EXHIBIT 10.10.2
TOYOTA DEALER AGREEMENT
STANDARD PROVISIONS
The Standard Provisions set forth below are expressly incorporated in and made a
part of the Toyota Dealer Agreement.
XIII. SALE OF TOYOTA PRODUCTS TO DEALER
A. DEALER'S RIGHT TO PURCHASE TOYOTA PRODUCTS
DEALER shall have the right to purchase Toyota Products from
DISTRIBUTOR subject to the provisions of paragraph XIII(B)
herein.
B. DISTRIBUTOR'S OBLIGATION TO SELL TOYOTA PRODUCTS
DISTRIBUTOR agrees to use its best efforts to provide Toyota
Products to DEALER in such quantities and types as may be
required by DEALER to fulfill its obligations with respect to the
sale and servicing of Toyota Products under this Agreement,
subject to available supply from IMPORTER, DISTRIBUTOR's
marketing requirements, and any change or discontinuance with
respect to any Toyota Product.
DISTRIBUTOR and DEALER recognize that certain Toyota Products may
not be available in sufficient supply from time to time because
of factors which are beyond the control of DISTRIBUTOR and
IMPORTER. Where such a shortage is determined by DISTRIBUTOR to
exist, DISTRIBUTOR will endeavor to allocate the affected Toyota
Product(s) among its dealers in a fair and equitable manner,
which it shall determine in its sole discretion. DISTRIBUTOR
agrees to provide DEALER with an explanation of the method used
to distribute such products and, upon written request, will
advise DEALER of DISTRIBUTOR's total sales of new motor vehicles,
by series, in DEALER's region, and to DEALER individually.
C. DELIVERY OF TOYOTA PRODUCTS
1. Mode and Place of Delivery
DISTRIBUTOR shall select the distribution points and the
mode of transportation and shall pay carrier(s) for all
charges in effecting delivery of Toyota Products to DEALER.
DISTRIBUTOR will invoice DEALER for Destination Freight
Charges or such functional equivalent as DISTRIBUTOR may in
its discretion establish, and DEALER agrees to reimburse
DISTRIBUTOR therefor.
2. Diversion Charges
If DISTRIBUTOR is required to divert any Toyota Product
which DEALER has agreed to purchase and which is not
cancelled prior to shipment by DISTRIBUTOR, because of
DEALER's failure or refusal to accept such product, DEALER
agrees to assume responsibility for and pay any charges
incurred by DISTRIBUTOR as a result of such diversion.
DEALER's responsibility for such charges shall not exceed
the charge of returning any such product to the point of
original shipment by DISTRIBUTOR plus all charges for
demurrage, storage or other charges related to such
diversion.
DEALER also agrees to assume responsibility for and shall
pay any and all charges for demurrage, storage or other
charges accruing after arrival of shipment at the
distribution point established by DISTRIBUTOR.
3. Delay or Failure of Delivery
DISTRIBUTOR shall not be liable for delay or failure to
deliver Toyota Products which it has previously agreed to
deliver, where such delay or failure to deliver is the
result of any event beyond the control of DISTRIBUTOR or
IMPORTER, including but not limited to any law or regulation
of any governmental entity, acts of God, foreign or civil
wars, riots, interruptions of navigation, shipwrecks, fires,
floods, storms, strikes, lockouts, or other labor troubles,
embargoes, blockades, or delay or failure of FACTORY,
IMPORTER or other suppliers of DISTRIBUTOR to deliver Toyota
Products.
4. Damage Claims Against Carriers
Upon request by DEALER and as may be mutually agreed upon by
the parties, DISTRIBUTOR agrees to assist DEALER in recovery
against any carrier for loss or damage to Toyota Products
shipped hereunder.
D. PRICES AND OTHER TERMS OF SALE
DISTRIBUTOR shall have the right from time to time to establish
and revise prices and other terms for its sales of Toyota
Products to DEALER. Revised prices, terms or provisions shall
apply to any Toyota Product not shipped by DISTRIBUTOR at the
time the notice of such change is given to DEALER (in the case of
Toyota Motor Vehicles) or upon issuance of a new or modified
parts price list or through change notices, letters, bulletins or
revision sheets (in the case of parts, options and accessories).
E. CHANGE OF DESIGN, OPTIONS OR SPECIFICATIONS
DEALER understands and agrees that there may be changes in the
design or specifications of any Toyota Product or in the
availability of options in any Toyota Product and that
DISTRIBUTOR is under no obligation to provide notice of same or
to make any similar change upon any product previously purchased
by or shipped to DEALER. No change shall be considered a model
year change unless so specified by FACTORY.
F. DISCONTINUANCE OF MANUFACTURE
The manufacture and production of all or part of any Toyota
Product, whether motor vehicle, parts, options, or accessories,
including any model, series, or body style of any Toyota Motor
Vehicle, may be discontinued at any time without any obligation
or liability to DEALER on the part of FACTORY, IMPORTER, or
DISTRIBUTOR by reason thereof.
XIV. PROMOTING AND SELLING TOYOTA PRODUCTS
A. RESPONSIBILITIES OF THE DEALER
DEALER shall actively and effectively promote, through DEALER's
own advertising and sales promotion activities, the purchase of
Toyota Products by CUSTOMERS in DEALER's primary area of
responsibility. Nothing contained in this Agreement, however,
shall limit or be construed to limit the geographical area in
which, or the persons to whom, DEALER may sell or promote the
sale of Toyota Products.
The primary area of responsibility is a geographic area which
DISTRIBUTOR shall designate from time to time and is solely a
tool used by DISTRIBUTOR to evaluate DEALER's performance of its
sales and service obligations hereunder.
DEALER agrees that: it has no right or interest in any primary
area of responsibility that DISTRIBUTOR may designate;
DISTRIBUTOR may add new dealers to, or relocate dealers in, the
primary area of responsibility designated for DEALER; and
DISTRIBUTOR may, in its sole discretion, change DEALER's primary
area of responsibility from time to time.
B. SALES OPERATIONS
1. Sales Organization
To enable DEALER to fulfill it responsibilities
satisfactorily under paragraph XIV(A) of this section,
DEALER agrees to organize and maintain an adequate and
trained sales organization.
2. Fair Dealing
DISTRIBUTOR has selected DEALER because of its integrity and
commitment to fair dealing. DEALER shall at all times
maintain a high standard of ethics in advertising, promoting
and selling Toyota Products and shall not engage in any
misrepresentation or unfair or deceptive trade practices.
3. Disclosure as to Prices of Toyota Products
DEALER agrees to explain to purchasers of Toyota Products
the items which make up the purchase price and to give such
purchasers itemized invoices and any other information
required by law. DEALER further agrees that it will not
make any misleading statements or misrepresentations as to
the items which make up the total selling price
of any Toyota Motor Vehicle, or as to the prices related to
such items. DEALER also agrees not to charge CUSTOMERS for
any services for which the DEALER is reimbursed by DISTRIBUTOR
and/or IMPORTER, including pre-delivery inspection and
adjustment services, without disclosing the fact of such
reimbursement to the CUSTOMER.
4. Product Warranties
DEALER understands and agrees that the only warranties of
FACTORY, IMPORTER or DISTRIBUTOR that shall be applicable to
each new Toyota Product sold to DEALER by DISTRIBUTOR shall
be the written warranty or warranties expressly furnished by
FACTORY, IMPORTER or DISTRIBUTOR and/or as stated in the
Toyota Warranty Policies and Procedures Manual, as it may be
revised from time to time. Except for its limited liability
under such written warranty or warranties, neither FACTORY,
IMPORTER nor DISTRIBUTOR assumes any other warranty,
obligation or liability. DEALER is not authorized to assume
any additional warranty obligations or liabilities on behalf
of DISTRIBUTOR, FACTORY or IMPORTER. Any such additional
obligations assumed by DEALER shall be solely the
responsibility of DEALER.
5. Disclosure Regarding Dealer Installed Items
DEALER recognizes that its CUSTOMERS have a right to expect
that any product that they purchase from DEALER meets the
high quality standards associated with DISTRIBUTOR,
IMPORTER, FACTORY, the Toyota Marks and Toyota Products in
general. Accordingly, DEALER agrees that, if it sells any
equipment, part or accessory that is not a Genuine Toyota
part or accessory, it shall disclose such fact to the
CUSTOMER and shall advise the CUSTOMER that the item is not
included in warranties furnished by IMPORTER or FACTORY. In
all cases, the purchaser's contract of purchase and sale
will include written notice of such disclosure. In
addition, DEALER will clearly explain to the CUSTOMER the
extent of any warranty covering the equipment, part or
accessory involved and will deliver a copy of such warranty
to the CUSTOMER.
C. ASSISTANCE PROVIDED BY DISTRIBUTOR
1. Sales Training Assistance
To assist DEALER in the fulfillment of its sales
responsibilities under this Agreement, DISTRIBUTOR agrees to
offer general and specialized sales management and sales
training programs for the benefit and use of DEALER's sales
organization. When requested by DISTRIBUTOR, DEALER's
personnel shall participate in such programs.
2. Sales Promotion Assistance
In order that authorized Toyota dealers may be assured of
the benefits of comprehensive advertising and promotion of
Toyota Products,
DISTRIBUTOR agrees to establish and
maintain general advertising and promotion programs and will
from time to time make sales promotion and campaign
materials available to DEALER to promote the sales of such
Toyota Products at a reasonable charge where applicable.
3. Field Sales Personnel Assistance
To assist DEALER in handling its sales responsibilities
under this Agreement, DISTRIBUTOR agrees to provide trained
field sales personnel to advise and counsel DEALER on sales-
related subjects, including merchandising, training and
sales management.
D. EVALUATION OF DEALER'S SALES PERFORMANCE
DISTRIBUTOR will evaluate DEALER's sales performance within
DEALER's primary area of responsibility on an annual basis.
DISTRIBUTOR agrees to review such evaluations with DEALER and, if
requested, to furnish copies thereof, so that DEALER may take
prompt action if necessary to improve its sales performance to
such levels as DISTRIBUTOR may reasonably require.
In evaluating DEALER's sales performance, DISTRIBUTOR may, at its
discretion, include the following considerations:
1. Achievement of fair and reasonable sales objectives as
DISTRIBUTOR may establish at its discretion;
2. A comparison of sales and/or registrations of Toyota Motor
Vehicles to sales and/or registrations of other line makes:
(a) in DEALER's primary area of responsibility; and (b) in
DISTRIBUTOR's region or any area thereof as DISTRIBUTOR may
reasonably establish;
3. A comparison of sales and/or registration of Toyota Motor
Vehicles to sales and/or registrations of Toyota Motor
Vehicles of other Toyota dealers of comparable size which
DISTRIBUTOR shall select in its sole discretion;
4. The trend of DEALER's sales performance over a reasonable
period of time;
5. The manner in which DEALER has conducted its sales
operations, including advertising, sales promotions and
total CUSTOMER satisfaction;
6. The availability of new motor vehicles to DEALER from
DISTRIBUTOR; and
7. Significant local conditions that may have affected DEALER's
performance.
XV. SERVICING TOYOTA MOTOR VEHICLES
A. DEALER'S SERVICING OBLIGATIONS
DEALER and DISTRIBUTOR agree that the future growth of sales of
Toyota Motor Vehicles is in part dependent upon CUSTOMER
satisfaction with vehicle servicing. DEALER recognizes that
DISTRIBUTOR entered into this Agreement with DEALER in reliance
upon DEALER's ability and commitment to fair dealing and
professional servicing. DEALER agrees, therefore, to take all
reasonable steps to provide service and parts for all Toyota
Motor Vehicles, regardless of where purchased, and whether or not
under warranty; insure that necessary repairs on CUSTOMER
vehicles are accurately diagnosed and professionally performed;
see that the CUSTOMER is advised and his or her consent is
obtained prior to the initiation of any repairs; and, assure that
the CUSTOMER is treated courteously and fairly at all times.
1. Warranty and Policy Service
Warranty and policy service shall be performed in accordance
with the Toyota Warranty Policies and Procedures Manual.
DISTRIBUTOR agrees to compensate DEALER for all warranty and
policy work, including labor and diagnosis, in accordance
with procedures and at rates to be announced from time to
time by DISTRIBUTOR and in accordance with applicable law.
DEALER agrees that such rates shall constitute full and
complete payment to DEALER for such work. Both parties
agree that warranty and policy service is provided for the
benefit of CUSTOMERS and DEALER agrees that the CUSTOMER
shall not be obligated to pay any charges for warranty or
policy work, except as required by law.
2. Changes In Reimbursement Rates
DISTRIBUTOR and DEALER recognize that it may be necessary
from time to time to adjust the rates at which DEALER is
reimbursed for labor and diagnosis in connection with
warranty and policy service performed on CUSTOMERS'
vehicles. In the event DEALER seeks to readjust such
reimbursement rates, DEALER agrees to make the appropriate
application to DISTRIBUTOR and to comply with such
applicable procedures or policies as may be set forth in the
Toyota Warranty Policies and Procedures Manual.
3. New Motor Vehicle Pre-delivery Service
DEALER agrees that prior to delivery of a new Toyota Motor
Vehicle to any purchaser, DEALER shall be responsible for
verifying that the pre-delivery service has been performed
in accordance with IMPORTER'S Schedule of Operations
published in the applicable Technical Services Bulletin.
DEALER shall be reimbursed by DISTRIBUTOR for such pre-
delivery service at an authorized labor and/or diagnosis
rate established by DISTRIBUTOR and according to the pre-
delivery service time allowances as established by IMPORTER
or as required by law.
4. Independent Warranty or Service Contract Protection
If DEALER sells warranty or service contract protection for
a Toyota Motor Vehicle to its CUSTOMER which is independent
of that provided by IMPORTER or FACTORY and which covers a
period of time and Toyota Products also covered by the
limited warranty provided by IMPORTER or FACTORY:
a. At the time of sale, DEALER shall conspicuously
disclose in writing upon CUSTOMER's purchase order the
extent to which the independent warranty or service
contract protection purchased by the CUSTOMER overlaps
with that provided by IMPORTER or FACTORY; and
b. Whenever a CUSTOMER who purchases such independent
warranty or service contract protection seeks service
on a Toyota Product during the period of time that such
Product is also covered by the limited warranty
provided by IMPORTER or FACTORY, DEALER expressly
agrees that it will not apply for, and will not be
entitled to, reimbursement under such limited warranty
unless DEALER advises the CUSTOMER in writing, on all
copies of the repair order, that the service was
provided pursuant to IMPORTER's limited warranty and
not by the independent warranty or service contract
protection that the CUSTOMER purchased.
5. Use of Parts and Accessories
DEALER understands that it has the right to sell, install or
use products which are not Genuine Toyota Parts or
Accessories.
DEALER agrees, however, that its CUSTOMERS have a right to
expect that any part or accessory which it sells, installs
or uses in the repair or servicing of Toyota Motor Vehicles
meets the high quality standards of Genuine Toyota Parts or
Accessories. Therefore, in cases where DEALER does not
sell, install or use a Genuine Toyota Part or Accessory,
DEALER will only utilize such other parts or accessories as:
a. Will not adversely affect the mechanical operation of
the Toyota Motor Vehicles being serviced or repaired;
and
b. Are equivalent in quality and design to Genuine Toyota
Parts or Accessories.
DEALER agrees that it will not represent or offer to sell
as new Genuine Toyota Parts or Accessories, any parts or
accessories used by it in the repair or servicing of
Toyota Motor Vehicles which are not in fact Genuine
Toyota Parts or Accessories.
6. Disclosures as to Parts and Accessories
In order to avoid confusion and to minimize potential
CUSTOMER dissatisfaction, in any case where DEALER does not
sell, install or use a Genuine Toyota Part or Accessory in
connection with the repair or servicing of a CUSTOMER's
Toyota Motor Vehicle, and instead sells, installs or uses a
non-Genuine Toyota Part or Accessory, it shall disclose such
fact to the CUSTOMER and shall advise the CUSTOMER that the
item is not included in warranties furnished by IMPORTER or
FACTORY. Such disclosure and advice shall be in writing,
conspicuous and set forth on CUSTOMER's copy of the service
or repair order. In addition, DEALER will clearly explain
to the CUSTOMER the extent of any warranty covering the
parts or accessories involved and will deliver a copy of
such warranty to the CUSTOMER.
7. Campaign Inspections and Corrections
DEALER agrees to perform campaign inspections and/or
corrections for owners and users of all Toyota Products that
qualify for such inspections and/or corrections. DEALER
further agrees to comply with all of the procedures relating
thereto set forth in the Toyota Warranty Policies and
Procedures Manual. DISTRIBUTOR agrees to reimburse DEALER
for all replacement parts and/or other materials required
and used in connection therewith and for labor in accordance
with the applicable provisions of the Toyota Warranty
Policies and Procedures Manual.
8. Compliance With Safety and Emission Control Requirements
DEALER agrees to comply with and operate consistently with
all applicable provisions of the National Traffic and Motor
Vehicle Safety Act of 1966 and the Federal Clean Air Act, as
amended, including applicable rules and regulations issued
from time to time thereunder, and all other applicable
federal, state and local motor vehicle safety and emission
control statutes, rules and regulations.
In the event that the laws of the state in which DEALER is
located require motor vehicle dealers or distributors to
install in new or used motor vehicles, prior to the retail
sale thereof, any safety devices or other equipment not
installed or supplied as standard equipment by FACTORY,
IMPORTER or DISTRIBUTOR, then DEALER, prior to its sale of
any Toyota Motor Vehicles on which such installations are so
required, shall properly install such devices or equipment
on such Toyota Motor Vehicles. DEALER shall comply with
state and local laws pertaining to installation of such
equipment, including, without limitation, the reporting
thereof.
In the interest of motor vehicle safety and emission
control, DISTRIBUTOR agrees to provide to DEALER, and DEALER
to DISTRIBUTOR, such information and assistance as may
reasonably be requested by the other in connection with the
performance of obligations imposed on either party by the
National Traffic and Motor Vehicle Safety Act of 1966 and
the Federal Clean Air Act, as amended, and the
rules and regulations issued thereunder, and all other
applicable federal, state and local motor vehicle safety and
emission control statutes, rules and regulations.
9. Compliance With Consumer Protection Statutes, Rules and
Regulations
Because certain CUSTOMER complaints may have legal
significance for or impose liability upon DEALER,
DISTRIBUTOR or IMPORTER under various repair or replace, or
other consumer protection laws, rules and regulations,
DEALER agrees to provide promptly notice of such complaints
and take such other steps as DISTRIBUTOR or IMPORTER may
reasonably require. DEALER will do nothing to affect
adversely DISTRIBUTOR's or IMPORTER's rights under such
laws, rules and regulations.
B. SERVICE AND PARTS OPERATIONS
1. Service and Parts Organization
To enable DEALER to fulfill its responsibilities
satisfactorily under paragraph XV(A) herein, DEALER agrees
to organize and maintain a complete service and parts
organization, including a qualified service manager and a
qualified parts manager and a sufficient number of competent
CUSTOMER relations, service and parts personnel. DEALER
further agrees that the foregoing personnel will meet such
educational, management and technical training standards as
IMPORTER may establish or approve.
2. Handling of Service Complaints
DEALER recognizes that it is uniquely positioned to convey
to purchasers of Toyota Products the concern of DEALER,
DISTRIBUTOR, IMPORTER and FACTORY for the CUSTOMER's
satisfaction. DEALER, therefore, agrees to acknowledge,
investigate and handle all complaints from CUSTOMERS in a
manner which will enhance the goodwill of such CUSTOMERS
towards DEALER, DISTRIBUTOR, IMPORTER and Toyota Products.
Furthermore, DEALER agrees to participate in and cooperate
with such dispute resolution procedures as IMPORTER may
designate from time to time.
3. Service Equipment and Special Tools
DEALER agrees to provide and maintain adequate service
equipment and such special tools as are specified in
IMPORTER's minimum equipment standard listing, as amended
from time to time, and maintain same in good repair and
proper calibration to enable DEALER to fulfill its service
responsibilities under this Agreement.
4. Parts Inventory
DEALER and DISTRIBUTOR recognize that the owners and users
of Toyota Motor Vehicles may reasonably expect that DEALER
will have
Genuine Toyota Parts or Accessories immediately available for
purchase or installation. DEALER, therefore, agrees to carry
in stock at all times during the term of this Agreement a
complete inventory of Genuine Toyota Parts or Accessories, as
listed in DISTRIBUTOR's current inventory guide, to enable
DEALER to meet its CUSTOMER's needs and to fulfill its service
responsibilities under this Agreement.
C. ASSISTANCE PROVIDED BY DISTRIBUTOR
1. Service Training Assistance
To assist DEALER in the fulfillment of its service and parts
responsibilities, DISTRIBUTOR from time to time shall offer
general and specialized service and technical training
programs and materials. When requested by DISTRIBUTOR,
DEALER's personnel shall participate in such programs.
2. Service Manuals and Materials
DISTRIBUTOR agrees to make available to DEALER, for use by
DEALER's service and parts organization, copies of such
DEALER service manuals and bulletins, publications and
technical data as IMPORTER and DISTRIBUTOR shall deem to be
necessary for the needs of DEALER's service organization.
DEALER shall have the responsibility of keeping such
manuals, publications and data current and available for
consultation by its service employees.
3. Field Service Personnel Assistance
To assist DEALER in handling service responsibilities under
this Agreement, DISTRIBUTOR agrees to make available field
service personnel who will, from time to time, advise and
counsel DEALER on service-related subjects, including
product quality, technical adjustment, repair and
replacement of product components, customer relations,
warranty administration, service and parts merchandising,
training and service management.
D. EVALUATION OF DEALER'S SERVICE PERFORMANCE
Because of the importance of DEALER's service performance to the
purposes and objectives of this Agreement, DISTRIBUTOR will
periodically evaluate DEALER's performance of its
responsibilities for service in areas such as consumer
satisfaction, service management and operating procedures,
personnel, new vehicle pre-delivery service, parts operation,
tools and equipment, and service and parts facilities.
DISTRIBUTOR agrees to review such evaluations with DEALER, and if
requested, to provide a copy thereof, so that DEALER may take
prompt action if necessary to improve its service performance to
satisfactory levels as DISTRIBUTOR may reasonably require.
XVI. DEALERSHIP FACILITIES AND LOCATIONS
A. RESPONSIBILITIES OF DEALER
DEALER and DISTRIBUTOR agree that it is important to establish
and maintain an effective network of authorized Toyota dealers.
Accordingly, DISTRIBUTOR has entered into this Agreement in
reliance upon DEALER's representation that it will establish and
maintain dealership facilities and operations at the locations
identified in paragraph VII that are satisfactory as to space,
appearance, amenities, layout, equipment, signage and are
otherwise in accordance with IMPORTER'S minimum facilities
standards, as amended from time to time.
B. OPERATING HOURS
DEALER recognizes that the transportation, service and
maintenance needs of CUSTOMERS served by the DEALER can be met
properly only if DEALER keeps its dealership premises open for
business during hours which are reasonable and convenient for
such CUSTOMERS. Accordingly, DEALER agrees to maintain its
respective dealership operations open for business during all
days and hours which are customary and lawful for such operations
in the community or locality in which DEALER is located and in
accordance with industry standards.
C. MINIMUM VEHICLE INVENTORIES
Subject to the ability of DISTRIBUTOR to supply Toyota Motor
Vehicles to DEALER, DEALER agrees that it shall, at all times,
maintain at least the minimum inventory of Toyota Motor Vehicles
as may be established by DISTRIBUTOR from time to time. DEALER
also agrees that it shall have available at all times, for
purposes of display and demonstration, the number of Toyota Motor
Vehicles of the most current models as may be established by
DISTRIBUTOR from time to time, and shall, at all times, maintain
such Motor Vehicles in showroom ready condition.
D. SIGNS
Subject to applicable governmental ordinances, regulations and
statutes, DEALER agrees to erect and maintain, at the dealership
location(s), entirely at DEALER's expense standard authorized
product and service signs of types recommended by DISTRIBUTOR, as
well as such other authorized signs as are necessary to advertise
the dealership operations effectively and as recommended by
DISTRIBUTOR.
E. PLANNING ASSISTANCE FOR DEALERSHIP PREMISES
To assist DEALER in planning, establishing and maintaining the
dealership premises, DISTRIBUTOR will make available to DEALER,
upon request, sample copies of building layout plans, facility
planning recommendations, and an applicable identification
program covering the placement, installation and maintenance of
recommended signs. In addition, representatives of DISTRIBUTOR
will be available to DEALER from time to time to counsel and
advise DEALER and dealership personnel in connection with
DEALER's planning and equipping the dealership premises.
F. EVALUATION OF DEALERSHIP FACILITIES
DISTRIBUTOR will periodically evaluate DEALER's performance of
its responsibilities under paragraphs VII and XVI herein. In
making such evaluations, DISTRIBUTOR will consider: the actual
building and land space provided by DEALER for the performance of
its responsibilities under this Agreement; compliance with
DISTRIBUTOR's current requirements for dealership operations; the
appearance, condition, layout and signage of the dealership
facilities; and such other factors, if any, as in DISTRIBUTOR's
opinion may directly relate to the DEALER's performance of its
responsibilities under this Agreement. DISTRIBUTOR will discuss
such evaluations with DEALER, and upon request will provide a
copy of same, so that the DEALER may take prompt action, if
necessary, to comply with IMPORTER's minimum facility standards.
XVII. CAPITALIZATION REQUIREMENTS
DEALER recognizes that its ability to conduct operations successfully
on a day-to-day basis depends to a great extent upon the net working
capital and flooring and lines of credit which DEALER maintains.
A. NET WORKING CAPITAL
The amount and structure of the net working capital required to
conduct the business of DEALER properly depends upon many
factors, including the nature, size and volume of DEALER's
vehicle sales, service and parts operations. Therefore, DEALER
agrees to establish and maintain actual net working capital in an
amount not less than the minimum net working capital specified in
a separate Minimum Net Working Capital Agreement made between
DEALER and DISTRIBUTOR and executed by DEALER and DISTRIBUTOR
concurrently with this Agreement. If, because of changed
conditions, it should become necessary to revise the minimum
amount of net working capital deemed to be necessary to conduct
DEALER's business properly, DISTRIBUTOR shall have the right to
revise DEALER's minimum net working capital requirements to be
used in dealership's operations and DEALER agrees to meet the new
standard within a reasonable period of time.
B. FLOORING AND LINES OF CREDIT
DEALER recognizes that its ability to fulfill its obligations
under this Agreement is dependent upon its maintenance of
flooring and lines of credit which are sufficient to sustain its
ongoing operations. Accordingly, DEALER agrees, at all times, to
obtain, maintain and increase as DISTRIBUTOR may require,
adequate flooring and lines of credit from any reputable
financial institution or other credit source. Subject to the
foregoing obligations, DEALER is free to do its financing
business, wholesale or retail or both, with whomever it chooses
and to the extent it desires.
XVIII. ACCOUNTS, RECORDS AND REPORTS
A. UNIFORM ACCOUNTING SYSTEM
DISTRIBUTOR uses the operating information provided by its
dealers to develop composite operating statistics which are
useful to dealers and to DISTRIBUTOR in assessing DEALER's
progress in meeting its obligations hereunder and to provide a
basis for recommendations which DISTRIBUTOR may make to DEALER
from time to time to assist it in improving its dealership
operations. It is necessary, therefore, that authorized dealers
provide information which is true and accurate and based upon
common accounting principles. Accordingly, DEALER agrees to
maintain a uniform accounting system designated by DISTRIBUTOR,
and in accordance with the Toyota Accounting Manual, as amended
from time to time. In addition, DEALER agrees that it will
furnish to DISTRIBUTOR, by the tenth (10th) of each month, in a
format prescribed by DISTRIBUTOR, a complete and accurate
financial and operating statement covering the preceding month
and calendar year-to-date operations and showing the true and
accurate condition of DEALER's business. DEALER shall also
promptly furnish to DISTRIBUTOR a copy of any adjusted financial
or operating statement prepared by or for DEALER.
B. SALES REPORTING
In order to evaluate correctly current market trends and other
developments, to provide meaningful advice and recommendations to
DEALER, to provide the information necessary for DISTRIBUTOR to
evaluate DEALER's sales performance and to enable DISTRIBUTOR to
maintain a fair and equitable vehicle distribution system,
DISTRIBUTOR requires sales reporting which is true, accurate and
up-to-date. Accordingly, DEALER agrees to:
1. Accurately report to DISTRIBUTOR, with such relevant
information as DISTRIBUTOR may reasonably require, the
delivery of each new motor vehicle to a purchaser by the end
of the day in which the vehicle is delivered to the
purchaser thereof; and
2. Furnish DISTRIBUTOR with such other reports as DISTRIBUTOR
may reasonably require from time to time; and
3. Participate in good faith in any dispute resolution program
which DISTRIBUTOR or IMPORTER in its discretion may
establish to resolve specific sales reporting and/or sales
credit disputes.
C. ELECTRONIC DATA PROCESSING REQUIREMENTS
To facilitate the accurate and prompt reporting of such relevant
dealership operational and financial data as DISTRIBUTOR may
require, DEALER agrees to install and maintain electronic data
processing facilities which are compatible with and which will
facilitate the transmission and reception of such data on the
computer network utilized by DISTRIBUTOR.
D. SALES AND SERVICE RECORDS
DEALER agrees to keep complete, accurate and current records
regarding the sale and servicing of Toyota Products for a minimum
of five years, exclusive of any retention period required by any
governmental entity. In order that the policies and procedures
relating to the application for reimbursement for warranty and
policy work may be applied uniformly to all dealers, DEALER
agrees to prepare, keep current and retain records in support of
requests for reimbursement for warranty and policy work performed
by DEALER in accordance with the policies and procedures
prescribed in the Toyota Warranty Policies and Procedures Manual
and standards established by DISTRIBUTOR consistent with said
manual.
E. EXAMINATION OF DEALERSHIP ACCOUNTS AND RECORDS
DEALER agrees that DISTRIBUTOR shall have the right, at all
reasonable times and during regular business hours, to inspect
the dealership facilities and to examine, audit and to reproduce
all records, accounts and all supporting data relating to the
sale, sales reporting, service and repair of Toyota Products by
DEALER. If requested by DEALER, DISTRIBUTOR agrees to discuss
and to provide a copy of the report of the examination or audit
of DEALER.
F. CONFIDENTIALITY
DISTRIBUTOR agrees that it shall not provide any data or
documents submitted to it by DEALER to any third party, except
IMPORTER, unless authorized by DEALER, required by law, or
required to generate composite data for analytical purposes.
XIX. DISPLAY AND USE OF TRADEMARKS, SERVICE MARKS AND TRADE NAMES
A. USE BY DEALER
DISTRIBUTOR grants to DEALER the nonexclusive privilege of
displaying or otherwise using the various Toyota Marks, including
the name Toyota utilized by IMPORTER and DISTRIBUTOR, in
connection with the selling or offering for sale of Toyota
Products and the servicing of Toyota Motor Vehicles by DEALER at
the location(s) approved herein.
DEALER agrees, however, that it shall promptly discontinue the
display and use of any such Toyota Marks, and shall change the
manner in which any Toyota Marks are displayed and used, when for
any reason, it is requested to do so by DISTRIBUTOR. DEALER also
agrees that it may use the Toyota Marks only at such locations
and for such purposes as are approved herein. DEALER further
agrees that such Toyota Marks may be used as part of the name
under which DEALER's business is conducted only with the prior
written approval of DISTRIBUTOR.
B. DISCONTINUANCE OF USE
Upon termination, non-renewal, or expiration of this Agreement,
DEALER agrees that it shall immediately:
1. Discontinue the use of the word Toyota and the Toyota Marks,
or any semblance of same, including without limitation, the
use of all stationery and other printed material referring
in any way to Toyota or bearing any Toyota ▇▇▇▇;
2. Discontinue any use of the word Toyota or the Toyota Marks,
or any semblance of same, as part of its business or
corporate name, and file a change or discontinuance of such
name with appropriate authorities;
3. Remove all product signs bearing said word(s) or Toyota
Marks at DEALER's sole cost and expense;
4. Cease representing itself as an authorized Toyota Dealer;
and
5. Refrain from any action, including without limitation any
advertising, stating or implying that it is authorized to
sell or distribute Toyota Products.
In the event DEALER fails to comply with the terms and conditions
of this paragraph, DISTRIBUTOR shall have the right to enter upon
DEALER's premises and remove, without liability, all such product
signs bearing the word Toyota or any Toyota Marks. DEALER agrees
that it shall reimburse DISTRIBUTOR for any costs and expenses
incurred in connection therewith, including reasonable attorneys
fees.
XX. TERMINATION OF AGREEMENT
A. VOLUNTARY TERMINATION
DEALER may voluntarily terminate this Agreement at any time by
written notice to DISTRIBUTOR. Termination shall be effective
thirty (30) days after DISTRIBUTOR receives such notice unless
otherwise waived in writing by DISTRIBUTOR.
B. TERMINATION FOR CAUSE
1. Immediate Termination
DEALER and DISTRIBUTOR agree that the following conduct is
within DEALER's control and is so contrary to the spirit,
purposes and objectives of this Agreement as to warrant its
immediate termination. Accordingly, DEALER agrees that if
it engages in any of the following types of conduct,
DISTRIBUTOR shall have the right to terminate this Agreement
immediately:
a. If dealership is closed for a period of seven (7)
consecutive days, except in the event such closure or
cessation of operation is caused by some physical event
beyond the control of the DEALER, such as strikes,
civil war, riots, fires, floods, earthquakes, or other
acts of God;
b. If DEALER becomes insolvent, or files any petition
under any bankruptcy law, or executes an assignment for
the benefit of creditors, or appoints a receiver or
trustee or another officer having similar powers is
appointed for DEALER and is not removed within thirty
days from his appointment thereto or there is any levy
under attachment or execution or similar process which
is not vacated or removed by payment or bonding within
ten (10) days;
c. If DEALER, or any Owner or officer of DEALER, is
convicted of any felony or for any violation of law
which in DISTRIBUTOR's opinion tends to adversely
affect the ownership, operation, management,
reputation, business, or interests of DEALER or
DISTRIBUTOR, or to impair the goodwill associated with
the Toyota Marks. Such violations of law may include,
without limitation, any finding or adjudication by any
court of competent jurisdiction or government agency
that DEALER has engaged in a misrepresentation or
unfair or deceptive trade practice.
d. Any misrepresentation to DISTRIBUTOR by DEALER or any
DEALER Owner or General Manager in applying for this
Agreement or for approval as Owner or General Manager
of DEALER;
e. Submission by DEALER to DISTRIBUTOR or IMPORTER of
false reports, statements or claims for reimbursement,
sales incentives, refunds, rebates or credits;
submission of false financial information or false
sales reporting data; or the making or submission by
DEALER of a false report or statement relating to pre-
delivery preparation, testing, warranties, servicing,
repairing, or maintenance required by DISTRIBUTOR or
IMPORTER;
f. Failure of DEALER to obtain or maintain any license, or
the suspension or revocation of any license, necessary
for the conduct by DEALER of its business pursuant to
this Agreement;
2. Termination Upon Sixty Days Notice
DEALER and DISTRIBUTOR agree that the following conduct
violates the terms and conditions of this Agreement and, if
DEALER engages in such conduct DISTRIBUTOR shall have the
right to terminate this Agreement upon sixty days notice:
a. Any attempted or actual sale, transfer or assignment by
DEALER of this Agreement or any of the rights granted
DEALER hereunder, or any attempted or actual transfer,
assignment or delegation by DEALER of any of the
responsibilities assumed by it under this Agreement
without the prior written approval of DISTRIBUTOR;
b. Any removal, withdrawal or change, whether voluntary or
involuntary, in the General Manager with ownership of
DEALER without the prior written approval of
DISTRIBUTOR;
c. The conduct, directly or indirectly, of any dealership
operation at any location other than those specifically
approved herein for such operation without the prior
written approval of DISTRIBUTOR;
d. Failure of DEALER to pay DISTRIBUTOR for any Toyota
Products in accordance with the terms and conditions of
sale;
e. Failure of DEALER to establish or maintain during the
existence of this Agreement: required net working
capital or adequate flooring and lines of credit;
f. Any dispute, disagreement or controversy between or
among partners, managers, officers or stockholders of
DEALER which, in the reasonable opinion of DISTRIBUTOR,
adversely affects the ownership, operation, management,
business, reputation or interests of DEALER or
DISTRIBUTOR;
g. Retention by DEALER of any General Manager, who in
DISTRIBUTOR's reasonable opinion is not competent or,
if previously approved by DISTRIBUTOR, no longer
possesses the requisite qualifications for the position
or who has acted in a manner contrary to the continued
best interests of both DEALER and DISTRIBUTOR;
h. Impairment of the reputation or financial standing of
DEALER or any of its management subsequent to the
execution of this Agreement;
i. Refusal to permit DISTRIBUTOR to examine or audit
DEALER's accounts and records as provided herein upon
receipt by DEALER from DISTRIBUTOR of written notice
requesting such permission or information.
j. Failure of DEALER to furnish accurate sales or
financial information and related supporting data in a
timely fashion; or
k. Breach or violation by DEALER of any other term or
provision of this Agreement.
3. Termination For Failure of Performance
If, upon evaluation of DEALER's performance pursuant to
paragraphs XIV(D), XV(D) and XVI(F) herein, DISTRIBUTOR
concludes that DEALER has failed to perform adequately its
sales or service responsibilities or to provide adequate
dealership facilities, DISTRIBUTOR shall notify DEALER in
writing of such failure(s) and will endeavor to review
promptly with DEALER the nature and extent
of such failure(s), and will grant DEALER 180 days or
such other period as may be required by law to correct
such failure(s). If DEALER fails or refuses to correct
such failure(s) or has not made substantial progress
towards remedying such failure(s) at the expiration of
such period, DISTRIBUTOR may terminate this Agreement
upon sixty (60) days notice or such other notice as may
be required by law.
4. Termination of DISTRIBUTOR
This Agreement shall terminate upon the effective date of
the termination or expiration of DISTRIBUTOR's right to
distribute Toyota Products. DEALER understands that
IMPORTER has undertaken to assure DEALER that in the event
of termination or expiration of DISTRIBUTOR's right to
distribute Toyota Products, IMPORTER or its designee will
offer DEALER a new agreement of no less than one year's
duration containing the terms of the Dealer Agreement then
prescribed by IMPORTER and any terms in DEALER's then
current agreement relating uniquely to DEALER.
5. Termination Upon Death or Incapacity
a. Notice
Subject to certain exceptions identified below,
DISTRIBUTOR near terminate this Agreement in the event
of the death of an Owner or upon the incapacity of any
Owner who is also the General Manager identified
herein, upon written notice to DEALER and such Owner's
legal representative. DISTRIBUTOR shall provide such
notices within a reasonable time after Owner's death or
incapacity. Termination hereunder shall be effective
ninety (90) days from the date of such notice.
b. Succession to Ownership After Death of Owner
In the event that Owner's interest in dealership passes
directly to any person or persons ("Heirs") who wish to
succeed to Owner's interest, then Owner's legal
representative must notify DISTRIBUTOR within 90 days
of the date of notice of termination hereunder of such
person's or persons' intent to succeed Owner. In
addition, one of the following conditions must be
satisfied:
(1) the Owner's legal representative must also request
DISTRIBUTOR's approval of one of the Heirs to
become the new General Manager; or
(2) the General Manager of DEALER identified herein
must remain unchanged; or
(3) the Owner's legal representative must designate
for DISTRIBUTOR's approval a new DEALER General
Manager.
The effect of such notice from Owner's legal
representative shall be to suspend the notice of
termination issued hereunder.
Upon receipt of such notice, DISTRIBUTOR shall request
any person identified by the Owner's legal
representative as intending to succeed Owner and the
designated candidate for General Manager, if any, to
submit an application and to provide all personal and
financial information that DISTRIBUTOR may reasonably
and customarily require in connection with the review
of such applications. All requested information must
be provided promptly and in no case later than 30 days
after receipt of such request. Upon the submission of
all requested information, DISTRIBUTOR agrees to review
such application(s) pursuant to the then current
criteria generally applied by DISTRIBUTOR in qualifying
dealer owners and/or general managers. DISTRIBUTOR
shall either approve or disapprove the application(s)
within ninety (90) days of full compliance with all of
DISTRIBUTOR's requests for information. If DISTRIBUTOR
approves the application(s), it shall offer to enter
into a new Toyota Dealer Agreement with DEALER or its
successor in interest in the form then currently in
use, except that Heir(s) and the designated General
Manager, if any, shall be identified as the new
Owner(s) and/or General Manager. The new agreement
shall be for a term of twelve (12) months. In the
event that DISTRIBUTOR does not approve of the
designated Heir or any other candidate for General
Manager, or if the Owner's legal representative
withdraws his or her notice of a person or persons to
succeed as Owner(s) or if the legal representative, or
any proposed Owner-successor or designated candidate
for General Manager fails to timely provide the
required information, DISTRIBUTOR may reinstate the
notice of termination by written notice to Heir.
c. Succession Upon Incapacity of Owner
The parties agree that, as used herein, incapacity
shall refer to any physical or mental ailment which, in
DISTRIBUTOR's opinion, adversely affects Owner's
ability to meet his or her obligations under this
Agreement. Termination for incapacity shall apply only
where the incapacitated owner is also the General
Manager identified herein.
Prior to the effective date of any notice of
termination hereunder, an incapacitated Owner, or his
or her legal representative, may propose a new
candidate for the position of General Manager to
DISTRIBUTOR. Such proposal shall be in writing and
shall suspend the pending notice of termination until
DISTRIBUTOR advises DEALER of its approval or
disapproval of the new candidate. Any such proposed
candidate for General Manager must submit all personal
and financial information that DISTRIBUTOR may
reasonably and customarily require in connection with
its review of such applications. All requested
information must be provided promptly and in no case
later than thirty (30) days after receipt of such
request. Upon submission of all requested information,
DISTRIBUTOR agrees to review such application pursuant
to the then current criteria generally applied by
DISTRIBUTOR in qualifying dealer owners and/or general
managers. DISTRIBUTOR shall either approve or
disapprove the application within ninety (90) days of
full compliance with all of DISTRIBUTOR's requests for
information. If DISTRIBUTOR approves the application,
it shall offer to enter into a new Toyota Dealer
Agreement with DEALER or its successor in interest in
the form then currently in use, except that the
candidate shall be identified as new General Manager.
The new agreement shall be for a term of twelve (12)
months. In the event that DISTRIBUTOR disapproves such
candidate or candidate withdraws his or her application
to be General Manager or fails to timely provide the
required information, DISTRIBUTOR may reinstate the
notice of termination by written notice to the
incapacitated Owner or his or her legal representative.
6. Approval of Successor Prior to Death or Incapacity of Owner
DISTRIBUTOR recognizes that a DEALER Owner may wish to
designate a person to succeed himself in case of death or
incapacity. Accordingly, Owner may nominate on a form
provided by DISTRIBUTOR a candidate to assume ownership
and/or management of the dealership upon the death or
incapacity of the requesting Owner.
As soon as practicable after such nomination, DISTRIBUTOR
will request such personal and financial information from
Owner and/or candidate as it reasonably and customarily may
require in evaluating candidates for ownership and/or
management qualifications. Owner agrees that DISTRIBUTOR
may apply criteria then currently used by DISTRIBUTOR in
qualifying owners and/or general managers of authorized
dealers. Upon receipt of all requested information,
DISTRIBUTOR shall either approve or disapprove such
candidate. If DISTRIBUTOR initially approves the candidate,
said approval shall remain in effect for the term of this
Agreement. DISTRIBUTOR agrees that DEALER may renominate
the candidate after the termination of this Agreement and
DISTRIBUTOR will review such nomination: (1) so long as
DISTRIBUTOR and DEALER have entered into a new Toyota Dealer
Agreement; and (2) the proposed candidate continues to
comply with the then current criteria used by DISTRIBUTOR in
qualifying such candidates. If DISTRIBUTOR does not
initially qualify the candidate, DISTRIBUTOR agrees to
review the reason(s) for its decision with Owner. Owner is
free at any time to renew its nomination. However, in such
instance, the candidate must again qualify pursuant to then
current criteria. Owner may, by written notice, withdraw a
nomination at any time, even if DISTRIBUTOR previously has
qualified said candidate.
In any case where Owner designates a successor pursuant to
this paragraph and that person is not the same person as the
Heir, as defined in paragraph XX(B)(5)(b), then DISTRIBUTOR
shall proceed as though Owner had withdrawn his nomination
of a successor pursuant to this paragraph.
C. NOTICE OF TERMINATION
Any notice of termination under paragraph XX shall be in writing
and shall be mailed to the person(s) designated to receive such
notice return receipt requested or shall be delivered in person.
Except as otherwise provided in paragraph XX(B)(5), such notice
shall be effective on the date of receipt. DISTRIBUTOR need not
state all grounds on which it relies in its termination of
DEALER. DISTRIBUTOR's failure to refer to additional grounds for
termination shall not constitute a waiver of its right to rely
upon such grounds.
If any period of notice of termination required hereunder is less
than that required by applicable law, the period of notice
required hereunder shall be deemed to be the minimum period
required by such laws.
D. CONTINUANCE OF BUSINESS RELATIONS
Upon receipt of any notice of termination or non-renewal, DEALER
agrees to conduct itself and its operations until the effective
date of termination or nonrenewal in a manner which will not
injure the reputation or goodwill of the Toyota Marks or
DISTRIBUTOR. The continuance of business relations between
DISTRIBUTOR and DEALER or the sale or delivery of Toyota Products
to DEALER after termination, expiration or non-renewal of this
Agreement shall not be construed as a waiver of the termination
or a renewal, extension or continuation of this Agreement.
E. REPURCHASE PROVISIONS
1. DISTRIBUTOR's Obligations
Upon the expiration or prior termination of this Agreement,
DISTRIBUTOR shall have the right to cancel any and all
shipments of Toyota Products scheduled for delivery to
DEALER, and DISTRIBUTOR shall repurchase from DEALER the
following:
a. New, unused, unmodified and undamaged current model
Toyota Motor Vehicles then unsold in DEALER's
inventory. The prices of such Motor Vehicles shall be
the same as those at which they were originally
purchased by DEALER, less all prior refunds or other
allowances made by DISTRIBUTOR to DEALER with respect
thereto.
b. New, unused and undamaged Toyota parts and accessories
then unsold in DEALER's inventory which are in good and
saleable condition, provided that they are listed in
the then current Toyota Dealer Parts Price List. The
prices for such parts and accessories shall be the
prices last established by DISTRIBUTOR
for the sale of identical parts or accessories to dealers
in the area in which DEALER is located.
c. Tools and equipment recommended by IMPORTER and then
owned by DEALER which are especially designed for
servicing Toyota Motor Vehicles. The prices for such
tools and equipment will be the price paid by DEALER
less appropriate depreciation or such other price as
the parties may negotiate.
d. Signs which DISTRIBUTOR has recommended for
identification of DEALER. The price of such signs
shall be the price paid by DEALER less appropriate
depreciation or such other price as the parties may
negotiate.
2. Responsibilities of Dealer
DISTRIBUTOR's obligations to repurchase the items set forth
in paragraph XX(E)(1), are contingent upon DEALER fulfilling
its responsibilities as set forth herein.
a. Within thirty days after the date of expiration or the
effective date of termination of this Agreement DEALER
shall deliver or mail to DISTRIBUTOR a detailed
inventory of all items referred to in the
paragraph XX(E)(1) which it requests DIStRIBUTOR to
repurchase and shall certify that such list is true and
accurate. In the event that DEALER fails to supply
such a list to DISTRIBUTOR within such period,
DISTRIBUTOR shall have the right to enter upon DEALER's
premises, without liability, for the purpose of
compiling such an inventory list and DEALER shall
reimburse DISTRIBUTOR for any costs and expenses
incurred in connection therewith.
b. DEALER shall request repurchase only of those items
which were purchased by DEALER from DISTRIBUTOR, unless
DISTRIBUTOR agrees otherwise.
c. DEALER agrees that products to be repurchased by
DISTRIBUTOR from DEALER shall be delivered by DEALER to
DISTRIBUTOR's place of business at DEALER's expense.
If DEALER fails to do so, DISTRIBUTOR may transfer such
products and deduct the cost therefor from the
repurchase price.
d. DEALER agrees to execute and deliver to DISTRIBUTOR
instruments satisfactory to DISTRIBUTOR conveying good
and marketable title to the aforesaid property to
DISTRIBUTOR. If such property is subject to any lien
or charge of any kind, DEALER agrees to procure the
discharge in satisfaction thereof prior to the
repurchase of such property by DISTRIBUTOR. DEALER
further agrees to comply with the requirements of any
state or federal laws which relate to the repurchase
including bulk sales or transfer laws.
e. DEALER agrees that it must remove, at its own expense,
all signage including all Toyota marks before it is
eligible for payment hereunder.
3. Payment by DISTRIBUTOR
DISTRIBUTOR will pay DEALER for such items as DEALER may
request repurchase and which qualify hereunder as soon as
practicable upon DEALER's compliance with the obligations
set forth herein and upon computation of any outstanding
indebtedness of DEALER to DISTRIBUTOR. DISTRIBUTOR shall
have the right to offset from any amounts due to DEALER
hereunder the total sum of DEALER's outstanding indebtedness
to DISTRIBUTOR.
If DEALER disagrees with DISTRIBUTOR's valuation of any item
herein, and DEALER and DISTRIBUTOR shall have not resolved
their disagreement within sixty (60) days of the effective
date of termination or expiration of this Agreement,
DISTRIBUTOR shall pay to DEALER the amount to which it
reasonably believes DEALER is entitled. DEALER's exclusive
remedy to recover any additional sums which it believes is
due under this paragraph shall be by arbitration in
accordance with the commercial arbitration rules of the
American Arbitration Association. The site of the
arbitration shall be the office of the American Arbitration
Association in the locality of DISTRIBUTOR's principal place
of business or Regional Office.
XXI. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
A. RIGHTS GRANTED
DEALER recognizes the importance of the approved locations to
DISTRIBUTOR's authorized dealer network and to the effective sale
and servicing of Toyota Products in DEALER's primary area of
responsibility. Accordingly, DEALER agrees that in the event
that DISTRIBUTOR refuses to approve a transfer or sale of any
ownership interest in the dealership, pursuant to paragraph VI,
DISTRIBUTOR shall have the right of first refusal or an option to
purchase the dealership assets, including any leasehold interest
or realty, as provided herein.
B. EXERCISE OF DISTRIBUTOR'S RIGHTS
If DISTRIBUTOR exercises its right of first refusal or option to
purchase the dealership, it must advise DEALER in writing of its
decision within thirty (30) days of its refusal to approve any
sale or transfer pursuant to paragraph VI. DEALER agrees that
DISTRIBUTOR shall have the right to assign its right to exercise
its option to purchase or right of first refusal to any third
party it may select and hereby guarantees the full payment of the
purchase price by such assignee.
C. THE NATURE OF DISTRIBUTOR'S RIGHTS
If DISTRIBUTOR has refused to approve the transfer or sale of
DEALER's ownership or assets and DEALER has entered into a
bona fide arm's length written agreement governing such transfer
or sale, DISTRIBUTOR's right under this paragraph shall be a
right of first refusal, permitting DISTRIBUTOR to assume the
buyer's rights and obligations under such written agreement. The
purchase price and other terms of sale shall be those set forth
in such agreement and any related documents. DISTRIBUTOR may
request and DEALER agrees to provide any and all supporting
documents relating to the transfer which DISTRIBUTOR may require
to assess the bona fides of the agreement. Refusal to provide
such documentation or to state that no such documents exist shall
create the presumption that the buy/sell agreement is not a bona
fide agreement.
If DISTRIBUTOR has refused to approve the transfer or sale of
DEALER's ownership or assets and DEALER has not entered into a
bona fide arm's length written agreement governing such transfer
or sale, then DISTRIBUTOR shall have the option to purchase the
principal assets of DEALER utilized in the dealership operations,
including real estate and/or leasehold interest, and to terminate
this Agreement. The purchase price shall be the fair market
value as negotiated by the parties. If the parties are unable to
reach a negotiated sale in a reasonable time, the price and other
terms of sale shall be established exclusively by arbitration in
accordance with the commercial arbitration rules of the American
Arbitration Association. The site of the arbitration shall be
the office of the American Arbitration Association in the
locality of DISTRIBUTOR's principal place of business or Regional
Office.
D. DEALER'S OBLIGATIONS
Upon DISTRIBUTOR's exercise of its right or option and tender of
the purchase price hereunder, DEALER shall transfer the affected
real property by warranty deed conveying marketable title free
and clear of all liens, claims, mortgages, encumbrances,
tenancies and occupancies. The warranty deed shall be in proper
form for recording and DEALER shall deliver complete possession
of the property and the deed at time of closing. DEALER shall
also furnish to DISTRIBUTOR copies of any easements, licenses or
other documents affecting the property or dealership operations
and shall assign any permits or licenses which are necessary for
the use of the property or the conduct of such DEALER operations.
DEALER also agrees to execute and deliver to DISTRIBUTOR
instruments satisfactory to DISTRIBUTOR conveying title to all
personal property, including leasehold interests, involved in the
transfer or sale to DISTRIBUTOR. If any personal property is
subject to any lien or charge of any kind, DEALER agrees to
procure the discharge and satisfaction thereof prior to the
transfer or sale of such property to DISTRIBUTOR.
XXII. DEFENSE AND INDEMNIFICATION
A. DEFENSE AND INDEMNIFICATION BY DISTRIBUTOR AND/OR IMPORTER
DISTRIBUTOR agrees to assume the defense of DEALER and to
indemnify and hold DEALER harmless in any lawsuit naming DEALER
as a defendant and involving any Toyota Product when the lawsuit
also involves allegations of:
1. Breach of warranty provided by FACTORY, IMPORTER or
DISTRIBUTOR, bodily injury or property damage arising out of
an occurrence allegedly caused solely by a defect in design,
manufacture or assembly of a Toyota Product (except for
tires not manufactured by FACTORY), provided that the defect
could not reasonably have been discovered by DEALER during
the pre-delivery service of the Toyota Product required
under paragraph XV(A)(3) of this Agreement; or
2. Any misrepresentation or misleading statement or unfair or
deceptive trade practice of DISTRIBUTOR or IMPORTER; or
3. Any substantial damage to a Toyota Product purchased by
DEALER from DISTRIBUTOR which was repaired by DISTRIBUTOR
and where DEALER had not been notified of such damage in
writing prior to the delivery of the subject vehicle, part
or accessory to a retail CUSTOMER; and
Provided:
4. That DEALER delivers to DISTRIBUTOR, in a manner to be
designated by DISTRIBUTOR, within ten (10) days of the
service of any summons or complaint, copies of such
documents and request in writing a defense and/or
indemnification therein (except as provided in
paragraph XXII(D));
5. That the complaint does not involve allegations of DEALER
misconduct, including but not limited to, improper or
unsatisfactory service or repair, misrepresentation, or any
claim of DEALER's unfair or deceptive trade practice;
6. That the Toyota Product which is the subject of the lawsuit
was not altered by or for DEALER;
7. That DEALER agrees to cooperate fully in the defense of such
action as DISTRIBUTOR may reasonably require; and,
8. That DEALER agrees that DISTRIBUTOR may offset any recovery
on DEALER's behalf against any indemnification that may be
required hereunder.
B. DEFENSE AND INDEMNIFICATION BY DEALER
DEALER agrees to assume the defense of DISTRIBUTOR, IMPORTER and
FACTORY and to indemnify and hold them harmless in any lawsuit
naming DISTRIBUTOR, IMPORTER or FACTORY as a defendant when the
lawsuit involves allegations of:
1. DEALER's alleged failure to comply, in whole or in part,
with any obligation assumed by DEALER pursuant to this
Agreement;
2. DEALER's alleged negligent or improper repairing or
servicing of a new or used Toyota Motor Vehicle or
equipment, or such other motor vehicles or equipment as may
be sold or serviced by DEALER;
3. DEALER's alleged breach of any contact or warranty other
than that provided by DISTRIBUTOR, IMPORTER or FACTORY;
4. DEALER's alleged misleading statements, misrepresentations,
or deceptive or unfair trade practices;
5. Any modification or alteration made by or on behalf of
DEALER to a Toyota Product, except those made pursuant to
the express instruction or with the express approval of
DISTRIBUTOR or IMPORTER; and
Provided:
6. That DISTRIBUTOR, IMPORTER or FACTORY delivers to DEALER,
within ten (10) days of the proper service of any summons or
complaint, copies of such documents, and requests in writing
a defense and/or indemnification therein (except as provided
in paragraph XXII(D));
7. That DISTRIBUTOR, IMPORTER or FACTORY agree to cooperate
fully in the defense of such action as DEALER may reasonably
require; and,
8. That the complaint does not involve allegations of liability
premised upon separate DISTRIBUTOR, IMPORTER or FACTORY
conduct or omissions.
C. CONDITIONAL DEFENSE AND/OR INDEMNIFICATION
In agreeing to defend and/or indemnify each other, DEALER and
DISTRIBUTOR may make their agreement 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 DISTRIBUTOR
to refuse such request.
The party withdrawing from its agreement to defend and/or
indemnify shall give timely notice of its intent to withdraw.
Such notice shall be in writing and shall be effective upon
receipt. Moreover, the withdrawing party shall be responsible
for all costs and expenses of defense up to the date of receipt
of the notice of withdrawal.
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS
In the event that subsequent developments in a case make clear
that the allegations which initially precluded a request or an
acceptance of a request for a defense and/or indemnification are
no longer at issue therein or are without foundation, any party
having a right to a defense and/or indemnification hereunder may
tender such request for a defense and indemnification to the
other party. Neither DEALER nor DISTRIBUTOR shall be required to
agree to such subsequent request for a defense and/or
indemnification where that party would be unduly prejudiced by
such delay.
E. TIME TO RESPOND AND RESPONSIBILITIES OF THE PARTIES
DEALER and DISTRIBUTOR shall have thirty (30) days from the
receipt of a request for a defense and/or indemnification to
conduct an investigation to determine whether or not, or under
what conditions, it may agree to defend and/or indemnify pursuant
to this paragraph. If local rules require a response to the
complaint in the lawsuit prior to the time provided hereunder for
a response to such request the requesting party shall take all
steps necessary, including obtaining counsel, to protect its own
interest in the lawsuit until DEALER or DISTRIBUTOR assumes the
requested defense and/or indemnification. In the event that
DEALER or DISTRIBUTOR agrees to assume the defense and/or
indemnification of a lawsuit, such party shall have the right to
engage and direct counsel of its own choosing and, except in
cases where the request is made pursuant to paragraph XXII(D)
herein, shall have the obligation to reimburse the requesting
party for all reasonable costs and expenses, including attorney
fees, incurred prior to such assumption.
XXIII. GENERAL PROVISIONS
A. NEW DEALERS
Both parties understand and agree that additional authorized
Toyota dealers may be appointed in or near the primary area of
responsibility served by DEALER when DISTRIBUTOR determines that
new dealers are warranted, based upon such reasonable criteria as
DISTRIBUTOR may establish in its sole discretion.
B. TAXES
DEALER agrees that it shall be responsible for and shall duly pay
all sales taxes, use taxes, excise taxes and other governmental
or municipal charges imposed, levied or based upon the sale of
Toyota Products by DISTRIBUTOR to DEALER and shall maintain
accurate records of same for reporting purposes.
C. NOTICES
Except as otherwise specifically provided herein, any notice
required to be given by either party to the other under or in
connection with this Agreement shall be in writing and delivered
personally or by certified mail, return receipt requested
and shall be effective from the date of mailing. Notices to
DEALER shall be directed to DEALER or its representative at
DEALER's place of business identified herein. Notices to
DISTRIBUTOR shall be directed to the president of DISTRIBUTOR
at its place of business identified herein.
D. NO IMPLIED WAIVERS
Any failure of either party at any time to require performance by
the other party of any provision herein shall in no way affect
the right of such party to require such performance at any time
thereafter, nor shall any waiver by either party of a breach of
any provision herein constitute a waiver of any succeeding breach
of the same or any other provision, nor constitute a waiver of
the provision itself.
E. DEALER NOT AN AGENT OR REPRESENTATIVE
DEALER is an independently owned business entity. This agreement
does not make DEALER the agent or legal representative of
DISTRIBUTOR, IMPORTER or FACTORY for any purpose whatsoever.
DEALER is not granted any express or implied right or authority
to assume or to create any obligation or responsibility on behalf
of or in the name of DISTRIBUTOR, IMPORTER or FACTORY or to bind
it in any manner whatsoever.
F. SOLE AGREEMENT OF THE PARTIES
There are no other agreements or understandings, either oral or
written, between the parties affecting this Agreement or relating
to the sale or servicing of Toyota Products, except as otherwise
specifically provided for or referred to in this Agreement.
This Agreement cancels and supersedes all previous agreements
between the parties relating to the subject matters covered
herein.
No change or addition to, or deletion of, any portion of this
Agreement shall be valid or binding upon the parties hereto
unless the same is approved in writing by an officer of each of
the parties hereto.
G. NEW AND SUPERSEDING DEALER AGREEMENTS
In the event any new and superseding form of dealer agreement is
offered by DISTRIBUTOR to authorized Toyota dealers generally at
any time prior to the expiration of the term of this Agreement,
DISTRIBUTOR may, by written notice to DEALER, replace this
Agreement with a new agreement in the new and superseding form
for a term not less than the then unexpired term of this
Agreement.
H. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
Except as provided in this Agreement, neither this Agreement nor
the rights or obligations of either party hereunder may be sold,
assigned, delegated or otherwise transferred without the written
approval of the other party.
I. SEVERABILITY
If any term or provision of this Agreement, or the application
thereof to any person or circumstance, shall to any extent 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.
J. RELEASE
Because the success of the relationship between DISTRIBUTOR and
DEALER depends upon the mutual understanding, cooperation, trust
and confidence of both DISTRIBUTOR and DEALER, each party hereby
releases the other from any and all claims, causes of action or
otherwise that it may have against the other for money damages
arising from any event occurring prior to the date of execution
of this Agreement, except for any accounts payable by one party
to the other as a result of the purchase of any Toyota Products,
audit adjustments or reimbursement for any services. This
release does not extend to claims which either party does not
know or reasonably suspect to exist in its favor at the time of
execution of this Agreement.
K. NO FRANCHISE FEE
DEALER agrees and warrants that it has paid no fee, nor has it
provided any goods or services in lieu of same, to DISTRIBUTOR in
consideration of entering into this Agreement and that the sole
consideration for DISTRIBUTOR's entering into this Agreement was
DEALER's ability, integrity, assurance of personal services and
expressed intention to deal fairly and equitably with DISTRIBUTOR
and the public and any other promises recited herein.
XXIV. DEFINITIONS
The parties agree that the following terms, as used in this Agreement,
shall be defined exclusively as set forth below.
A. AGREEMENT: This Agreement consists of the Toyota Dealer
Agreement entered into by DEALER and DISTRIBUTOR and includes the
Standard Provisions. The various headings used in this Agreement
are for organizational purposes only and in any case where the
heading and the related text shall conflict, the text shall
govern.
B. AUTHORIZED TOYOTA DEALER: Dealers who are authorized by
DISTRIBUTOR to sell and service Toyota Products, and to use the
Toyota Marks in connection therewith, pursuant to a duly executed
Toyota Dealer Agreement.
C. DEALER FACILITIES: The buildings, improvements, fixtures and
equipment situated at the approved DEALER locations.
D. DEALER LOCATION: The location or locations, and any facilities
located thereon, identified in paragraph VII which DISTRIBUTOR
has approved for the dealership operations specified therein.
E. DEALERSHIP OPERATIONS: All dealer functions contemplated by this
Agreement. These include, without limitation, sale and servicing
of Toyota Products, use and display of Toyota Marks, advertising
and promotion of Toyota Products, rental and leasing of Toyota
Motor Vehicles, sale of used cars, body shop work, and financing
or insurance services, whether conducted directly or indirectly
by DEALER.
F. GENERAL MANAGER: The person identified in paragraph V of the
Agreement.
G. OWNER: The person(s) identified in paragraph IV of the
Agreement.
H. GENUINE TOYOTA PARTS OR ACCESSORIES: All Toyota parts,
accessories and equipment manufactured by or on behalf of FACTORY
or specifically approved by IMPORTER for use in servicing Toyota
Motor Vehicles and sold by DISTRIBUTOR to authorized Toyota
dealers.
I. STANDARD PROVISIONS: The Standard Provisions are a part of all
Toyota Dealer Agreements and are fully incorporated therein by
the express provision of paragraph IX of the Agreement. The
Standard Provisions commence with paragraph XIII to reflect
continuity with the twelve paragraphs of the Agreement.
J. TOYOTA MARKS: The various Toyota trademarks, service marks,
names, logos and designs which DEALER is authorized by
DISTRIBUTOR to use in the sale and servicing of Toyota Products.
K. TOYOTA MOTOR VEHICLES: All automobiles, trucks, vans,
cab/chassis or other motor vehicles which IMPORTER, in its sole
discretion, sells to DISTRIBUTOR for resale to authorized Toyota
dealers.
L. TOYOTA PRODUCTS: All Toyota Motor Vehicles, parts, accessories
and equipment which IMPORTER, in its sole discretion, sells to
DISTRIBUTOR for resale to authorized Toyota dealers.
M. TOYOTA WARRANTY POLICIES AND PROCEDURES MANUAL: The current
publication issued by IMPORTER known as the Toyota Warranty
Policies and Procedures Manual, as it may be revised or
supplemented from time to time.