EXHIBIT 10.2.9
[NISSAN LOGO]
NISSAN DEALER
SALES AND SERVICE AGREEMENT
[NISSAN LOGO]
NISSAN
DEALER SALES & SERVICE AGREEMENT
THIS AGREEMENT is entered into effective the day last set forth below by
and between the Nissan Division of NISSAN NORTH AMERICA, INC., a California
corporation, hereinafter called Seller, and the natural person or entity
identified as "Dealer" in the Final Article of this Agreement.
INTRODUCTION
The purpose of this Agreement is to establish Dealer as an authorized dealer
of Nissan Products and to provide for the sale and servicing of Nissan Products
in a manner that will best serve the interests of Seller, Dealer, other
Authorized Nissan Dealers and owners and purchasers of Nissan Products. This
Agreement sets forth: the rights which Dealer will enjoy as an Authorized Nissan
Dealer; the responsibilities which Dealer assumes in consideration of its
receipt of these rights; and the respective conditions, rights and obligations
of Seller and Dealer that apply to Seller's grant to Dealer of such rights and
Dealer's assumption of such responsibilities.
This is a personal services Agreement. In entering into this Agreement and
appointing Dealer as provided below, Seller is relying upon the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations of the individual(s) named herein as Principal Owner(s) and
Executive Manager.
Achievement of the purposes of this Agreement is premised upon mutual
understanding and cooperation between Seller and Dealer. Dealer has entered into
this Agreement in reliance upon Seller's integrity and expressed intention to
deal fairly with Dealer and the consuming public. Seller has entered into this
Agreement in reliance upon Dealer's integrity and ability and expressed
intention to deal fairly with Seller and the consuming public.
It is the responsibility of Seller to market Nissan Products throughout the
Territory. It is the responsibility of Dealer to actively promote the retail
sale of Nissan Products and to provide courteous and efficient service of Nissan
Products. The success of Seller and Dealer will depend on how well they each
fulfill their respective responsibilities under this Agreement. It is recognized
that: Nissan North America, Inc. (hereinafter called "Manufacturer") will
endeavor to provide motor vehicle that offer outstanding value to the consuming
public; Seller will endeavor to establish a national network of Authorized
Nissan Dealers that can provide effective sales and service effort at the retail
level; and Dealer will endeavor to fulfill its responsibilities through
aggressive, sound, ethical selling practices and through conscientious regard
for customer service.
Seller and Dealer shall refrain from engaging in conduct or activities which
might be detrimental to or reflect adversely upon the reputation of Seller,
Manufacturer, Dealer or Nissan Products and shall engage in no discourteous,
deceptive, misleading or unethical practices or activities.
For consistency and clarity, terms which are used frequently in this
Agreement have been defined in Section 1 of the Standard Provisions. All terms
used herein which are defined in the Standard Provisions shall have the meaning
stated in said Standard Provisions. These definitions should be read carefully
for a proper understanding of the provisions in which they appear.
To achieve the purposes referred to above, Seller and Dealer agree as
follows:
ARTICLE FIRST: Appointment of Dealer
Subject to the conditions and provisions of this Agreement, Seller:
(a) appoints Dealer as an Authorized Nissan Dealer and grants Dealer the
non-exclusive right to buy from Seller those Nissan Products specified in
Dealer's current Product Addendum hereto, for resale, rental or lease at or from
the Dealership Locations established and described in accordance with Section 2
of the Standard Provisions; and
(b) grants Dealer a non-exclusive right, subject to and in accordance with
Section 6.K of the Standard Provisions, to identify itself as an Authorized
Nissan Dealer, to display the Nissan Marks in the conduct of its Dealership
Operations and to use the Nissan Marks in the advertising, promotion and sale of
Nissan Products in the manner provided in this Agreement.
ARTICLE SECOND: Assumption of Responsibilities by Dealer
Dealer hereby accepts from Seller its appointment as an Authorized Nissan
Dealer and, in consideration of its appointment and subject to the other
conditions and provisions of this Agreement, hereby assumes the responsibility
for:
(a) establishing and maintaining at the Dealership Locations the Dealership
Facilities in accordance with Section 2 of the Standard Provisions;
(b) actively and effectively promoting the sale at retail (and, if Dealer
elects, the leasing and rental) of Nissan Vehicles within Dealer's Primary
Market Area in accordance with Section 3 of the Standard Provisions;
(c) servicing Nissan Vehicles and for selling and servicing Genuine Nissan
Parts and Accessories in accordance with Section 5 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and in Nissan
Products in accordance with Section 5 of the Standard Provisions; and
(e) performance of the additional responsibilities set forth in this
Agreement, including those specified in Section 6 of the Standard Provisions.
ARTICLE THIRD: Ownership
(a) Owners. This Agreement has been entered into by Seller in reliance upon,
and in consideration of, the personal qualifications, expertise, reputation,
integrity, experience, ability and representations with respect thereto of the
Principal Owner(s) named in the Final Article of this Agreement and in reliance
upon Dealer's representations concerning the ownership of Dealer as follows:
(i) Dealer represents and agrees that the person(s) named as Principal
Owner(s) in the Final Article of this Agreement, and only those person(s), shall
be the Principal Owner(s) of Dealer;
(ii) Dealer represents and agrees that the person(s) named as Other
Owner(s) in the Final Article of this Agreement, and only those person(s), shall
be the Other Owner(s) of Dealer.
(b) Holding Company. Seller requires that a natural person be named as the
Principal Owner(s) of Dealer because Seller relies on the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations of such individuals. If one or more of the owner(s) of Dealer is
a corporation, partnership or other entity and not a natural person
(hereinafter called "Holding Company"), Dealer and Seller agree that the natural
persons listed in the Holding Company Addendum of this Agreement as owners of
the Holding Company shall be deemed to be the Principal Owner(s) and Other
Owner(s) of Dealer, as the case may be and that the terms and conditions of this
Agreement, including without limitation the provisions of this Article Third and
Sections 12, 14 and 15 of the Standard Provisions, shall apply to the owner(s)
of the Holding Company as well as to Dealer. Dealer represents to Seller and
agrees that the Holding Company is owned as indicated in the Holding Company
Addendum to this Agreement.
(c) Changes in Ownership. In view of the fact that this is a personal
services agreement and in view of its objectives and purposes, this Agreement
and the rights and privileges conferred on Dealer hereunder are not assignable,
transferable or salable by Dealer, and no property right or interest is or shall
be deemed to be sold, conveyed or transferred to Dealer under this Agreement.
Dealer agrees that any change in the ownership of Dealer specified herein
requires the prior written consent of Seller, excepting only changes in the
record or beneficial ownership interests of Other Owner(s) not effecting a
change in majority control or interest. Dealer shall give Seller prior notice of
any proposed change in said ownership requiring the consent of Seller and
immediate notice of the death or incapacity of any Principal Owner. No such
change, and no assignment of this Agreement or of any right or interest herein,
shall be effective against Seller unless and until embodied in an appropriate
amendment to or assignment of this Agreement, as the case may be, duly executed
and delivered by Seller and by Dealer. Seller shall not, however, unreasonably
withhold its consent to any such change. Seller shall have no obligation to
transact business with any person who is not named either as a Principal Owner
or Executive Manager of Dealer hereunder or otherwise to give effect to any
proposed sale or transfer of the ownership or management of Dealer prior to
having concluded the evaluation of such a proposal as provided in Section 15 of
the Standard Provisions.
ARTICLE FOURTH: Management
(a) Executive Manager. Seller and Dealer agree that the retention by Dealer
of qualified management is of critical importance to the successful operation of
Dealer and to the achievement of the purposes and objectives of this Agreement.
This Agreement has been entered into by Seller in reliance upon, and in
consideration of, the personal qualifications, expertise, reputation, integrity,
experience, ability and representations with respect thereto of the person
named as Executive Manager in the Final Article of this Agreement and on
Dealer's representation to Seller and agreement that the person identified as
Executive Manager shall be Dealer's executive manager, shall have full
managerial authority for the Dealership Operations, and shall continually
provide his or her personal services in operating the dealership and will be
physically present at the Dealership Facilities.
(b) Changes in Management. In view of the fact that this is a personal
services Agreement and in view of its objectives and purposes, Dealer agrees
that any change in the Executive Manager from that specified in the Final
Article of this Agreement requires the prior written consent of Seller. Dealer
shall give Seller prior notice of any proposed change in Executive Manager and
immediate notice of the death or incapacity of any Executive Manager. No change
in Executive Manager shall be effective unless and until embodied in an
appropriate amendment to this Agreement duly executed and delivered by Seller
and by Dealer. Subject to the foregoing, Dealer shall make its own, independent
decisions concerning the hiring and firing of its employees including without
limitation, its Executive Manager.
To enable Seller to evaluate and respond to Dealer concerning any proposed
change in Executive Manager, Dealer agrees to provide, in the form requested by
Seller and in a timely manner, all applications and information customarily
requested by Seller to evaluate the proposed change. While Seller shall not
unreasonably withhold its consent to any such change, it is agreed that any
successor Executive Manager must possess personal qualifications, expertise,
reputation, integrity, experience and ability which are, in the opinion of
Seller, satisfactory. Seller will determine whether, in its opinion, the
proposed change is likely to result in a successful dealership operation with
capable management that will satisfactorily perform Dealer's obligations under
this Agreement. Seller shall have no obligation to transact business with any
person who is not named as an Executive Manager of Dealer hereunder prior to
having concluded its evaluation of such person.
(c) Evaluation of Management. Dealer and Seller understand and acknowledge
that the personal qualifications, expertise, reputation, ability, integrity,
experience and ability of the Executive Manager and his or her ability to
effectively manage Dealer's day-to-day Dealership Operations is critical to the
success of Dealer in performing its obligations under this Agreement. Seller
may from time to time develop standards and/or procedures for evaluating the
performance of the Executive Manager and of Dealer's personnel generally. Seller
may, from time to time, evaluate the performance of the Executive Manager and
will advise Dealer and the Executive Manager of the results of such evaluations,
and Dealer shall promptly take such action as may be required to correct any
deficiencies in the Executive Manager's performance to the reasonable
satisfaction of Seller.
ARTICLE FIFTH: Additional Provisions
The additional provisions set forth in the attached "Nissan Dealer Sales and
Service Agreement Standard Provisions," bearing form number NDA-4S/9-88 are
hereby incorporated in and made a part of this Agreement. The Notice of Primary
Market Area, Dealership Facilities Addendum, Product Addendum, Dealer
Identification Addendum, Holding Company Addendum, if applicable, and all Guides
referred to in this Agreement (including references contained in the Standard
Provisions referred to above) are hereby incorporated in and made a part of this
Agreement. Dealer further agrees to be bound by and comply with: the Warranty
Manual; Seller's Manuals or Instructions heretofore or hereafter issued by
Seller to Dealer; any amendment, revision or supplement to any of the foregoing;
and any other manuals heretofore or hereafter issued by Seller to Dealer.
ARTICLE SIXTH: Termination of Prior Agreements
This Agreement cancels, supersedes and annuls all prior contracts,
agreements and understandings except as stated herein, all negotiations,
representations and understandings being merged herein. No waiver, modification
or change of any of the terms of this Agreement or change or erasure of any
printed part of this Agreement or addition to it (except filling of blank spaces
and lines) will be valid or binding on Seller unless approved in writing by the
President or an authorized Vice-President of Seller.
ARTICLE SEVENTH: Term
This Agreement shall have a term commencing on the effective date hereof and
continuing until terminated by either party in accordance with Section 12 of the
Standard Provisions.
ARTICLE EIGHTH: License of Dealer
If Dealer is required to secure or maintain a license for the conduct of
its business as contemplated by this Agreement in any state or jurisdiction
where any of its Dealership Operations are to be conducted or any of its
Dealership Facilities are located, this Agreement shall not be valid until and
unless Dealer shall have furnished Seller with written notice specifying the
date and number, if any, of such license or licenses issued to Dealer, Dealer
shall notify Seller immediately in writing if Dealer shall fail to secure or
maintain any and all such licenses or renewal thereof or, if such license or
licenses are suspended or revoked, specifying the effective date of any such
suspension or revocation.
ARTICLE NINTH: Execution of Agreement
This Agreement, and any Addendum or amendment or notice with respect
thereto, shall be valid and binding on Seller only when it bears the signature
of either the President or an authorized Vice-President of Seller and, when such
signature is a facsimile, the manual countersignature of an authorized employee
of Seller and a duplicate original thereof is delivered personally or by mail to
the main Dealership Location. This Agreement shall bind Dealer only when it is
signed by: a duly authorized officer or executive of Dealer if a corporation;
one of the general partners of Dealer if a partnership; or Dealer if an
individual.
ARTICLE TENTH: Special Conditions
FINAL ARTICLE
Dealer , is
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a(an) (SELECT ONE) [ ] individual [ ] partnership [ ] corporation [ ] limited liability company,
incorporated or formed under the laws of the State of doing business
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as
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("Dealer"). Dealer is located in
-----------------------------------------------------------, ------------.
City State
The Principal Owner(s) of Dealer are as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
---- --------- --------
The Other Owner(s) of Dealer are as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
---- --------- --------
The Executive Manager of Dealer is as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
---- --------- --------
IN WITNESS THEREOF, the parties hereto have executed this Agreement in
triplicate as of , at Carson, California.
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DEALER:
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By SELLER:
------------------------------------------- NISSAN DIVISION
Title NISSAN NORTH AMERICA, INC.
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By
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Title
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By
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Form # NDA-4P/4-2000 Title
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[NISSAN LOGO]
NISSAN DEALER
SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
NISSAN DIVISION
NISSAN NORTH AMERICA, INC.
Nissan S.P.
NISSAN DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
TABLE OF CONTENTS
1. Definitions...........................................01 10. Warranties............................................19
2. Dealership Location and 11. Indemnification.......................................19
Dealership Facilities.................................03 A. Indemnification of Dealer..........................19
A. Location and Facilities............................03 B. Indemnification of Seller..........................20
B. Dealership Facilities Addendum.....................03 C. Conditions and Exceptions to
C. Changes and Additions..............................03 Indemnification....................................21
D. Assistance Provided by Seller......................03 12. Termination...........................................21
E. Evaluation of Dealership Facilities A. Termination Due to Certain Acts
and Location.......................................03 or Events .........................................21
3. Vehicle Sales Responsibilities B. Termination by Seller for
of Dealer.............................................04 Non-Performance by Dealer..........................23
A. General Obligations of Dealer .....................04 C. Termination Because of Death or Physical
B. Sales of Nissan Cars and Nissan Trucks ............04 or Mental Incapacity of Principal Owner............24
C. Metropolitan Markets ..............................04 D. Termination for Failure of Seller or
D. Additional Factors for Consideration ..............04 Dealer to be Licensed..............................24
E. Used Motor Vehicle Sales ..........................05 E. Termination by Dealer..............................24
F. Dealer Sales Personnel ............................05 F. Termination by Seller Because of
G. Assistance Provided by Seller .....................05 a Change of Seller's Method of
H. Evaluation of Dealer's Sales Distribution or Decision by Seller to
Performance........................................05 Cease Distribution of Nissan Vehicles..............24
4. Determination of Dealer G. Termination Upon Entering Into a
Representation........................................05 New Sales and Service Agreement....................25
A. Development of Market Studies......................05 13. Rights and Liabilities Upon Termination...............25
B. Appointment of New Authorized A. Termination Procedures.............................25
Nissan Dealers to Fill Open Points.................06 B. Repurchases by Seller
5. Responsibilities of Dealer With Upon Termination...................................26
Respect to Service and Parts..........................07 C. Dealer's Responsibilities with
A. General Service Obligations of Dealer..............07 Respect to Repurchase..............................26
B. Specific Service Obligations of Dealer.............07 D. Title to Repurchased Property......................27
C. Service Operations of Dealer.......................09 E. Payment............................................27
D. Parts Operations of Dealer.........................10 F. Cancellation of Deliveries.........................27
E. Assistance Provided by Seller......................10 14. Establishment of Successor Dealer.....................27
F. Evaluation of Dealer's Service A. Because of Death of Principal Owner................27
and Parts Performance..............................11 B. Consideration of Successor
6. Other Seller and Dealer Responsibilities..............11 Addendum ..........................................28
A. Advertising and Promotion..........................11 C. Termination of Successor Addendum .................28
B. Dealer Disclosures and Representations D. Evaluation of Successor Dealership ................28
Concerning Nissan Products and E. Termination of Market
Other Products or Services.........................12 Representation.....................................28
C. Signs..............................................12 F. Termination of Offer...............................29
D. Hours of Operation.................................12 15. Sale of Assets or Ownership
E. Capital and Financing..............................12 Interests in Dealer...................................29
F. Accounting System..................................13 A. Sale or Transfer...................................29
G. Records and Reports................................13 B Seller's Evaluation.................................29
H. Nissan Datanet System..............................14 C. Effect of Termination..............................30
I. Right of Inspection................................14 16. Policy Review Board...................................30
J. Confidentiality....................................14 A. Establishment of Policy
K. Use of Nissan Marks................................14 Review Board.......................................30
7. Purchase and Delivery.................................15 B. Appeal of Dealer Appointment to
A. Dealer Purchases...................................15 Policy Review Board................................31
B. Delays in Delivery.................................15 C. Appeal of Termination to Policy
C. Shipment of Nissan Products........................15 Review Board.......................................31
D. Passage of Title...................................16 D. Effect of Other Proceedings........................31
E. Security Interest..................................16 17. General...............................................31
F. Charges For Storage and Diversions.................17 A. Notices............................................31
G. Changes in Nissan Products.........................17 B. No Implied Waivers.................................31
8. Pricing...............................................17 C. No Agency..........................................31
A. Nissan Vehicles....................................17 D. Limitations of Seller's Liability..................32
B. Genuine Nissan Parts E. Entire Agreement...................................32
and Accessories....................................17 F. California Law.....................................32
9. Payment...............................................18 G. Changes Required by Law............................32
A. Payment for Vehicles ..............................18 H. Severability.......................................32
B. Payment for Parts and Accessories .................18 I. Assignment.........................................32
C. Accounts Payable ..................................18 J. No Franchise Fee...................................32
D. Collection of Taxes by Dealer .....................19 K. Captions...........................................33
L. Benefit............................................33
NISSAN
DEALER SALES & SERVICE AGREEMENT
The following Standard Provisions have by reference been incorporated in and
made a part of the Nissan Dealer Sales & Service Agreement which they
accompany and which has been executed on behalf of Seller and Dealer.
SECTION 1. DEFINITIONS
Seller and Dealer agree that the following terms, as used in this Agreement,
shall be defined exclusively as set forth below.
A. "Authorized Nissan Dealers" shall mean dealers located in the Territory
that are authorized by Seller to conduct Dealership Operations in
connection with the sale of Nissan Products, pursuant to a duly executed
Nissan Dealer Sales and Service Agreement.
B. "Nissan Cars" shall mean the new passenger cars specified in the current
Product Addendum.
C. "Nissan Trucks" shall mean the new trucks, cab and chassis, utility
vehicles, buses or vans specified in the current Product Addendum.
D. "Nissan Vehicles" shall mean Nissan Cars and Nissan Trucks.
E. "Genuine Nissan Parts and Accessories" shall mean such parts, accessories
and other products for Nissan Vehicles as are from time to time offered for
sale by Seller to Authorized Nissan Dealers for resale under this Agreement.
F. "Nissan Products" shall mean Nissan Vehicles and Genuine Nissan Parts and
Accessories.
G. "Competitive Vehicles" shall mean those new vehicles which are considered
by Seller to be directly competitive with Nissan Vehicles.
H. "Industry Cars" shall mean all new cars of all manufacturers which are
sold and distributed within the United States, to the extent data relating to
registration thereof are reasonably available.
I. "Competitive Truck Segment" shall include all compact pickup trucks,
compact utility vehicles, and compact buses of all manufacturers which are
sold and distributed within the United States, to the extent data relating
to registration thereof are reasonably available.
J. "Dealership Location" shall mean the place or places of business of Dealer
established and described in accordance with Section 2 of this Agreement.
K. "Dealership Facilities" shall mean the land areas at the Dealership
Location and the buildings and improvements erected thereon provided by
Dealer in accordance with Section 2 of this Agreement.
L. "Dealership Facilities Addendum" shall mean the addendum executed by
Seller and Dealer pursuant to Section 2 of this Agreement.
M. "Dealership Operations" shall mean all dealer functions contemplated by
this Agreement including, without limitation, sale and servicing of Nissan
Products, use and display of Nissan Marks and Nissan Products, rental and
leasing of Nissan Vehicles, sales of used vehicles, body shop work,
financing or insurance services and any other activities undertaken by
Dealer in connection with Nissan Products whether conducted directly or
indirectly by Dealer.
N. "Primary Market Area" shall mean the geographic area which is designated
from time to time as the area of Dealer's sales and service
1
responsibility for Nissan Products in a Notice of Primary Market Area issued by
Seller to Dealer. Seller reserves the right, in its reasonable discretion, to
issue new, superseding,"Notices of Primary Market Area" to Dealer from time to
time. Such geographic area may at any time be applicable to Dealer and to other
Authorized Nissan Dealers.
O. "Principal Owner(s)" shall mean the person(s) named as Principal
Owner(s) in the Final Article of this Agreement upon whose personal
qualifications, expertise, reputation, integrity, experience, ability and
representations concerning the management and operation of Dealer, Seller has
relied in entering this Agreement.
P. "Other Owner(s)" shall mean the person(s) named as Other Owner(s) in the
Final Article of this Agreement who will not be involved in the operation or
management of Dealer.
Q. "Executive Manager" shall mean the person named as Executive Manager in
the Final Article of this Agreement upon whose personal qualifications,
expertise, reputation, integrity, experience, ability and representations that
he or she shall devote his or her primary efforts to and have full managerial
authority and responsibility for the day-to-day management and performance of
Dealer, Seller has relied in entering into this Agreement.
R. "Successor Addendum" shall mean the Successor Addendum, if any, executed
by Seller and Dealer pursuant to Section 14 of this Agreement.
S. "Guides" shall mean such reasonable standards as may be established by
Seller for Authorized Nissan Dealers from time to time under its standard
procedures with respect to such matters as dealership facilities, tools,
equipment, financing, capitalization, inventories, operations and personnel. The
execution of this Agreement or of any addenda hereto (including, without
limitation, any Dealership Facilities Addendum) shall not, however, be construed
as evidence of Dealer's fulfillment of or compliance with said Guides or of
Dealer's fulfillment of its responsibilities under this Agreement.
T. "Warranty Manual" shall mean the publication or publications of Seller,
as the same may from time to time be amended, revised or supplemented, which set
forth Seller's policies and procedures concerning the administration of Seller's
warranties and related matters.
U. "Nissan Marks" shall mean those trademarks, service marks, names, logos
and designs that Seller may, from time to time, use or authorize for use by
Dealer in connection with Nissan Products or Dealership Operations including,
without limitation, the name "Nissan".
V. "Seller's Manuals and Instructions" shall mean those bulletins, manuals
or instructions issued by Seller to all Authorized Nissan Dealers advising them
of Seller's policies or procedures under this Agreement including, without
limitation, the Parts and Accessories Policy and Procedures Manual and the
Nissan Dealer Accounting System Manual.
W. "Territory" shall mean the geographic area in which Seller has been
authorized by Manufacturer to distribute Nissan Products.
X. "Product Addendum" shall mean the Product Addendum issued by Seller to
Dealer which specifies those Nissan Vehicles which shall be Offered for sale by
Seller to Dealer for resale. Seller reserves the right, in its sole discretion,
to issue new, superseding Product Addenda to Dealer from time to time.
Y. "Dealer Identification Addendum" shall mean the Dealer Identification
Addendum Executed by Seller and Dealer pursuant to Section 6.C of this
Agreement.
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SECTION 2. DEALERSHIP LOCATION AND
DEALERSHIP FACILITIES
A. Location and Facilities.
Dealer shall provide, at the Dealership Location approved by Seller in
accordance with Section 2.B hereof, Dealership Facilities that will enable
Dealer to effectively perform its responsibilities under this Agreement and
which are reasonably equivalent to those maintained by Dealer's principal
competitors in the geographic area in which Dealer's Primary Market Area is
located. In addition, the Dealership Facilities shall be satisfactory in space,
appearance, layout, equipment, signage and otherwise be substantially in
accordance with the Guides therefor established by Seller from time to time.
Dealer shall conduct its Dealership Operations only from the Dealership Location
specified in the Dealership Facilities Addendum. If the Dealership Location is
comprised of more than one place of business, Dealer shall use each such place
of business only for the purposes specified therefor in the current Dealership
Facilities Addendum.
B. Dealership Facilities Addendum.
Dealer and Seller will execute a Dealership Facilities Addendum which will
include a description of the Dealership Location and the Dealership Facilities,
the approved use for each such place of business and facility, and the current
Guides therefor.
C. Changes and Additions.
Dealer shall not move, relocate, or change the usage of the Dealership Location
or any of the Dealership Facilities, or substantially modify any of the
Dealership Facilities, nor shall Dealer or any person named in the Final Article
of this Agreement directly or indirectly establish or operate any other
locations or facilities for the sale or servicing of Nissan Products or for the
conduct of any other of the Dealership Operations contemplated by this
Agreement, without the prior written consent of Seller. Any changes in the
Dealership Location or the Dealership Facilities that may be agreed to by
Seller and Dealer shall be reflected in a new, superseding Dealership Facilities
Addendum executed by Seller and Dealer.
D. Assistance Provided by Seller.
To assist Dealer in planning, establishing and maintaining the Dealership
Facilities, Seller, at the request of Dealer, will from time to time make its
representatives available to Dealer to provide standard building layout plans,
facility planning recommendations, and counsel and advice concerning location
and facility planning.
E. Evaluation of Dealership Facilities and Location.
Seller will periodically evaluate Dealer's performance of its responsibilities
under this Section 2. In making such evaluations, Seller will give consideration
to: the actual land and building space provided by Dealer for the performance of
its responsibilities under this Agreement; the current Guides established by
Seller for the Dealership Facilities; the appearance, condition and layout of
the Dealership Facilities; the location of the Dealership Facilities relative
to the sales opportunities and service requirements of the Primary Market Area;
equivalence with facilities maintained by Dealer's principal competitors; and
such other factors, if any, as may directly relate to Dealer's performance of
its responsibilities under this Section 2. Evaluations prepared pursuant to this
Section 2.E will be discussed with and provided to Dealer, and Dealer shall have
an opportunity to comment, in writing, on such evaluations, and Seller will
consider Dealer's comments. Dealer shall promptly take such action as may be
required to correct any deficiencies in Dealer's performance of its
responsibilities under this Section 2.
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SECTION 3. VEHICLE SALES
RESPONSIBILITIES OF DEALER
A. General Obligations of Dealer.
Dealer shall actively and effectively promote through its own advertising and
sales promotion activities the sale at retail (and if Dealer elects, the leasing
and rental) of Nissan Vehicles to customers located within Dealer's Primary
Market Area. Dealer's Primary Market Area is a geographic area which Seller uses
as a tool to evaluate Dealer's performance of its sales obligations hereunder.
Dealer agrees: that it has no right or property interest in any such geographic
area which Seller may designate; that, subject to Section 4 of this Agreement,
Seller may add, relocate or replace dealers in Dealer's Primary Market Area; and
that Seller may, in its reasonable discretion, change Dealer's Primary Market
Area from time to time.
B. Sales of Nissan Cars and Nissan Trucks.
Dealer's performance of its sales responsibility for Nissan Cars and Nissan
Trucks will be evaluated by Seller on the basis of such reasonable criteria as
Seller may develop from time to time, including for example:
1. Achievement of reasonable sales objectives which may be established from
time to time by Seller for Dealer as standards for performance;
2. Dealer's sales of Nissan Cars and Nissan Trucks in Dealer's Primary
Market Area and/or the metropolitan area in which Dealer is located, as
applicable, or Dealer's sales as a percentage of:
(i) registrations of Nissan Cars and Nissan Trucks;
(ii) registrations of Competitive Vehicles;
(iii) registrations of Industry Cars;
(iv) registrations of vehicles in the Competitive Truck Segment;
3. A comparison of Dealer's sales and/or registrations to sales and/or
registrations of all other Authorized Nissan Dealers combined in Seller's Sales
Region and District in which Dealer is located and, where Section 3.C applies,
for all other Authorized Nissan Dealers combined in the metropolitan area in
which Dealer is located; and
4. A comparison of sales and/or registrations achieved by Dealer to the sales
or registrations of Dealer's competitors.
The sales and registration data referred to in this Section 3 shall be
those utilized in Seller's records or in reports furnished to Seller by
independent sources selected by it and generally available for such purpose in
the automotive industry. If such reports of registration and/or sales are not
generally available, Seller may rely on such other registration and/or sales
data as can be reasonably obtained by Seller.
C. Metropolitan Markets.
If Dealer is located in a metropolitan or other marketing area where there are
located one or more Authorized Nissan Dealers other than Dealer, the combined
sales performance of all Nissan Dealers in such metropolitan or other marketing
area may be evaluated as indicated in Sections 3.B.2 and 3.B.3 above, and
Dealer's sales performance may also be evaluated on the basis of the proportion
of sales and potential sales of Nissan Vehicles in the metropolitan or other
marketing area in which Dealer is located for which Dealer fairly may be held
responsible.
D. Additional Factors for Consideration.
Where appropriate in evaluating Dealer's sales performance, Seller will take
into account such reasonable criteria as Seller may determine from time to time,
including, for example, the following: the Dealership Location; the general
shopping habits of the public in such market area; the
4
availability of Nissan Vehicles to Dealer and to other Authorized Nissan
Dealers; any special local marketing conditions that would affect Dealer's sales
performance differently from the sales performance of other Authorized Nissan
Dealers; the recent and long term trends in Dealer's sales performance; the
manner in which Dealer has conducted its sales operations (including
advertising, sales promotion, and treatment of customers); and the other
factors, if any, directly affecting Dealer's sales opportunities and
performance.
E. Used Motor Vehicle Sales.
Dealer shall engage in used motor vehicle operations as and to the
extent reasonably required for Dealer to effectively perform its
responsibilities for the sale of Nissan Vehicles. Subject to requirements and
guidelines established by Seller, Dealer shall be entitled to identify such used
motor vehicle operations as a part of its Dealership Operations and to apply
the Nissan Marks relating to used motor vehicle operations.
F. Dealer Sales Personnel.
Dealer shall organize and maintain a sales organization that includes a
sufficient number of qualified and trained sales managers and sales people to
enable Dealer to effectively fulfill its responsibilities under this Section 3.
Seller may, from time to time, comment on or advise Dealer concerning the
qualifications, performance and ability of Dealer's sales personnel as the same
affect Dealer's performance of its obligations under this Section 3.
G. Assistance Provided by Seller.
1. Sales Training Courses.
Seller will offer from time to time sales training courses for Dealer sales
personnel. Based on its need therefor, Dealer shall, without expense to Seller,
have members of Dealer's sales organization attend such training courses and
Dealer shall cooperate in such courses as may from time to time be offered by
Seller.
2. Sales Personnel.
To further assist Dealer, Seller will provide to Dealer advice and counsel on
matters relating to new vehicle sales, sales personnel training and management,
merchandising, and facilities used for Dealer's vehicle sales operations.
H. Evaluation of Dealer's Sales Performance. Seller will periodically
evaluate Dealer's performance of its responsibilities under this Section 3.
Evaluations prepared pursuant to this Section 3.H will be discussed with and
provided to Dealer, and Dealer shall have an opportunity to comment, in writing,
on such evaluations. Dealer shall promptly take such action as may be required
to correct any deficiencies in Dealer's performance of its responsibilities
under this Section 3.
SECTION 4. DETERMINATION OF
DEALER REPRESENTATION
A. Development of Market Studies.
Seller may, from time to time and in its sole discretion, conduct studies of
various geographic areas to evaluate market conditions. Such market studies may,
where appropriate, take into account such factors as geographical
characteristics, consumer shopping patterns, existence of other automobile
retail outlets, sales opportunities and service requirements of the geographic
area in which Dealer's Primary Market Area is located, trends in marketing
conditions, current and prospective trends in population, income, occupation,
and such other demographic characteristics as may be determined by Seller to be
relevant to its study. Such studies will make recommendations concerning the
market, the Dealership Facilities, and the Dealership Location. Prior to
conducting a study which includes the geographic area in which Dealer's
▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ is located, Seller will notify Dealer of its intention to
conduct such a study. Dealer will be given the opportunity to present to Seller
such information pertaining to such study as Dealer believes may be relevant.
Seller will consider all relevant information timely provided by Dealer before
concluding its study.
B. Appointment of New Authorized Nissan Dealers to Fill Open Points.
1. If any study conducted pursuant to Section 4.A recommends that an open
point be established at a location that is within ten (10) miles driving
distance, by the shortest publicly traveled route, of Dealer's main Dealership
Location, Seller will so notify Dealer. Dealer will have thirty (30) days from
Dealer's receipt of notice of the recommendations of the study in which to
object to them. Upon Dealer's request, Seller will review the results of the
study with Dealer (excluding information considered by Seller to be
confidential). Seller will consider all objections to the recommended open
point timely made by Dealer. Prior to entering into a Nissan Dealer Sales and
Service Agreement with a New Authorized Nissan Dealer filling such an open
point, Seller will give Dealer written notice of its intent to fill the open
point (hereinafter the "Notice of Appointment"). If Dealer timely files a Notice
of Appeal (as defined in Section 16.B hereof) with the Policy Review Board (as
defined in Section 16.A hereof) in accordance with the procedures established
in Section 16.B therefor, Seller will not enter into a Nissan Dealer Sales and
Service Agreement appointing such New Authorized Nissan Dealer until the
Policy Review Board has rendered its decision on the matter.
2. Nissan reserves the right to sell Nissan Products to others and to
appoint Authorized Nissan Dealers within and outside the ten (10) miles driving
distance described above. However, Seller agrees that it will not enter into a
Nissan Dealer Sales and Service Agreement appointing a New Authorized Nissan
Dealer filling an open point which is located within the ten (10) miles driving
distance described above unless the study made pursuant to Section 4.A
demonstrates in Seller's good faith opinion that the declaration of an open
point is warranted by market or economic conditions.
3. Nothing in this Agreement shall be construed to require Dealer's consent
to the appointment of a New Authorized Nissan Dealer at a location that is
within the ten (10) miles driving distance described above. Nothing in this
Agreement shall be construed to grant Dealer any rights in connection with the
appointment of an Authorized Nissan Dealer at a location that is not within the
ten (10) miles driving distance described above. In addition, this Section 4.B
does not apply to, nor shall it be construed to grant Dealer any rights in
connection with any of the events or transactions excluded from the definition
of "New Authorized Nissan Dealer" in Section 4.B.4(a), (b) or (c) below.
4. "New Authorized Nissan Dealer" shall mean an Authorized Nissan Dealer that
has not previously executed a Nissan Dealer Sales and Service Agreement or done
business as an Authorized Nissan Dealer; provided, however, that "New
Authorized Nissan Dealer" shall not include an Authorized Nissan Dealer who: (a)
is a Successor Dealer appointed pursuant to Section 14, (b) is a purchaser or
transferee of the assets of or ownership interests in an Authorized Nissan
Dealer that is appointed as an Authorized Nissan Dealer pursuant to Section 15,
or (c) who is approved as a Nissan Dealer following or resulting from:
(i) a change in name or form of an Authorized Nissan Dealer;
(ii) any other sale, exchange or other transfer of any ownership
interests in or any assets of any other Authorized Nissan Dealer, by operation
of law or otherwise and whether voluntary and involuntary;
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(iii) an assignment, sale or other transfer of any interest in a Nissan
Dealer Sales and Service Agreement, by operation of law or otherwise and whether
voluntary or involuntary;
(iv) the relocation of an existing Authorized Nissan Dealer; or
(v) the replacement of a former Authorized Nissan Dealer where the
appointment of such replacement Dealer takes place within two (2) years of the
date on which the former Dealer ceased doing business and where such replacement
Dealer's main Dealership Location is located within a five (5) mile driving
distance by the shortest publicly traveled route of the former Dealer's main
Dealership Location;
regardless of whether any of the foregoing actions, individually or
collectively, result in the appointment of an Authorized Nissan Dealer at a
location that is within or without the ten (10) miles driving distance described
above.
SECTION 5. RESPONSIBILITIES OF DEALER
WITH RESPECT TO SERVICE AND PARTS
A. General Service Obligations of Dealer.
Dealer understands and acknowledges that future sales of Nissan Products depend,
in part, upon the satisfaction of Dealer's customers with its servicing of such
Products. Dealer further recognizes that Seller has entered into this Agreement
in reliance upon Dealer's representations concerning its ability and commitment
to fair dealing and professional servicing. Accordingly, Dealer shall develop
and maintain a quality service organization and shall render at the Dealership
Facilities prompt, efficient and courteous service to owners and users of Nissan
Products, regardless of the origin of purchase, including, without limitation,
the specific obligations described in Section 5.B. In this regard, Dealer shall
take all reasonable steps to insure that: the service needs of its customer's
Nissan Vehicles are accurately diagnosed; Dealer's customers are advised of such
needs and that each customer's consent is obtained prior to initiation of any
repairs; necessary repairs and maintenance are professionally performed; and
Dealer's customers are treated courteously and fairly.
B. Specific Service Obligations of Dealer.
1. Pre-Delivery Inspections and Service.
Dealer shall perform or be responsible for the performance of pre-delivery
inspections and service on each Nissan Vehicle prior to sale and delivery
thereof by Dealer, in accordance with the standards and procedures relating
thereto set forth in the applicable pre-delivery inspection schedules furnished
by Seller to Dealer from time to time. The completion of such inspection and
service shall be verified by Dealer on forms supplied or approved by Seller for
this purpose. Dealer shall retain the original or a legible copy of each such
form in its records and shall furnish a copy to the purchaser.
2. Warranty Repairs and Goodwill Adjustments.
Dealer shall promptly, courteously and efficiently perform: (i) warranty repairs
on each Nissan Product which qualifies for such repairs under the provisions of
any warranty furnished therewith by Seller, Manufacturer or the manufacturer of
the Product; and (ii) such other inspections, repairs or corrections on Nissan
Products as may be approved or authorized by Seller to be made at Seller's
expense (hereinafter referred to as "goodwill adjustments"). Dealer shall
perform such repairs and service on each such Nissan Product as and when
required and requested by the owner or user (or in the case of goodwill
adjustments when requested by Seller), without regard to its origin of purchase
and in accordance with the provisions relating thereto set forth in the Warranty
Manual or in Seller's Manuals or Instructions issued to Dealer from time to
time. In performing such repairs and service on Nissan Products for which Seller
has agreed to reimburse Dealer, Dealer shall use Genuine Nissan Parts and
Accessories unless
7
Dealer receives prior authorization from Seller to use non-genuine parts or
accessories. Dealer will provide to each owner or user of a Nissan Product upon
which any such repairs or service are performed a copy of the repair order
reflecting all services performed.
3. Campaign Inspections and Corrections.
Dealer shall promptly, courteously and efficiently perform such campaign
inspections and/or corrections for owners and users of Nissan Products,
regardless of their origin of purchase, as are: (i) described in owner
notifications and recall campaigns conducted by Seller in furtherance of any
federal or state law, regulation, rule or order; or (ii) requested by Seller on
Nissan Products that qualify for such inspections and/or corrections. Once
Dealer has been notified that a recall or service campaign affects a particular
class or type of Nissan Product, Dealer shall perform such campaign inspections
and/or corrections on all affected Nissan Products then in or which thereafter
come into Dealer's inventory or which are delivered to Dealer for repair or
service. Dealer shall inquire, through the Nissan Datanet system or otherwise,
with respect to each such Nissan Product to determine whether all applicable
campaign inspections and/or corrections have been performed on such Nissan
Product and, if they have not been performed, Dealer shall perform them.
Dealer shall advise Seller as and when such campaign inspections and/or
corrections are performed, in accordance with Seller's Manuals or Instructions
relating thereto and in accordance with the provisions relating thereto set
forth in the Warranty Manual. To enable Dealer to perform required corrections
as promptly as practicable, parts and /or other materials required for each such
campaign may be shipped in quantity and billed to Dealer. Dealer shall accept
and retain such parts and/or other materials for use in such campaign. Upon
completion of the campaign program, Dealer shall have the right to return excess
parts shipped by Seller to Dealer for such campaign, but only to the extent
that Dealer has not ordered and received additional parts from Seller. Such a
return of parts shall be apart from any other parts return policies or programs
which may be instituted by Seller. In performing such campaign corrections for
which Seller has agreed to reimburse Dealer for parts and materials used in
making such corrections, Dealer shall use Genuine Nissan Parts and Accessories
unless Dealer receives prior authorization from Seller to use non-genuine parts
and accessories.
4. Maintenance and Repair Service.
Dealer shall promptly, courteously and efficiently maintain and repair Nissan
Products as and when required and requested by the owner or user thereof,
without regard to their origin of purchase. Dealer shall provide all owners and
users for whom Dealer provides maintenance and repair service itemized invoices
reflecting all the services performed. In connection with its sale or offering
for sale of any maintenance services recommended by Seller for the maintenance
of a Nissan Product, Dealer shall advise each customer requesting such
recommended maintenance service of: (i) a description of the items included in
maintenance recommended by Seller and Dealer's price therefor; and (ii) the
price and description of such additional maintenance or repair being sold or
recommended by Dealer which are in addition to that recommended by Seller in
published owner's manuals.
5. Payments by Seller to Dealer.
For pre-delivery inspections and service, warranty repairs, goodwill
adjustments, and campaign inspections and corrections performed by Dealer in
accordance with this Section 5.B, Seller shall fairly and adequately reimburse
Dealer for the parts and/or other materials (or shall provide Dealer with the
parts and/or other materials) and the labor required and used in connection
therewith in accordance with the provisions relating thereto set forth in the
Warranty Manual. Dealer understands and acknowledges that such repairs are
provided for the benefit of owners and users of Nissan Products, and Dealer
shall not impose any charge on such owners or users for parts, materials, or
labor for
8
which Dealer has received or will receive compensation from Seller hereunder.
Dealer shall comply with the disposition instructions contained in the
Warranty manual with respect to any Genuine Nissan Parts or Accessories acquired
by Dealer as a result of its performance of warranty repairs, goodwill
adjustments and campaign adjustments and/or corrections.
C. Service Operations of Dealer.
1. Dealer Personnel.
Dealer shall organize and maintain, substantially in accordance with Seller's
Guides, a complete service organization that includes a competent, trained
service manager and a sufficient number of trained service and customer
relations personnel to enable Dealer to fulfill its responsibilities for service
and customer relations under this Section 5. Dealer shall designate at least one
member of its staff who shall be responsible for resolving consumer
complaints on behalf of Dealer. Dealer shall, without expense to Seller, have
members of Dealer's service organization attend training courses offered by
Seller and Dealer shall cooperate with and participate in such training courses
as may from time to time be offered by Seller. Dealer agrees that its personnel
will meet such educational, management and technical training standards as
Seller may establish or approve. Seller may, from time to time, comment on or
advise Dealer concerning the qualifications, performance and ability of Dealer's
service personnel as the same affect Dealer's performance of its obligations
under this Section 5.
2. Compliance with Laws.
In performing the maintenance and service obligations specified in Section 5.B,
Dealer shall comply with all applicable provisions of federal, state and local
laws, ordinances, rules, regulations and orders affecting Nissan Products
including, but not limited to, laws relating to safety, emissions control, noise
control and customer service. Seller shall provide to Dealer, and Dealer shall
provide to Seller, such information and assistance as may be reasonably
requested by the other in connection with the performance of obligations of the
parties under such laws, ordinances, rules, regulations and orders. If
applicable law requires the installation or supply of equipment not installed or
supplied as standard equipment by Seller or the manufacturer of a Nissan
Vehicle, Dealer shall, prior to its sale of the Nissan Vehicles on or for which
such equipment is required, install or supply such equipment at its own expense
and in conformance with such standards as may be adopted by Seller. Dealer shall
comply with all applicable laws pertaining to the installation or supply of such
equipment including, without limitation, the reporting thereof.
3. Tools and Equipment.
Dealer shall provide for use in its service operations such service equipment
and special tools, comparable to the type and quality recommended by Seller
from time to time, as are necessary to meet Dealer's service responsibilities
hereunder and as are substantially in accordance with Seller's Guides. In
addition, Dealer shall obtain and maintain for use in its service operations
all tools which are essential to the proper service, repair and maintenance of
Nissan Vehicles and are identified by Seller as essential tools. Seller shall
ship such essential tools to Dealer as required due to new model and component
introductions and Dealer shall pay Seller therefor as invoiced. If Dealer is in
possession of a tool equivalent to any essential tool shipped by Seller, Dealer
may so notify Seller and Seller will exempt Dealer from purchasing such
essential tool from Seller upon Seller's determination that Dealer's tool will
satisfy the need for the specific repair procedure or procedures for which the
essential tool is intended. Dealer shall maintain all such equipment and tools
in good repair and proper calibration so as to enable Dealer to meet its service
responsibilities under this Section 5.
4. Owner Relations.
In providing service on Nissan Products, Dealer shall make every effort to
build and maintain good
9
relations between Dealer and owners and users of Nissan Products. Dealer shall
promptly investigate and handle all matters brought to its attention by Seller,
owners or users of Nissan Products, or any public or private agency, relating to
the sale or servicing of Nissan Products, so as to develop and maintain owner
and user confidence in Dealer, Seller and Nissan Products.
Dealer shall promptly report to Seller the details of each inquiry or
complaint received by Dealer relating to any Nissan Product which Dealer cannot
handle promptly and satisfactorily. Dealer will take such other steps with
respect to such customer complaints as Seller may reasonably require. Dealer
will do nothing to affect adversely Seller's rights or obligations under
applicable laws, rules and/or regulations. Furthermore, Dealer shall participate
in and cooperate with such dispute resolution procedures as Seller may
designate from time to time and such other procedures as may be required by
law.
Seller will promptly investigate all matters brought to its attention by
Dealer, owners or users of Nissan Products, or any public or private agency,
relating to the design, manufacture or sale by Seller of Nissan Products, and
Seller will take such action as it may deem necessary or appropriate so as to
develop and maintain owner confidence in Seller, Dealer and Nissan Products.
D. Parts Operations of Dealer.
1. Parts Sales Responsibility of Dealer.
Dealer shall actively and effectively promote through its own advertising and
sales promotion activities the sale of Genuine Nissan Parts and Accessories to
service, wholesale, retail and other customers within Dealer's Primary Market
Area.
2. Dealer Personnel.
Dealer shall organize and maintain, substantially in accordance with Seller's
recommendations with respect thereto, a complete parts organization that
includes a competent, trained parts manager and a sufficient number of trained
parts personnel to enable Dealer to fulfill its responsibilities under this
Section 5. Based on its need therefor, Dealer shall, without expense to Seller,
have members of Dealer's parts organization attend training courses offered by
Seller and Dealer shall cooperate in such training courses as may from time to
time be offered by Seller. Seller may, from time to time, comment on or advise
Dealer concerning the qualifications, performance and ability of Dealer's parts
personnel as the same affect Dealer's performance of its obligations under this
Section 5.
3. Inventories of Parts and Accessories.
Dealer shall maintain at all times a stock of parts and accessories which is
adequate to meet its service and wholesale and retail parts sales
responsibilities under this Section 5. Dealer shall also maintain, subject to
the ability of Seller to supply the products ordered by Dealer, a stock of
Genuine Nissan Parts and Accessories of an assortment and in quantities adequate
to meet customer demand and for warranty repairs, goodwill adjustments and
campaign corrections made pursuant to this Section 5.
E. Assistance Provided by Seller.
1. Service and Parts Manuals.
Seller will make available to Dealer, for use by Dealer's service and parts
personnel, Seller's Manuals or Instructions concerning Dealer's service and
parts operations and other sources of information and technical data as Seller
deems necessary to permit Dealer to perform its service and parts
responsibilities under this Section 5. Dealer shall keep such information and
data current and available for consultation by Dealer's service and parts
employees.
2. Service and Parts Field Personnel.
To further assist Dealer, Seller will provide to Dealer the advice and counsel
of its service and parts field personnel on matters relating to service,
10
parts and accessories, including technical diagnosis, service and parts
management, merchandising, personnel training, owner relations, and facilities
used for Dealer's service and parts operations.
F. Evaluation of Dealer's Service and Parts Performance.
Dealer's performance of its service and parts responsibilities will be evaluated
by Seller on the basis of such reasonable criteria as Seller may develop from
time to time, including for example:
1. Dealer's performance in building and maintaining consumer confidence in
Dealer and in Nissan Products as measured by surveys or indices of consumer
satisfaction as compared with performance levels achieved by other Authorized
Nissan Dealers in Seller's Region or District in which Dealer is located or such
other means as may be deemed appropriate by Seller;
2. Reasonable parts purchase or sales performance objectives which may be
established from time to time by Seller for Dealer;
3. Dealer's advertising and promotion of its parts and service operations;
4. Dealer's performance of its service responsibilities and Dealer's
conduct of its service operations including, without limitation, the financial
results of its service operations, labor sales, warranty claims practices
training of service personnel, qualification, performance and ability of
service personnel, and inventory of special and essential tools and service
equipment, as compared with Seller's Guides therefor where such have been
established and/or as compared with performance levels achieved by other
Authorized Nissan Dealers in Seller's Region or District in which Dealer is
located;
5. Dealer's performance of its parts sales responsibilities and Dealer's
conduct of its parts operations including, without limitation, the financial
results of its parts operations, training of parts personnel, and inventory of
parts, as compared with Seller's Guides therefor where such have been
established and/or as compared with performance levels achieved by other
Authorized Nissan Dealers in Seller's Region or District in which Dealer is
located; and
6. Evaluation reports resulting from any audit or review of Dealer's service
or parts operations by Seller's representatives.
Seller will periodically evaluate Dealer's performance of its responsibilities
under this Section 5. Evaluations prepared pursuant to this Section 5 will be
discussed with and provided to Dealer, and Dealer shall have an opportunity to
comment, in writing, on such evaluations. Dealer shall promptly take such
action as may be required to correct any deficiencies in Dealer's performance of
its responsibilities under this Section 5.
SECTION 6. OTHER SELLER AND DEALER
RESPONSIBILITIES
A. Advertising and Promotion.
1. Advertising Standards. Both Seller and Dealer recognize the need for
maintaining the highest standards of ethical advertising which is of a quality
and dignity consonant with the reputation and standing of Nissan Products.
Accordingly, neither Seller nor Dealer shall publish or cause to be published
any advertising relating to Nissan Products that is not in compliance with all
applicable federal, state and local laws, ordinances, rules, regulations and
orders or that is likely to mislead, confuse or deceive the public or impair the
goodwill of Manufacturer, Seller or Dealer or the reputation of Nissan Products
or the Nissan Marks.
2. Display by Dealer.
Dealer shall prominently state upon its stationery and other printed matter that
it is an Authorized Nissan Dealer.
3. Sales Promotion.
Seller will establish and maintain comprehensive advertising programs to promote
the sale of Nissan
11
Vehicles and will from time to time offer advertising, sales promotion and
sales campaign materials to Dealer. In addition, to effectively promote the
sale of Nissan Products and the availability of service for Nissan Vehicles,
Dealer shall establish and maintain its own advertising and sales promotion
programs including, but not limited to, effective showroom displays, and Dealer
will have available in showroom ready condition at least one vehicle in each
model line of Nissan Vehicles for purposes of demonstration to potential
customers.
B. Dealer Disclosures and Representations Concerning Nissan Products and
Other Products or Services.
Dealer understands and acknowledges that it is of vital importance to Seller
that Nissan Products are sold and serviced in a manner which promotes consumer
satisfaction and which meet the high quality standards associated with Seller,
Manufacturer, the Nissan Marks and Nissan Products in general. Accordingly,
Dealer shall fully and accurately disclose to its customers all material
information concerning the products and services sold by Dealer and the terms of
purchase and sale including, without limitation: the items making up the
purchase price; the source of products sold; and all warranties affecting
products sold. Dealer shall not make any misleading statements or
misrepresentations concerning the products sold by Dealer, the terms of sale,
the warranties applicable to such products, the source of the products, or the
recommendations or approvals of Seller or Manufacturer.
Nothing in this Agreement shall limit or be construed to limit the products
or services which Dealer may sell to its customers. Seller acknowledges that
Dealer is free to sell whatever products or services Dealer may choose in
connection with its sale and servicing of Nissan Products, subject to Dealer
obligations under Sections 5 and 6 of this Agreement.
C. Signs.
Dealer shall, at its expense, display at its Dealership Location, in such
number and at such locations as Seller may reasonably require, signs which are
compatible with the design standards established by Seller and published in
Seller's Manuals or Instructions from time to time. Dealer's use and operation
of signs displayed by Dealer at the Dealership Location and Dealer's display of
any Nissan ▇▇▇▇ shall be subject to Seller's approval and shall be in accordance
with the terms and conditions of Section 6.K and the Dealership Identification
Addendum.
D. Hours of Operations.
Dealer recognizes that the service and maintenance needs of the owners of Nissan
Products and Dealer's own responsibilities to actively and effectively promote
the sale of Nissan Products can be met properly only if Dealer keeps its
Dealership Facilities open and conducts all of its Dealership Operations
required by this Agreement during hours which are reasonable and convenient for
Dealer's customers. Accordingly, Dealer shall maintain its Dealership Facilities
open for business and shall conduct all Dealership Operations required under
this Agreement during such days and hours as automobile dealers' sales and
service facilities are customarily and lawfully open in Dealer's Primary Market
Area or in the metropolitan area in which Dealer is located.
E. Capital and Financing.
Dealer recognizes that its ability to conduct its Dealership Operations
successfully on a day-to-day basis and to effectively perform its other
obligations under this Agreement including, without limitation, its obligations
with respect to Dealership Facilities, new vehicle sales, and service and parts
sales, depends to a great extent upon the adequate capitalization of Dealer,
including its maintaining sufficient net working capital and net worth and
12
employing the same in its Dealership Operations. Dealer shall at all times
maintain and employ such amount and allocation of net working capital and net
worth as are substantially in accordance with Seller's Guides therefor and which
will enable Dealer to fulfill all of its responsibilities under this Agreement.
Dealer shall at all times during the term of this Agreement have flooring
arrangements (wholesale financing) satisfactory to Seller, in an amount
substantially in accordance with Seller's Guides therefor, with a financial
institution acceptable to Seller, and which will enable Dealer to fulfill its
obligations under this Agreement.
F. Accounting System.
It is in the mutual interest of Seller and Dealer that all Authorized Nissan
Dealers install and maintain uniform accounting systems and practices, so that
Seller can develop standards of operating performance which will assist Dealer
in obtaining satisfactory results from its Dealership Operations and which will
assist Seller in formulating policies in the interests of Seller and all
Authorized Nissan Dealers. Accordingly, Dealer shall install and maintain an
accounting system, not exclusive of any other system, in accordance with
Seller's Nissan Dealer Accounting System Manual, as the same may from time to
time be amended, revised or supplemented.
G. Records and Reports.
1. Financial Statements.
Dealer shall furnish to Seller, on or before the tenth (10th) day of each month,
in a manner acceptable to Seller, complete and accurate financial and operating
statements which fairly present, in accordance with generally accepted
accounting principles, Dealer's financial condition as of the end of the
preceding month and the results of Dealer's Dealership Operations for the
preceding month and for that portion of Dealer's fiscal year then ended. Dealer
shall also furnish for such periods reports of Dealer's sales and inventory of
Nissan Products. Dealer shall also promptly furnish to Seller a copy of any
adjusted annual financial or operating statement prepared by or for Dealer.
2. Sales Records and Reports.
Dealer shall prepare and retain for a minimum of two (2) years, complete and
up-to-date records covering its sales of Nissan Products. To assist Seller in
evaluating, among other things current market trends, to provide information
for use in the adjustment of production and distribution schedules, to provide
information used by Seller in providing Nissan Vehicles to Dealer, and to
provide Seller with accurate records of the ownership of Nissan Vehicles for
various purposes including warranty records and ownership notification, Dealer
shall accurately submit to Seller such information with respect to Dealer's
sales of Nissan Products as Seller may reasonably require as and in the form or
manner specified by Seller, at or as soon as possible after the close of each
business day on which such Nissan Products are sold by Dealer. If Dealer becomes
aware that any information submitted by Dealer to Seller hereunder is or has
become inaccurate, Dealer will immediately take all steps necessary to advise
Seller of and to correct such inaccuracy. Should Seller determine or discover
that any report submitted hereunder by Dealer is or has become inaccurate,
Seller may take any steps it deems necessary or appropriate to correct such
inaccuracy and to adjust its records, calculations or procedures with respect to
Dealer's reported sales to correct the effect of such inaccuracy or to prevent
additional inaccurate reports from being made.
3. Service Records.
Dealer shall prepare and retain for a minimum of
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two (2) years, in accordance with the procedures specified in the Warranty
Manual: records in support of applications for payment for pre-delivery
inspection and service, warranty repairs and goodwill adjustments, and campaign
inspections and corrections performed by Dealer; claims for parts compensation;
and applications for discounts, allowances, refunds or credits.
4. Other Reports.
Dealer shall furnish to Seller such other records or reports concerning its
Dealership Operations as Seller may reasonably require from time to time.
H. Nissan Datanet System.
Seller has developed the Nissan Datanet system, which is an electronic data
communication and processing system designed to facilitate accurate and prompt
reporting of dealership operational and financial data, submission of parts
orders and warranty claims and processing of information with respect to the
Dealership Operations. Such data is used by Seller, among other things, to
develop composite operating statistics which are useful to Dealer and Seller in
assessing Dealer's progress in meeting its obligations under this Agreement, to
provide a basis for recommendations which Seller may make to Dealer from time to
time to assist Dealer in improving Dealership Operations, to assist Seller in
developing standards of operating performance which will assist Dealer in
obtaining satisfactory results from its Dealership Operations, to assist Seller
in formulating policies in the interest of Seller and all Authorized Nissan
Dealers, and to provide sales reporting information relied upon by Seller in
providing Nissan Vehicles to Dealer. Accordingly, Dealer shall install and
maintain electronic data processing facilities which are compatible with the
Nissan Datanet system.
I. Right of Inspection.
Seller shall have the right, at all reasonable times during regular business
hours, to inspect the Dealership Facilities and to examine, audit and make and
take copies of all records, accounts and supporting data relating to the sale,
sales reporting, service and repair of Nissan Products by Dealer. When
practicable, Seller shall attempt to provide Dealer with advance notice of an
indealership audit of Dealer's records or accounts.
J. Confidentiality.
Seller will not furnish to any third party financial statements or other
confidential data, excluding sales records or reports, submitted by Dealer to
Seller, except as an unidentified part of a composite or coded report, unless
disclosure is authorized by Dealer or is required by law, or unless such
information is pertinent to judicial or governmental administrative proceedings
or to proceedings conducted pursuant to Section 16 of this Agreement.
K. Use of Nissan Marks.
Seller grants Dealer the non-exclusive right to identify itself as an Authorized
Nissan Dealer and to display at the Dealership Location and use, in connection
with the sale and service of Nissan Products, the Nissan Marks. The Nissan Marks
may not be used as part of Dealer's name or trade name without Seller's written
consent. No entity owned by or affiliated with Dealer or any of its owners may
use any Nissan ▇▇▇▇ without Seller's prior written consent. Dealer shall not
make any use of any Nissan ▇▇▇▇ which is inconsistent with Seller's policies
concerning trademark use. Dealer may not, either directly or indirectly, display
any Nissan Marks at any location or facility other than those identified in the
Dealership Facilities Addendum to this Agreement, without the prior written
consent of Seller. Except as authorized herein, Dealer shall not make use of any
Nissan ▇▇▇▇, and Dealer shall neither have nor claim any rights in respect of
any Nissan ▇▇▇▇. Dealer shall comply with any of Seller's Manuals or
Instructions regarding the use of Nissan Marks as may be issued
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to Dealer from time to time. Dealer shall promptly change or discontinue its use
of any Nissan Marks upon Seller's request. Any authorization granted may be
withdrawn by Seller at any time and, in any event, shall cease immediately upon
the effective date of termination of this Agreement.
If Seller institutes litigation to effect or enforce compliance with this
Section 6.K, the prevailing party in such litigation shall be entitled to
reimbursement for its costs and expenses in such litigation, including
reasonable attorney's fees.
SECTION 7. PURCHASE AND DELIVERY
A. Dealer Purchases.
1. Nissan Vehicles.
From time to ▇▇▇▇ ▇▇▇▇▇▇ will advise Dealer of the number and model lines of
Nissan Vehicles which Seller has available for sale to Dealer and, subject to
this Section 7, Dealer shall have the right to purchase such Nissan Vehicles.
Seller will distribute Nissan Vehicles to Authorized Nissan Dealers in
accordance with Seller's written distribution policies and procedures as the
same may be in effect from time to time. Seller will provide to Dealer an
explanation of the method used by Seller to distribute Nissan Vehicles to
Authorized Nissan Dealers. Dealer recognizes that there are numerous factors
which affect the availability of Nissan Vehicles to Seller and to Dealer
including, without limitation, production capacity, sales potential in Dealer's
and other Primary Market Areas, varying consumer demand, weather and
transportation conditions, and state and federal government requirements. Since
such factors may affect individual dealers differently, Seller reserves to
itself sole discretion to distribute Nissan Vehicles in a fair and consistent
manner, and its decisions in such matters shall be final.
2. Genuine Nissan Parts and Accessories.
Dealer shall submit to Seller firm orders for Genuine Nissan Parts and
Accessories in such quantity and variety as are reasonably necessary to fulfill
Dealer's obligations under this Agreement. All orders shall be submitted by
Dealer in the manner specified by Seller and in accordance with Seller's Parts
and Accessories Policy and Procedures Manual, may be accepted in whole or in
part by Seller, and shall be effective only upon acceptance thereof by Seller at
its home office in California (but without necessity of any notice of acceptance
by Seller to Dealer). Such orders shall not be cancellable by Dealer after
acceptance and shipment by Seller, except in accordance with Section 8 of this
Agreement.
B. Delays in Delivery.
Seller shall not be liable for failure or delay in delivery to Dealer of Nissan
Products which Seller has previously agreed to deliver to Dealer where such
failure or delay is due to cause or causes beyond the control or without the
fault or negligence of Seller.
C. Shipment of Nissan Products.
1. Nissan Vehicles.
Seller will ship Nissan Vehicles to Dealer by whatever mode of transportation,
by whatever route, and from whatever point Seller may select. Dealer shall pay
to Seller in connection with Nissan Vehicles delivered to Dealer the applicable
destination charges that are established for Dealer by Seller and that are in
effect at the time of shipment. Dealer shall bear the risk of loss and damage to
Nissan Vehicles during transportation from the point of shipment; however,
Seller will, if requested by Dealer in such manner and within such time as
Seller shall from time to time specify, prosecute claims for loss of or damage
to Nissan Vehicles during said transportation against the responsible carrier
for and on behalf of Dealer.
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2. Genuine Nissan Parts and Accessories.
Seller will ship Genuine Nissan Parts and Accessories to Dealer by whatever mode
of transportation, by whatever route, and from whatever point Seller may
select. Dealer shall bear the risk of loss and damage to Genuine Nissan Parts
and Accessories during transportation from the point of shipment.
D. Passage of Title.
Title to each Nissan Product shall pass from Seller to Dealer, or to the
financial institution designated by Dealer, upon delivery of said Product to
Dealer or to a carrier for transportation to Dealer, whichever occurs first.
E. Security Interest.
1. Grant of Security Interest
As security for the full payment of all sums from time to time owed by Dealer
to Seller under this Agreement, whether such sums are now, or hereafter become,
due and owing, Dealer hereby grants to Seller a security interest in the
following (collectively referred to as "Collateral"):
(i) All non-vehicle inventory of Dealer including, without limitation,
all Genuine Nissan Parts and Accessories delivered by Seller to Dealer hereunder
on account (all such inventory hereinafter referred to collectively as
"Inventory" and individually as "Item of Inventory"); and
(ii) All proceeds from any of the foregoing including, without
limitation, insurance payable by reason of the loss, damage or destruction of
any Item of Inventory; and all accounts and chattel paper of Dealer arising from
sale, lease, or other disposition of Inventory now existing or hereafter
arising, and all liens, securities, guarantees, remedies and privileges
pertaining thereto, together with all rights and liens of Dealer relating
thereto.
2. Default in Payment.
Dealer shall be in default of this Section 7 if: (i) Dealer shall fail to pay
any amounts secured hereby when due or fail to perform any obligations under
this Section 7 in a timely manner; (ii) there shall occur any material adverse
change in the financial condition of Dealer; (iii) Dealer shall dissolve or
become insolvent or bankrupt; or (iv) Seller shall have determined in good faith
that the prospect of such payment or performance is impaired; and in any such
case Seller may declare all sums secured by this Section 7.E immediately due and
payable and Seller shall have all rights and remedies afforded to a secured
party after default under the Uniform Commercial Code or other applicable law
in effect on the date of this Agreement.
3. Assembly of Collateral, Payment of Costs, Notices.
Dealer shall, if requested by Seller upon the occurrence of any default under
the foregoing Section 7.E.2 assemble the Collateral and make it available to
Seller at a place or places designated by Seller. Dealer also shall pay all
costs of Seller including, without limitation, attorneys' fees incurred with
respect to the enforcement of any of Seller's rights under this Section 7.
4. Recording, Further Assurances.
Dealer shall execute and deliver such financing statements and such other
instruments or documents and take any other action as Seller may request in
order to create or maintain the security interest intended to be created by this
Section 7.E or to enable Seller to exercise and enforce its rights hereunder. A
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement and may be filed in lieu of a financing statement in
any and all jurisdictions which accept such reproductions.
5. Records and Schedules of Inventory.
Dealer shall keep accurate records itemizing and describing the kind, type and
quantity of Inventory and shall furnish to Seller within five (5) days
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of receipt of Seller's request therefor, with a current schedule of inventory
in form and substance satisfactory to Seller ("Schedule of Inventory"), which
shall be true and accurate in all respects. A physical inventory shall be
conducted no less than annually in connection with preparation of year-end
financial statements of Dealer and, at Seller's request, a report of such
inventory shall be promptly provided to Seller.
F. Charges for Storage and Diversions.
Dealer shall be responsible for and shall pay all charges for demurrage, storage
and other expense accruing after shipment to Dealer or to a carrier for
transportation to Dealer. If diversions of shipments are made upon Dealer's
request or are made by Seller as a result of Dealer's failure or refusal to
accept shipments made pursuant to Dealer's orders, Dealer agrees to pay all
additional charges and expenses incident to such diversions.
G. Changes in Nissan Products.
Seller shall have the right in its sole discretion to discontinue the supply, or
make changes in the design or component materials, of any Nissan Product at any
time. Seller shall be under no liability to Dealer on account of any such
changes and shall not be required as a result of any such changes to make any
changes to Nissan Products previously purchased by Dealer. No change shall be
considered a model year change unless so specified by Seller.
SECTION 8. PRICING
A. Nissan Vehicles.
At any time prior to shipment (or delivery to a carrier for transportation to
Dealer) of any Nissan Vehicle, Seller may, without prior notice and without
incurring any liability to Dealer or anyone else, including any customer of
Dealer, change at any time and from time to time the price, discount, allowance
or other terms of sale of any Nissan Vehicle offered for sale by Seller. Except
with respect to the establishment of initial prices for a new model year vehicle
or for any new model or body type, Seller will notify Dealer by mailgram or
other acceptable means of any such change in price as soon as reasonably
practicable, and Dealer may, by notice to Seller within ten (10) days after such
notification, cancel any offer to purchase Nissan Vehicles affected by such
change, provided that Seller has not notified Dealer of its acceptance of
Dealer's offer on or prior to the date such notification by Dealer is received
by Seller.
B. Genuine Nissan Parts and Accessories.
Seller may, without prior notice and without incurring any liability to Dealer
or anyone else, including any customer of Dealer, change at any time and from
time to time the price, discount, allowance or other terms of sale of any
Genuine Nissan Part or Accessory offered for sale by Seller, and any such change
in price, discount, allowance or other terms of sale shall apply to all such
Genuine Nissan Parts and Accessories whether or not an order has been submitted
by Dealer, but not to Genuine Nissan Parts and Accessories for which Seller has
accepted and processed Dealer's order prior to the effective date of such
change. Seller will notify Dealer of any such change in price as soon as is
reasonably practicable. Dealer may, by notice to Seller, cancel any order for
Genuine Nissan Parts and Accessories affected by such change which was placed
before such notification was given, provided that such Genuine Nissan Parts and
Accessories have not been shipped to Dealer or delivered to a carrier for
transportation to Dealer on or prior to the date such notification by Dealer is
received by Seller.
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SECTION 9. PAYMENT
A. Payment for Vehicles.
Payment by Dealer for Nissan vehicles must be made in accordance with the
applicable prices, charges, discounts, allowances and other terms of sale
established by Seller either: (i) in accordance with wholesale financing
arrangements that at the time of delivery to Dealer or to a carrier for
transportation to Dealer of such Nissan Vehicles, whichever shall first occur,
are in effect between Seller, Dealer and a financing institution; or (ii) prior
to delivery to Dealer or to a carrier for transportation to Dealer, whichever
shall first occur, by cash or such other medium of payment as Seller may agree
to accept.
B. Payment for Parts and Accessories.
Parts, equipment, accessories and other products and services will normally be
billed by Seller to Dealer on Seller's invoices, which shall be due the tenth
(10th) of the month following the month of shipment of such products and
services; provided, however, Seller reserves the right to place any and all
sales of such items on a C.O.D. or cash in advance basis, without notice;
provided further, however, that Seller will endeavor to provide Dealer with
prior notice if in Seller's sole judgement such notice would be practicable.
C. Accounts Payable.
1. Right of Set Off.
In addition to any right of set off provided by law, all sums due Dealer shall
be considered net of indebtedness of Dealer to Seller, and Seller may deduct
any amounts due or to become due from Dealer to Seller or any amounts held by
Seller from any sums or accounts due from Seller to Dealer.
2. Liquidated Damages.
(i) Liquidated Damages for Delinquent Payments.
In the event that Dealer fails to pay Seller in full any amounts owed by Dealer
to Seller when due, Dealer shall pay Seller a delinquency charge of one percent
(1%) per month of such amount or amounts to compensate Seller for its costs of
carrying and collection; provided, however, that Seller agrees that it will not
assess any delinquency charge on an overdue account which has a total
outstanding balance of less than $1,000.00, unless such account is more than
ninety (90) days overdue. Dealer and Seller agree that such charge is to be
assessed not as a penalty, but as liquidated damages under California Civil Code
ss. 1671(b) based on Seller's reasonable estimate of the losses which will be
suffered by Seller as a result of such delinquent payment or payments. The
imposition of such delinquency charges shall not imply or constitute any
agreement to forbear collection of a delinquent account.
(ii) Liquidated Damages for Improper Payments to Dealer.
Seller may, from time to time, conduct audits or reviews of Dealer's books and
records pursuant to Section 6.I of this Agreement. If any such audit or review
results in a determination by Seller that Dealer was or is not entitled to
received payment from Seller, Seller may debit Dealer's account in such amounts
as Seller shall determine were improperly paid to Dealer. Such a determination
may be based on Dealer's failure to comply with applicable rules or procedures
or on Dealer's submission of false or inaccurate information to Seller. In
addition, Seller may assess and, if it does, Dealer will pay a delinquency
charge of one percent (1%) per month of such amount or amounts improperly paid
by Seller to Dealer to compensate Seller for its costs of auditing, loss of
funds and collection. Dealer and Seller agree that such charge is to be assessed
not as a penalty, but as liquidated damages under California Civil Code ss.
1671(b) based on Seller's reasonable estimate of the losses
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which will be suffered by Seller as a result of such improper payment or
payments. The imposition of such delinquency charges shall not imply or
constitute any agreement to forbear collection of a delinquent account.
D. Collection of Taxes by Dealer.
Dealer hereby represents and warrants that all Nissan Products purchased from
Seller are purchased for resale in the ordinary course of Dealer's business.
Dealer further represents and warrants that Dealer has obtained all licenses and
complied with all other requirements to collect sales, use and or other taxes
incurred in any such resale transaction, and that Dealer will furnish evidence
thereof to Seller, at Seller's request. If Dealer purchases any Nissan Products
other than for resale, or puts any Nissan Products to a taxable use, Dealer
shall pay directly to the appropriate taxing authority any sales, use or
similar taxes incurred as a result of such use or purchase, to file any tax
returns required in connection therewith and to hold Seller harmless from any
claims or demands with respect thereto.
SECTION 10. WARRANTIES
The only warranties that shall be applicable to Nissan Products (or any
components thereof) shall be such written warranty or warranties as may be
furnished by Seller and as stated in the Warranty Manual or Seller's Parts and
Accessories Policy and Procedures Manual, as the same may be revised from time
to time. Except for its express limited liability under such written warranties,
neither Manufacturer nor Seller assumes, or authorizes any other person or party
including, without limitation, Dealer, to assume on their behalf any other
obligation or liability in connection with any Nissan Product (or component
thereof). Any obligations or liabilites assumed by Dealer which are in addition
to Seller's written warranties shall be solely the responsibility of Dealer.
Dealer shall expressly incorporate in full and without modification any
warranty furnished by Seller with a Nissan Vehicle as a conspicuous part of each
order form or other contract for the sale of such Nissan Vehicle by Dealer to
any buyer. Dealer shall make available to the buyer of each Nissan Product prior
to the purchase of such Nissan Product, copies of such applicable warranties as
may be furnished by Seller. Dealer shall also provide to the buyer of each
Nissan Product, in full and without modification, any owner's manual, warranty
booklet or other owner information which Seller may provide to Dealer for
delivery with such Nissan Product. Dealer agrees to abide by and implement in
all other respects Seller's warranty procedures then in effect.
SECTION 11. INDEMNIFICATION
A. Indemnification of Dealer.
Subject to Section 11. C, and upon Dealer's written request, Seller shall:
1. Defend Dealer against any and all claims that during the term of this
Agreement may arise, commence or be asserted against Dealer in any action
concerning or alleging:
(a) Bodily injury or property damage arising out of an occurrence caused
soley by a manufacturing defect or alleged manufacturing defect in a Nissan
Product supplied by Seller, except for any manufacturing defect in tires,
provided that the defect could not have reasonably been discovered by Dealer
during the pre-delivery inspection of the product required by Section 5.B.1 of
this Agreement;
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(b) Bodily injury or property damage arising out of an occurrence caused
solely by a defect or alleged defect in the design of a Nissan Product supplied
by Seller, except for a defect or alleged defect in the design of tires; and
(c) Any substantial damage occurring to a new Nissan Product and
repaired by Seller from the time the product left the manufacturer's assembly
plant to the time it was delivered to Dealer's designated location or to a
carrier for transportation to Dealer, whichever occurred first, provided Seller
failed to notify Dealer of such damage and repair prior to delivery of the
product to the first retail customer; and
(d) Breach of Seller's warranty of a Nissan Product which is not, in
whole or part, the result of Dealer's sales, service or repair practices or
conduct; and
2. Indemnify and hold Dealer harmless from any and all settlements made
which are approved by Seller and final judgments rendered with respect to any
claims described in Section 11.A.1; provided, however, that Seller shall have no
obligation to indemnify or hold Dealer harmless unless Dealer: (i) promptly
notifies Seller of the assertion of such claim and the commencement of such
action against Dealer; (ii) cooperates fully in the defense of such action in
such manner and to such extent as Seller may reasonably require; (iii) consents
to the employment of attorneys selected by Seller and agrees to waive any
conflict of interest then existent or which may later arise, thereby enabling
Seller's selected attorneys to represent Seller and/or the manufacturer of a
Nissan Product throughout the defense of the claim; and (iv) withdraws any
actions (including cross-claims) filed against Seller or the manufacturer of a
Nissan Product arising out of the circumstances for which Dealer seeks
indemnity. Dealer shall pay all costs of its own defense incurred prior to
Seller's assumption of Dealer's defense and thereafter to the extent that Dealer
employs attorneys in addition to those selected by Seller.
3. Seller may offset any recovery on Dealer's behalf against any
indemnification that may be required under this Section 11 including, without
limitation, attorneys' fees paid by Seller pursuant to this Section 11.A and the
amount of any settlement or judgment paid by Seller.
B. Indemnification of Seller.
Subject to Section 11.C and upon Seller's written request, Dealer shall:
1. Defend Seller against any and all claims that during the term of this
Agreement may arise, commense or be asserted against Seller in any action
concerning or alleging:
(a) Dealer's failure to comply, in whole or in part, with any obligation
of Dealer under this Agreement;
(b) Any negligence, error, omission or act of Dealer in connection with
the preparation, repair or service (including warranty service, goodwill
adjustments, and campaign inspections and corrections) by Dealer of Nissan
Products;
(c) Any modification or alteration made by or on behalf of Dealer to a
Nissan Product, except those made pursuant to the express written instruction
or with the express written approval of Seller;
(d) Dealer's breach of any agreement between Dealer and Dealer's
customer or other third party;
(e) Misleading, libelous or tortious statements, misrepresentations or
deceptive or unfair practices by Dealer, directly or indirectly, to Seller, a
customer or other third party including, without limitation, Dealer's failure to
comply with Section 6.B of this Agreement;
(f) Dealer's breach of any contract or warranty other than a contract
with or warranty of Seller or the manufacturer of a Nissan Product; or
(g) Any change in the employment status or in the terms of employment of
any officer, employee or agent of Dealer or of any Principal
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Owner, Other Owner or Executive Manager including but not limited to, claims for
breach of employment contract, wrongful termination or discharge, tortious
interference with contract or economic advantage, and similar claims; and
2. Indemnify and hold Seller harmless from any and all settlements made and
final judgments rendered with respect to any claims described in Section 11.B.1;
provided, however, that Dealer shall have no obligation to indemnify or hold
Seller harmless unless Seller: (i) promptly notifies Dealer of the assertion of
such claim and the commencement of such action against Seller; (ii) cooperates
fully in the defense of such action in such manner and to such extent as Dealer
may reasonably require; (iii) consents to the employment of attorneys selected
by Dealer and agrees to waive any conflict of interest then existent or which
may later arise, thereby enabling Dealer's selected attorneys to represent
Dealer throughout the defense of the claim; and (iv) withdraws any actions
(including cross-claims) filed against Dealer arising out of the circumstances
for which Seller seeks indemnity. Seller shall pay all costs of its own defense
incurred prior to Dealer's assumption of Seller's defense and thereafter to the
extent that Seller employs attorneys in addition to those selected by Dealer.
C. Conditions and Exceptions to Indemnification.
1. If the allegations asserted in any action or if any facts established
during or with respect to any action would require Seller to defend and
indemnify Dealer under Section 11.A and Dealer to defend and indemnify Seller
under Section 11.B, Seller and Dealer shall each be responsible for its own
defense in such an action and there shall be no obligation or responsibility in
connection with any defense, judgment, settlement or expenses of such action as
between Seller and Dealer.
2. In undertaking its obligations to defend and/or indemnify each other,
Dealer and Seller may make their defense and/or indemnification conditional on
the continued existence of the state of facts as then known to such party and
may provide for the withdrawal of such defense and/or indemnification at such
time as facts arise which, if known at the time of the original request for a
defense and/or indemnification, would have caused either Dealer or Seller to
refuse such request. In the event that subsequent developments in a case make
clear that the allegations which initially justified acceptance of a request for
a defense and/or indemnification are no longer at issue therein or that the
claims no longer meet the description of those for which indemnification is
required hereunder, any party providing a defense and/or indemnification
hereunder may terminate such defense and/or indemnification of the other party.
The party withdrawing from its defense and/or indemnification to defend and/or
indemnify shall give notice of its withdrawal to the indemnifying party.
Moreover, the withdrawing party shall be responsible for all costs and expenses
of defense up to the date of the other party's receipt of the notice of
withdrawal.
SECTION 12. TERMINATION
A. Termination Due to Certain Acts or Events.
The following represent events which are within the control of or originate from
actions taken by Dealer or its management or owners and which are so contrary to
the intent and purpose of this Agreement that they warrant its termination:
1. Any actual or attempted sale, transfer, assignment or delegation, whether
by operation of law or otherwise, by Dealer of an interest in or right,
privilege or obligation under this Agreement, or of the principal assets
necessary for the performance of Dealer's responsibilities under this
Agreement, without, in either case, the prior
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written consent of Seller having been obtained, which consent shall not be
unreasonably withheld;
2. Subject to the provisions of Section 14 hereof, a change, by operation of
law or otherwise, in the direct or indirect ownership of Dealer, whether
voluntary or involuntary, from that set forth in the Final Article of this
Agreement, except as expressly permitted herein, without the prior written
consent of Seller having been obtained, which consent shall not be unreasonably
withheld;
3. Removal, resignation, withdrawal or elimination from Dealer for any
reason of the Executive Manager of Dealer; provided, however, Seller shall give
Dealer a reasonable period of time within which to replace such person with an
Executive Manager satisfactory to Dealer and Seller in accordance with Article
Fourth of this Agreement; or the failure of Dealer to retain an Executive
Manager who, in accordance with Article Fourth of this Agreement, in Seller's
reasonable opinion, is competent, possesses the requisite qualifications for the
position, and who will act in a manner consistent with the continued best
interests of both Seller and Dealer;
4. The failure of Dealer to maintain the Dealership Facilities open for
business or to conduct all the Dealership Operations required by this Agreement
during and for not less than the hours customary and lawful in Dealer's Primary
Market Area or in the metropolitan area in which Dealer is located for seven (7)
consecutive days, unless such failure is caused by fire, flood, earthquake or
other act of God;
5. Any undertaking by Dealer to conduct, directly or indirectly, any of the
Dealership Operations at a location or facility other than that which is
specified in the current Dealership Facilities Addendum for that Dealership
Operation;
6. The failure of Dealer to establish or maintain wholesale financing
arrangements which are in accordance with Seller's Guides and which are
reasonably acceptable to Seller with banks or other financial institutions
approved by Seller for use in connection with Dealer's purchase of Nissan
Vehicles, unless Seller shall have agreed to accept another medium of payment;
7. Insolvency of Dealer; voluntary institution by Dealer of any proceeding
under the federal bankruptcy laws or under any state insolvency law; institution
against Dealer of any proceeding under the federal bankruptcy laws or under any
state insolvency law which is not vacated within thirty (30) days from the
institution thereof; appointment of a receiver, trustee or other officer having
similar powers for Dealer or Dealer's business, provided such appointment is not
vacated within thirty (30) days of the date of such appointment; execution by
Dealer of an assignment for the benefit of creditors; or any levy under
attachment, foreclosure, execution or similar process whereby a third party
acquires rights to a significant portion of the assets of Dealer necessary for
the performance of Dealer's responsibilities under this Agreement or to the
operation or ownership of Dealer, which is not within thirty (30) days from the
date of such levy vacated or removed by payment or bonding;
8. Any material misrepresentation by Dealer or any person named in the Final
Article of this Agreement as to any fact relied on by Seller in entering into,
amending or continuing with this Agreement including, without limitation, any
representation concerning the ownership, management or capitalization of
Dealer;
9. The conviction in a court of original jurisdiction of Dealer or of any
Principal Owner OR Executive Manager of a crime affecting the Dealership
Operations or of any felony; provided,
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however, that a convicted Executive Manager's ownership interest in Dealer shall
not be an event warranting termination of this Agreement if the individual is no
longer employed by Dealer or involved in any way in the management or operation
of Dealer and Dealer has made reasonable efforts to obtain the individual's
divestiture of his ownership interest in Dealer; or any willful failure of
Dealer to comply with the provisions of any laws, ordinances, rules,
regulations, or orders relating to the conduct of its Dealership Operations
including, without limitation, the sale and servicing of Nissan Products.
10. Knowing submission by Dealer to Seller of: (i) a false or fraudulent
report or statement; (ii) a false or fraudulent claim (or statement in support
thereof), for payment, reimbursement or for any discount, allowance, refund,
rebate, credit or other incentive under any plan that may be offered by Seller,
whether or not Dealer offers or makes restitution; (iii) false financial
information; (iv) false sales reporting data; or (v) any false report or
statement relating to pre-delivery inspection, testing, warranties, service,
repair or maintenance required to be performed by Dealer.
Upon the occurrence of any of the foregoing events, Seller may terminate this
Agreement by giving Dealer notice thereof, such termination to be effective upon
the date specified in such notice, or such later date as may be required by any
applicable statute.
B. Termination by Seller for Non-Performance by Dealer.
1. If, based upon the evaluations thereof made by Seller, Dealer shall fail
to substantially fulfill its responsibilities with respect to:
a. Sales of new Nissan Vehicles and the other responsibilities of
Dealer set forth in Section 3 of this Agreement;
b. Maintenance of the Dealership Facilities and the Dealership
Location set forth in Section 2 of this Agreement;
c. Service of Nissan Vehicles and sale and service of Genuine Nissan
Parts and Accessories and the other responsibilities of Dealer set forth in
Section 5 of this Agreement;
d. The other responsibilities assumed by Dealer in this Agreement
including, without limitation, Dealer's failure to:
(i) Timely submit accurate sales, service and financial information
concerning its Dealership Operations, ownership or management and related
supporting data, as required under this Agreement or as may be reasonably
requested by Seller;
(ii) Permit Seller to make an examination or audit of Dealer's accounts
and records concerning its Dealership Operations after receipt of notice from
Seller requesting such permission or information;
(iii) Pay Seller for any Nissan Products or any other products or
services purchased by Dealer from Seller, in accordance with the terms and
conditions of sale; or
(iv) Maintain net worth and working capital substantially in accordance
with Seller's Guides therefore; or
2. In the event that any of the following occur:
(i) any dispute, disagreement or controversy between or among Dealer
and any third party or between or among the owners or management personnel of
Dealer relating to the management or ownership of Dealer develops or exists
which, in the reasonable opinion of Seller, tends to adversely affect the
conduct of the Dealership Operations or the interests of Dealer or Seller; or
(ii) any other act or activity of Dealer, or any of its owners or
management occurs, which substantially impairs the reputation or financial
standing of Dealer or of any of its management subsequent to the execution of
this Agreement:
Seller will notify Dealer of such failure and will
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review with Dealer the nature and extent of such failure and the reasons which,
in Seller's or Dealer's opinion, account for such failure.
Thereafter, Seller will provide Dealer with a reasonable opportunity to
correct the failure. If Dealer fails to make substantial progress towards
remedying such failure before the expiration of such period, Seller may
terminate this Agreement by giving Dealer notice of termination, such
termination to be effective at least ninety (90) days after such notice is
given.
During such period Dealer will commence such actions as may be necessary so
that the termination obligations of Seller and Dealer set forth in this
Agreement may be fulfilled as promptly as practicable.
C. Termination Because of Death or Physical or Mental Incapacity of
Principal Owner.
This Agreement is a personal services agreement and has been entered into by
Seller in reliance on Dealer's being owned by the Principal Owner(s). Seller
(subject to Section 14 hereof) may terminate this Agreement by giving notice to
Dealer upon the death of any of the Principal Owner(s) or if Seller in good
faith determines that any Principal Owner is so physically or mentally
incapacitated as to be unable to discharge his or her responsibility to the
operating management of Dealer. Unless deferred as hereinafter provided, the
effective date of such termination shall be not less than ninety (90) days from
the date such notice is given to Dealer.
To facilitate the orderly termination of the business relationship between
Seller and Dealer and of the Dealership Operations, Seller may, in its sole
discretion, defer the effective date of such termination and continue to operate
with Dealer under the terms of this Agreement for a period of time, to be
determined by Seller, of up to one (1) year from the date such notice of
termination is given if within sixty (60) days from the date of said notice, the
executor or representative of the deceased or incapacitated Principal Owner or a
surviving Principal Owner shall give to Seller written request for such
deferment. This Agreement shall automatically terminate without further notice
or action by Seller upon the expiration of any such deferment.
D. Termination for Failure of Seller or Dealer to be Licensed.
If Seller or Dealer shall fail to secure or maintain any license, permit or
authorization required by either of them for their performance of any obligation
under or in connection with this Agreement, or if such license, permit or
authorization is suspended or revoked, irrespective of the cause, and such
suspension or revocation continues for a period of seven (7) days, either party
may immediately terminate this Agreement by giving notice to the other party.
E. Termination by Dealer.
Dealer has the right to terminate this Agreement at any time by giving notice to
Seller, such termination to be effective thirty (30) days after the giving of
such notice (unless the thirty (30) day notice period is waived in writing by
Seller) or on such other date as may be mutually agreed to in writing by Seller
and Dealer.
F. Termination by Seller Because of a Change of Seller's Method of
Distribution or Decision by Seller to Cease Distribution of Nissan Vehicles.
If Seller should elect or be required to discontinue its present method of
distributing Nissan Vehicles, or if Seller should elect or be required to cease
selling or distributing Nissan Vehicles, Seller may terminate this Agreement by
giving Dealer notice and such termination will be effective not less than one
(1) year after such notice is given.
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G. Termination Upon Entering Into a New Sales and Service Agreement.
Seller may terminate this Agreement at any time by giving Dealer at least
ninety (90) days prior notice thereof and offering to enter into a new or
amended form of Agreement with Dealer in a form being offered generally to
Authorized Nissan Dealers.
Unless otherwise agree in writing, the rights and obligations of Dealer that
may otherwise become applicable upon termination or expiration of the term of
this Agreement shall not be applicable if Seller and Dealer enter into a new or
susperseding Dealer Sales and Service Agreement, and the rights and obligations
of the parties hereunder shall continue under the terms and provisions of the
new agreement.
Dealer's performance under any prior agreement may be considered by Seller
in evaluating Dealer's performance under this, or any succeeding, agreement.
SECTION 13. RIGHTS AND LIABILITIES
UPON TERMINATION
A. Termination Procedures.
1. Upon termination of this Agreement by either Seller or Dealer for any
reason, Dealer shall cease to be an Authorized Nissan Dealer, and Dealer shall:
(i) immediately discontinue the distribution and sale of Nissan Products as an
Authorized Nissan Dealer; and (ii) at its own expense (a) erase or obliterate
all Nissan Marks and any word or words indicating that Dealer is an Authorized
Nissan Dealer from the stationery, forms and other papers used by Dealer or any
business associated or affiliated with Dealer; (b) discontinue all advertising
of Dealer as an Authorized Nissan Dealer; (c) take all steps necessary to remove
any listing in any telephone directory yellow pages advertisement indicating
that Dealer is an Authorized Nissan Dealer; (d) discontinue any use of any
Nissan ▇▇▇▇ in Dealer's firm or trade name and take all steps necessary or
appropriate in the opinion of Seller to change such firm or trade name to
eliminate any Nissan ▇▇▇▇ therefrom; (e) discontinue or cause to be discontinued
all other use of the Nissan Marks; (f) refrain from doing anything, whether or
not specified above, that would indicate that Dealer is or was an Authorized
Nissan Dealer; and (g) refrain from using, either directly or indirectly, any
Nissan Marks or any other confusingly similar marks, names, logos or designs in
a manner likely to cause confusion or mistake or to deceive the public. If
Dealer fails to comply with any requirements of this Section 13.A.1, Dealer
shall reimburse Seller for all costs and expenses, including reasonable
attorney's fees, incurred by Seller in effecting or enforcing compliance;
2. Termination of this Agreement will not release Dealer or Seller from the
obligation to pay any amounts owing the other;
3. Subject to Section 13.E, Seller shall process all claims and make all
payments due for all labor provided and all parts and/or other materials used by
Dealer pursuant to Sections 5.B.2 and 5.B.3 prior to the effective date of
termination as provided in the Warranty Manual. Dealer shall cease, as of the
effective date of termination, to be eligible to receive reimbursement for any
work thereafter performed or parts thereafter supplied under any warranty,
campaign inspections or corrections and any other adjustment previously
authorized by Seller.
4. Dealer shall, upon Seller's request, deliver to Seller or its designee
copies of Dealer's records with respect to pre-delivery, warranty, goodwill
campaign and other service work of Dealer.
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B. Repurchases by Seller Upon Termination.
Upon termination other than pursuant to a sale or transfer, Seller shall buy
from Dealer and Dealer shall sell to Seller, within ninety (90) days after the
effective date of termination:
1. All new, unused, undamaged, unlicensed, then current and immediate
previous model year Nissan Vehicles which were purchased by Dealer from Seller
and are then the unencumbered property of and in the possession of Dealer or
Dealer's flooring and/or financing institution. The price for such vehicles
shall be the invoice price previously paid by Dealer therefor, less Seller's
destination charges, all allowances paid or applicable allowances offered
thereon by Seller, any amount paid by Seller to Dealer for pre-delivery
inspection and service with respect to such vehicles pursuant to Section 5.B,
any dealer association collection, and any other charge for taxes or special
items or service. Seller shall also repurchase Genuine Nissan Accessories which
have been installed in such Nissan Vehicles which accessories are listed in the
current parts and accessories price list (except those items marked "not
eligible") at the prices set forth on Seller's then current parts and
accessories price list.
2. Subject to Section 13.C, all new, unused, undamaged and resalable Genuine
Nissan Parts and Accessories which are still in the original and undamaged
packages, were purchased from Seller, are listed in the current parts and
accessories price list (except those items marked "not eligible"), and are then
the unencumbered property of and in the possession of Dealer. The prices for
such Genuine Nissan Parts and Accessories shall be the prices set forth on
Seller's then current parts and accessories price list.
3. Subject to Section 13.C, all special tools and equipment owned by Dealer
and which are unencumbered and in the possession of Dealer on the effective date
of termination which were designed especially for servicing Nissan Vehicles, are
of the type recommended in writing by Seller and designated as "essential" tools
in accordance with Seller's Guides or other notices pertaining thereto from
Seller, are in usable and good condition, except for reasonable wear and tear,
and were purchased by Dealer from Seller within the three (3) year period
preceding the date of termination. Seller's purchase price for such essential
tools shall be calculated at Dealer's purchase price reduced by straight-line
depreciation on the basis of a useful life of thirty six (36) months.
Dealer's and Seller's obligations with respect to the signs located at the
Dealership Facilities shall be determined in accordance with the Dealership
Identification Addendum between Seller and Dealer.
C. Dealer's Responsibilities with Respect to Repurchase.
Seller's obligation to repurchase Genuine Nissan Vehicles, Genuine Nissan
Parts and Accessories, and essential tools from Dealer is conditioned on
Dealer's fulfilling its responsibilities under this Section 13.C as follows:
1. Immediately following the effective date of termination of this
Agreement, Dealer shall furnish to Seller a list of vehicle identification
numbers and such other information and documents as Seller may require
pertaining to the Nissan Vehicles subject to the repurchase obligations of
Section 13.B.1. Dealer shall deliver all such vehicles in accordance with
Seller's instructions.
2. Within thirty (30) days after the effective date of termination of this
Agreement, Dealer shall deliver or mail to Seller a detailed inventory of all of
the items referred to in Sections 13.B.2 and 13.B.3. Within thirty (30) days of
its receipt of such inventory, Seller shall provide Dealer with instructions as
to the procedures to be followed in returning such items to Seller. Dealer
shall, at its
26
expense, tag, pack and deliver all such items to Seller at Seller's designated
parts distribution center in accordance with such instructions.
Should Dealer fail to comply with the responsibilities listed above, Seller
shall have no obligation to repurchase any such items from Dealer; provided,
however, that Seller shall have the right, but no obligation, to enter into the
Dealership Facilities for the purpose of compiling an inventory, tagging,
packing and shipping such items to Seller's designated parts distribution
center. If Seller undertakes any such responsibilities of Dealer, the repurchase
prices of such items shall be fifteen percent (15%) less than the repurchase
prices otherwise applicable under Section 13.B.
D. Title to Repurchased Property.
With respect to any items of property repurchased by Seller pursuant to this
Section 13, Dealer shall take such action and shall execute and deliver such
instruments as may be necessary: (i) to convey good and marketable title to all
such items of property; (ii) to comply with the requirements of any applicable
law relating to bulk sales and transfers; and (iii) to satisfy and discharge any
liens or encumbrances on such items of property prior to delivery thereof to
Seller.
E. Payment.
Seller shall make all payments to Dealer pursuant to this Section 13 within
ninety (90) days after Seller's receipt of all items to be repurchased by
it and provided Dealer has fulfilled all of its obligations under this Section
13; provided, however, that Seller shall be entitled to offset against such
payments any and all indebtedness or other obligations of Dealer to Seller.
Seller may make any payment for any property repurchased pursuant to this
Section 13 directly to anyone having a security or ownership interest therein.
F. Cancellation of Deliveries.
Upon termination of this Agreement Seller shall have the right to cancel all
shipments of Nissan Products scheduled for delivery to Dealer. After the
effective date of termination, if Seller shall voluntarily ship any Nissan
Products to Dealer, or otherwise transact business with Dealer, all such
transactions will be governed by the same terms provided in this Agreement,
insofar as those terms would have been applicable had the Agreement not been
terminated. Nevertheless, neither the shipping of such Nissan Products nor any
other acts by Seller shall be construed as a waiver of the termination or a
renewal or extension of this Agreement.
SECTION 14. ESTABLISHMENT OF
SUCCESSOR DEALER
A. Because of Death of Principal Owner.
If Seller shall terminate this Agreement pursuant to Section 12.C because of the
death of a Principal Owner, the following provisions shall apply:
1. Subject to the other provisions of this Section 14, Seller shall offer a
two (2) year Term Sales and Service Agreement to a successor dealership
("Succcessor Dealership") comprised of the person nominated by such deceased
Principal Owner as his or her successor, together with the other Principal
Owner(s) and Other Owner(s), provided that:
(a) The nomination was submitted to Seller on a Successor Addendum, was
consented to by the remaining Principal Owner(s) and Other Owner(s), and was
approved by Seller prior to the death of such Principal Owner;
(b) Either (i) there has been no change in the Executive Manager of
Seller; or (ii) Seller has approved a candidate for Executive Manager having the
required qualifications, expertise, integrity, experience and ability to
successfully operate the dealership and perform Dealer's obligations under this
Agreement; and
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(c) The Successor Dealership has capital and facilities substantially
in accordance with Seller's Guides therefor at the time the Term Sales and
Service Agreement is offered.
2. If the deceased Principal Owner has not nominated a successor in
accordance with Section 14.A.l(a) above, but all of the beneficial interest of
the deceased Principal Owner has passed by will or the laws of intestate
succession directly to the deceased Principal Owner's spouse and/or children or
to one (1) or more other Principal Owners who each held not less than a
twenty-five percent (25%) beneficial ownership interest in the dealership prior
to the death of the deceased Principal Owner (collectively "proposed New
Owners"), subject to the other provisions of this Section 14, Seller shall offer
a two (2) year Term Sales and Service Agreement to a Successor Dealership
composed of the Proposed New Owner(s), together with the other Principal
Owner(s) and Other Owner(s), provided that:
(a) Either (i) there has been no change in the Executive Manager of
Dealer; or (ii) Seller has approved a candidate for Executive Manager having the
required qualifications, expertise, integrity, experience and ability to
successfully operate the dealership and perform Dealer's obligations under this
Agreement; and
(b) The Successor Dealership has capital and facilities substantially
in accordance with Seller's Guides therefor at the time the Term Sales and
Service Agreement is offered.
(B) Consideration of Successor Addendum.
To be named in the Successor Addendum, a proposed Principal Owner or Executive
Manager must (i) be employed by Dealer or a comparable automotive dealership as
his principal place of employment; (ii) be already qualified as a Principal
Owner or Executive Manager, as the case may be; and (iii) otherwise be
acceptable to Seller as provided below.
Upon receipt of a request from Dealer that one or more individuals be named
in a Successor Addendum, Seller shall request those named to submit an
application and to provide all personal and financial information that Seller
may reasonably and customarily require in connection with the review of such
applications. Seller, upon the submission of all requested information, will
determine whether to consent to a Successor Addendum naming such individuals by
applying its criteria for considering the qualifications of Principal Owners or
Executive Managers, as the case may be.
C. Termination of Successor Addendum.
Dealer may, at any time, withdraw a nomination of a Successor even if Seller
previously has qualified the candidate, or cancel an executed Successor Addendum
by giving notice to Seller of such withdrawal at any time prior to the death or
incapacity of any Principal Owner named in this Agreement. Seller may cancel an
executed Successor Addendum only if the proposed Principal Owner or Executive
Manager no longer complies with the requirements of this Section 14.
D. Evaluation of Successor Dealership.
During the term of the Term Sales and Service Agreement, Seller will evaluate
the performance of the Successor Dealership and periodically review with the new
Dealer this evaluation. If the Successor Dealership's performance is deemed to
be satisfactory to Seller during the Term Sales and Service Agreement, Seller
will give first consideration to such Successor Dealership with respect to a new
Sales and Service Agreement.
E. Termination of Market Representation.
Notwithstanding anything stated or implied to the contrary in this Section 14,
Seller shall not be obligated to offer a Term Sales and Service Agree-
28
ment to any Successor Dealership if Seller notified Dealer prior to the event
causing the termination of this Agreement that Seller's market representation
plans do not provide for continuation of representation in Dealer's Primary
Market Area.
F. Termination of Offer.
If the person or persons comprising a proposed Successor Dealership to which any
offer of a Term Sales and Service Agreement for Nissan Products shall have been
made pursuant to this Section 14 do not accept same within thirty (30) days
after notification to them of such offer, such offer shall automatically expire.
SECTION 15. SALE OF ASSETS OR OWNERSHIP
INTERESTS IN DEALER.
A. Sale or Transfer.
Article Third of this Agreement provides that neither this Agreement nor any
right or interest herein may be assigned without the prior written consent of
Seller. However, during the term of this Agreement, Dealer may negotiate for the
sale of the assets of Dealer, or the owners of Dealer may negotiate the sale of
their ownership interests in Dealer, upon such terms as may be agreed upon by
them and the prospective purchaser. With respect to any sale or transfer which
requires Seller's prior written consent under Article Third of this Agreement,
Dealer shall notify Seller prior to any closing of the transaction called for by
the purchase and sale agreement, and the prospective purchaser shall apply to
Seller for a Sales and Service Agreement.
B. Seller's Evaluation.
Seller is responsible for establishing and maintaining an effective body of
Authorized Nissan Dealers to promote the sale and servicing of Nissan Products.
Accordingly, Seller has the right and obligation to evaluate each prospective
dealer, its owner(s) and executive manager, the dealership location and the
dealership facilities to ensure that each of the foregoing is adequate to enable
Dealer to meet its responsibilities hereunder. Seller will evaluate each
prospective purchaser's qualifications and proposal for the conduct of the
Dealership Operations by applying the standards set forth or referred to in
this Agreement. In determining whether it shall consent to such a sale or
transfer, Seller will take into account factors such as the personal, business
and financial qualifications, expertise, reputation, integrity, experience and
ability of the proposed Principal Owner(s) and Executive Manager as referred to
in Articles Third and Fourth of this Agreement, the capitalization and financial
structure of the prospective dealer, the prospective purchaser's proposal for
conducting the Dealership Operations, and Seller's interest in promoting and
preserving competition.
In evaluating the prospective purchaser's application for a Sales and Service
Agreement, Seller may, without liability to Dealer, Dealer's Owners or the
prospective purchaser, consult with the prospective purchaser regarding any
matter relating to the proposed dealership.
Seller shall notify Dealer of Seller's consent or refusal to consent to
Dealer's proposed sale or transfer within sixty (60) days after Seller has
received from Dealer (i) Dealer's written request for Seller's approval; and
(ii) all applications and information customarily or reasonably requested by
Seller to evaluate such a proposal including without limitation, information
concerning each proposed owner's and/or the replacement dealer's identity,
character, business affiliations, business experience, financial qualifications
and proposals for conducting the Dealership Operations. Any material change in
such a proposal including,
29
without limitation, any change in the financial terms or in the proposed
ownership or management of any proposed replacement dealer, shall be treated as
a new proposal for purposes of this Section 15.B. If Seller does not consent to
Dealer's proposed sale or transfer, Seller will specify in its notice to Dealer
the reasons for its refusal to consent.
If Seller determines that the proposed dealership would not, at the
commencement of its operations, have capital or facilities in accordance with
Seller's Guides therefor and otherwise satisfactory to Seller, or if Seller
reasonably determines that the proposed dealership might not meet Seller's
performance standards in sales or service, Seller may, in its sole discretion
and in lieu of refusing to consent to the proposed sale or transfer, agree to
enter into a Term Sales and Service Agreement with the prospective purchaser. If
Seller has recommended, pursuant to a market study conducted in accordance with
Section 4.A, that Dealer relocate its Dealership Facilities, Seller may offer to
the proposed dealer a Term Sales & Service Agreement subject to the condition
that its Dealership Facilities shall be relocated within a reasonable time to a
location and in facilities acceptable to Seller and in accordance with the
market study recommendations.
Notwithstanding anything stated or implied to the contrary in this
Section 15, Seller shall not be obligated to enter into a Sales and Service
Agreement with any purchaser of the assets or ownership interests of Dealer if
Seller has notified Dealer prior to its having received notice of the proposed
sale or transfer that Seller's market representation plans do not provide for
continuation of representation in Dealer's Primary Market Area.
C. Effect of Termination.
This Agreement shall end on the effective date of termination and, except as
otherwise set forth in Section 13, all rights, obligations, duties and
responsibilities of Dealer and Seller under this Agreement shall cease as of the
effective date of termination. No assignment, transfer or sale of Dealer's right
or interest in this Agreement shall have the effect of granting the assignee,
transferee or buyer any right or interest in this Agreement that is greater than
or in addition to that then held by Dealer. Any such assignment, transfer or
sale shall be subject to the terms of any written notice of deficiency under
Section 12.B or any written notice of termination under Sections 12.A, 12.B,
12.C, 12.D, 12.E or 12.F that was previously received by Dealer, including but
not limited to Dealer's obligation to correct any failure before the expiration
date of any period established in any such notice of deficiency. No such
assignment, transfer or sale shall correct any such deficiency or extend the
effective date of termination specified in any written notice of termination.
SECTION 16. POLICY REVIEW BOARD
A. Establishment of Policy Review Board.
In the interest of maintaining harmonious relations between Seller and Dealer
and to provide for the resolution of certain protests, controversies and claims
with respect to or arising out of Section 4, Section 12 or Section 13 of this
Agreement, Seller has established the Nissan Motor Corporation in U.S.A. Policy
Review Board ("Policy Review Board"). The procedures of the Policy Review Board,
as they may be revised by Seller from time to time, are incorporated herein by
reference. At the time of execution of this Agreement, Seller will have
furnished to Dealer a copy of such procedures, and Seller will furnish to Dealer
a copy of each revision or modification that Seller may thereafter make to such
procedures. Any decision of the
30
policy Review Board shall represent the independent decision of Seller and shall
be binding on Seller but not on Dealer.
B. Appeal of Dealer Appointment to Policy Review Board.
Any objections by Dealer to the proposed appointment of an additional Nissan
dealer within the ten (10) mile driving distance described in Section 4.B shall
be appealed to the Policy Review Board by filing a Notice of Appeal in
accordance with the procedures established therefor within thirty (30) days from
the date of Dealer's receipt of the Notice of Appointment.
C. Appeal of Termination to Policy Review Board.
Any protests, controversies or claims by Dealer (whether for damages, stay of
action, or otherwise) with respect to any termination of this Agreement or the
settlement of the accounts of Dealer with Seller after termination of this
Agreement has become effective shall be appealed to the Policy Review Board by
filing an appeal in accordance with the procedures established therefor within
thirty (30) days after Dealer's receipt of notice of termination or, as to
settlement of accounts after termination, within one (1) year after the
termination has become effective.
D. Effect of Other Proceedings.
Because the purpose of the Policy Review Board is to assist in resolving issues
between Seller and Dealer in a non-adversarial setting and to avoid litigation,
if Dealer institutes or seeks any relief or remedy through legal, administrative
or other proceedings as to any matter that is or could be the subject of an
appeal to the Policy Review Board, then the Policy Review Board may, in its
sole discretion, elect to refuse to consider any appeal to the Policy Review
Board then pending or thereafter filed by Dealer relating to such subject
matter.
Dealer further agrees that Dealer's seeking such relief or remedy shall
constitute a waiver of any right to an appeal to the Policy Review Board with
respect to such subject matter and Seller and the Policy Review Board shall be
forever released from any obligation they might otherwise have had to conduct
any proceedings, render any decision or take any other action in connection with
such subject matter.
SECTION 17. GENERAL
A. Notices.
All notices or notifications required or permitted to be given by this Agreement
to either party shall be sufficient only if given in writing and delivered
personally or by mail to Dealer at the address set forth on the Dealership
Facilities Addendum to this Agreement and to Seller at its national
headquarters, or at such other address as the party to be addressed may have
previously designated by written notice to the other party. Unless otherwise
specified in the notice, such notices shall be effective upon receipt.
B. No Implied Waivers.
The waiver by either party, or the delay or failure by either party to claim a
breach, of any provision of this Agreement shall not affect the right to
require full performance thereafter, nor shall it constitute a waiver of any
subsequent breach, or affect in any way the effectiveness of such provision.
C. No Agency.
Dealer is an independently operated business entity in which Seller has no
ownership interest. This Agreement does not constitute Dealer the agent or legal
representative of Seller or Manufacturer for any purpose whatsoever. Dealer is
not granted any express or implied right or authority to assume or create any
obligation on behalf of or in the name of Seller or Manufacturer or to bind
31
Seller or Manufacturer in any manner or thing whatsoever.
D. Limitations of Seller's Liability.
This Agreement contemplates that all investments by or in Dealer shall be made,
and Dealer shall purchase and resell Nissan Products, in conformity with the
provisions hereof, but otherwise in the discretion of Dealer. Except as herein
specified, nothing herein contained shall impose any liability on Seller in
connection with the business of Dealer or otherwise or for any expenditures made
or incurred by Dealer in preparation for performance or in performance of
Dealer's responsibilities under this Agreement.
E. Entire Agreement.
This agreement contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and may be amended only by a
written instrument executed by each of the parties or their respective personal
representatives, successors and/or assigns. This Agreement supersedes any and
all prior agreements with respect to the subject matter hereof, and there are no
restrictions, promises, warranties, covenants or undertakings between the
parties other than those expressly set forth in this Agreement; provided,
however, Seller shall have the right to amend, modify or change this Agreement
in case of legislation, government regulations or changes in circumstances
beyond the control of Seller that might affect materially the relationship
between Seller and Dealer as further provided in Section 17.G.
F. California Law.
This Agreement shall be deemed to have been entered into in the State of
California, and all questions concerning the validity, interpretation or
performance of any of its terms or provisions, or of any rights or obligations
of the parties hereof, shall be governed by and resolved in accordance with the
internal laws of the State of California including, without limitation, the
statute of limitations.
G. Changes Required by Law.
Should Seller determine that any federal or state legislation or regulation or
any condition referred to in Section 17.E requires a change or changes in any of
the provisions of this Agreement, Seller may offer to Dealer an amendment or an
amended Agreement embodying such change or changes. If Dealer shall fail to
execute such amendment or amended Agreement and return it to Seller within
thirty (30) days after it is offered Dealer, Seller may terminate this Agreement
by giving notice to Dealer, such termination to effective upon receipt by Dealer
of such notice.
H. Severability.
If any term or provision of this Agreement, or the application thereof to any
person or circumstance, shall to any extent be found to be invalid, void or
unenforceable, the remaining provisions and any application thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way.
I. Assignment.
Dealer shall not transfer or assign any right or transfer or delegate any
obligation of Dealer under this Agreement without the prior written approval of
Seller. Any purported transfer, assignment or delegation made without the prior
written approval of Seller shall be null and void.
J. No Franchise Fee.
Dealer represents and warrants that it has paid no fee, nor has it provided any
goods or services in lieu of a fee, as consideration for Seller's entering into
this Agreement and that the sole consideration for Seller's entering into this
Agreement was Dealer's Principal Owners' and Executive Manager's abilities,
integrity, assurances of personal services and expressed intention to deal
fairly and equitably with Seller and the public and any
32
other promises recited in this Agreement.
K. Captions.
The captions of the sections of this Agreement are for convenience and reference
only and shall in no way be construed to explain, modify, amplify, or aid in the
interpretation, construction or meaning of the provisions of this Agreement or
to be a part of this Agreement.
L. Benefit.
This Agreement is entered into by and between Seller 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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(INSERT HERE)
ADDITIONAL DOCUMENTS RELATING
TO NISSAN DEALER
SALES AND SERVICE AGREEMENT