implement such program on a continuous
basis. This plan shall include an ongoing system for:
1. Emphasizing customer satisfaction to all DEALER's employees;
2. Training DEALER's employees, including participation in
DISTRIBUTOR's customer satisfaction training at DEALER's expense;
and
3. Responding immediately to, and resolving promptly, requests for
customer assistance, and conveying to customers that DEALER is
committed to the highest possible level of customer satisfaction.
XVIII. DEALERSHIP FACILITIES AND IDENTIFICATION
A. FACILITIES
1. In order for DISTRIBUTOR to establish an effective network of
authorized Toyota dealers, DEALER shall provide, and at all times
maintain, attractive dealership facilities at the Approved
Location(s) that satisfy the image, size, layout, interior
design, color, equipment, identification and other factors
established by DISTRIBUTOR. DEALER shall meet the minimum
facility standards and policies established by DISTRIBUTOR which
can be amended from time to time.
17
2. To assist DEALER in planning, building, or remodeling dealership
facilities, DISTRIBUTOR will provide DEALER, upon request, a
Toyota Dealer Facility Planner and will assist in identifying
sources from which DEALER may purchase architectural materials
and furnishings that meet Toyota standards and guidelines. In
addition, representatives of DISTRIBUTOR will be available to
DEALER from time to time to counsel and advise DEALER in
connection with DEALER's planning and equipping the dealership
premises.
B. DEALER'S OPERATING HOURS
DEALER agrees to keep all of its dealership operations open for
business during an days and hours that are customary and lawful for
such operations in the community or locality in which DEALER is
located and in accordance with industry standards. The dealership
shall not be considered open unless all sales, service and parts
operations are open to the public and dealership personnel are
present to assist customers.
C. SIGNS
Subject to applicable governmental ordinances, regulations, and
statutes, DEALER agrees to comply with IMPORTER's signage program
and to display only standard authorized signage which conforms to
the approved corporate identification program.
D. USE OF TOYOTA MARKS
1. USE BY DEALER
DISTRIBUTOR grants to DEALER the non-exclusive privilege of
displaying or otherwise using authorized Toyota Marks as
specified in the Toyota Brand Graphic Standards Manual at the
Approved Location(s) in connection with the selling or servicing
of Toyota Products.
DEALER further agrees that it promptly shall discontinue the
display and use of any Toyota Marks, or shall change the manner
in which any Toyota Marks are displayed and used, when for any
reason it is requested to do so by DISTRIBUTOR. DEALER may use
the Toyota Marks as specified in the Toyota Brand Graphic
Standards Manual only at Approved Location(s) and for such
purposes as are specified in this Agreement. DEALER agrees that
such Toyota Marks may be used as part of the name under which
DEALER's business is conducted only with the prior written
approval of DISTRIBUTOR.
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DEALER shall discontinue any advertising that DISTRIBUTOR may
find to be injurious to DISTRIBUTOR's business or reputation or
the Toyota Marks.
2. DISCONTINUANCE OF USE
Upon termination, non-renewal, or expiration of this Agreement,
DEALER agrees that it shall immediately:
a. Discontinue the use of Toyota Marks, or any semblance of same,
including without limitation, the use of all stationery,
telephone directory listing, and other printed material
referring in any way to Toyota or bearing any Toyota ▇▇▇▇;
b. Discontinue the use of the Toyota Marks, or any semblance of
same, as part of its business or corporate name, and file a
change or discontinuance of such name with appropriate
authorities;
c. Remove all product signs bearing Toyota Marks. Product signs
owned by DEALER shall be removed and disposed of at DEALER's
sole cost and expense. Product signs leased to DEALER by or
through IMPORTER or its representative shall be removed from
DEALER's premises at IMPORTER's sole cost and expense. DEALER
hereby grants permission for DISTRIBUTOR to enter upon
DEALER's premises to remove signs leased to DEALER by
IMPORTER;
d. Cease representing itself as an authorized Toyota Dealer; and
e. Refrain from any action, including without limitation, any
advertisement, statement or implication that it is authorized
to sell or distribute Toyota Products.
In the event DEALER fails to comply promptly with the terms and
conditions of this Section, DISTRIBUTOR shall have the right to
enter upon DEALER's premises and remove, without notice or
liability, all such product signs and identification bearing the
Toyota Marks. DEALER agrees that it shall reimburse DISTRIBUTOR
for any costs and expenses incurred in the removal of signs owned
by DEALER bearing the Toyota Marks, including reasonable attorney
fees.
XIX. EVALUATION OF DEALER'S PERFORMANCE
DEALER acknowledges the importance of its overall performance in
relation to the purposes and objectives of this Agreement. DISTRIBUTOR
will periodically evaluate DEALER's performance of its responsibilities
in the areas of sales, service and parts, facili-
19
ties and customer satisfaction, based upon such reasonable criteria as
DISTRIBUTOR may establish from time to time. DISTRIBUTOR agrees to
review all such evaluations with DEALER and will provide DEALER a copy
thereof. Where performance is below acceptable standards of
DISTRIBUTOR, DEALER agrees to take prompt action to improve its
performance and, if requested by DISTRIBUTOR, to notify DISTRIBUTOR in
writing of its detailed plans and timetables for accomplishing those
improvements.
A. SALES PERFORMANCE EVALUATION
Pursuant to Section XIV herein, DISTRIBUTOR will evaluate DEALER's
sales performance under criteria established by DISTRIBUTOR, which
may include, but is not limited to, the achievement of reasonable
sales objectives as DISTRIBUTOR may establish; comparisons of
DEALER's sales and/or registrations to those of comparable Toyota
dealers and other line makes within DEALER's Primary Market Area or
such area(s) which DISTRIBUTOR believes is a reasonable basis for
comparison; sales performance trends over a reasonable period of
time; and the manner in which DEALER has conducted its sales and
marketing operations.
B. SERVICE PERFORMANCE EVALUATION
Pursuant to Sections XV and XVI herein, DISTRIBUTOR will evaluate
DEALER's service performance in such areas as, without limitation,
warranty management, compliance with the Toyota Warranty Policy and
Procedures Manual, service management, service operating procedures,
service staffing and training, administration, service facilities
and equipment, new vehicle pre-delivery service, customer handling
and customer retention.
C. PARTS PERFORMANCE EVALUATION
Pursuant to Section XVI herein, DISTRIBUTOR will evaluate DEALER's
parts performance in such areas as, without limitation, general
parts management, parts operating procedures, parts staffing and
training, parts facilities, parts inventory management, parts sales,
accessory sales, parts merchandising and parts availability to
customers.
D. CUSTOMER SATISFACTION PERFORMANCE EVALUATION
Pursuant to Section XVII, herein, DISTRIBUTOR will evaluate DEALER's
performance of its responsibilities in the area of customer
satisfaction based on the following considerations:
20
1. DISTRIBUTOR will provide DEALER with customer satisfaction
reports or such other equivalent data as will permit DEALER to
assess its performance and maintain the highest level of
customer satisfaction. DEALER agrees to review with its employees
on a regular basis the results of the customer satisfaction
reports or other data it receives.
2. DEALER agrees to develop, implement and review with DISTRIBUTOR
specific action plans for improving results in the event that
DEALER is below the average customer satisfaction levels for
other Toyota dealers in such areas that DISTRIBUTOR believes are
a reasonable basis for comparison. DEALER shall respond on a
timely basis to requests from DISTRIBUTOR to take action on
unsatisfactory customer satisfaction matters and to commit
necessary resources to remedy deficiencies reasonably specified
by DISTRIBUTOR, and DEALER shall remedy those deficiencies.
DISTRIBUTOR reserves the right to establish reasonable, uniform
criteria to be used to evaluate DEALER.
E. DEALERSHIP FACILITIES EVALUATION
Pursuant to Section XVIII, herein, DISTRIBUTOR will evaluate
DEALER's performance of its responsibilities in the area of
dealership facilities.
XX. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS
A. NET WORKING CAPITAL
The amount and structure of the net working capital required to
properly conduct the business of DEALER depends upon many factors,
including the nature, size and volume of DEALER's vehicle sales,
service and parts operations. Therefore, DEALER agrees to establish
and maintain actual net working capital in an amount not less than
the minimum net working capital specified in a separate Minimum Net
Working Capital Agreement executed by DEALER and DISTRIBUTOR
concurrently with this Agreement. If, either because of changed
conditions or because DISTRIBUTOR adopts a new net working capital
formula, DISTRIBUTOR shall have the right to revise DEALER's minimum
net working capital requirement to be used in DEALER's operation. If
so revised, DEALER agrees to enter into the revised Minimum Net
Working Capital Agreement and to meet the new standard within a
reasonable period of time as established by DISTRIBUTOR.
B. FLOORING LINE
DEALER recognizes that its ability to fulfill its obligations under
this Agreement is dependent upon its maintenance of flooring which
is sufficient to sustain its ongoing
21
operations. DEALER agrees to obtain and maintain at all times a
confirmed and adequate flooring line with a bank or financial
institution or other method of financing acceptable to DISTRIBUTOR
to enable DEALER to perform its obligations pursuant to this
Agreement. Subject to the foregoing obligations, DEALER is free to
do its financing business, wholesale, retail or both, with whomever
it chooses and to the extent it desires.
C. PAYMENT TERMS AND SETTLEMENT OF ACCOUNTS
All monies or accounts due DEALER from DISTRIBUTOR will be
considered net of DEALER's obligations to DISTRIBUTOR on DEALER's
parts/open account. DISTRIBUTOR may deduct or offset any amounts due
or to become due from DEALER to DISTRIBUTOR, or any amounts held by
DISTRIBUTOR, from or against any sums or accounts due or to become
due from DISTRIBUTOR to DEALER. Payments by DEALER to DISTRIBUTOR
shall be made by electronic bank draft or in any other manner
prescribed by DISTRIBUTOR and shall be applied against DEALER's
indebtedness in accordance with DISTRIBUTOR's policies and
practices. DISTRIBUTOR shall have the right to apply payments
received from DEALER to any amount owed to DISTRIBUTOR, in
DISTRIBUTOR's sole discretion. All obligations owed by DEALER to
DISTRIBUTOR shall be due and payable when billed, unless other terms
are established by DISTRIBUTOR in writing.
Under no circumstances will DISTRIBUTOR enter into a new Agreement
with a proposed transferee unless DEALER first makes arrangements
acceptable to DISTRIBUTOR to satisfy any outstanding obligations to
DISTRIBUTOR on DEALER's parts/open account.
D. UNIFORM ACCOUNTING SYSTEM
DEALER agrees to maintain its financial books and records in
accordance with the Toyota Dealer Accounting Manual, as amended from
time to time by DISTRIBUTOR. In addition, DEALER shall furnish to
DISTRIBUTOR, who may also furnish it to IMPORTER and FACTORY,
complete and accurate financial and operating information by the
tenth (10th) of each month in a format prescribed by DISTRIBUTOR.
This information shall include, without limitation, a complete and
accurate financial and operating statement covering the preceding
month and calendar year-to-date operations, including any adjusted
year-end statements, showing the true condition of DEALER's
business. All such information shall be furnished by DEALER to
DISTRIBUTOR via DISTRIBUTOR's electronic communications network
and/or in hard copy and/or in any other manner designated by
DISTRIBUTOR.
22
E. RECORDS MAINTENANCE
DEALER agrees to keep complete, accurate and current records
regarding its sale, lease and servicing of Toyota Products for a
minimum of five (5) years, regardless of any retention period
required by any governmental entity. DEALER shall prepare, keep
current and retain records in support of requests for reimbursement
for warranty and policy work performed by DEALER in accordance with
the IMPORTER's Toyota Warranty Policy and Procedures Manual.
F. EXAMINATION OF DEALERSHIP ACCOUNTS AND RECORDS
DISTRIBUTOR, in its sole discretion, without notice and for any
reason whatsoever, shall have the right during regular business
hours to inspect DEALER's facilities and to examine, audit and to
reproduce all records, accounts and supporting data relating to the
operations of DEALER, including without limitation, sales, sales
reporting, service and repair of Toyota Products by DEALER. If
requested by DEALER, DISTRIBUTOR agrees to review any report with
DEALER and to provide a copy of any report of the examination or
audit of DEALER
G. TAXES
DEALER shall be responsible for and duly pay all taxes of any kind,
including, but not limited to, sales taxes, use taxes, excise taxes
and other governmental municipal charges imposed, levied or based
upon the sale of Toyota Products by DEALER, and shall maintain
accurate records of the same.
H. CONFIDENTIALITY
Except as provided in Sections XX(D) above and XXI(A), below,
DISTRIBUTOR agrees that it shall not provide any financial
information, documents or other information submitted to it by
DEALER to any third party, other than subsidiary and parent
corporations of DISTRIBUTOR, unless authorized by DEALER, required
by law, required to effectuate the terms and conditions of this
Agreement, or required to generate composite or comparative data
for analytical purposes.
DEALER agrees to keep confidential and not to disclose, directly or
indirectly, any information that DISTRIBUTOR designates as
confidential.
23
I. INFORMATION COMMUNICATION SYSTEMS
To facilitate the accurate and prompt reporting of such relevant
dealership operational and financial information as DISTRIBUTOR
may require, DEALER agrees to install and maintain electronic
communication processing facilities which are compatible with and
which will facilitate the transmission and reception of such
information on the electronic communications network utilized by
DISTRIBUTOR.
J. SALES REPORTING
DEALER agrees to report accurately to DISTRIBUTOR, together with
such information as DISTRIBUTOR may reasonably require, the delivery
of each new motor vehicle to a purchaser by the end of the day in
which the vehicle is delivered to the purchaser thereof; and to
furnish DISTRIBUTOR with such other reports in such form as
DISTRIBUTOR may reasonably require from time to time.
XXI. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
A. RIGHTS GRANTED
If a proposal to sell the dealership's assets or transfer its
ownership is submitted by DEALER to DISTRIBUTOR, or in the event of
the death of the majority Owner of DEALER, DISTRIBUTOR has a right
of first refusal or option to purchase the dealership assets or
stock, including any leasehold interests or realty. DISTRIBUTOR's
exercise of its right or option under this Section supersedes any
right or attempt by DEALER to transfer its interest in, or
ownership of, the dealership. DISTRIBUTOR's right or option may be
assigned by it to any third party and DISTRIBUTOR hereby guarantees
the full payment to DEALER of the purchase price by such assignee.
DISTRIBUTOR may disclose the terms of any pending buy/sell agreement
and any other relevant dealership performance information to any
potential assignee. DISTRIBUTOR's rights under this Section will be
binding on and enforceable against any successor in interest of
DEALER or purchaser of DEALER's assets or stock.
B. EXERCISE OF DISTRIBUTOR'S RIGHTS
DISTRIBUTOR shall have thirty (30) days from the following events
within which to exercise its right of first refusal or option to
purchase: (i) DISTRIBUTOR's receipt of all data and documentation
customarily required by it to evaluate a proposed transfer of
ownership; (ii) DISTRIBUTOR's receipt of written notice from DEALER
of the death of the majority Owner of DEALER, or (iii) DISTRIBUTOR's
disapproval of any application submitted by
24
an Owner's heirs pursuant to Section XXII. DISTRIBUTOR's exercise
of its right of first refusal under this Section shall neither be
dependent upon nor require its prior consideration of or refusal
to approve the proposed buyer or transferee.
C. RIGHT OF FIRST REFUSAL
If DEALER has entered into a bona fide written agreement to sell its
dealership stock or assets, DISTRIBUTOR's right under this Section
is a right of first refusal, enabling DISTRIBUTOR to assume the
buyer's rights and obligations under such agreement, and to
terminate this Agreement and all rights granted DEALER. Upon
DISTRIBUTOR's request, DEALER agrees to provide other documents
relating to the proposed transfer and any other information which
DISTRIBUTOR deems appropriate, including, but not limited to, those
reflecting other agreements or understandings between the parties to
the buy/sell agreement. Refusal to provide such documentation or to
state in writing that no such documents exist shall create the
presumption that the buy/sell agreement is not a bona fide
agreement.
D. OPTION TO PURCHASE
In the event of the death of the majority Owner of DEALER or if
DEALER submits a proposal which DISTRIBUTOR reasonably believes is
not bona fide, DISTRIBUTOR has the option to purchase the principal
assets of DEALER utilized in the dealership business, including real
estate and leasehold interests, and to cancel this Agreement and the
rights granted DEALER. The terms and conditions of the purchase of
the dealership assets will be determined by good faith negotiations
between the parties. If an agreement cannot be reached, those terms
will be exclusively determined by arbitration in accordance with
the commercial arbitration rules of the American Arbitration
Association. The site of the arbitration shall be the office of the
American Arbitration Association in the locality of DISTRIBUTOR's
principal place of business.
E. DEALER'S OBLIGATIONS
Upon DISTRIBUTOR's exercise of its right or option and tender of
performance hereunder, DEALER shall forthwith transfer the affected
real property by warranty deed or its equivalent, conveying
marketable title free and clear of all liens, claims, mortgages,
encumbrances, interests and occupancies. The warranty deed or its
equivalent shall be in proper form for recording, and DEALER shall
deliver complete possession of the property and deed at the time of
closing. DEALER shall also furnish to DISTRIBUTOR all copies of any
easements, licenses or other documents affecting the property or
dealership operations and shall assign any permits or licenses that
are necessary or desirable for the
25
use of or appurtenant to the property or the conduct of such
dealership operations. DEALER shall also forthwith execute and
deliver to DISTRIBUTOR instruments satisfactory to DISTRIBUTOR
conveying title to all affected personal property and leasehold
interests involved in the transfer or sale to DISTRIBUTOR. If any
personal property is subject to any lien or charge of any kind,
DEALER agrees to procure the discharge and satisfaction thereof
prior to the closing of sale of such property to DISTRIBUTOR.
F. NO APPLICABILITY TO NOMINATED SUCCESSOR
Section XXI shall not apply to any DEALER whose proposed transfer of
assets or ownership is to a candidate who is currently approved by
DISTRIBUTOR to be DEALER's nominated successor pursuant to Section
XXII(C).
XXII. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF OWNER
In the event that Owner dies and his or her interest in Dealership
passes directly to any person or persons ("Heirs") who wish to
succeed to Owner's interest, then Owner's legal representative must
notify DISTRIBUTOR within sixty (60) days of the death of the Owner
of such Heir's or Heirs' intent to succeed Owner. The legal
representative also must then designate a proposed General Manager
for DISTRIBUTOR approval. The effect of such notice from Owner's
legal representative will be to suspend any notice of termination
provided for in Section XXIII(B)(4) issued hereunder.
Upon delivery of such notice, Owner's legal representative shall
immediately request any person(s) identified by it as intending to
succeed Owner and the designated candidate for General Manager to
submit an application and to provide all personal and financial
information that DISTRIBUTOR may reasonably and customarily require
in connection with its review of such applications. All requested
information must be provided promptly to DISTRIBUTOR and in no case
later than thirty (30) days after receipt of such request from
Owner's legal representative. Upon the submission of all requested
information, DISTRIBUTOR agrees to review such application(s)
pursuant to the then current criteria generally applied by
DISTRIBUTOR in qualifying dealer Owners and/or General Managers.
DISTRIBUTOR shall either approve or disapprove the application(s)
within ninety (90) days of full compliance with all DISTRIBUTOR's
requests for information. If DISTRIBUTOR approves the
application(s), it shall offer to enter into a new Toyota Dealer
Agreement with Owner's Heir(s) in the form then currently in use,
subject to such additional conditions and for such a term as
DISTRIBUTOR deems appropriate.
26
In the event that DISTRIBUTOR does not approve the designated
Heir(s) or designated candidate for General Manager, or if the
Owner's legal representative withdraws his or her notice of the
Heir(s) intent to succeed as Owner(s), or if the legal
representative or any proposed owners or General Manager fails to
timely provide the required information, DISTRIBUTOR may
reinstate or issue a notice of termination. Nothing in this Section
shall constitute a waiver of DISTRIBUTOR's right under Section XXI
to exercise its right of first refusal or option to purchase.
B. INCAPACITY OF OWNER
The parties agree that, as used herein, incapacity shall refer to
any physical or mental ailment that, in DISTRIBUTOR's opinion,
adversely affects Owner's ability to meet his or her obligations
under this Agreement. DISTRIBUTOR may terminate this Agreement when
an incapacitated Owner also is the General Manager identified
herein.
Prior to the effective date of any notice of termination, an
incapacitated Owner who is also the General Manager, or his or her
legal representative, may propose a new candidate for the position
of General Manager. Such proposal shall be in writing and shall
suspend any pending notice of termination until DISTRIBUTOR advises
DEALER of its approval or disapproval of the new candidate. Upon
receipt of such notice, DISTRIBUTOR and DEALER shall follow the
qualification procedures set forth in subsection (A) above.
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH OR INCAPACITY OF OWNER
An Owner owning a majority of DEALER's stock may nominate a
candidate to assume ownership and/or the position of General Manager
of the dealership upon his or her death or incapacity.
As soon as practicable after such nomination, DISTRIBUTOR will
request such personal and financial information from the nominated
Owner and/or General Manager candidate as it reasonably and
customarily may require in evaluating such candidates. DISTRIBUTOR
shall apply criteria then currently used by DISTRIBUTOR in
qualifying Owners and/or General Managers of authorized dealers.
Upon receipt of all requested information, DISTRIBUTOR shall either
approve or disapprove such candidate. Approval by DISTRIBUTOR will
not be unreasonably withheld. In the event of the death or
incapacity of the nominating Owner, DISTRIBUTOR will enter into a
new Toyota Dealer Agreement with the approved nominee of a length to
be determined by DISTRIBUTOR. DISTRIBUTOR agrees that DEALER may
renominate the candidate
27
after the expiration of this Agreement, and DISTRIBUTOR will approve
such nomination provided: (1) DISTRIBUTOR and DEALER have entered
into a new Toyota Dealer Agreement; and (2) the proposed candidate
continues to comply with the then current criteria used by
DISTRIBUTOR in qualifying such candidates. If DISTRIBUTOR does not
initially qualify the candidate, DISTRIBUTOR agrees to review the
reason(s) for its decision with Owner. Owner is free at any time to
renew its nomination. However, in such instances, the candidate must
again qualify pursuant to the then current criteria. Owner may, by
written notice, withdraw a nomination at any time, even if
DISTRIBUTOR has previously qualified said candidate.
XXIII. TERMINATION
A. VOLUNTARY TERMINATION BY DEALER
DEALER may voluntarily terminate this Agreement at any time by
written notice to DISTRIBUTOR. Termination shall be effective thirty
(30) days after receipt of the notice by DISTRIBUTOR, unless
otherwise mutually agreed in writing.
B. TERMINATION FOR CAUSE
1. IMMEDIATE TERMINATION
DEALER and DISTRIBUTOR agree that the following conduct is within
DEALER's control and is so contrary to the goals, purposes and
objectives of this Agreement as to warrant its immediate
termination. Accordingly, DEALER agrees that if it engages in any
of the following types of conduct, DISTRIBUTOR shall have the
right to terminate this Agreement immediately:
a. If DEALER fails to conduct any customary dealership
operations for seven consecutive business days during
DEALER's customary business hours, except in the event such
closure or cessation of operation is caused by some physical
event beyond the control of DEALER, such as fires, floods,
earthquakes, or other acts of God;
b. If DEALER becomes insolvent, or files any petition under
bankruptcy law, or executes an assignment for the benefit of
creditors, or appoints a receiver or trustee or another
officer having similar powers is appointed for DEALER and is
not removed within thirty (30) days from his appointment
thereto or there is any levy under attachment or execution or
similar process which is not vacated or removed by payment or
bonding within ten (10) days;
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c. If DEALER, or any Owner or officer or parent company of
DEALER, is convicted of any felony;
d. If DEALER or any Owner, officer or General Manager of DEALER
makes any material misrepresentation to DISTRIBUTOR,
including, but not limited to, any misrepresentations made by
DEALER to DISTRIBUTOR in applying for this Agreement or for
approval as Owner or General Manager of DEALER;
e. If DEALER fails to obtain or maintain any license, permit or
authorization necessary for the conduct by DEALER of his or
her business pursuant to this Agreement, or such license,
permit or authorization is suspended or revoked; or
f. If DEALER makes any attempted or actual sale, transfer or
assignment by DEALER of this Agreement or any of the rights
granted DEALER hereunder, or upon any attempted or actual
transfer, assignment or delegation by DEALER of any of the
responsibilities assumed by it under this Agreement without
the prior written approval of DISTRIBUTOR.
2. TERMINATION UPON SIXTY DAYS NOTICE
The following conduct violates the terms and conditions of this
Agreement and, if DEALER engages in such conduct, DISTRIBUTOR
shall have the right to terminate this Agreement upon sixty (60)
days notice:
a. Appointment of a new General Manager without the prior written
approval of DISTRIBUTOR;
b. Conducting, directly or indirectly, any Toyota dealership
operation at any location other than at the Approved
Location(s);
c. Failure of DEALER to make any payments to DISTRIBUTOR when
due;
d. Failure of DEALER to establish or maintain during the
existence of this Agreement the required net working capital
or adequate flooring line;
e. Any dispute, disagreement or controversy among Owners,
partners, managers, officers or stockholders of DEALER that,
in the reasonable opinion of DISTRIBUTOR, adversely affects
the ownership, operation, management, business, reputation or
interests of DEALER or DISTRIBUTOR;
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f. Impairment of the reputation or financial standing of DEALER,
Owner, officer or parent company subsequent to the execution
of this Agreement;
g. Refusal to permit DISTRIBUTOR to examine or audit DEALER's
accounting records as provided herein upon receipt by DEALER
from DISTRIBUTOR of written notice requesting such permission
or information;
h. Failure of DEALER to furnish all required sales or financial
information and related supporting information in a timely
manner;
i. Any civil, criminal or administrative liability found against
DEALER or any Owner, officer or parent company of DEALER for
any automotive-related matter which adversely affects the
ownership, operation, management, reputation, business or
interests of DEALER, or impairs the goodwill associated with
the Toyota Marks; or
j. Breach or violation by DEALER of any other term or provision
of this Agreement.
3. TERMINATION FOR FAILURE OF PERFORMANCE
If, upon evaluation of DEALER's performance pursuant to
Section XIX, herein, DISTRIBUTOR concludes that DEALER has
failed to perform adequately its sales, service, parts or
customer satisfaction responsibilities or to provide adequate
dealership facilities, DISTRIBUTOR shall notify DEALER in
writing of such failure(s) and will endeavor to review
promptly with DEALER the nature and extent of such failure(s),
and will grant DEALER 180 days or such other period as may be
required by law to correct such failure(s). If DEALER fails or
refuses to correct such failure(s) or has not made substantial
progress towards remedying such failure(s) at the expiration
of such period, DISTRIBUTOR may terminate this Agreement upon
sixty (60) days notice or such other notice as may be required
by law. Section XXIII(B)(3) shall not be applicable where
DEALER has relocated without DISTRIBUTOR's approval.
4. TERMINATION UPON DEATH OR INCAPACITY
DISTRIBUTOR may terminate this Agreement in the event of the
death of an Owner or upon the incapacity of any Owner who is
also the General Manager identified herein, upon written
notice to DEALER and/or such Owner's legal representative.
Termination upon either of these events shall be effective
ninety (90) days from the date of such notice.
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C. NOTICE OF TERMINATION
Any notice of termination under this Agreement shall be in writing
and shall be mailed to DEALER or its General Manager at DEALER's
Approved Location by certified mail, return receipt requested, or
shall be delivered in person to the dealership. Such notice shall be
effective upon the date of receipt. DISTRIBUTOR need not state all
grounds on which it relies in its termination of DEALER, and shall
have the right to amend such notice as appropriate. DISTRIBUTOR's
failure to refer to any additional grounds for termination shall not
constitute a waiver of its right later to rely upon such grounds.
D. CONTINUANCE OF BUSINESS RELATIONS
Upon receipt of any notice of termination or non-renewal, DEALER
agrees to conduct itself and its operation until the effective date
of termination or non-renewal in a manner that will not injure the
reputation or goodwill of the Toyota Marks or DISTRIBUTOR.
E. REPURCHASE PROVISIONS
1. DISTRIBUTOR'S OBLIGATIONS
Upon the expiration or termination of this Agreement (other than
pursuant to an approved agreement to sell the dealership business
or assets or to otherwise transfer the ownership of DEALER),
DISTRIBUTOR shall repurchase from DEALER the following:
a. New, unused, never titled, unmodified, undamaged, current
model year Toyota Motor Vehicles with less than 100 miles,
then unsold in DEALER's inventory. The prices of such Motor
Vehicles shall be the same as those at which they were
originally purchased by DEALER, less all prior refunds or
other allowances made by DISTRIBUTOR to DEALER with respect
thereto.
b. New, unused and undamaged Toyota parts and accessories,
contained in the original packaging, then unsold in DEALER's
inventory that are in good and saleable condition. The prices
for such parts and accessories shall be the prices last
established by DISTRIBUTOR for the sale of identical parts or
accessories to dealers in the area in which DEALER is located.
c. Special service tools recommended by DISTRIBUTOR and then
owned by DEALER and that are especially designed for servicing
Toyota Motor Vehicles. The prices for such special service
tools will be the price paid by DEALER less appropriate
depreciation, or such other price as the parties may
negotiate.
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d. Signs that DISTRIBUTOR has recommended for identification of
DEALER and are owned by DEALER. The price of such signs shall
be the price paid by DEALER less appropriate depreciation or
such other price as the parties may negotiate.
2. RESPONSIBILITIES OF DEALER
DISTRIBUTOR's obligations to repurchase the items set forth in
this Section are contingent upon DEALER fulfilling the following
obligations:
a. Within thirty (30) days after the date of expiration or the
effective date of termination of this Agreement, DEALER
shall deliver or mail to DISTRIBUTOR a detailed inventory of
all items referred to in this Section which it requests
DISTRIBUTOR to repurchase and shall certify that such list is
true and accurate.
b. DEALER shall be entitled to request repurchase of only those
items which it purchased from DISTRIBUTOR, unless DISTRIBUTOR
agrees otherwise.
c. Products and special service tools to be repurchased by
DISTRIBUTOR from DEALER shall be delivered by DEALER to
DISTRIBUTOR's place of business at DEALER's expense.
d. DEALER will execute and deliver to DISTRIBUTOR instruments
satisfactory to DISTRIBUTOR conveying good and marketable
title to the aforesaid items to DISTRIBUTOR. If such items are
subject to any lien or charge of any kind, DEALER will
procure the discharge in satisfaction thereof prior to
their repurchase by DISTRIBUTOR.
e. DEALER will remove, at its own expense, all signage bearing
Toyota marks which it owns from DEALER's Approved Location(s)
before it is eligible for payment for any repurchased items
pursuant to Section XXIII(E).
3. PAYMENT BY DISTRIBUTOR
DISTRIBUTOR will pay DEALER for such items as DEALER may request
be repurchased and that qualify hereunder as soon as practicable
upon DEALER's compliance with the obligations set forth herein
and upon computation of any outstanding indebtedness of DEALER to
DISTRIBUTOR. DISTRIBUTOR shall have the right to offset from any
amounts due to DEALER hereunder the total sum of DEALER's
outstanding indebtedness to DISTRIBUTOR.
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If DEALER disagrees with DISTRIBUTOR's valuation of any item
herein, and DEALER and DISTRIBUTOR have not resolved their
disagreement within sixty (60) days of the effective date of
termination or expiration of this Agreement, DISTRIBUTOR shall pay
to DEALER the amount to which it reasonably believes DEALER is
entitled. DEALER's exclusive remedy to recover any additional sums
that it believes is due under this Section shall be by resort to any
existing Alternative Dispute Resolution program established by
DISTRIBUTOR that is binding on DISTRIBUTOR. If no Alternative
Dispute Resolution program is then existing, DEALER's exclusive
remedy shall be by resort to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association
(AAA). The site of the arbitration shall be the office of the AAA in
the locality of DISTRIBUTOR's principal place of business.
XXIV. MANAGEMENT OF DISPUTES
A. ALTERNATIVE DISPUTE RESOLUTION PROGRAMS
DISTRIBUTOR and DEALER acknowledge that disputes involving the
performance of this Agreement may from time to time arise that
cannot be resolved at the DISTRIBUTOR level. In order to minimize
the effects of such disputes on their business relationship, the
parties agree to participate in such Alternative Dispute Resolution
programs, including mediation, as may be established by DISTRIBUTOR
in its sole discretion.
It is expressly understood that, unless otherwise specified in this
Agreement, the results of any Alternative Dispute Resolution program
will not be binding upon DEALER, but shall be binding upon
DISTRIBUTOR. The parties' commitment to support and participate in
Alternative Dispute Resolution programs specifically is not a waiver
of DEALER's right to later resort to litigation before any judicial
or administrative forum.
B. APPLICABLE LAW
This Agreement shall be governed by and construed according to the
laws of the state in which DEALER is located.
C. MUTUAL RELEASE
Each party hereby releases the other from any and all claims and
causes of action that it may have against the other for money
damages arising from any event occurring prior to the date of
execution of this Agreement, except for any accounts payable by one
33
party to the other as a result of the purchase of any Toyota
Products, audit adjustments or reimbursement for any services. This
release does not extend to claims which either party does not know
or reasonably suspect to exist in its favor at the time of the
execution of this Agreement.
XXV. DEFENSE AND INDEMNIFICATION
A. DEFENSE AND INDEMNIFICATION BY DISTRIBUTOR
DISTRIBUTOR agrees to assume the defense of DEALER and to indemnify
and hold harmless DEALER, expressly conditioned and subject to all
provisions of Section XXV(C), against loss in any lawsuit or claim
naming DEALER for bodily injury, property damage or breach of
warranty caused solely by an alleged defect in design, manufacture
or assembly of a Toyota Product (except for tires not manufactured
by FACTORY) sold by DISTRIBUTOR to DEALER for resale that has not
been altered, converted or modified by or for DEALER, provided that
the alleged defect could not reasonably have been discovered by
DEALER during pre-delivery inspection or service or installation of
Toyota Products, less any offset. DISTRIBUTOR agrees to defend, to
indemnify and hold harmless DEALER for alleged misrepresentations,
misleading statements, unfair or deceptive trade practices of
DISTRIBUTOR, IMPORTER or FACTORY or any substantial damage to a
Toyota Product purchased by DEALER from DISTRIBUTOR which was
improperly repaired by DISTRIBUTOR unless DEALER has been notified
of such damage in writing prior to retail delivery of the affected
Toyota Product. Notwithstanding any provision of this Agreement,
DISTRIBUTOR shall not be required to defend, to indemnify or hold
harmless DEALER against loss resulting from any claim, complaint, or
action alleging DEALER misconduct, including but not limited to,
improper or unsatisfactory service or repair, or misrepresentations,
or any claim of DEALER's unfair or deceptive trade practices or any
claim of improper environmental or work place practices or
conditions.
B. DEFENSE AND INDEMNIFICATION BY DEALER
DEALER agrees to assume the defense of DISTRIBUTOR, IMPORTER or
FACTORY and to indemnify and hold them harmless, expressly
conditioned and subject to all provisions of Section XXV(C), against
loss in any lawsuit or claim naming DISTRIBUTOR, IMPORTER or
FACTORY, or their subsidiaries or affiliates, when the claim or
lawsuit directly or indirectly involves any allegations of: (1)
DEALER's alleged failure to comply, in whole or in part, with any
obligation assumed by DEALER pursuant to this Agreement; or (2)
DEALER's alleged negligent or improper repairing or servicing or
installation of a new or used Toyota Motor Vehicle or Toyota
Product, or any loss related to other motor vehicles or equipment,
other than Toyota Motor Vehicles or Products, as may be
34
sold, serviced, repaired or installed by DEALER; or (3) DEALER's
alleged breach of any contract or warranty other than that provided
by DISTRIBUTOR, IMPORTER or FACTORY; or (4) DEALER's alleged
misleading statements, misrepresentations, or deceptive or unfair
trade practices; or (5) any modification, conversion or alteration
made by or for DEALER to a Toyota Product, except those made
pursuant to the express written approval and instruction of
DISTRIBUTOR, IMPORTER or FACTORY; or (6) any and all claims arising
out of or in any way connected to the hiring, retention or
termination of any person by DEALER, including but not limited to,
claims of employment discrimination, age, race or sex discrimination
or harassment, wrongful discharge or termination, breach of the
covenant of good faith and fair dealing, breach of contract,
interference with contractual relations, intentional and/or
negligent infliction of emotional distress, defamation, negligent
hiring, violations of or non-compliance with: the Occupational
Safety and Health Act, the Fair Labor Standards Act, or the
Employment Retirement Income and Security Act ("ERISA") or any
similar state or local laws.
C. CONDITIONAL DEFENSE AND/OR INDEMNIFICATION
The obligations of the DEALER, DISTRIBUTOR, IMPORTER or FACTORY to
defend, to indemnify and hold harmless are expressly conditioned and
subject to all of the following terms:
1. The party initially requesting defense and/or indemnification
shall make such request in writing and deliver to the other party
within twenty (20) days of service of any legal process or within
twenty (20) days of discovery of facts giving rise to
indemnification, whichever is sooner.
2. The party requesting defense and/or indemnification covenants,
represents and warrants that it, its agents or employees have
not permitted a default judgment to be entered and have not made
any direct or indirect admissions of liability, and are not aware
of any credible evidence to support any independent claim of
liability or lack of unity of interest. Said party further agrees
to cooperate fully in the defense of such action as may be
reasonably required.
3. The party requested to defend and/or indemnify shall have sixty
(60) days from receipt of a request in writing to conduct an
investigation or otherwise determine whether or not, or under
what conditions, it will agree to defend and/or indemnify.
4. During the pendency of a request for defense and/or
indemnification, and thereafter, the requesting party shall have
a continuing duty to avoid undue prejudice to
35
the other party and to mitigate damages. The party requesting
indemnification shall protect its own interests until a decision
has been made to assume the defense and/or provide
indemnification.
5. The party accepting the request for defense and/or
indemnification shall have the right to engage and direct
counsel of its own choosing and shall have the obligation to
reimburse the requesting party for all reasonable costs and
expenses, including reasonable attorneys' fees, incurred prior
to such assumption except where the request is made under the
circumstances described in XXV(C)(6), and subject to the
provisions of XXV(C)(9).
6. If subsequent developments in a case, supported by credible
evidence, cause a party to reasonably conclude that the
allegations which initially preclude a request or acceptance of
a request for defense and/or indemnification are meritless or no
longer at issue, then the request may be retendered.
7. No party shall be required to agree to such a subsequent request
or retender of defense and/or indemnification where that party
would be unduly prejudiced by such delay. Initial acceptance by
any party of defense and/or indemnification is not a waiver of
the right to retender timely.
8. A party agreeing to defend and/or indemnify may make its written
agreement conditioned upon the continued existence of the state
of facts as then known as well as such other reasonable
conditions as may be dictated by the particular allegations or
claims.
9. Any party withdrawing from its agreement to defend and/or
indemnify, shall give timely written notice which shall be
effective upon receipt. The withdrawing party shall be
responsible for all costs and expenses of defense prior to
receipt of notice of withdrawal, except for those reasonable
costs and expenses, including reasonable attorneys' fees,
incurred solely for the benefit of the other party.
10. The defense, indemnification and hold harmless obligations
of this Agreement shall survive the termination of this
Agreement.
XXVI. GENERAL PROVISIONS
A. NOTICES
Except as otherwise specifically provided herein, any notice
required to be given by either party to the other shall be in
writing and delivered personally to the dealership or by certi-
36
fied mail, return receipt requested, and shall be effective on the
date of receipt. Notices to DEALER shall be directed to DEALER or
its General Manager at DEALER's Approved Location. Notices to
DISTRIBUTOR shall be directed to the General Manager of DISTRIBUTOR.
B. NO IMPLIED WAIVERS
The failure of either party at any time to require performance by
the other party of any provision herein shall in no way affect the
right of such party to require such performance at any time
thereafter, nor shall any waiver by any party of a breach of any
provision herein constitute a waiver of any succeeding breach of the
same or any other provision, nor constitute a waiver of the
provision itself.
Any continuation of business relations between the parties following
expiration of this Agreement shall not be deemed a waiver of the
expiration nor shall it imply that either party has committed to
continue to do business with the other at any time in the future.
Should this Agreement be renewed or any other form of agreement be
offered to DEALER, DISTRIBUTOR reserves the right to offer an
agreement of a length and upon such additional terms and conditions
as it deems reasonable.
C. SOLE AGREEMENT OF THE PARTIES
There are no prior agreements or understandings, either oral or
written, between the parties affecting this Agreement or relating to
the sale or service of Toyota Products, except as otherwise
specifically provided for or referred to in this Agreement. DEALER
acknowledges that no representations or statements other than those
expressly set forth herein were made by DISTRIBUTOR or any officer,
employee, agent or representative thereof, or were relied upon by
DEALER in entering into this Agreement. This Agreement cancels and
supersedes all previous agreements between the parties relating to
the subject matters covered herein. No change or addition to, or
deletion of, any portion of this Agreement (except as provided in
Section III) shall be valid or binding upon the parties hereto
unless the same is approved in writing by an officer of each of the
parties hereto.
D. DEALER NOT AN AGENT OR REPRESENTATIVE
DEALER is an independent business. This Agreement is not a property
right and does not constitute DEALER, Owners or employees of DEALER
as the agent or legal representatives of DISTRIBUTOR for any
purpose whatsoever. DEALER, Owners and employees of DEALER or any
other persons acting on behalf of DEALER are not granted
37
any express or implied right or authority to assume or create any
obligation on behalf of or in the name of DISTRIBUTOR or to bind
DISTRIBUTOR in any manner whatsoever.
E. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
This is a personal service agreement and may not be assigned or sold
in whole or in part, directly or indirectly, voluntarily or by
operation of law, without the prior written approval of DISTRIBUTOR.
Any attempted transfer, assignment or sale without DISTRIBUTOR's
prior written approval will be void and not binding upon
DISTRIBUTOR.
F. NO FRANCHISE FEE
DEALER warrants that it has paid no fee, nor has it provided any
goods or services in lieu of same, to DISTRIBUTOR or any other party
in consideration of entering into this Agreement. The sole
consideration for DISTRIBUTOR's entering into this Agreement is
DEALER's ability, integrity, assurance of personal services and
expressed intention to deal fairly and equitably with DISTRIBUTOR
and the public.
G. SEVERABILITY
If any provision of this Agreement should be held invalid or
unenforceable for any reason whatsoever, or conflicts with any
applicable law, this Agreement will be considered divisible as to
such provisions, and such provisions will be deemed amended to
comply with such law, or if it cannot be so amended without
materially affecting the tenor of the Agreement, then it will be
deemed deleted from this Agreement in such jurisdiction, and in
either case, the remainder of the Agreement will be valid and
binding.
H. NEW AND SUPERSEDING DEALER AGREEMENTS
In the event any new and superseding form of dealer Agreement is
offered by DISTRIBUTOR to authorized Toyota dealers generally at any
time prior to the expiration of the term of this Agreement,
DISTRIBUTOR may, by written notice to DEALER, replace this Agreement
with a new agreement in a new and superseding form for a term not
less than the then unexpired term of this Agreement.
I. BENEFIT
This Agreement is entered into by and between DISTRIBUTOR and DEALER
for their sole and mutual benefit. Neither this Agreement nor any
specific provision contained in it is intended or shall be construed
to be for the benefit of any third party.
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J. NO FIDUCIARY RELATIONSHIP
This Agreement shall not be construed to create a fiduciary
relationship between DEALER and DISTRIBUTOR.
K. NO JOINT EMPLOYMENT
DEALER acknowledges that it has assumed obligations under this
Agreement to use its best efforts to sell and service Toyota
Products, to increase the future growth in Toyota Product sales
through increased customer satisfaction and other obligations
related to the operation of the dealership and recognizes the
necessity to employ and train qualified personnel to satisfy these
commitments. To this end, DEALER agrees to employ only qualified
persons who will fulfill the commitments made by DEALER to
DISTRIBUTOR in this Agreement. Notwithstanding the foregoing, DEALER
retains the sole and exclusive right to determine whom to hire and
their qualifications, to direct, control and supervise DEALER's
employees, and to establish all terms and conditions of employment
of DEALER's employees. All supervision, control and direction of
DEALER's employees shall be the sole and exclusive responsibility of
DEALER. DEALER shall at all times remain the sole employer of
persons employed by DEALER and, to this end, DEALER and DISTRIBUTOR
agree that no act or omission of DEALER or DISTRIBUTOR shall be
construed to make or render them joint employer, co-employer or
alter ego of each other.
L. CONSENT OF DISTRIBUTOR
Any time that this Agreement provides that DEALER must obtain
DISTRIBUTOR's consent to any proposed conduct or change, DEALER must
provide all information requested by DISTRIBUTOR concerning the
proposal, and DISTRIBUTOR shall have a reasonable amount of time in
which to evaluate the proposal.
M. DISTRIBUTOR'S POLICIES
This Agreement, from time to time, refers to certain policies and
standards. DEALER acknowledges that these policies and standards are
prepared by DISTRIBUTOR in its sole discretion based upon
DISTRIBUTOR's evaluation of the marketplace. DISTRIBUTOR may
reasonably amend its policies and standards as the marketplace
changes from time to time.
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XXVII. DEFINITIONS
As used in this Agreement, the parties agree that the following
terms shall be defined as exclusively set forth below.
A. OWNER: The persons identified in Section IV hereof.
B. GENERAL MANAGER: The person identified in Section V hereof.
C. DEALER FACILITIES: The buildings, improvements, fixtures, and
equipment situated at the Approved Location(s).
D. APPROVED LOCATION(S): The location(s) and any facilities thereon,
designated in Section VII that DISTRIBUTOR has approved for the
dealership operation(s) specified therein.
E. TOYOTA MARKS: The various Toyota trademarks, service marks, names,
logos and designs that DEALER is authorized by DISTRIBUTOR to use in
the sale and servicing of Toyota Products as specified in the
current Toyota Brand Graphic Standards Manual.
F. TOYOTA PRODUCTS: All Toyota Motor Vehicles, parts, accessories
and equipment which IMPORTER, in its sole discretion, sells to
DISTRIBUTOR for resale to authorized Toyota dealers.
G. TOYOTA MOTOR VEHICLES: All motor vehicles identified in the current
Toyota Product Addendum that DISTRIBUTOR sells to DEALER for
resale.
H. GENUINE TOYOTA PARTS AND ACCESSORIES: All Toyota brand Parts and
Accessories manufactured by or on behalf of DISTRIBUTOR or FACTORY,
or other parts and accessories specifically approved by FACTORY for
use in servicing Toyota Motor Vehicles and sold by DISTRIBUTOR to
DEALER for resale.
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TOYOTA PRODUCT ADDENDUM TO
TOYOTA DEALER AGREEMENT
Pursuant to Paragraph I(A) of the Toyota Dealer Agreement, DISTRIBUTOR hereby
grants DEALER the non-exclusive right to buy and resell the Toyota Products as
defined in the Toyota Dealer Agreement and identified below:
Tercel Cressida
Corolla Land Cruiser
Paseo Previa
MR2 Truck (GVW 1 & 2)
Camry Cab/Chassis (GVW 1 & 2)
Celica 4Runner
Supra
and all parts, accessories and equipment for such vehicles.
This Toyota Product Addendum shall remain in effect unless and until superseded
by a new Toyota Product Addendum furnished DEALER by IMPORTER.
PRIMARY MARKET AREA DEFINITION
ADDENDUM TO TOYOTA DEALER AGREEMENT
Pursuant to Section VIII of the Toyota Dealer Agreement, the following
documents provide a detailed definition of the Primary Market Area (PMA) that
is currently assigned to _____________________________________________________
____________ (DEALER).
If DEALER's PMA is modified by DISTRIBUTOR, DISTRIBUTOR will provide DEALER
with a revised Addendum which defines the structure of the modified PMA.