EXHIBIT 10.2.4
[LEXUS LOGO]
AUTOMOBILE DEALER
SALES AND SERVICE
AGREEMENT
Lexus Agt.
LEXUS DEALER AGREEMENT
This is an Agreement between LEXUS, A Division of TOYOTA MOTOR SALES, U.S.A.,
INC., ("LEXUS" or "DISTRIBUTOR") and ______________________ ("DEALER"), a
closely held corporation, incorporated in the State of __________________ and
doing business as ____________________________.
LEXUS GOALS AND COMMITMENTS
LEXUS is committed to creating luxury automobiles which are and will be among
the finest ever built anywhere in the world. LEXUS is equally committed to
setting a new standard for extraordinary customer satisfaction throughout the
ownership cycle. To achieve this goal, LEXUS intends to maintain the finest
dealer network in the industry.
This Agreement embodies the LEXUS commitment to promote fairness within a
harmonious and mutually profitable business relationship between LEXUS and
DEALER. The ultimate goal shared by all parties to this Agreement is the
satisfaction of the LEXUS customer.
PURPOSES OF AGREEMENT
LEXUS is the exclusive distributor in the continental United States of LEXUS
Products which are manufactured or approved by TOYOTA MOTOR CORPORATION
("FACTORY"). The principal purposes of this Agreement are to set forth and
affirm the commitment of LEXUS and DEALER to the goals of LEXUS; authorize
DEALER to sell and service LEXUS Products; and identify the rights and
responsibilities of LEXUS and DEALER.
I. TERM OF AGREEMENT
This Agreement is effective on the date signed by LEXUS and shall
continue for a period of six years unless ended earlier by mutual
agreement or terminated as provided herein. This Agreement may not be
extended except by written consent of LEXUS. Any continuation of
business relations between the parties following expiration of this
Agreement shall be on a day-to-day basis and subject to the provisions
of this Agreement. Such a continuation shall not be deemed a waiver of
the right of termination nor shall it imply that either party has
committed to continue to do business with the other at any time in the
future.
Upon the expiration of this Agreement, DISTRIBUTOR shall have no
obligation to renew the Agreement or to extend DEALER a subsequent
Agreement. However, should this Agreement be renewed or any other form
of agreement be offered to DEALER, DISTRIBUTOR reserves the right to
offer an agreement of a term to be determined at DISTRIBUTOR'S sole
discretion.
II. OWNERSHIP AND OFFICERS
This is a personal service Agreement and has been entered into by LEXUS
upon, and in consideration of, DEALER'S representation that only the
following named persons are the owners and officers of DEALER, and that
such persons are committed to achieving the purposes, goals and
commitments of this Agreement:
1
PERCENT OF
OWNERS NAMES ADDRESS OWNERSHIP
________________________ ______________________ _______________
________________________ ______________________ _______________
________________________ ______________________ _______________
________________________ ______________________ _______________
OFFICERS NAMES ADDRESS TITLE
________________________ ______________________ _______________
________________________ ______________________ _______________
________________________ ______________________ _______________
________________________ ______________________ _______________
III. MANAGEMENT
LEXUS and DEALER agree that qualified dealership management and active,
day-to day owner involvement are critical to the successful operation
of DEALER. OWNERS agree, and LEXUS enters into this Agreement on the
condition that at least one OWNER will be involved on a full-time basis
in the day-to-day operations of the dealership. If no OWNER is involved
on a full-time basis in DEALER's day-to day operations, the General
Manager named below shall devote his or her personal services on a
full-time basis to the general management of the dealership.
DEALER appoints _________________________ as General Manager. The
General Manager has full managerial authority to make all operating
decisions on behalf of DEALER. DEALER shall make no change in the
dealership's ownership or General Manager without the prior written
approval of LEXUS.
IV. APPROVED DEALER LOCATIONS
In order that DISTRIBUTOR may establish and maintain an effective
network of authorized LEXUS dealers, DEALER agrees that it shall
conduct its LEXUS operations only in facilities and at locations
herein designated and approved by DISTRIBUTOR. DISTRIBUTOR hereby
designates and approves the following facilities as the exclusive
location(s) for the sale and servicing of LEXUS Products and the
display of LEXUS Marks:
New Vehicle Sales and Showroom Used Vehicle Display and Sales
2
Sales and General Office Body and Paint
Parts and Service Other Facilities
DEALER shall not modify or change the designated usage or function of
any facility without the prior written consent of LEXUS.
V. CERTIFICATION
By their signatures hereto, the parties certify that they have read and
understood this Agreement, including the Standard Provisions which are
incorporated herein, and agree to abide and be bound by all of its
terms and conditions.
_________________________ DEALER
DBA
DATE: __________________ By: _________________________ ______________________
SIGNATURE TITLE
LEXUS, A Division of
TOYOTA MOTOR SALES, U.S.A., INC.
DATE: __________________ By: _________________________ ______________________
SIGNATURE TITLE
3
LEXUS DEALER AGREEMENT
AND
STANDARD PROVISIONS
TABLE OF CONTENTS
I. TERM OF AGREEMENT................................................... 1
II. OWNERSHIP AND OFFICERS.............................................. 1
III. MANAGEMENT.......................................................... 2
IV. APPROVED DEALER LOCATIONS........................................... 2
V. CERTIFICATION....................................................... 3
VI. ACQUISITION, DELIVERY AND INVENTORY OF LEXUS PRODUCTS............... 4
A. APPOINTMENT OF DEALER............................................ 4
B. AVAILABILITY AND ALLOCATION OF PRODUCT........................... 4
C. PRICES AND TERMS OF SALE......................................... 4
D. MODE, PLACE AND CHARGES FOR DELIVERY OF PRODUCTS................. 4
E. DAMAGE CLAIMS AGAINST TRANSPORTATION CARRIERS.................... 5
▇. ▇▇▇▇▇ OR FAILURE OF DELIVERY..................................... 5
G. DIVERSION CHARGES................................................ 5
H. CHANGES OF DESIGN, OPTIONS OR SPECIFICATIONS..................... 5
1. DISCONTINUANCE OF MANUFACTURE OR IMPORTATION..................... 5
J. MINIMUM VEHICLE INVENTORIES...................................... 6
K. PRODUCT MODIFICATIONS............................................ 6
VII. DEALER MARKETING OF LEXUS PRODUCTS.................................. 6
A. DEALER'S SALES RESPONSIBILITIES.................................. 6
B. EXPORT POLICY.................................................... 7
C. LEXUS DEALER ASSOCIATION......................................... 7
D. USED VEHICLES.................................................... 7
E. PRIMARY AREA OF RESPONSIBILITY................................... 7
F. EVALUATION OF DEALER'S SALES AND MARKETING PERFORMANCE........... 7
VIII. DEALER SERVICE OBLIGATIONS.......................................... 7
A. CUSTOMER SERVICE STANDARDS....................................... 7
B. NEW MOTOR VEHICLE PRE-DELIVERY SERVICE........................... 8
C. WARRANTY AND POLICY SERVICE...................................... 8
IX. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICE................ 8
A. WARRANTY DISCLOSURES AS TO NON-GENUINE PARTS AND
ACCESSORIES...................................................... 9
B. ROADSIDE ASSISTANCE PROGRAM...................................... 9
C. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS..................... 9
D. COMPLIANCE WITH SAFETY AND EMISSION CONTROL
REQUIREMENTS..................................................... 9
E. COMPLIANCE WITH CONSUMER PROTECTION STATUTES, RULES
AND REGULATIONS..................................................10
X. SERVICE AND PARTS ORGANIZATION......................................10
A. ORGANIZATION AND STANDARDS.......................................10
B. SERVICE EQUIPMENT AND SPECIAL TOOLS..............................10
C. PARTS STOCKING LEVEL.............................................11
D. AFTER-HOURS DELIVERY.............................................11
E. ASSISTANCE PROVIDED BY DISTRIBUTOR...............................11
1. Service Manuals And Materials.................................11
2. Field Service Personnel Assistance............................11
F. EVALUATION OF DEALER'S SERVICE AND PARTS PERFORMANCE.............11
XI. CUSTOMER SATISFACTION RESPONSIBILITIES..............................12
A. DEALER'S CUSTOMER SATISFACTION OBLIGATIONS.......................12
1. DEALER'S Customer Satisfaction Plan...........................12
2. Employee Training.............................................12
3. Customer Satisfaction Manager.................................12
4. Customer Assistance Response System...........................12
B. EVALUATION OF DEALER'S CUSTOMER SATISFACTION PERFORMANCE.........12
XII. DEALERSHIP FACILITIES AND IDENTIFICATION............................13
A. FACILITIES.......................................................13
B. SERVICE RECEPTION AREA...........................................13
C. DEALER'S OPERATING HOURS.........................................13
D. SIGNS............................................................14
E. EVALUATION OF DEALERSHIP FACILITIES..............................14
F. USE OF LEXUS MARKS...............................................14
1. Use By DEALER.................................................14
2. Discontinuance of Use.........................................14
XIII. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS........................15
A. NET WORKING CAPITAL..............................................15
B. FLOORING AND LINES OF CREDIT.....................................15
C. PAYMENT TERMS....................................................15
D. UNIFORM ACCOUNTING SYSTEM........................................16
E. RECORDS MAINTENANCE..............................................16
F. EXAMINATION OF DEALERSHIP ACCOUNTS AND RECORDS...................16
G. TAXES............................................................16
H. CONFIDENTIALITY..................................................16
1. DATA TRANSMISSION SYSTEMS........................................17
J. SALES REPORTING..................................................17
XIV. TRANSFERS...........................................................17
A. SALE OF OWNERSHIP INTEREST IN DEALERSHIP.........................17
B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE.....................17
1. Rights Granted................................................17
2. Exercise of Distributor's Rights..............................18
3. Right of First Refusal........................................18
4. Option to Purchase............................................18
5. Dealer's Obligations..........................................19
XV. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY..........................19
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF OWNER.....................19
B. INCAPACITY OF OWNER..............................................20
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH OR INCAPACITY OF
OWNER............................................................20
XVI. TERMINATION.........................................................21
A. VOLUNTARY TERMINATION BY DEALER..................................21
B. TERMINATION FOR CAUSE............................................21
1. Immediate Termination.........................................21
2. Termination Upon Sixty Days Notice............................22
3. Termination for Failure of Performance........................23
4. Termination Upon Death or Incapacity..........................23
C. NOTICE OF TERMINATION............................................23
D. CONTINUANCE OF BUSINESS RELATIONS................................23
E. REPURCHASE PROVISIONS............................................23
1. DISTRIBUTOR'S Obligations.....................................23
2. Responsibilities of DEALER....................................24
3. Payment by DISTRIBUTOR........................................25
XVII. MANAGEMENT OF DISPUTES..............................................25
A. ALTERNATIVE DISPUTE RESOLUTION PROGRAMS..........................25
B. APPLICABLE LAW...................................................26
C. MUTUAL RELEASE...................................................26
XVIII. DEFENSE AND INDEMNIFICATION.........................................26
A. DEFENSE AND INDEMNIFICATION BY DISTRIBUTOR.......................26
B. DEFENSE AND INDEMNIFICATION BY DEALER............................27
C. CONDITIONAL DEFENSE AND/OR INDEMNIFICATION.......................28
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS............................28
E. TIME TO RESPOND AND RESPONSIBILITIES OF THE PARTIES..............28
XIX. GENERAL PROVISIONS..................................................29
A. NOTICES..........................................................29
B. NO IMPLIED WAIVERS...............................................29
C. SOLE AGREEMENT OF THE PARTIES....................................29
D. DEALER NOT AN AGENT OR REPRESENTATIVE............................29
E. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES.....................29
F. NO FRANCHISE FEE.................................................30
G. SEVERABILITY.....................................................30
H. NEW AND SUPERSEDING DEALER AGREEMENTS............................30
I. BENEFIT..........................................................30
XX. DEFINITIONS.........................................................31
A. DEALER...........................................................31
B. OWNER............................................................31
C. GENERAL MANAGER..................................................31
D. DEALER FACILITIES................................................31
E. APPROVED LOCATION(S).............................................31
F. LEXUS MARKS......................................................31
G LEXUS MOTOR VEHICLES.............................................31
H. GENUINE LEXUS PARTS AND ACCESSORIES..............................31
I. LEXUS PRODUCTS...................................................31
XXI. ADDITIONAL PROVISIONS...............................................32
LEXUS DEALER AGREEMENT
STANDARD PROVISIONS
The following Standard Provisions are expressly incorporated in and made a part
of the LEXUS Dealer Agreement.
VI. ACQUISITION, DELIVERY AND INVENTORY OF LEXUS PRODUCTS
A. APPOINTMENT OF DEALER
DISTRIBUTOR hereby appoints DEALER and grants unto it the
non-exclusive right to buy and resell the LEXUS Products identified
in the LEXUS Product Addendum. DEALER accepts such appointment and
understands that its appointment as a DEALER does not grant it an
exclusive right to sell LEXUS Products in any specified geographical
area.
DEALER shall have the right to purchase LEXUS Products from
DISTRIBUTOR in accordance with the provisions set forth herein and
such other requirements as may be established from time to time by
LEXUS.
B. AVAILABILITY AND ALLOCATION OF PRODUCT
DISTRIBUTOR will allocate LEXUS Products among its dealers in a fair
and equitable manner. DEALER acknowledges and agrees that
DISTRIBUTOR may consider, among other things, DEALER'S service
capacity, customer satisfaction performance, sales performance,
sales potential and facilities in determining the quantity of
Product to offer to DEALER. DISTRIBUTOR will, upon DEALER'S request,
explain the considerations and method used to distribute LEXUS
Products to DEALER.
C. PRICES AND TERMS OF SALE
DISTRIBUTOR, from time to time, shall establish and revise prices
and other terms for the sale of LEXUS Products to DEALER. Revised
prices, terms, or provisions shall apply to any LEXUS Product not
invoiced to DEALER by DISTRIBUTOR at the time the notice of such
change is given to DEALER (in the case of LEXUS Motor Vehicles), or
upon issuance of a new or modified Parts Price List or through
change notices, letters, bulletins, or revision sheets (in the case
of parts, options and accessories), or at such other times as may be
designated in writing by DISTRIBUTOR.
D. MODE, PLACE AND CHARGES FOR DELIVERY OF PRODUCTS
DISTRIBUTOR shall designate the distribution points and the mode of
transportation and shall select carrier(s) for the delivery of LEXUS
Products to DEALER. DEALER shall pay DISTRIBUTOR such charges as
DISTRIBUTOR in its sole discretion establishes for such
transportation services.
4
Lexus Standard Provisions
E. DAMAGE CLAIMS AGAINST TRANSPORTATION CARRIERS
DEALER shall promptly notify DISTRIBUTOR of any damage occurring
during transit and shall, if so directed by DISTRIBUTOR, file
claims against transportation carrier for damage. DEALER agrees to
assist DISTRIBUTOR in obtaining recovery against any transportation
carrier or insuree for loss or damage to LEXUS Products shipped
hereunder. DISTRIBUTOR shall not be liable for loss or damage to
LEXUS Products sold hereunder occurring after delivery thereof to
premises of DEALER
To the extent required by law, DEALER shall notify the purchaser of
a vehicle of any damage sustained by such vehicle prior to sale.
DEALER shall indemnify and hold DISTRIBUTOR harmless from any
liability resulting from DEALER'S failure to so notify such
purchasers.
▇. ▇▇▇▇▇ OR FAILURE OF DELIVERY
DISTRIBUTOR shall not be liable for delay or failure to deliver
LEXUS 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, 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 to deliver LEXUS Products.
G. DIVERSION CHARGES
If after shipment DEALER fails or refuses to accept LEXUS Products
that it had agreed to purchase, DEALER shall pay all charges
incurred by DISTRIBUTOR as a result of such diversion. 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 reasonable charges for, demurrage, storage or other charges
accruing after arrival of shipment at the diversion point
established by DISTRIBUTOR.
H. CHANGES OF DESIGN, OPTIONS OR SPECIFICATIONS
DISTRIBUTOR may change the design or specifications of any LEXUS
Product or the options in any LEXUS Product and shall be under no
obligation to provide notice of same or to make any similar change
upon any product previously purchased by or shipped to DEALER. No
change shall be considered a model year change unless so specified
by DISTRIBUTOR.
I. DISCONTINUANCE OF MANUFACTURE OR IMPORTATION
FACTORY and/or DISTRIBUTOR may discontinue the manufacture,
importation or distribution of all or part of any LEXUS Product,
whether motor vehicle, parts, options, or accessories, including any
model, series, or body style of any
5
LEXUS Motor Vehicle at any time without any obligation or liability
to DEALER by reason thereof.
J. MINIMUM VEHICLE INVENTORIES
DEALER agrees that it shall, at all times, maintain in showroom
ready condition at least the minimum inventory of LEXUS Motor
Vehicles as may be established by DISTRIBUTOR from time to time.
K. PRODUCT MODIFICATIONS
DEALER agrees that it will not install aftermarket accessories or
make any modifications to LEXUS vehicles that may impair or
adversely affect a vehicle's safety, emissions, structural integrity
or performance.
VII. DEALER MARKETING OF LEXUS PRODUCTS
A. DEALER'S SALES RESPONSIBILITIES
DEALER recognizes that customer satisfaction and the successful
promotion and sale of LEXUS Products are significantly dependent on
DEALER'S advertising and sales promotion activities. Therefore,
DEALER at all times shall:
1. Use its best efforts to promote, sell and service new and used
LEXUS Products;
2. Advertise and merchandise LEXUS Products and use current LEXUS
showroom displays;
3. Ensure that its sales personnel meet the educational and
management standards established by DISTRIBUTOR and have such
personnel, as are appropriate, attend all sales training courses
prescribed by DISTRIBUTOR at DEALER'S expense;
4. Maintain a high standard of ethics in advertising, promoting and
selling LEXUS Products and avoid engaging in any
misrepresentation or unfair or deceptive practices. DEALER shall
discontinue any advertising that DISTRIBUTOR may find to be
injurious to DISTRIBUTOR'S business or reputation or to the LEXUS
Marks, or that are likely to be violative of applicable laws or
regulations;
5. Advertise in the local classified telephone directories
identifying itself as an authorized LEXUS DEALER. Such ad(s)
shall properly display the LEXUS Marks; and
6. Accurately represent to customers the total selling price of
LEXUS Products. DEALER agrees to explain to customers of LEXUS
Products the items that make up the total selling price and to
give the customers itemized invoices and all other information
required by law. DEALER understands and hereby acknowledges that
it may sell LEXUS Products at whatever price DEALER desires.
6
B. EXPORT POLICY
DEALER is authorized to sell LEXUS Motor Vehicles only to customers
located in the United States. DEALER agrees that it will not sell
LEXUS Motor Vehicles for resale or use outside the United States.
DEALER agrees to abide by any export policy established by
DISTRIBUTOR.
C. LEXUS DEALER ASSOCIATION
Except where prohibited by law, DEALER will participate in a LEXUS
Dealer Advertising Association. DEALER agrees to cooperate in the
establishment of such an association and to fund its fair share of
advertising and merchandising programs undertaken by the
association.
D. USED VEHICLES
DEALER agrees to display and sell used vehicles at the Approved
Location(s). DEALER shall maintain for resale an adequate inventory
of used vehicles.
E. PRIMARY AREA OF RESPONSIBILITY
DISTRIBUTOR will assign DEALER a geographic area called a Primary
Market Area ("PMA"). DEALER'S PMA may be altered or adjusted by
DISTRIBUTOR at any time. The PMA is a tool used by DISTRIBUTOR to
evaluate DEALER'S performance of its obligations. DEALER agrees
that it has no right or interest in any PMA that DISTRIBUTOR, in its
sole discretion, may designate. As permitted by local law,
DISTRIBUTOR may add new dealers to, or relocate dealers in or into
the PMA assigned to DEALER.
F. EVALUATION OF DEALER'S SALES AND MARKETING PERFORMANCE
DISTRIBUTOR periodically will evaluate DEALER'S sales and marketing
performance under this Agreement. DEALER'S evaluation will be based
on such reasonable criteria as DISTRIBUTOR may establish including,
without limitation, comparisons of DEALER'S sales with those of
other LEXUS dealers. DISTRIBUTOR will review such evaluations with
DEALER and DEALER shall take prompt corrective action, if required,
to improve its performance.
VIII. DEALER SERVICE OBLIGATIONS
A. CUSTOMER SERVICE STANDARDS
DEALER and DISTRIBUTOR agree that the success and future growth of
the LEXUS franchise is substantially dependent upon the customers'
ability to obtain responsive, high-quality vehicle servicing.
Therefore, DEALER agrees to:
1. Take all reasonable steps to provide service of the highest
quality for all LEXUS Motor Vehicles, regardless of where
purchased and whether or not under warranty;
7
2. Ensure that the customer is advised of the necessary repairs and
his or her consent is obtained prior to the initiation of any
repairs;
3. Ensure that necessary repairs on LEXUS Motor Vehicles are
accurately diagnosed and professionally performed; and
4. Assure that the customer is treated courteously and fairly at all
times.
B. NEW MOTOR VEHICLE PRE-DELIVERY SERVICE
DEALER agrees that, prior to delivery of a new LEXUS Motor Vehicle
to a customer, it shall perform, if directed by DISTRIBUTOR,
pre-delivery service on each LEXUS Motor Vehicle in accordance with
LEXUS standards. DISTRIBUTOR shall reimburse DEALER for such
pre-delivery service according to such directives and the applicable
provisions of the LEXUS Warranty Policies and Procedures Manual.
C. WARRANTY AND POLICY SERVICE
DEALER acknowledges that the only warranties of DISTRIBUTOR or
FACTORY applicable to LEXUS Products shall be the New Vehicle
Limited Warranty or such other written warranties that may be
expressly furnished by DISTRIBUTOR or FACTORY. Except for its
limited liability under such written warranty or warranties,
DISTRIBUTOR and FACTORY do not assume any other warranty,
obligation or liability. DEALER is not authorized to assume any
additional warranty obligations or liabilities on behalf of
DISTRIBUTOR or FACTORY. Any such additional obligations assumed by
DEALER shall be the sole responsibility of DEALER.
DEALER shall perform warranty and policy service specified by
DISTRIBUTOR, in accordance with the LEXUS Warranty Policies and
Procedures Manual. DISTRIBUTOR agrees to compensate DEALER for all
warranty and policy work, including labor, diagnosis and Genuine
LEXUS Parts and Accessories, in accordance with procedures and at
rates to be announced from time to time by DISTRIBUTOR and in
accordance with applicable law. Unless otherwise approved in
advance by DISTRIBUTOR, DEALER shall use only Genuine LEXUS Parts
and Accessories when performing LEXUS warranty repairs. 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 or any other services for which DEALER
is reimbursed by DISTRIBUTOR, except as required by law.
IX. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICE
Subject to the provisions of Sections VI(k) and VIII(c), DEALER has the
right to sell, install or use for making non-warranty repairs products
that are not Genuine LEXUS Parts or Accessories.
DEALER acknowledges, however, that its customers expect that any parts
or accessories that DEALER sells, installs or uses in the sale, repair
or servicing of LEXUS vehicles are, or meet the high quality standards
of, Genuine LEXUS Parts or ▇▇▇▇▇-
▇
sories. DEALER agrees that in sales, repairs or servicing where DEALER
does not use Genuine LEXUS Parts or Accessories, DEALER only will
utilize such other parts or accessories as:
1. Will not adversely affect the mechanical operation of the LEXUS
vehicle being sold, repaired or serviced; and
2. Are equivalent in quality and design to Genuine LEXUS Parts or
Accessories.
DEALER further agrees that it will not offer to sell any parts or
accessories that for reasons of quality or image are reasonably
objected to by LEXUS.
A. WARRANTY DISCLOSURES AS TO NON-GENUINE PARTS AND ACCESSORIES
In order to avoid confusion and to minimize potential customer
dissatisfaction, in any non-warranty instance where DEALER sells,
installs or uses non-Genuine LEXUS Parts or Accessories, DEALER
shall disclose such fact to the customer and shall advise the
customer that the item is not included in warranties furnished by
DISTRIBUTOR or FACTORY. Such disclosure shall be written,
conspicuous and stated on the customer's copy of the service or
repair order or sale document. In addition, DEALER will clearly
explain to the customer the extent of any warranty covering the
parts or accessories involved and will deliver a copy of the
warranty to the customer.
B. ROADSIDE ASSISTANCE PROGRAM
Dealer agrees to participate in the LEXUS Roadside Assistance
Program as specified by DISTRIBUTOR.
C. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS
DEALER agrees to perform service campaign inspections and/or
corrections for owners or users of all LEXUS Products that qualify
for such inspections and/or corrections. DEALER further agrees to
comply with all DISTRIBUTOR'S directives and with the applicable
procedures in the LEXUS Warranty Policies and Procedures Manual
relating to those inspections and/or corrections. DISTRIBUTOR
agrees to reimburse DEALER for all replacement parts and/or other
materials required and used in connection with such work and for
labor according to such directives and the applicable provisions of
the LEXUS Warranty Policies and Procedures Manual.
D. COMPLIANCE WITH SAFETY AND EMISSION CONTROL REQUIREMENTS
DEALER agrees to comply and operate consistently with all applicable
provisions of the National Traffic and Motor Vehicle Safety Act of
1966 and the Federal Clean Air Act, as amended, including applicable
rules and regulations issued from time to time thereunder, and all
other applicable federal, state and local motor vehicle safety and
emission control statutes, rules and regulations.
In the event that the laws of the state in which DEALER is located
require motor vehicle dealers or distributors to install in new or
used motor vehicles,
9
prior to their retail sale, any safety devices or other equipment
not installed or supplied as standard equipment by FACTORY, then
DEALER, prior to the sale of any LEXUS Motor Vehicle on which such
installations are required, shall properly install such devices or
equipment on such LEXUS Motor Vehicles. DEALER shall comply with
state and local laws pertaining to the installation and reporting of
such equipment.
In the interest of motor vehicle safety and emission control,
DISTRIBUTOR and DEALER agree to provide to each other such
information and assistance as may reasonably be requested by the
other in connection with the performance of obligations imposed on
either party by the National Traffic and Motor Vehicle Safety Act
of 1966 and the Federal Clean Air Act, as amended, and their rules
and regulations, and all other applicable federal, state and local
motor vehicle safety and emissions control statutes, rules and
regulations.
E. COMPLIANCE WITH CONSUMER PROTECTION STATUTES, RULES AND REGULATIONS
Because certain customer complaints may impose liability upon
DISTRIBUTOR under various repair or replace laws or other consumer
protection laws and regulations, DEALER agrees to provide prompt
notice to DISTRIBUTOR of such complaints and take such other steps
as DISTRIBUTOR may require. DEALER will do nothing to affect
adversely DISTRIBUTOR'S rights under such laws and regulations.
Subject to any law or any regulation to the contrary, DEALER shall
be liable to DISTRIBUTOR for any refunds or vehicle replacements
provided to customer where DISTRIBUTOR reasonably establishes that
DEALER failed to carry out vehicle repairs in accordance with
DISTRIBUTOR'S written published policies and procedures or its
express oral instructions subsequently confirmed in writing. DEALER
also agrees to provide applicable required customer notifications
and disclosures as prescribed repair or replacement laws or other
consumer laws or regulations.
X. SERVICE AND PARTS ORGANIZATION
A. ORGANIZATION AND STANDARDS
DEALER agrees to organize and maintain a complete service and parts
organization of the highest quality, including a qualified Service
Manager, Parts Manager, Diagnostic Specialists, Technicians and a
sufficient complement of qualified customer relations, service and
parts personnel as recommended in the LEXUS Dealer Facility Planner.
DEALER'S personnel will meet the educational, management and
technical training standards established by DISTRIBUTOR, and will
attend all service, parts and customer satisfaction training courses
prescribed by DISTRIBUTOR at DEALER'S expense.
B. SERVICE EQUIPMENT AND SPECIAL TOOLS
DEALER agrees to acquire and properly maintain adequate service
equipment and such special service tools and instruments as are
specified by DISTRIBUTOR.
10
C. PARTS STOCKING LEVEL
DEALER agrees to maintain its parts stock at minimum stocking levels
established by DISTRIBUTOR. In consideration for DEALER'S
maintenance of the Dealer Stocking Guide, DISTRIBUTOR grants DEALER
a one hundred percent (100%) obsolescence parts return policy. For
non-stocking guide parts, parts orders will accrue a five percent
(5%) obsolescence eligibility.
D. AFTER-HOURS DELIVERY
Dealer agrees to provide DISTRIBUTOR, upon request, access to a
secure area for after-hours parts or vehicle delivery.
E. ASSISTANCE PROVIDED BY DISTRIBUTOR
1. SERVICE MANUALS AND MATERIALS
DISTRIBUTOR agrees to make available to DEALER copies of such
service manuals and bulletins, publications and technical data as
DISTRIBUTOR shall deem to be necessary for the needs of DEALER'S
service and parts organization. DEALER shall be responsible for
keeping such manuals, publications and data current and available
for consultation by its employees.
2. FIELD SERVICE PERSONNEL ASSISTANCE
To assist DEALER in handling service responsibilities under this
Agreement, DISTRIBUTOR agrees to make available qualified field
service personnel who will, from time to time, advise and counsel
DEALER on service-related subjects, including service policies,
product and technical adjustments, repair and replacement of
product components, customer relations, warranty administration,
service and parts merchandising, and personnel/management
training.
F. EVALUATION OF DEALER'S SERVICE AND PARTS PERFORMANCE
DISTRIBUTOR will evaluate periodically DEALER'S: (i) service
performance in areas such as customer satisfaction, warranty
administration, service repairs, service management, facilities,
operating procedures, new vehicle pre-delivery service; and (ii)
parts operations, facilities, tools and equipment. DISTRIBUTOR
agrees to review such evaluations with DEALER and DEALER agrees to
take prompt action to improve the service and parts performance to
satisfactory levels as DISTRIBUTOR may require. Such action shall,
if requested by DISTRIBUTOR, include an action plan by DEALER for
improvement of service and parts performance within a specific time
period approved by DISTRIBUTOR.
11
XI. CUSTOMER SATISFACTION RESPONSIBILITIES
A goal of DISTRIBUTOR and DEALER is to be recognized as marketing the
finest products and providing the best service in the automobile
industry. The LEXUS name should be synonymous with the highest level of
customer satisfaction.
A. DEALER'S CUSTOMER SATISFACTION OBLIGATIONS
DEALER will be responsible for satisfying LEXUS customers in all
matters except those that are directly related to product design
and manufacturing or are otherwise out of DEALER'S control. DEALER
will take all reasonable steps to ensure that each customer is
completely satisfied with his or her LEXUS Products and the services
and practices of DEALER. DEALER will not engage in any practice or
method of operation if its nature or quality may impair the
reputation of LEXUS or LEXUS Products and it has been reasonably
objected to by DISTRIBUTOR.
1. DEALER'S CUSTOMER SATISFACTION PLAN
DEALER shall provide a detailed plan of DEALER'S customer
satisfaction program to DISTRIBUTOR and shall implement such
program on a continuous basis. This plan shall include an
ongoing system for emphasizing customer satisfaction to all
DEALER'S employees, for training DEALER employees and for
conveying to customers that DEALER is committed to the highest
possible level of customer satisfaction.
2. EMPLOYEE TRAINING
DEALER agrees to participate and to have its employees
participate in LEXUS customer satisfaction training as required
by DISTRIBUTOR, at DEALER'S expense.
3. CUSTOMER SATISFACTION MANAGER
If requested by DISTRIBUTOR, DEALER agrees to employ a full-time
Customer Satisfaction Manager with the necessary authority to
make all decisions regarding customer satisfaction and to resolve
all customer problems.
4. CUSTOMER ASSISTANCE RESPONSE SYSTEM
DEALER agrees to implement a system, approved by DISTRIBUTOR,
that will respond immediately to requests for customer assistance
from DISTRIBUTOR.
B. EVALUATION OF DEALER'S CUSTOMER SATISFACTION PERFORMANCE
DISTRIBUTOR periodically will evaluate DEALER'S customer
satisfaction performance based on the following considerations and
efforts by DEALER.
1. DISTRIBUTOR will provide DEALER with Owner Satisfaction Index
("OSI") reports or such other equivalent data as will permit
DEALER to assess its performance and maintain the highest level
of customer satisfaction.
12
DEALER agrees to review with its employees on a regular basis the
results of the customer satisfaction reports or other data it
receives.
2. DEALER agrees to develop and implement specific action plans to
improve results in the event that DEALER is below the average for
other LEXUS dealers. The plans are to be reviewed with
DISTRIBUTOR on a basis that DISTRIBUTOR deems appropriate. DEALER
will use its best efforts to respond on a timely basis to
requests from DISTRIBUTOR to take action on unsatisfactory
customer satisfaction matters and to commit necessary resources
to remedy deficiencies reasonably specified by DISTRIBUTOR.
XII. DEALERSHIP EACH AND IDENTIFICATION
A. FACILITIES
1. In order for DISTRIBUTOR to establish an effective network of
authorized LEXUS dealers, DEALER shall provide, and at all times
maintain, attractive dealership facilities at the Approved
Location(s) that satisfy the image, size, layout, interior
design, color, equipment and identification required by
DISTRIBUTOR. DEALER'S facility shall meet the minimum facility
standards established by LEXUS.
2. To assist DEALER in planning, building, remodeling, or
maintaining dealership facilities, DISTRIBUTOR will provide
DEALER a LEXUS Dealer Facility Planner and will identify sources
from which DEALER may purchase facility consultation and planning
services, and architectural materials and furnishings that meet
LEXUS standards and guidelines. DISTRIBUTOR will also 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 required 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.
B. SERVICE RECEPTION AREA
DEALER agrees to maintain a service reception area that meets all
requirements set forth in the LEXUS Dealer Facility Planner, that
is consistent with the LEXUS image and that will promote a high
level of customer satisfaction.
C. DEALER'S OPERATING HOURS
DEALER agrees to keep its dealership operations open for business
during all days and hours that are customary and lawful for such
operations in the community or locality in which DEALER is located
and in accordance with industry standards.
13
D. SIGNS
Subject to applicable governmental statutes, ordinances and
regulations, DEALER agrees to erect, display and maintain, at
Approved Location(s) only and at DEALER'S sole expense, such
standard authorized product and service signs as specified by
DISTRIBUTOR.
E. EVALUATION OF DEALERSHIP FACILITIES
DISTRIBUTOR periodically will evaluate DEALER'S facilities. In
making such evaluations, DISTRIBUTOR may consider, among other
things: the actual building and land 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 as in DISTRIBUTOR'S opinion may
relate to DEALER'S performance of its responsibilities under this
Agreement. DISTRIBUTOR will discuss such evaluations with DEALER and
DEALER shall take prompt action to comply with DISTRIBUTOR'S
recommendations and minimum facility standards.
F. USE OF LEXUS MARKS
1. USE BY DEALER
DISTRIBUTOR grants to DEALER the non-exclusive privilege of
displaying or otherwise using authorized LEXUS Marks as specified
in the LEXUS Graphic Standards Manual at the Approved Location(s)
in connection with the selling or servicing of LEXUS Products.
DEALER further agrees that it promptly shall discontinue the
display and use of any such LEXUS Marks, and shall change the
manner in which any LEXUS Marks are displayed and used, when for
any reason it is requested to do so by DISTRIBUTOR. DEALER may
use the LEXUS Marks only at Approved Location(s) and for such
purposes as are specified in this Agreement. DEALER agrees that
such LEXUS Marks may be used as part of the name under which
DEALER'S business is conducted only with the prior written
approval of DISTRIBUTOR
2. DISCONTINUANCE OF USE
Upon termination, non-renewal, or expiration of this Agreement,
DEALER agrees that it shall immediately:
a. Discontinue the use of the word LEXUS and the LEXUS Marks, or
any semblance of same, including without limitation, the use
of all stationery, telephone directory listing, and other
printed material referring in any way to LEXUS or bearing any
LEXUS ▇▇▇▇;
b. Discontinue the use of the word LEXUS or the LEXUS 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;
14
c. Remove all product signs bearing said word(s) or LEXUS Marks
at DEALER'S sole cost and expense;
d. Cease representing itself as an authorized LEXUS Dealer; and
e. Refrain from any action, including without limitation, any
advertising, stating or implying that it is authorized to sell
or distribute LEXUS Products.
In the event DEALER fails to comply with the terms and conditions
of this Section, DISTRIBUTOR shall have the right to enter upon
DEALER'S premises and remove, without liability, all such product
signs and identification bearing the word LEXUS or any LEXUS
Marks. DEALER agrees that it shall reimburse DISTRIBUTOR for any
costs and expenses incurred in such removal, including reasonable
attorney fees.
XIII. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS
A. NET WORKING CAPITAL
DEALER agrees to establish and maintain actual net working capital
in an amount not less than the minimum net working capital
specified by DISTRIBUTOR. DISTRIBUTOR will have the right to
increase the minimum net working capital required, and DEALER
agrees promptly to establish and maintain the increased amount.
B. FLOORING AND LINES OF CREDIT
DEALER agrees to obtain and maintain at all times a confirmed and
adequate flooring line with a bank or financial institution or other
method of financing acceptable to DISTRIBUTOR to enable DEALER to
perform its obligations pursuant to this Agreement.
DISTRIBUTOR may increase the required amounts of flooring or lines
of credit, and DEALER agrees promptly to establish and maintain the
increased amount.
Subject to the foregoing obligations, DEALER is free to do its
financing business, wholesale, retail or both, with whomever it
chooses and to the extent it desires.
C. PAYMENT TERMS
All monies or accounts due DEALER from DISTRIBUTOR will be
considered net of DEALER'S indebtedness to DISTRIBUTOR. DISTRIBUTOR
may deduct or offset any amounts due or to become due from DEALER
to DISTRIBUTOR, or any amounts held by DISTRIBUTOR, from or against
any sums or accounts due or to become due from DISTRIBUTOR to
DEALER. Any amounts owed by DEALER to DISTRIBUTOR that are not paid
when due shall bear interest as established by DISTRIBUTOR and
permitted by law. Payments by DEALER to DISTRIBUTOR shall be made in
such a manner as prescribed by DISTRIBUTOR and shall be applied
against DEALER'S indebtedness in accordance with DISTRIBUTOR'S
policies and practices.
15
D. UNIFORM ACCOUNTING SYSTEM
DEALER agrees to maintain its financial books and records in
accordance with the LEXUS Accounting Manual, as amended from time
to time by DISTRIBUTOR. In addition, DEALER shall furnish to
DISTRIBUTOR complete and accurate financial or operating
information, including without limitation, a financial and/or
operating statement covering the current month and calendar
year-to-date operations and showing the true and accurate condition
of DEALER'S business. DEALER shall promptly furnish to DISTRIBUTOR
copies of any adjusted financial and/or operating statements,
including any and all adjusted, year-end statements prepared for
tax or any other purposes. All such information shall be furnished
by DEALER to DISTRIBUTOR via DISTRIBUTOR'S electronic communications
network and in such a format and at such times as prescribed by
DISTRIBUTOR.
E. RECORDS MAINTENANCE
DEALER agrees to keep complete, accurate and current records
regarding its sale, leasing and servicing of LEXUS Products for a
minimum of five (5) years, exclusive of any retention period
required by any governmental entity. DEALER shall prepare, keep
current and retain records in support of requests for
reimbursement for warranty and policy work performed by DEALER in
accordance with the LEXUS Warranty Policies and Procedures Manual.
F. EXAMINATION OF DEALERSHIP ACCOUNTS AND RECORDS
DISTRIBUTOR shall have the right at all reasonable times and during
regular business hours to inspect DEALER'S facilities and to
examine, audit and to reproduce all records, accounts and supporting
data relating to the operations of DEALER, including without
limitation, sales reporting, service and repair of LEXUS Products
by DEALER.
G. TAXES
DEALER shall be responsible for and duly pay all sales taxes, use
taxes, excise taxes and other governmental or municipal charges
imposed, levied or based upon the purchase or sale of LEXUS
Products by DEALER, and shall maintain accurate records of the same.
H. CONFIDENTIALITY
DISTRIBUTOR agrees that it shall not provide any financial data or
documents submitted to it by DEALER to any third party unless
authorized by DEALER, required by law, or required to generate
composite or comparative data for analytical purposes.
DEALER agrees to keep confidential and not to disclose, directly or
indirectly, any information that DISTRIBUTOR designates as
confidential.
16
I. DATA TRANSMISSION SYSTEMS
DISTRIBUTOR has established a national, private, centralized database
of information about all LEXUS vehicles and customers. In order to
provide the highest level of service and support and to facilitate
accurate and timely reporting of relevant DEALER operational and
financial data, DEALER shall provide information to DISTRIBUTOR as
specified by DISTRIBUTOR from time to time, including, but not
limited to, customer service, sales, parts inventory and accounting
information. All information shall be submitted by DEALER via the
LEXUS electronic communications network. DEALER will acquire, install
and maintain at its expense the necessary equipment and systems
compatible with the LEXUS electronic communications network.
DISTRIBUTOR will recommend to DEALER an independent source for
purchasing the required equipment and systems. DEALER, however, may
purchase equipment from any source, provided the equipment meets the
LEXUS electronic communications network specifications.
J. SALES REPORTING
DEALER agrees to 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 to furnish
DISTRIBUTOR with such other reports as DISTRIBUTOR may reasonably
require from time to time.
XIV. TRANSFERS
A. SALE OF OWNERSHIP INTEREST IN DEALERSHIP
This is a personal services Agreement based upon the personal skills,
service, qualifications and commitment of DEALER'S OWNERS and General
Manager. For this reason, and because DISTRIBUTOR has entered into
this Agreement in reliance upon DEALER'S, OWNERS' and General
Manager's qualifications, DEALER agrees to obtain DISTRIBUTOR'S prior
written approval of any proposed change in its ownership, General
Manager or any proposed disposition of DEALER'S principal assets.
DISTRIBUTOR shall not be obligated to renew this Agreement or to
execute a new Agreement to a proposed transferee unless DEALER first
makes arrangements acceptable to DISTRIBUTOR to satisfy any
outstanding indebtedness to DISTRIBUTOR.
B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
1. RIGHTS GRANTED
If a proposal to sell the dealership's assets or transfer its
ownership is submitted by DEALER to DISTRIBUTOR, or in the event
of the death of the majority owner of DEALER, DISTRIBUTOR has a
right of first refusal or option to purchase the dealership assets
or stock, including any leasehold
17
interest or realty. DISTRIBUTOR'S exercise of its right or option
under this Section supercedes DEALER'S right to transfer its
interest in, or ownership of, the dealership. DISTRIBUTOR'S right
or option may be assigned by it to any third party and DISTRIBUTOR
hereby guarantees the full payment to DEALER of the purchase price
by such assignee. DISTRIBUTOR may disclose the terms of any
pending buy/sell agreement and any other relevant dealership
performance information to any potential assignee. DISTRIBUTOR'S
rights under this Section will be binding on and enforceable
against any assignee or successor in interest of DEALER or
purchaser of DEALER'S assets.
2. EXERCISE OF DISTRIBUTOR'S RIGHTS
DISTRIBUTOR shall have thirty (30) days from the following events
within which to exercise its option to purchase or right of first
refusal: (i) DISTRIBUTOR'S receipt of all data and documentation
customarily required by it to evaluate a proposed transfer of
ownership; (ii) DISTRIBUTOR'S receipt of notice from DEALER of the
death of the majority owner of DEALER; or (iii) DISTRIBUTOR'S
disapproving of any application submitted by an OWNER'S heirs
pursuant to Section XIV. DISTRIBUTOR'S exercise of its right of
first refusal under this Section neither shall be dependent upon
nor require its prior refusal to approve the proposed transfer.
3. RIGHT OF FIRST REFUSAL
If DEALER has entered into a bona fide written buy/sell agreement
for its dealership business or assets, DISTRIBUTOR'S right under
this Section is a right of first refusal, enabling DISTRIBUTOR to
assume the buyer's rights and obligations under such buy/sell
agreement, and to cancel this Agreement and all rights granted
DEALER. Upon DISTRIBUTOR'S request, DEALER agrees to provide other
documents relating to the proposed transfer and any other
information which DISTRIBUTOR deems appropriate, including, but
not limited to, those reflecting other agreements or under-
standings between the parties to the buy/sell 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.
4. OPTION TO PURCHASE
In the event of the death of a majority OWNER or if DEALER submits
a proposal which DISTRIBUTOR determines is not bona fide or in
good faith, DISTRIBUTOR has the option to purchase the principal
assets of DEALER utilizing the dealership business, including real
estate and leasehold interest, and to cancel this Agreement and
the rights granted DEALER. The purchase price of the dealership
assets will be determined by good faith negotiations between the
parties. If an agreement cannot be reached, the purchase price
will be exclusively determined by binding 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
18
Arbitration Association in the locality of DISTRIBUTOR'S
principal place of business.
5. DEALER'S OBLIGATIONS
Upon DISTRIBUTOR'S exercise of its right or option and tender of
performance under the buy/sell agreement or upon whatever terms
may be expressed in the buy/sell agreement, DEALER shall forthwith
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 deed at the time of closing. DEALER
shall also furnish to DISTRIBUTOR all copies of any easements,
licenses or other documents affecting the property or dealership
operations and shall assign any permits or licenses that are
necessary or desirable for the use of or appurtenant to 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 closing of sale of such
property to DISTRIBUTOR.
XV. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF OWNER
In the event that OWNER dies and his or her interest in Dealership
passes directly to any person or persons ("Heirs") who wish to
succeed to OWNER'S interest, then OWNER'S legal representative must
notify DISTRIBUTOR within sixty (60) days of the death of the OWNER
of such Heir's or Heirs' intent to succeed OWNER. The legal
representative also must then designate a proposed General Manager
for DISTRIBUTOR approval. The effect of such notice from OWNER'S
legal representative will be to suspend any notice of termination
provided for in Section XVI(B)(4) issued hereunder.
Upon delivery of such notice, OWNER'S legal representative shall
immediately request any person(s) identified by it as intending to
succeed OWNER and the designated candidate for General Manager to
submit an application and to provide all personal and financial
information that DISTRIBUTOR may reasonably and customarily require
in connection with its review of such applications. All requested
information must be provided promptly to DISTRIBUTOR and in no case
later than thirty (30) days after receipt of such request from
OWNER'S legal representative. Upon the submission of all requested
information, DISTRIBUTOR agrees to review such application(s)
pursuant to the then current criteria generally applied by
DISTRIBUTOR in qualifying dealer OWNERS and/or General Managers.
DISTRIBUTOR shall either approve or disapprove the application(s)
within ninety (90) days of full compliance with all DISTRIBUTOR'S
requests for information. If DISTRIBUTOR approves the application(s),
it shall offer to enter into a new LEXUS Dealer
19
Agreement with OWNER'S Heir(s) in the form then currently in use,
subject to such additional conditions and for such term as
DISTRIBUTOR deems appropriate.
In the event that DISTRIBUTOR does not approve the designated Heir(s)
or designated candidate for Manager, or if the OWNER'S legal
representative withdraws his or her notice of the Heir(s) intent to
succeed as OWNER(S) or if the legal representative or any proposed
OWNERS or General Manager fails to timely provide the required
information, DISTRIBUTOR may reinstate or issue a notice of
termination. Nothing in this Section shall waive DISTRIBUTOR'S right
to exercise its Option to Purchase set forth in Section XIV herein.
B. INCAPACITY OF OWNER
The parties agree that, as used herein, incapacity shall refer to any
physical or mental ailment that, in DISTRIBUTOR'S opinion, adversely
affects OWNER'S ability to meet his or her obligations under this
Agreement. DISTRIBUTOR may terminate this Agreement when an
incapacitated OWNER also is the General Manager identified herein.
Prior to the effective date of any notice of termination, an
incapacitated OWNER who is also the General Manager, or his or her
legal representative, may propose a new candidate for the position of
General Manager. Such proposal shall be in writing and shall suspend
any pending notice of termination until DISTRIBUTOR advises DEALER
of its approval or disapproval of the new candidate. Upon receipt of
such notice, DISTRIBUTOR and DEALER shall follow the qualification
procedures set forth in subsection A above.
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH OR INCAPACITY OF OWNER
An OWNER owning a majority of DEALER'S stock may nominate a candidate
to assume ownership and/or the position of General Manager of the
dealership upon his or her death or incapacity.
As soon as practicable after such nomination, DISTRIBUTOR will
request such personal financial information from the nominated OWNER
and/or General Manager candidate as it reasonably and customarily may
require in evaluating such candidates. DISTRIBUTOR shall apply
criteria then currently used by DISTRIBUTOR in qualifying OWNERS
and/or General Managers of authorized dealers. Upon receipt of all
requested information, DISTRIBUTOR shall either approve or disapprove
such candidate. If DISTRIBUTOR initially approves the candidate, said
approval shall remain in effect for the duration of the current
Agreement. DISTRIBUTOR agrees that DEALER may renominate the
candidate after the expiration of this Agreement, and DISTRIBUTOR
will approve such nomination provided: (i) DISTRIBUTOR and DEALER
have entered into a new LEXUS Dealer Agreement; and (ii) 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
20
free at any time to renew its nomination. However, in such instances,
the candidate must again qualify pursuant to the then current
criteria. OWNER may, by written notice, withdraw a nomination at any
time, even if DISTRIBUTOR has previously qualified said candidate.
XVI. TERMINATION
A. VOLUNTARY TERMINATION BY DEALER
DEALER may voluntarily terminate this Agreement at any time by
written notice to DISTRIBUTOR. Termination shall be effective thirty
(30) days after receipt of the notice by DISTRIBUTOR, unless
otherwise mutually agreed in writing.
B. TERMINATION FOR CAUSE
1. IMMEDIATE TERMINATION
DEALER and DISTRIBUTOR agree that the following conduct is within
DEALER'S control and is so contrary to the goals, purposes and
objectives of this Agreement as to warrant its immediate
termination. Accordingly, DEALER agrees that if it engages in any
of the following types of conduct, DISTRIBUTOR shall have the
right to terminate this Agreement immediately:
a. If DEALER fails to conduct any customary dealership
operations for seven consecutive business days, 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
bankruptcy law, or executes an assignment for the benefit of
creditors, or appoints a receiver or trustee or another officer
having similar powers is appointed for DEALER and is not
removed within thirty (30) days from his appointment thereto or
there is any levy under attachment or execution or similar
process which is not vacated or removed by payment or bonding
within ten (10) days;
c. If DEALER, or any OWNER or Officer of DEALER is convicted of
any felony;
d. If DEALER or any OWNER, Officer or General Manager of Dealer
makes any material misrepresentation to DISTRIBUTOR; or
e. If DEALER fails to obtain or maintain any license, permit or
authorization necessary for the conduct by DEALER of his or
her business pursuant to this Agreement, or such license,
permit or authorization is suspended or revoked.
21
2. TERMINATION UPON SIXTY DAYS NOTICE
The following conduct violates the terms and conditions of this
Agreement and, if DEALER engages in such conduct, DISTRIBUTOR
shall have the right to terminate this Agreement upon sixty (60)
days notice:
a. 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 unreasonable removal of the General Manager;
c. Appointment of a new General Manager without the prior written
approval of DISTRIBUTOR;
d. The conducting, directly or indirectly, of any LEXUS dealer
operation other than at the Approved Location(s);
e. Failure of DEALER to pay DISTRIBUTOR for any LEXUS Products;
f. Failure of DEALER to establish or maintain during the existence
of this Agreement the required net working capital or adequate
flooring and lines of credit;
g. Any dispute, disagreement or controversy among managers,
officers or stockholders of DEALER that, in the reasonable
opinion of DISTRIBUTOR, adversely affects the ownership,
operation, management, business, reputation or interests of
DEALER or DISTRIBUTOR;
h. 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 interest of both DEALER
and DISTRIBUTOR;
i. Impairment of the reputation or financial standing of DEALER
subsequent to the execution of this Agreement;
j. Refusal to permit DISTRIBUTOR to examine, or audit DEALER'S
accounting records as provided herein upon receipt by DEALER
from DISTRIBUTOR of written notice requesting such permission
or information;
k. Failure of DEALER to timely furnish accurate sales or financial
information and related supporting data;
1. Breach or violation by DEALER of any other term or provision
of this Agreement; or
m. Any civil or administrative liability found against DEALER or
any OWNER or Officer of DEALER for any automotive-related
matter which in DISTRIBUTOR'S opinion tends to seriously and
adversely affect the
22
ownership, operation, management, reputation, business or
interests of DEALER, or to impair the goodwill associated with
the LEXUS Marks.
3. TERMINATION FOR FAILURE OF PERFORMANCE
If, upon evaluation of DEALER'S performance pursuant to
paragraphs VII(F), X(F), XI(B) or XII(E) herein, DISTRIBUTOR
concludes that DEALER has failed to perform adequately its sales,
service or customer satisfaction responsibilities or to provide
adequate dealership facilities, DISTRIBUTOR shall notify DEALER in
writing of such failure(s) and will endeavor to review promptly
with DEALER the nature and extent of such failure(s), and will
grant DEALER 180 days or such other period as may be required by
law to correct such failure(s). If DEALER fails or refuses to
correct such failure(s) or has not made substantial progress
towards remedying such failure(s) at the expiration of such
period, DISTRIBUTOR may terminate this Agreement upon sixty (60)
days notice or such other notice as may be required by law.
4. TERMINATION UPON DEATH OR INCAPACITY
Subject to certain exceptions identified in Section XV,
DISTRIBUTOR may terminate this Agreement in the event of the death
of an OWNER or upon the incapacity of any OWNER who is also the
General Manager identified herein, upon written notice to DEALER
and such OWNER'S legal representative. Termination, upon either
of these events shall be effective ninety (90) days from the date
of such notice.
C. NOTICE OF TERMINATION
Any notice of termination under this Agreement shall be in writing
and shall be mailed to the person(s) designated to receive such
notice, via certified mail, or shall be delivered in person. Such
notice shall be effective upon the date of receipt. DISTRIBUTOR shall
state the grounds on which it relies in its termination of DEALER,
and shall have the right to amend such notice as appropriate.
DISTRIBUTOR'S failure to refer to additional grounds for termination
shall not constitute a waiver of its right later to rely upon such
grounds.
D. CONTINUANCE OF BUSINESS RELATIONS
Upon receipt of any notice of termination or non-renewal, DEALER
agrees to conduct itself and its operation until the effective date
of termination or nonrenewal in a manner that will not injure the
reputation or goodwill of the LEXUS Marks or DISTRIBUTOR.
E. REPURCHASE PROVISIONS
1. DISTRIBUTOR'S OBLIGATIONS
Upon the expiration or termination of this Agreement, DISTRIBUTOR
shall have the right to cancel any and all shipments of LEXUS
Products scheduled for delivery to DEALER, and DISTRIBUTOR shall
repurchase from DEALER the following:
23
a. New, unused, unmodified and undamaged LEXUS 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 LEXUS parts and accessories then
unsold in DEALER'S inventory that are in good and saleable
condition. The prices for such parts and accessories shall be
the prices last established by DISTRIBUTOR for the sale of
identical parts or accessories to dealers in the area in which
DEALER is located.
c. Special service tools recommended by DISTRIBUTOR and then
owned by DEALER and that are especially designed for servicing
LEXUS Motor Vehicles. The prices for such special service tools
will be the price paid by DEALER less appropriate depreciation,
or such other price as the parties may negotiate.
d. Signs that 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
this Section are contingent upon DEALER fulfilling the following
obligations:
a. Within thirty (30) days after the date of expiration or the
effective date of termination of this Agreement, DEALER shall
deliver or mail to DISTRIBUTOR a detailed inventory of all
items referred to in this Section which it requests DISTRIBUTOR
repurchase and shall certify that such list is true and
accurate.
b. DEALER shall be entitled to request repurchase of only those
items which it purchased from DISTRIBUTOR, unless DISTRIBUTOR
agrees otherwise.
c. Products and special service tools to be repurchased by
DISTRIBUTOR from DEALER shall be delivered by DEALER to
DISTRIBUTOR'S place of business at DEALER'S expense. If DEALER
fails to do so, DISTRIBUTOR may transfer such items and deduct
the cost therefor from the repurchase price.
d. DEALER will execute and deliver to DISTRIBUTOR instruments
satisfactory to DISTRIBUTOR conveying good and marketable
title to the aforesaid items to DISTRIBUTOR. If such items are
subject to any lien or charge of any kind, DEALER will procure
the discharge in satisfaction thereof prior to their repurchase
by DISTRIBUTOR. DEALER will comply with the requirements of
any state or federal laws that relate to the repurchase
including bulk sales or transfer laws.
24
e. DEALER will remove, at its own expense, all signage from
DEALER'S approved locations including all LEXUS Marks before it
is eligible for payment hereunder.
3. PAYMENT BY DISTRIBUTOR
DISTRIBUTOR will pay DEALER for such items as DEALER may request
be repurchased and that qualify hereunder as soon as practicable
upon DEALER'S compliance with the obligations set forth herein and
upon computation of any outstanding indebtedness of DEALER to
DISTRIBUTOR.
DISTRIBUTOR shall have the right to offset from any amounts due to
DEALER hereunder the total sum of DEALER'S outstanding
indebtedness to DISTRIBUTOR.
If DEALER disagrees with DISTRIBUTOR'S valuation of any item
herein, and DEALER and DISTRIBUTOR have not resolved their
disagreement within sixty (60) days of the effective date of
termination or expiration of this Agreement, DISTRIBUTOR shall
pay to DEALER the amount to which it reasonably believes DEALER is
entitled. DEALER'S exclusive remedy to recover any additional sums
that it believes is due under this Section shall be by resort to
an Alternative Dispute Resolution program, including arbitration,
that is binding on both parties.
XVII. MANAGEMENT OF DISPUTES
A. ALTERNATIVE DISPUTES RESOLUTION PROGRAMS
1. DISTRIBUTOR and DEALER acknowledge that disputes involving the
performance of this Agreement may from time to time arise. In
order to minimize the effects of such disputes on their business
relationship, the parties agree to participate in such
Alternative Dispute Resolution programs as may be established by
DISTRIBUTOR.
2. Such Alternative Dispute Resolution programs may be
established to resolve disputes in matters including, but not
limited to, sales reporting and/or sales credit disputes, product
allocation disputes, DEALER liability for repair/replace claims,
warranty and service campaign reimbursement, sales contests and
merchandising incentive programs, and accounts of debt between
the parties.
3. In all disputes between DEALER and DISTRIBUTOR, the parties shall
first resort to such Alternative Dispute Resolution programs,
including mediation, as may have been established by
DISTRIBUTOR.
4. It is expressly understood that, unless otherwise specified in
this Agreement, the results of any Alternative Dispute Resolution
program will not be binding upon DEALER or DISTRIBUTOR.
25
5. The parties' commitment to support and participate in
non-binding Alternative Dispute Resolution programs specifically
is not a waiver of DEALER'S or DISTRIBUTOR'S right to later
resort to litigation before any judicial or administrative forum.
B. APPLICABLE LAW
This Agreement shall be governed by and construed according to
the laws of the state in which DEALER is located.
C. MUTUAL RELEASE
Each party hereby releases the other from any and all claims and
causes of action that it may have against the other for money
damages arising from any event occurring prior to the date of
execution of this Agreement, except for any accounts payable by
one party to the other as a result of the purchase of any LEXUS
Products, audit adjustments or reimbursement for any services.
This release does not extend to claims which either party does
not know or reasonably suspect to exist in its favor at the time
of the execution of this Agreement.
XVIII. DEFENSE AND INDEMNIFICATION
A. DEFENSE AND INDEMNIFICATION BY DISTRIBUTOR
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 LEXUS Product when the lawsuit also involves
allegations of:
1. Breach of warranty provided by DISTRIBUTOR, bodily injury or
property damage arising out of an occurrence allegedly caused
solely by a defect or failure to warn of a defect in design,
manufacture or assembly of a LEXUS 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 LEXUS Product;
2. Any misrepresentation or misleading statement or unfair or
deceptive trade practice of DISTRIBUTOR; or
3. Any damage to a LEXUS Product purchased by DEALER from DISTRIBUTOR
that 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 twenty (20) days of the 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 (D) below;
26
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 LEXUS 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 or FACTORY and to
indemnify and hold them harmless in any lawsuit naming DISTRIBUTOR 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
obligations assumed by DEALER pursuant to this Agreement;
2. DEALER'S alleged negligent or improper repairing or servicing of
a new or used LEXUS 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 contract or warranty other than
that provided by DISTRIBUTOR 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
LEXUS Product, except those made pursuant to the express
instruction or with the express approval of DISTRIBUTOR; and
Provided:
6. That DISTRIBUTOR delivers to DEALER, within twenty (20) days of
the 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 (D) below);
7. That DISTRIBUTOR agrees 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'S conduct or omissions.
27
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. The
withdrawing party shall be responsible for all costs and expenses of
defense up to the date of receipt of its 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 preclude 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 sixty (60) 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 Section.
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, it
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
(D) above, shall have the obligation to reimburse the requesting
party for all reasonable costs and expense, including actual
attorneys' fees, incurred prior to such assumption.
28
XIX. GENERAL PROVISIONS
A. NOTICES
Except as otherwise specifically provided herein, any notice required
to be given by either party to the other shall be in writing and
delivered personally 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 General Manager at DEALER'S
Approved Location. Notices to DISTRIBUTOR shall be directed to the
General Manager of DEALER'S LEXUS Area Office.
B. NO IMPLIED WAIVERS
The failure of either party at any time to require performance by the
other party of any provision herein shall in no way affect the right
of such party to require such performance at any time thereafter, nor
shall any waiver by any party of a breach of any provision herein
constitute a waiver of any succeeding breach of the same or any
other provision, nor constitute a waiver of the provision itself.
C. SOLE AGREEMENT OF THE PARTIES
There are no prior agreements or understandings, either oral or
written, between the parties affecting this Agreement or relating to
the sale or service of LEXUS Products, except as otherwise
specifically provided for or referred to in this Agreement. DEALER
acknowledges that no representations or statements other than those
expressly set forth therein were made by DISTRIBUTOR or any officer,
employee, agent or representative thereof, or were relied upon by
DEALER in entering into this Agreement. This Agreement cancels and
supersedes all previous agreements between the parties relating to
the subject matters covered herein.
D. DEALER NOT AN AGENT OR REPRESENTATIVE
DEALER is an independent business. This Agreement is not a property
right and does not constitute DEALER the agent or legal
representative of DISTRIBUTOR or FACTORY 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
DISTRIBUTOR or FACTORY or to bind DISTRIBUTOR or FACTORY in any
manner whatsoever.
E. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
This is a personal services agreement and may not be assigned or sold
in whole or in part, directly or indirectly, voluntarily or by
operation of law, without the prior written approval of DISTRIBUTOR.
Any attempted transfer, assignment or sale without DISTRIBUTOR'S
prior written approval will be void and not binding upon DISTRIBUTOR.
29
F. NO FRANCHISE FEE
DEALER warrants that it has paid no fee, nor has it provided any
goods or services in lieu of same, to DISTRIBUTOR in consideration
of entering into this Agreement. The sole consideration for
DISTRIBUTOR'S entering into this Agreement is DEALER'S ability,
integrity, assurance of personal services and expressed intention to
deal fairly and equitably with DISTRIBUTOR and the public.
G. SEVERABILITY
If any provision of this Agreement should be held invalid or
unenforceable for any reason whatsoever, or conflicts with any
applicable law, this Agreement will be considered divisible as to
such provisions, and such provisions will be deemed amended to comply
with such law, or if it cannot be so amended without materially
affecting the tenor of the Agreement, then it will be deemed deleted
from this Agreement in such jurisdiction, and in either case, the
remainder of the initial Agreement will be valid and binding.
H. NEW AND SUPERSEDING DEALER AGREEMENTS
In the event any new and superseding form of dealer agreement is
offered by DISTRIBUTOR to authorized LEXUS dealers generally at any
time prior to the expiration of the term of this Agreement,
DISTRIBUTOR, may, by written notice to DEALER, replace this Agreement
with a new agreement in a new and superseding form for a term not
less than the then unexpired term of this Agreement.
I. BENEFIT
This Agreement is entered into by and between DISTRIBUTOR and DEALER
for their sole and mutual benefit. Neither this Agreement nor any
specific provision contained in it is intended or shall be construed
to be for the benefit of any third party.
30
XX. DEFINITIONS
As used in this Agreement, the parties agree that the following terms
shall be defined exclusively as set forth below.
A. DEALER: The entity that executes the Dealer Agreement and is
authorized by DISTRIBUTOR to sell and service LEXUS Products.
B. OWNER: The persons identified in Section 11 hereof.
C. GENERAL MANAGER: The person identified in Section III hereof.
D. DEALER FACILITIES: The buildings, improvements, fixtures, and
equipment situated at the Approved Location(s).
E. APPROVED LOCATION(S): The location(s) and any facilities thereon,
designated in Section IV that DISTRIBUTOR has approved for the
dealership operation(s) specified therein.
F. LEXUS MARKS: The various LEXUS trademarks, service marks, names,
logos and designs that DEALER is authorized by DISTRIBUTOR to use in
the sale and servicing of LEXUS Products.
G. LEXUS MOTOR VEHICLES: All motor vehicles identified in the
current LEXUS Product Addendum that DISTRIBUTOR sells to DEALER for
resale.
H. GENUINE LEXUS PARTS AND ACCESSORIES: All LEXUS brand Parts and
Accessories manufactured by or on behalf of DISTRIBUTOR or FACTORY,
or other parts and accessories specifically approved by FACTORY for
use in servicing LEXUS Motor Vehicles and sold by DISTRIBUTOR to
DEALER for resale.
I. LEXUS PRODUCTS: All LEXUS Motor Vehicles, Parts and Accessories
that DISTRIBUTOR, in its sole discretion, sells to DEALER for resale.
The term "LEXUS PRODUCTS" specifically excludes any motor vehicle,
part or accessory imported into the United States by any individual
or company other than DISTRIBUTOR
31
XXI. ADDITIONAL PROVISIONS
In consideration of DISTRIBUTOR'S agreement to appoint DEALER as an
authorized LEXUS dealer, DEALER-further agrees:
32
LEXUS
PRODUCT ADDENDUM
LEXUS hereby grants DEALER the non-exclusive right to buy and resell the LEXUS
Motor Vehicles as defined in the LEXUS Dealer Agreement and identified below:
GS 300
ES 300
LS 400
SC 300
SC 400
and all Genuine Lexus Parts and Accessories for such vehicles.
This LEXUS Product Addendum shall remain in effect unless and until superseded
by a new LEXUS Product Addendum furnished DEALER by DISTRIBUTOR.
33