Volvo Cars of North America, Inc.
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AUTHORIZED
RETAILER AGREEMENT
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[LOGO] VOLVO
TABLE OF CONTENTS
I. BUSINESS RELATIONSHIP
The Partners agree that a climate of mutual trust, respect, and shared
information is fundamental to the joint pursuit of a shared vision, which is
the foundation of this Agreement.
1. TERM OF AGREEMENT ..................................................... 3
2. OWNERSHIP ............................................................. 3
3. MANAGEMENT ............................................................ 4
4. CHANGES IN OWNERSHIP OR MANAGEMENT .................................... 4
5. LOCATION .............................................................. 5
6. FACILITIES ............................................................ 5
7. CAPITALIZATION OF RETAILER ............................................ 6
8. DISPOSITION OF BUSINESS BY RETAILER ................................... 6
9. SUCCESSION OF OWNERSHIP OR MANAGEMENT ................................. 8
10. TERMINATION ........................................................... 9
11. DISPUTE RESOLUTION .................................................... 13
II. VOLVO CUSTOMER OWNERSHIP EXPERIENCE
The Partners agree that the highest priority for Retailer and Company is
providing a superior ownership experience for Volvo Customers. This will be
achieved by providing unique customer value, and by treating Volvo customers and
prospective Volvo customers with honesty and integrity.
12. RETAILER BUSINESS PLAN ................................................ 14
13. REVIEW AND UPDATE OF BUSINESS PLAN .................................... 14
14. VEHICLE SALES OR SERVICE IMPROVEMENT PLAN ............................. 14
15. PRODUCT AVAILABILITY .................................................. 15
16. PURCHASE AND DELIVERY ................................................. 15
17. PAYMENTS BY RETAILER .................................................. 16
18. INVENTORY OF COMPANY VEHICLES ......................................... 16
19. DEMONSTRATORS ......................................................... 17
20. BUSINESS HOURS ........................................................ 17
21. PARTS AND ACCESSORIES ................................................. 17
22. WARRANTIES ON COMPANY PRODUCTS ........................................ 17
23. PRE-DELIVERY SERVICE .................................................. 18
24. REPAIR AND MAINTENANCE SERVICE ........................................ 18
25. TRAINING .............................................................. 18
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III. OPERATING PROVISIONS
The Partners agree that the success of Volvo, its name, trademarks and
reputation is their joint responsibility.
26. USE OF VOLVO TRADEMARK ................................................ 18
27. DISCONTINUANCE OF RIGHT TO USE TRADEMARK .............................. 19
28. LINES OF CREDIT ....................................................... 20
29. ACCOUNTING AND RECORD KEEPING ......................................... 20
30. RETAILER INFORMATION SYSTEMS .......................................... 20
31. CHANGE IN PRICES ...................................................... 20
32. EXPORT OF COMPANY VEHICLES ............................................ 20
33. FACTORY SUGGESTED PRICE LABELS ........................................ 20
34. INDEMNIFICATION ....................................................... 21
35. COMPLIANCE WITH LEGAL REQUIREMENTS .................................... 21
36. COMPLIANCE WITH CONSUMER PROTECTION LAWS AND REGULATIONS .............. 22
37. TRADE PRACTICES ....................................................... 22
38. REPURCHASE OF COMPANY PRODUCTS BY THE COMPANY ......................... 22
IV. MISCELLANEOUS PROVISIONS
39. LICENSING REQUIREMENTS ................................................ 23
40. INSURANCE ............................................................. 23
41. TAXES ................................................................. 23
42. WAIVER ................................................................ 23
43. AGENCY ................................................................ 23
44. SUBRETAILERS .......................................................... 24
45. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES .......................... 24
46. NOTICE AND SERVICE OF NOTICE .......................................... 24
47. APPLICABLE LAW AND SEVERABILITY ....................................... 24
48. FINANCIAL INFORMATION ................................................. 24
49. ENTIRE AGREEMENT ...................................................... 24
50. NO FRANCHISE FEE OR ADDITIONAL PAYMENTS ............................... 24
51. CAPTIONS .............................................................. 25
52. TIME OF THE ESSENCE ................................................... 25
53. DATE OF PERFORMANCE ................................................... 25
54. RULES OF CONSTRUCTION ................................................. 25
V. DEFINITIONS
55. DEFINITIONS ........................................................... 25
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AUTHORIZED RETAILER AGREEMENT
This Authorized Retailer Agreement ("Agreement") is entered into this 7 day of
May 1996, by and between Volvo Cars of North America, Inc., a Delaware
corporation with its principal place of business at ▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ("the Company") and European Motors, LLC, d/b/a Volvo of
Chattanooga ("Retailer"), having its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
This Agreement delineates the rights and responsibilities of the Company and
Retailer, who each believe that the goals described in the Preamble to this
Agreement can be achieved while providing the Company and Retailer with
reasonable profits, and providing Volvo Customers with a superior ownership
experience.
NOW, THEREFORE, in consideration of the mutual promises and other good and
valuable consideration referenced herein, the sufficiency of which is hereby
acknowledged, it is mutually agreed by the parties as follows;
PREAMBLE
A. MISSION
The mission of Volvo Cars of North America, Inc., and its Retailer Partners
is to maximize the potential of Volvo products, by identifying and
fulfilling clearly defined customer needs and demands.
This will be achieved by:
o Providing an ownership experience regarded as superior in the
industry.
o Developing and maintaining financially strong and professional
Retailers that are either exclusive, or have Volvo products as
their primary business.
o Developing a superior organization where employees strive for
excellence based on individual motivation, and TQM oriented
leadership; and
o Exploiting Volvo virtues created by leadership in the areas of
quality, safety and environmental care.
VCNA MISSION STATEMENT
January, 1995
B. VISION
This Agreement is the very foundation of the partnership between Volvo Cars
of North America, Inc. and its Retailers. It has been carefully and
diligently constructed by a team of equals, representing both Partners in
the spirit of fairness and cooperation.
It is upon this foundation we will strive to build a preeminent
organization dedicated to fulfilling our joint vision:
A seamless manufacturer/retailer commercial entity created and maintained
by:
o Sharing in risks and rewards.
o Building of financial strength.
o Common "ownership" of the Volvo brand.
o Maximizing the potential of Volvo products and delivering a
superior ownership experience.
Consistent with our vision, we mutually agree to conduct our respective
businesses with the highest level of integrity, thereby creating a strong
perception of seamlessness in the eyes of our customers.
C. PRINCIPLES OF OUR RELATIONSHIP
Both Partners have the right to expect from each other the mutual
commitment to and belief in the following Principles:
o That the pursuit of the Mission Statement and the Vision is a
joint responsibility.
o That the overall direction of the development of the name,
trademarks and reputation of "Volvo" is a joint responsibility.
o That rewards be shared in relation to risks assumed.
o That the Volvo brand be further protected and developed.
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o That people are important.
o That unique customer-value be provided.
o That disputes be resolved in a fair and equitable manner.
o That information be shared timely and accurately.
o That honesty and integrity are fundamental to our conduct of
business.
o That the commitment to and fulfillment of these principles is the
foundation upon which the right to represent Volvo is awarded.
D. RETAILER PARTICIPATION
The strength of this Agreement is the mutuality principle. It has been
deliberately constructed to protect the interests of both Partners equally,
for it is our mutual interests which make us strong.
The Company and Retailer agree that their interests must be aligned to
attain these goals and achieve long term success in the automotive market.
These interests include, without limitation, the profitable marketing,
promoting, selling and servicing of Company Products while building
superior levels of customer loyalty and satisfaction with the Company and
Retailer.
In consideration of Retailers' commitments, and to ensure a mutually
satisfactory relationship between Company and its Retailers, the Company
has established mechanisms for Retailer participation in the
decision-making process on matters significantly affecting Retailer's
business. Retailer involvement is provided through six principal
mechanisms: the Executive Committee, Regional Operating Teams, Retailer
Action Teams, Performance Enhancement Teams, the Market Representation
Panel, and the Mediation Panel.
A. EXECUTIVE COMMITTEE
Guided by the Mission Statement, Vision, and the Principles, the
Executive Committee is a Volvo policy team whose primary focus is the
future value of our business.
Four Retailers participate along with Company executives from various
disciplines. Retailer participants must have previously served as
members of a Regional Operating Team, are selected by the Executive
Committee, and serve for staggered two-year terms.
B. REGIONAL OPERATING TEAMS
The Regional Operating Teams are comprised of an equal number of
Retailers and Company representatives. Regional Operating Teams deal
with regional and local business issues in areas such as advertising
and market support.
C. RETAILER ACTION TEAMS
The Executive Committee may establish Retailer Action Teams as
necessary, to review certain specific business issues. The Executive
Committee will determine the membership of each Retailer Action Team
and the scope of its assignment.
D. PERFORMANCE ENHANCEMENT TEAMS
Performance Enhancement Teams are comprised of 8-14 Retailers and two
Company representatives. These Retailer-managed teams focus on best
practices sharing and team problem solving.
E. MARKET REPRESENTATION PANEL
The Market Representation Panel, consisting of three Retailers (one of
whom is from the Executive Committee), and three Company
representatives (of which one is from the Executive Committee) review
and revise the criteria used by the Company for awarding the Retailer
Agreement.
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F. MEDIATION PANEL
The Mediation Panel is designed to help resolve certain disputes which
may arise between a Retailer and the Company, and is comprised of two
Retailers, two Company representatives, and one member chosen by the
Mediation Panel.
Each of the above committees, teams, and panels represent each Partner's
belief in the mutuality principle and commitment to the future of the Volvo
brand.
I. BUSINESS RELATIONSHIP
The Partners agree that a climate of mutual trust, respect, and shared
information is fundamental to the joint pursuit of a shared vision, which is the
foundation of this Agreement.
1. TERM OF AGREEMENT
This Agreement is for a five-year term, beginning on the date it is signed
by a Company Officer, unless the parties mutually terminate in writing, or
it is terminated as otherwise provided herein.
If Retailer is not in material breach of this Agreement when it expires,
the Company will, either offer Retailer the then current Authorized
Retailer Agreement, or renew or extend this Agreement. The Company agrees
to notify Retailer in writing, no later than one (1) year prior to the end
of the term of this Agreement, in the event that the Company does not
intend to renew or extend this Agreement, or offer Retailer the then
current Authorized Retailer Agreement.
The term of this Agreement may be extended only by written agreement
between the parties, signed by an Officer of the Company. If the parties
continue their business relationship after this Agreement expires, the
relationship will be on a month-to-month basis only, and all other terms of
this Agreement will be applicable.
2. OWNERSHIP
A. Principal Owners.
This Agreement is in the nature of a personal services contract between the
Company and Retailer. The Company enters into this Agreement in express
reliance on, and in consideration of, the expertise, reputation, character,
integrity, ability, representations and professional and personal
qualifications of the Principal Owner(s) listed below.
In addition, the Company relies upon the fact that at all times during this
Agreement's term, the individuals identified below will remain the
Principal Owner(s) of Retailer, and that each is committed to achieving the
goals described in the Preamble to this Agreement, and understands and
agrees to abide by the terms and conditions of this Agreement:
PERCENTAGE OF
NAME RESIDENTIAL ADDRESS OWNERSHIP INTEREST
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 99%
2. _____________________ Lookout ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ _______________
3. ▇▇▇▇ ▇. ▇▇▇▇▇▇ Two Union Square
4. _____________________ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ _______________
Retailer represents and agrees that the person(s) named as Principal
Owner(s) above, and only those person(s), will exercise the ownership,
control and/or management of Retailer and that any change in ownership,
control or management shall be made only in accordance with, and subject
to, the terms and conditions of this Agreement.
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B. Investors.
The following person(s), ("Investor(s)"), also has an ownership
interest in Retailer:
PERCENTAGE OF
NAME RESIDENTIAL ADDRESS OWNERSHIP INTEREST
1. Same As Section IIA _______________________________________ _______________
2. _____________________ _______________________________________ _______________
3. _____________________ _______________________________________ _______________
4. _____________________ _______________________________________ _______________
Retailer represents and agrees that the person(s) named as investors above
will not exercise control and/or management of Retailer's operations.
3. MANAGEMENT
The Company and Retailer agree that Retailer's success under this Agreement
depends upon dedicated, full time, professional, qualified, on-site
management. The Company and Retailer agree that if no Principal Owner
identified in Section 2A, either: (i) maintains his or her principal place
of business at the Retailer Facility; or (ii) is involved in Retailer
Operations on a full time, on-site, day-to-day basis, except in those
circumstances when Owner operates more than one Retail Facility in the same
Area of Responsibility or Market Area, that full managerial authority shall
be granted to the person named below (the "General Manager"), and that this
General Manager shall devote his or her personal services on a full time,
on-site, day-to-day basis to Retailer's management and operation. The
Company enters into this Agreement in reliance on, and in consideration of
Retailer's representation that; (i) the General Manager will possess the
expertise, reputation, character, integrity, ability, and professional and
personal qualifications to achieve the goals and objectives of this
Agreement; (ii) he or she is committed to achieving the goals described in
the Preamble to this Agreement; and (iii) he or she understands and agrees
to a bide by the terms and conditions of this Agreement.
Retailer agrees that the General Manager identified in this Section 3 shall
have an ownership interest in Retailer of at least twenty percent (20%).
PERCENTAGE OF
NAME RESIDENTIAL ADDRESS OWNERSHIP INTEREST
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4. CHANGES IN OWNERSHIP OR MANAGEMENT
Because this Agreement is in the nature of a personal services contract,
and the Company has entered into this Agreement in reliance on, and in
consideration of, the expertise, reputation, character, integrity, ability,
representations and professional and personal qualifications of the
Principal Owners, Investors and the General Manager identified in Sections
2 and 3 above, if Retailer desires to make any change in: (i) Retailer's
ownership, including, but not limited to, any attempt to conduct a public
offering of any of Retailer's shares, regardless of the number or
percentage of shares; or (ii) the relative shares among the Principal
Owners or other investors referenced in 2B, Retailer agrees to obtain the
Company's written approval, which shall not be unreasonably withheld. The
Company recognizes that Retailer may wish to make a public offering of
Retailer's shares, and that such a proposed offering of Retailer's shares
shall not constitute the sole grounds upon which Company may reasonably
withhold approval under this Section.
Retailer agrees that the Company's knowledge of any change in ownership
interest or management of Retailer will not be a waiver of the Company's
rights and/or Retailer's obligations under this Section unless the Company
has approved the change in writing.
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5. LOCATION
In consideration of the Company entering into this Agreement, Retailer
agrees to at all times establish and maintain Retailer Facilities and
Operations in accordance with Company Policies, at only the following
location(s):
Location 1 Location 2 Location 3
A. New Car Sales ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ______________________ ______________________
& Showroom ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ______________________ ______________________
______________________ ______________________ ______________________
B. Service, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ______________________ ______________________
Parts & ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ______________________ ______________________
Accessories ______________________ ______________________ ______________________
C. Volvo Select ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ______________________ ______________________
Pre Owned Vehicles ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ______________________ ______________________
Display ______________________ ______________________ ______________________
D. Administrative Support ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ______________________ ______________________
Activities ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ______________________ ______________________
______________________ ______________________ ______________________
6. FACILITIES
Retailer and the Company agree that appropriate Retailer Facilities are
necessary to achieve the goals described in the Preamble to this Agreement
and to provide Volvo Customers with a superior ownership experience.
Retailer agrees to operate its Retailer Facilities in accordance with this
Agreement and the then current Retailer Facilities Guide. If Retailer
operates multiple sales and/or service facilities, the terms of this
Agreement will apply to all Retailer Facilities.
A. Location.
Retailer will provide Retailer Facilities that: (i) will enable
Retailer to perform its responsibilities under this Agreement; (ii)
are satisfactory in space, appearance, layout, equipment, and signage;
and (ii) are in accordance with the then current Retailer Facilities
Guide. Retailer will conduct its Retailer Operations only from the
location(s) identified in Section 5.
B. Changes and Additions.
Retailer will not move, relocate, or substantially change the usage of
Retailer Facilities, nor will Retailer, Principal Owner, Investor, or
General Manager directly or indirectly establish or operate any other
locations or facilities for any of the Retailer Operations (or similar
operations) contemplated by this Agreement without the Company's prior
written consent, which will not be unreasonably withheld. Retailer
agrees that all new Retailer Facilities shall conform to architecture,
design and style described in the then current Retailer Facilities
Guide.
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The Company and Retailer agree that any changes in Retailer Facilities
will be reflected in a written addendum to this Agreement. Retailer
will promptly correct any deficiencies in Retailer's performance of
its responsibilities under this Section 6.
Retailer acknowledges that the addition and maintenance of another
line of vehicles or another automobile dealership operating
simultaneously with its Retailer Operations at Retailer Facilities
could adversely affect Retailer's sales and service performance with
respect to Company Products. Accordingly, Retailer agrees to: (i)
notify the Company in writing within ten (10) days of its execution of
an agreement or letter of intent to add a new line of vehicles to be
sold or serviced at Retailer Facilities; and (ii) obtain the Company's
written approval which will not be unreasonably withheld.
C. Development of Market Studies.
The Company may, from time to time, conduct studies of various
geographic areas to evaluate market conditions. These market studies
may, where appropriate, evaluate factors including geographical
characteristics, consumer shopping patterns, existence of competitive
automobile dealerships, sales opportunities and service requirements
of the geographic area in which Retailer's Area of Responsibility or
Market Area is located, trends in marketing conditions, current and
prospective trends in population, income, occupation, and other
demographic characteristics which the Company may determine to be
relevant. Based upon such studies, the Company will make
recommendations concerning the market and Retailer Facilities. The
Company will give Retailer prior notice of its intention to conduct a
study which includes the geographic area in which Retailer's Area of
Responsibility or Market Area is located. Within 30 days of notice,
Retailer should provide the Company with all information Retailer
believes relevant to the market study.
D. Evaluation of Retailer Facilities and Location.
The Company will periodically evaluate Retailer's performance of its
responsibilities under this Section 6. In making evaluations, the
Company will consider: (i) the land and building space Retailer
actually dedicates to its performance under this Agreement; (ii) the
then current Retailer Facilities Guide; (iii) the appearance,
condition and layout of Retailer Facilities; (iv) the ability of
Retailer Facilities to satisfy the sales opportunities and service
requirements of the Area of Responsibility or Market Area; and (v)
other factors that may directly relate to Retailer's performance of
its responsibilities under this Agreement. Evaluations prepared
pursuant to this Section 6 will be discussed with and provided to
Retailer, and Retailer may comment in writing within thirty (30) days
of its receipt of an evaluation.
7. CAPITALIZATION OF RETAILER
Retailer agrees that its ability to market, promote, sell and service
Company Vehicles and provide Volvo customers with a superior ownership
experience is dependent in part upon Retailer maintaining adequate working
capital to meet its obligations under its Business Plan. The Company will
provide Retailer with a Working Capital Guide to assist Retailer in
determining its working capital requirements. Retailer agrees that the
Company may, upon prior written notice, reasonably modify the Working
Capital Guide.
8. DISPOSITION OF BUSINESS BY RETAILER
Retailer and the Company agree that to achieve the goals described in the
Preamble to this Agreement, each Authorized Retailer shall be owned and
operated by parties committed to achieving these same goals.
Retailer agrees that this Agreement is in the nature of a personal services
contract. While the Company acknowledges that Retailer has the right to
sell or otherwise transfer the stock and/or assets of the dealership,
Retailer acknowledges and agrees that this right is subject to this Section
8.
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A. General.
The Company recognizes Retailer's opportunity to sell or other wise
dispose of all or substantially all of Retailer's assets (including
goodwill) related to Retailer's obligations or performance under this
Agreement at any time and on such terms and conditions as Retailer may
decide to accept. Any transfer or sale of any stock of Retailer, or a
transfer and/or sale of a majority of the assets of Retailer to any
person or entity will be subject to the prior written approval of the
Company. Retailer agrees to provide the Company with all documents
reasonably necessary for the Company's evaluation of any transfer of
Retailer's stock or assets. Retailer also agrees that the time period
for the Company's review and evaluation of any transfer of stock or
assets shall not begin until all necessary documents have been
submitted to the Company. Subject to the Company's rights in Section
8B below, the Company will not unreasonably withhold consent to enter
into a new agreement with a buyer on terms substantially the same as
the provisions of this Agreement, or the then current Authorized
Retailer Agreement. Retailer agrees that if, in the Company's business
judgment, a sale may adversely affect the Company's ability to achieve
its goals described in the Preamble to this Agreement, or the ability
of the proposed retailer to meet the obligations under the then
current Authorized Retailer Agreement, the Company may reasonably
withhold approval.
B. Right of First Refusal.
(i) Request to Transfer.
If Retailer submits a written request to transfer stock and/or
assets in Retailer as described in this Section 8, the Company
shall have the right of first refusal or option to purchase
Retailer's stock and/or assets. The Company must notify Retailer
of its election to exercise such right within thirty (30) days
after receiving Retailer's complete written proposal. If the
Company exercises its right of first refusal, this shall
supersede any other right that Retailer may have to transfer or
otherwise dispose of its stock or assets. The Company may assign
its right or option to a third party.
(ii) Bona Fide Agreement.
If Retailer enters into a bona fide written agreement for the
sale of its stock and/or assets, the Company's right under this
Section 8 shall be a right of first refusal, enabling the Company
to assume the buyer's rights and obligations under such agreement
and cancel this Agreement and all rights granted Retailer. Upon
the Company's request, Retailer agrees to provide all documents
relating to the proposed transfer, including, without limitation,
those reflecting any other agreements or understandings between
the parties to the transfer agreement.
(iii) Non Bona Fide Agreement.
If Retailer fails to provide documentation as required in Section
8B(ii), or states in writing that the requested documents do not
exist, the Company will conclusively presume that the agreement
is not bona fide. If the Company determines that the agreement is
not bona fide, the Company will have the option to purchase
Retailer's stock and/or assets utilized in Retailer's Operations.
The Company may also, but shall not be required to, purchase any
of Retailer's real property or leasehold interest related to
Retailer's Facilities.
(iv) Purchase Price.
If Retailer enters into a bona fide written agreement, the
Company and Retailer agree that the purchase price and other
terms of sale under the right of first refusal will be those
described in such agreement and any related documents, unless
Retailer and the Company agree to other terms. In the absence of
a bona fide written agreement, the purchase price of Retailer's
stock and/or assets, excluding new and undamaged parts and
accessories, and other essential terms, will be determined by
good faith negotiation between the parties. If an agreement
cannot be reached, the purchase price and any other essential
terms not agreed upon will be determined through binding
arbitration conducted by the American Arbitration Association.
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Each party agrees to pay its own attorneys' fees associated with
this arbitration. If the sale involves the sale of real property,
Retailer agrees to transfer the real property by warranty deed,
in recordable form, conveying marketable title free and clear to
the Company. If the sale involves the sale, transfer, or
assignment of a leasehold interest, Retailer agrees to sell,
transfer, or assign such interest in a method typically
undertaken in similar commercial transactions.
(v) Assignments.
If the Company elects to exercise its rights under this Section
8, Retailer shall transfer or assign to the Company all licenses,
authorizations, permits, and other documents typically required
in similar commercial transactions, and shall grant all other
necessary approvals to conduct Retailer Operations in a manner
similar to that immediately prior to the sale.
(vi) Successors and Assigns.
The Company's rights under this Agreement shall be binding on and
enforceable against any assignee or successor in interest of
Retailer or any purchaser of Retailer's stock and/or assets,
unless the Company has previously approved the successor under
Section 9A.
C. Outstanding Obligations.
Retailer agrees that all outstanding monetary obligations to the
Company shall be paid prior to, or at the time of, transfer.
9. SUCCESSION OF OWNERSHIP OR MANAGEMENT
A. Successor Addendum.
Retailer may apply for a successor addendum designating proposed
principal owners and/or owners of a successor retailer to be
established if this Agreement expires because of the Principal
Owner(s) death or incapacity. The Company may execute the successor
addendum if the proposed successor completes, to the Company's
satisfaction, the then current selection process to become an
Authorized Retailer used by the Company.
B. Rights of Heirs.
If a Principal Owner(s) or General Manager (with an ownership
interest) dies and his or her interest in Retailer's Operations passes
directly to any heir who wishes to succeed to such party's interest,
the Principal Owner's or General Manager's legal representative must
notify the Company within thirty (30) day's of the Principal Owner's
or General Manager's death of such heir's or heirs' intent to succeed
the Principal Owner's or General Manager's interest. If a Principal
Owner(s) or General Manager becomes incapacitated, then the Principal
Owner's or General Manager's legal representative must notify the
Company within thirty (30) days of the determination of such
incapacity and provide the Company with plans, if any, for a
successor. The effect of notice of death or incapacity from either the
Principal Owner's or General Manager's legal representative will be to
suspend any notice of termination provided for in Section 10A (iv).
C. Rights of Remaining Owners and Investors.
If this Agreement would otherwise terminate because of a Principal
Owner's death or incapacity, and Retailer and the Company have not
executed a successor addendum, the remaining Principal Owners or
Investors, if any, may propose a successor to continue the operations
identified in this Agreement. The proposal must be made in writing to
the Company at least thirty (30) days prior to the termination of this
Agreement.
The proposal will be accepted if: (i) it meets the requirements of
Section 2 with regard to ownership; (ii) the proposed successor
successfully completes the Authorized Retailer selection process;
(iii) any proposed owner(s) satisfies applicable Authorized Retailer
selection criteria; iv) the proposed successor retailer and/or the
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proposed general manager are ready, willing and able to comply with
the requirements of the then current Authorized Retailer Agreement,
and agree to implement the Business Plan; and (v) all of the former
Retailer's outstanding monetary obligations to the Company have been
satisfied.
D. Limitation on Offers.
The Company will notify the individual or entity making a proposal
under Sections 9A, B, or C in writing of the decision on a proposal
under this Section 9 within sixty (60) day's after: (i) Retailer has
submitted all applications and information that the Company reasonably
requested, and (ii) the proposed retailer has successfully completed
the selection process to become an Authorized Retailer. The Company's
offer to enter into the then current authorized Retailer agreement
under this Section 9 will automatically expire if not accepted by the
proposed successor retailer within sixty (60) days after it receives
the offer.
E. New Successor Addendum.
Retailer may cancel an executed successor addendum in writing at any
time prior to the death or incapacity of a Principal Owner. The
Company may cancel an executed successor addendum only if the proposed
Principal Owner(s) no longer meets the selection criteria to become an
Authorized Retailer. The parties may execute a superseding successor
addendum by agreement.
10. TERMINATION.
A. Immediate Termination.
This Agreement will continue in force, and will govern all
transactions between the Company and Retailer until terminated in
accordance with this Section 10. Any termination of this Agreement
shall apply to all Retailer Facilities. The Company and Retailer may
also terminate this Agreement by mutual written agreement at any time.
Retailer may terminate this Agreement at any time, with or without
reason, by giving the Company sixty (60) days prior written notice.
The Company may terminate this Agreement upon written notice to
Retailer if the distribution agreement between the Company and
Manufacturer is terminated.
Retailer and the Company agree that certain conduct which is within
Retailer's control is so contrary to achieving the goals described in
the Preamble to this Agreement, and to the spirit, purpose and
objectives of this Agreement, that any of the following conduct will
constitute a material breach of this Agreement and justify its
immediate termination, upon written notice:
(i) Change in the control, ownership or management of Retailer as
described in Section 4 of this Agreement including, without
limitation, an attempted public offering of ownership in
Retailer, without the Company's prior written approval; or
(ii) Sale, transfer, or assignment by Retailer of this Agreement,
or any of the rights granted to it under this Agreement, or any
transfer, assignment or delegation by Retailer of any of the
responsibilities assigned to a Retailer under this Agreement,
without the Company's prior written approval; or
(iii) Sale, transfer or assignment by Retailer of any of the
stock or substantially all of the assets used by Retailer in its
Volvo operations, without the Company's prior written approval;
or
(iv) Subject to the provisions in Section 9, death or mental
incapacity of Retailer (if Retailer is an individual) or any
person identified in Section 2 of this Agreement; or
(v) Misrepresentation by Retailer concerning Retailer's ownership
or management, or any material misrepresentation in the
application for this Agreement, or at any time thereafter; or
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(vi) Undertaking by Retailer or any of its owners to conduct
either directly or indirectly, any of Retailer's Operations at
locations other than those designated in this Agreement, without
the Company's prior written approval; or
(vii) Willful misrepresentation by Retailer, or any of its agents
or employees, in any claim or application for reimbursement by,
or payment from the Company, including, without limitation,
warranty claims, goodwill payments, incentives, work performed
pursuant to a recall, pre-delivery inspection, or for any other
refund, credit, incentive, allowance, discount, reimbursement or
payment applied for or received under any Company program; or
(viii) Knowing acceptance by Retailer of any payment for any work
not performed or contracted for by Retailer in accordance with
this Agreement, or any applicable warranty or other Company
Policies, service bulletin, procedures or programs the Company
may issue; or
(ix) Filing by Retailer of a voluntary petition in bankruptcy, or
the filing of a petition to have Retailer declared bankrupt,
providing the petition is not vacated within thirty (30) days; or
any adjudication of Retailer as bankrupt pursuant to an
involuntary petition; or any appointment by a court of a
temporary or permanent receiver, trustee, or custodian for
Retailer, Retailer's assets or Retailer's business who shall not
be discharged within thirty (30) days; or execution of any
assignment for the benefit of creditors provided that the
assignment is not set aside within thirty (30) days; or any
material levy under attachment, or by any process of law by which
a third party acquires rights in or to the ownership or operation
of any Retailer Facility provided that the levy is not vacated
within thirty (30) day's; or if Retailer is unable to meet
maturing debts on terms agreeable to its creditors; or any
dissolution of Retailer; or
(x) Use by Retailer of any unfair, misleading, deceptive or
fraudulent advertising or business practice in the marketing,
sale or servicing of any Company Product or in any program
offered by Company; or
(xi) Conviction of or entry of a judgment in a court of competent
jurisdiction against a Retailer or any person named in Sections 2
or 3, of a felony, or any unfair, misleading, deceptive or
fraudulent business practice; or
(xii) Failure of Retailer to conduct its sales, service and parts
operations during the customary business hours of the trade in
Retailer's Area of Responsibility or Market Area for five (5)
consecutive business days, unless any failure is caused by
contingencies beyond Retailer's reasonable control, including
strikes, civil war, riots, fires, floods, earthquakes, or other
acts of God, provided that Retailer immediately resumes its
customary operation after the cause of the closure or cessation
of operation is removed; or
(xiii) Refusal or inability by Retailer to pay any amount
Retailer owes to the Company within thirty (30) days after the
Company demands payment from Retailer; or
(xiv) Failure by Retailer to comply with Section 35 of this
Agreement; or a
(xv) Agreement, combination, understanding or contract by
Retailer, whether oral or written, with any other corporation,
person, firm or other legal entity for the purpose of unlawfully
fixing prices of Company Products, or otherwise violating any
law; or
(xvi) Failure by Retailer to procure and maintain any license or
other governmental authorization necessary to operate as a Volvo
Retailer; or
(xvii) Importation, distribution or sale of Company Products
which are not originally manufactured, designed or intended for
use in the United States, without the Company's prior written
approval.
10
B. Sixty Day Cure Period Prior to Termination.
The Company may also terminate this Agreement upon no less than thirty
(30) days prior written notice if Retailer fails to cure within sixty
(60) days, to the Company's satisfaction, any other material default
in its performance under this Agreement. These material defaults
include, without limitation, the following:
(i) Any dispute, disagreement, or controversy between or among
persons identified in Section 2 of this Agreement which, in the
Company's reasonable opinion, adversely affects the ownership,
operation, management, or business of Retailer or Company; or
(ii) Retention by Retailer of any General Manager, who in the
Company's reasonable opinion is not competent, or no longer
possesses the requisite qualifications for the position, or who
has acted in a manner contrary to the continued best interests of
the Company or Retailer; or
(iii) Any material modification or change in the use of
Retailer's Facilities, including, without limitation, the
addition or maintenance of another line of vehicles at Retailer's
Facilities without the Company's prior written approval; or
(iv) Failure by Retailer to improve, alter, or modify its
Retailer Facility to meet the requirements in the Company
Facilities Guide or other Company Policies, or which Retailer had
agreed or represented to the Company that Retailer would make or
do; or
(v) Failure by Retailer to maintain and employ in Retailer's
business and operations under this Agreement sufficient net
working capital and net worth to enable Retailer to satisfy
Retailer's responsibility under this Agreement; or
(vi) Failure by Retailer to update its Business Plan in
accordance with Section 13; or
(vii) Failure by Retailer to maintain adequate flooring lines of
credit for Company Vehicles; or
(viii) Failure by Retailer to maintain an inventory of new
Company Vehicles of the latest model in accordance with the
objectives agreed to by Retailer and the Company; or
(ix) Failure by Retailer to keep available at all times, in
excellent condition for demonstration purposes, a representative
number and mix of the latest models equipped with the latest
accessories offered by the Company; or
(x) Failure by Retailer to, at all times, keep in Retailer's
Facilities), an inventory of Genuine Volvo Parts and Accessories
in quantities that the Company reasonably determines are
necessary to meet the current and reasonably anticipated service
requirements of Volvo Customers; or
(xi) Failure by Retailer to keep records of its business relating
to Company Products, or any failure, after reasonable notice to
Retailer, to submit Retailer's accounts and records relating to
the sale and servicing of Company Products, or allow the Company
to inspect its accounts and records; or
(xii) Failure by Retailer to furnish the Company, within
reasonable time limits specified by the Company, and on forms
prescribed by or acceptable to the Company, statements of
Retailer's financial condition and operating results; or
(xiii) Failure by Retailer to furnish the Company on such forms
and at such times as the Company may reasonably require, reports
of Retailer's sales and inventory of Company Products and used
automobiles; or
(xiv) Failure by Retailer to maintain warranty records in
accordance with the Company Policies; or
(xv) Negligent or willful conduct by Retailer that the Company
determines, in a reasonable exercise of its discretion, to be
harmful to the reputation of the Company, Company Products, or
Marks/Trademarks.
11
C. Failure to Meet Improvement Plan Objectives.
If Retailer fails to cure deficiencies identified in the improvement
plans within the periods described in Section 14, the Company may
terminate this Agreement upon thirty (30) day's prior written notice
to Retailer.
If Retailer refuses to enter into the applicable improvement plan, the
Company may terminate this Agreement in accordance with Section 10A.
D. Applicable Notice Provision for Termination.
Retailer and the Company acknowledge that under certain state laws,
the time period required for notice of termination may vary from those
described herein. Retailer and the Company agree that statutory and
regulatory time provisions, when greater than those provided above,
shall control as applicable.
E. Failure to Terminate Shall Not Constitute a Waiver.
The Company may terminate this Agreement under any applicable
provision which it elects, notwithstanding the existence of any other
grounds for termination, or the failure to refer to such other grounds
for termination. The Company's failure to specify additional ground(s)
for termination in its notice shall not preclude the Company from
later establishing, upon notice, that termination is also supported by
such additional grounds, without regard to when those additional
grounds were discovered.
F. Procedure on Termination.
Termination of this Agreement shall end Retailer's status as an
Authorized Retailer, but shall not affect any liability of either
party to the other accruing prior to the date of termination, or
arising out of Agreement.
Upon termination Retailer agrees to immediately: (i) discontinue the
use of any trademarks or trade names made up in whole or in part of
any trademark or tradename belonging to the Company or Manufacturer;
(ii) remove all signs containing any such trademarks or trade names;
and (iii) render unfit for the use originally intended (or to certify
to the Company that Retailer will not use for the purpose originally
intended) any stationery, printed matter, or advertising containing
any such trademarks or trade names. In addition, Retailer will not
represent or continue any practices which might make it appear that it
is still an authorized Volvo retailer and will permanently discontinue
any use of the word Volvo in Retailer's corporate title, firm name or
tradename and will immediately take such steps as may be necessary or
appropriate in the opinion of the Company to change such corporate
title, firm name or tradename to eliminate the word Volvo, all without
cost or expense to the Company.
Upon termination under Section 10A, all unfilled orders for Company
Products will be deemed canceled. Upon termination under Section 10B,
the Company will have the option to complete or cancel all unfilled
orders for Company Products then pending and will have a similar right
to complete or cancel any firm orders given after notice and before
termination.
Upon termination of this Agreement, Retailer shall transfer to the
Company: (i) all orders for sale by Retailer of Company Products then
pending with Retailer and all deposits obtained whether in cash or in
kind; (ii) all of Retailer's warranty files regarding warranty claims
on Company Products; (iii) all lists, files and service records of
Volvo Customers; and (iv) all technical or service literature,
advertising and other printed material relating to Company Products,
including, without limitation, sales instruction manuals, service
manuals, and promotional materials. All warranty claims must be closed
within thirty (30) days of such termination.
After termination, the Company's acceptance of orders from Retailer,
Retailer's continuance of sale of Company Products, or the Company's
referral of inquiries to Retailer or any business relations either
party has with the other will not be construed either as a renewal of
this Agreement or a waiver of the termination. If the Company accepts
any orders from Retailer after termination, all such transactions will
be governed by the terms of this Agreement applicable to such
transactions, unless otherwise agreed in writing.
12
11. DISPUTE RESOLUTION
Retailer and the Company recognize that certain disputes may arise between
them as to application and interpretation of this Agreement, the Company
Policies, and the other controlling documents referenced in this Agreement.
While understanding that certain federal and state courts and agencies may
be available to resolve any disputes, Retailer and the Company agree that
it is in their mutual best interests, consistent with achieving the goals
described in the Preamble to this Agreement, and in the spirit of this
Agreement, to attempt to resolve first through mediation, described below,
all disputes arising from a notice of termination as described in Section
10. Each party agrees to pay its own attorney's fees, costs and expenses
associated with such mediation.
A. Non-Binding Mediation.
Prior to initiating any judicial, agency or other administrative
proceeding, the Company and Retailer agree to mediate any dispute
arising from a notice of termination as described in Section 10.
Mediation shall be held at the Company regional office closest to
Retailer, or at another mutually agreed upon location, and shall begin
within ten (10) days after receipt of notice: (i) invoking this
Section 11; and (ii) clearly specifying the nature of the dispute.
Mediation shall not be binding unless first agreed to in writing by
Retailer and the Company. Any mediation under this Section 11 shall be
conducted before a Company/Retailer Mediation Panel (the "Mediation
Panel") chosen by the Company and Retailer at least five (5) days
before such mediation is scheduled to begin, and shall be governed by
the Company's Mediation Guidelines.
B. Mediation Panel.
The Mediation Panel shall consist of: (i) two members of the Company
management, including one from Retailer's region; (ii) two Retailer
Mediators, one of which shall be from Retailer's Region, but not by an
Authorized Retailer which has an Area of Responsibility in a Market
Area contiguous to or in competition with Retailer; and (ii) one
member chosen by the members identified in (i) and (ii). Within twenty
(20) days of hearing the dispute, the Mediation Panel shall recommend,
in writing, a solution to Retailer and the Company. The parties agree
that a majority vote of the Mediation Panel shall be deemed to be the
final decision of the Mediation Panel. Each party shall have five (5)
days to accept or reject the Mediation Panel's solution, in its
entirety.
C. No Waiver of Rights During Mediation.
The Company and Retailer agree that neither party shall waive any
rights it may have under any federal or state law during the pendency
of any mediation under this Section 11.
D. Tolling.
Each party agrees that mediation under this Section 11 will toll any
applicable statute of limitations during the mediation and solution
review periods referenced above. If Retailer is required under any
applicable state law to file a letter of protest before the completion
of any mediation contemplated hereby, nothing herein shall prohibit
Retailer from filing such protest; however, Retailer must continue
with the mediation procedures described in this Section 11.
E. Cost of Enforcement.
If the parties are unable to resolve disputes under this Section 11,
and a party elects to initiate administrative proceedings or civil
litigation arising from such disputes, the prevailing party shall, in
addition to all other available remedies, be entitled to recover all
of its reasonable attorneys' fees, court costs and expenses of
litigation.
13
II. VOLVO CUSTOMER OWNERSHIP EXPERIENCE
The Partners agree that the highest priority for Retailer and Company is
providing a superior ownership experience for Volvo Customers. This will be
achieved by providing unique customer value, and by treating Volvo Customers and
prospective Volvo customers with honesty and integrity.
12. RETAILER BUSINESS PLAN
Before entering into this Agreement, Retailer has provided the Company with
a Business Plan, signed by all Principal Owners listed in Section 2A of
this Agreement, and the General Manager listed in Section 3 of this
Agreement. The Business Plan addresses all areas of Retailer's business,
including, without limitation:
o Retailer's strategy for providing a superior ownership experience
for Volvo Customers;
o Retailer's strategy for developing Retailer's Area of
Responsibility or Market Area;
o A detailed description of Retailer's sales objectives and its
method of achieving its objectives;
o A detailed description of Retailer's service objectives and its
method of achieving its objectives;
o A detailed description of Retailer's Facilities;
o A complete statement of Retailer's ownership and management
structure;
o A complete statement of Retailer's financial structure, including
capitalization and lines of credit;
o Retailer's strategy for staffing and personnel development;
o Retailer's strategy for advertising, merchandising, and community
relations; and
o Retailer's strategy for other items as agreed to by Retailer and
the Company.
Retailer further agrees to develop its Area of Responsibility or Market
Area according to its Business Plan, and to fulfill its commitments as
described in the Business Plan.
13. REVIEW AND UPDATE OF BUSINESS PLAN
Retailer's performance under this Agreement is essential to the effective
representation of the Company in the marketing, promotion, sale and service
of Company Products and the reputation and goodwill of other Volvo
retailers. Retailer agrees to update and submit its written Business Plan
to the Company at least annually, or more often if the Company requests.
All Business Plan updates shall include Retailer's evaluation of its
performance for the previous year, and any proposed modifications to the
Business Plan.
Retailer and the Company agree that Retailer's performance shall be
evaluated based on criteria agreed to in Retailer's Business Plan, or as
updated. If Retailer and the Company agree that the changes to the proposed
Business Plan, or update are necessary. Retailer will make all necessary
modifications, and resubmit the Business Plan, or update, for the Company's
review and approval. While Retailer's Business Plan is subject to update
and review, the Company will require Retailer to modify Retailer's
Facilities only if the Company can show that a material change in marketing
conditions warrants modification in Retailer's Facilities,
14. VEHICLE SALES OR SERVICE IMPROVEMENT PLAN
If the Company determines that Retailer has failed to meet any material
provision of its Business Plan, or as updated, Retailer agrees to enter
into a written improvement plan to cure any performance deficiency. The
Company agrees that: (i) Retailer will have a minimum of six (6) months
from execution of an improvement plan to cure any performance deficiency;
and (ii) the Company will provide reasonable assistance as the Company and
Retailer agree upon in advance and in writing.
14
15. PRODUCT AVAILABILITY
The Company agrees to provide and allocate Company Products among its
Retailers on a fair and equitable basis.
Retailer agrees that, because Company Products may not be available in
sufficient quantities from time to time, the Company, in the exercise of
its reasonable business judgment, may determine the manner and method of
allocation among the Company's Retailers without any liability to the
Company.
16. PURCHASE AND DELIVERY
A. Retailer Purchases.
(i) Company Vehicles.
From time to time the Company will advise Retailer of the number
and model lines of Company Vehicle which the Company has
available for sale to Retailer and, subject to Section 15,
Retailer will have the right to purchase such Company Vehicles.
The Company will distribute Company Vehicles to Authorized
Retailers in accordance with the Company's written distribution
policies and procedures in effect from time to time, and in
accordance with this Section 16.
(ii) Genuine Volvo Parts and Accessories.
Retailer will submit firm orders for Genuine Volvo Parts and
Accessories to the Company in such quantity and variety to
fulfill Retailer's obligations under this Agreement. Retailer
will submit all orders in accordance with Company Policies. The
Company may accept orders in whole or in part, and all orders
shall be effective only upon acceptance by the Company (but
without necessity of any notice of acceptance by the Company to
Retailer). Orders for Genuine Volvo Parts and Accessories shall
not be cancelable by Retailer after acceptance and shipment by
the Company, except as otherwise provided in this Agreement.
(iii) Other Products and Services.
Retailer may submit firm orders to the Company for other products
and services the Company may offer for sale to Retailer from time
to time in such quantity and variety to fulfill Retailer's
obligations under this Agreement. Retailer will submit all orders
in accordance with Company procedures. The Company may accept
orders in whole or in part, and all orders shall be effective
only upon acceptance by the Company (but without necessity of any
notice of acceptance by the Company to Retailer). Orders for
other products and services shall not be cancelable by Retailer
after acceptance and shipment by the Company, except as otherwise
set forth in this Agreement.
(iv) Changes in Company Products.
The Company may discontinue the supply, or change the design of
component materials, of Company Products at any time. The Company
will be under no liability to Retailer for any changes and will
not be required, as a result of any changes, to make any changes
to Company Products previously purchased by Retailer. No change
shall be considered a model year change unless so specified by
the Company.
B. Delays in Delivery.
The Company will not be liable for failure or delay in delivery to
Retailer of Company Products if the failure or delay is beyond the
control, or without the fault or negligence of, the Company.
C. Passage of Title.
Title to each Company Product Retailer purchases under this Agreement
shall pass to Retailer, or to the finance institution designated by
it, upon delivery to a carrier for shipment to Retailer, but the
Company shall retain a security interest in, and right to repossess,
any such Company Product described in Section 16E below.
15
D. Shipment of Company Products.
(i) Company Vehicles.
The Company may select the mode of transportation, route and
point of origin for Company Vehicles shipped to Retailer.
Retailer will pay to the Company the applicable destination
charges that the Company establishes for Retailer for Company
Vehicles delivered to Retailer that are in effect at the time of
shipment. The Company will bear the risk of loss and damage to
Company Vehicles until delivery to a transport carrier for
shipment; however, the Company will, if requested by Retailer in
a manner and within the time as the Company shall from time to
time specify, prosecute for and on behalf of Retailer, at
Retailers expense, claims against the responsible transport
carrier for loss of or damage to Company Vehicles during
transportation.
(ii) Genuine Volvo Parts and Accessories.
The Company will ship Genuine Volvo Parts and Accessories to
Retailer by whatever means of transportation, by whatever route,
and from whatever point the Company may select. The Company will
bear the risk of loss and damage to Genuine Volvo Parts and
Accessories until delivery to a transport carrier for shipment;
however, the Company will, if requested by Retailer in a manner
and within the time as the Company shall from time to time
specify, prosecute for and on behalf of Retailer, at Retailer's
expense, claims against the responsible transport carrier for
loss of or damage to Genuine Volvo Parts and Accessories during
transportation.
E. Security Interest.
As security for full payment of all sums Retailer owes to the Company
under this Agreement, whether such sums are now, or subsequently
become due and owing, Retailer grants to the Company, subject to any
prior perfected secured creditor's security interest, a security
interest in all inventory, including, without limitation, Company
Products and proceeds from sales or insurance, and all liens. Upon any
non-payment or default in payment, the Company may accelerate any then
existing debt and shall have all applicable rights, including, without
limitation, those specified in the Uniform Commercial Code. If the
Company requests, Retailer agrees to perfect the Company's security
interests.
F. Charges for Storage and Diversions.
Retailer is responsible for, and will pay all charges, for demurrage,
storage and other expenses accruing after shipment to Retailer or to a
carrier for transportation to Retailer. If diversions of shipments are
made upon Retailer's request, or are made by the Company because of
Retailer's failure or refusal to accept shipments of Retailer's
orders, Retailer will pay all additional charges and expenses incident
to such diversion.
17. PAYMENTS BY RETAILER
Payment for Company Products purchased by Retailer shall be made in cash in
advance or by other payment methods the Company approves in writing. The
Company's receipt of any commercial paper will not constitute payment until
collected in full. Retailer will pay all collection costs, including but
not limited to, reasonable attorneys' fees, costs and expense of
litigation.
18. INVENTORY OF COMPANY VEHICLES
Retailer will maintain, and the Company shall supply, a representative
inventory of new Company Vehicles of the latest model in accordance with
Retailer's Business Plan. Retailer shall store and maintain such new
Company Vehicles in accordance with Company Policies.
16
19. DEMONSTRATORS
Retailer will keep available at all times, in excellent condition for
demonstration purposes, a representative number and mix of the Company
Vehicles of each of the latest models equipped with the latest accessories.
20. BUSINESS HOURS
Retailer will conduct its Retailer Operations during hours which are
reasonable and convenient for customers. All aspects of Retailer Facilities
will be open for business during days and hours reasonably necessary to
provide a superior customer experience, and consistent with local practice
in Retailer's Area of Responsibility or Market Area.
21. PARTS AND ACCESSORIES
A. Inventory.
Retailer agrees to purchase and maintain at Retailer's Facility, in
accordance with Company Policies, a sufficient inventory of Genuine
Volvo Parts and Accessories necessary to meet the current and
reasonably anticipated requirements of Volvo Customers.
B. Warranty Repairs.
When performing warranty repairs, or other repairs paid for, or
reimbursed, in whole or in part by the Company, Retailer shall only
use Genuine Volvo Parts and Accessories.
C. Non-Genuine Volvo Parts and Accessories.
When performing repairs on any Company Vehicle, other than warranty
repairs or repairs paid for, or reimbursed in whole or in part by, the
Company, Retailer may sell and install non-Genuine Volvo Parts and
Accessories.
D. Quality of Parts.
If Retailer sells, and/or installs non-Genuine Volvo Parts and
Accessories during repairs or service of Company Products under
Section 21C, Retailer will not use parts or accessories that do not
meet Company standards or that could adversely affect the mechanical
operation, safety, integrity or reputation of Company Products.
E. Disclosure.
If Retailer sells and/or installs non-Genuine Parts and Accessories
during repairs or service as described in Section 21C above. Retailer
will, prior to repair or installation, conspicuously disclose to the
customer in writing on all copies of the customer's repair order and
invoice the following:
(i) Those parts and accessories which are non-Genuine Volvo Parts and
Accessories; and
(ii) That non-Genuine Volvo Parts and Accessories are not covered by
the Company or Manufacturer warranty.
22. WARRANTIES ON COMPANY PRODUCTS
The Company provides a written warranty for the Company Products it
markets. The Company and Retailer shall each fulfill promptly their
respective obligations under such warranties.
Retailer agrees to furnish each retail purchaser or end user of a Company
Vehicle purchased from, or delivered by Retailer, excepting used vehicles
not covered under the Volvo Select Pre Owned Program, with such form of
warranty and maintenance record, owner's manual, and/or other documentation
then currently provided by the Company.
EXCEPT AS OTHERWISE PROVIDED BY LAW, THE WRITTEN COMPANY WARRANTIES ARE THE
ONLY WARRANTIES APPLICABLE TO COMPANY PRODUCTS. EXCEPT FOR ITS LIMITED
LIABILITY UNDER SUCH WRITTEN WARRANTIES, THE COMPANY AND MANUFACTURER DO
NOT ASSUME ANY OTHER
17
WARRANTY, OBLIGATION OR LIABILITY, RETAILER IS NOT AUTHORIZED TO CREATE OR
ASSUME ANY ADDITIONAL WARRANTY OBLIGATION OR LIABILITY ON BEHALF OF THE
COMPANY OR MANUFACTURER. ANY SUCH UNAUTHORIZED ASSUMPTION OR CREATION OF
OBLIGATIONS WITHOUT THE PRIOR WRITTEN AUTHORIZATION OF THE COMPANY SHALL BE
THE SOLE RESPONSIBILITY OF RETAILER. AS TO RETAILER, THE WRITTEN WARRANTIES
ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. THE COMPANY DISCLAIMS ANY LIABILITY TO RETAILER FOR
COMMERCIAL LOSSES BASED ON NEGLIGENCE OR MANUFACTURER'S STRICT LIABILITY OR
ANY OTHER THEORY OF RECOVERY.
23. PRE-DELIVERY SERVICE
Retailer agrees to inspect, service, condition and prepare each new Company
Vehicle before delivery to a customer in accordance with applicable
pre-delivery inspection, service and conditioning standards and schedules
the Company furnishes from time to time to Retailer, and to perform such
other normal service and conditioning work as may be prescribed in the
Company Policies. Retailer will maintain adequate pre-delivery service and
inspection records, and upon request, Retailer will provide to the Company
evidence that it has performed pre-delivery services.
24. REPAIR AND MAINTENANCE SERVICE
Retailer agrees to perform: (i) warranty service and repairs; (ii) services
included in On Call(R) (or other roadside assistance plan the Company may
offer from time to time); (iii) extended contract service repairs; (iv)
recall and service campaign repairs; (v) inventory maintenance; and (vi)
other maintenance required on Company Products in accordance with the
Company's then current recommendations and specifications, regardless of
where customer purchased Company Products. Warranty, recall, service
campaign and On Call services are provided for the customer's benefit, and
Retailer agrees that the customer shall not be obligated to pay for any
charges for these services for which Retailer is reimbursed by the Company
or a third party designated by the Company.
25. TRAINING
Retailer and the Company agree that ongoing training and development of
Retailer employees is necessary to provide Volvo Customers with a superior
ownership experience, and achieve the goals described in the Preamble to
this Agreement. To help accomplish this, the Company agrees to provide or
make training programs available to Retailer, and Retailer will require all
appropriate employees, as the Company may determine, to participate in such
training programs the Company offers. Retailer shall be responsible for
reasonable charges and expenses related to such training, unless otherwise
advised by the Company.
III. OPERATING PROVISIONS
The Partners agree that the success of Volvo, its name, trademarks and
reputation is their joint responsibility.
26. USE OF VOLVO TRADEMARK
Retailer agrees that the Company has been authorized by AB Volvo,
Gothenburg, Sweden, to permit Retailer to use the name "Volvo" under the
following terms and conditions:
A. Ownership of ▇▇▇▇.
AB Volvo is the owner of numerous trademarks and trade names: (i) the
name "Volvo" is a valid and existing trademark presently owned by AB
Volvo and is registered by AB Volvo in the United States Patent and
Trademark Office; (ii) AB Volvo presently has the sole right to use
such trademarks (except to the extent that it has previously expressly
authorized others to do so) and to authorize others to use such
trademarks; and (iii) valuable goodwill has accrued to, and is
attached to, such trademarks.
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B. Company Rights.
The Company has been granted the right to enforce rights associated
with the trademark "Volvo" in the United States. In addition, the
Company's rights hereunder shall inure to the benefit of, and are
assignable to, any successor to its business.
C. Right to Use.
During the term of this Agreement, Retailer has been granted the
limited, non-assignable, non-exclusive right to use the name "Volvo"
in the tradename used in connection with the sale and service of
Company Products described in this Agreement. Retailer will not claim
or make any attempt to register any corporate or other name or
trademark which includes the name "Volvo" in any place or office, but
Retailer may, in connection with Retailer's operations under this
Agreement and upon prior approval of the Company, register a tradename
containing the name "Volvo" where registration of businesses under
fictitious names are conducted as required by law. The rights
conferred herein will terminate upon termination of this Agreement.
D. Alterations.
Retailer will not alter any Company Product furnished under this
Agreement or change or substitute any of its equipment, nor do
anything that will in any way infringe, impeach or lessen the value or
validity of the trademarks associated with any Company Product.
E. Non-assignability.
Retailer's interest in this trademark license is personal and
non-assignable.
F. Assignability.
All rights exercisable by AB Volvo as the owner of the "Volvo"
trademark and tradenames shall, in the event of any assignment of such
trademarks and tradenames, be fully exercisable by, and inure to the
benefit of, the assignee.
27. DISCONTINUANCE OF RIGHT TO USE TRADEMARK
A. Immediate Termination.
The permission to use the Trademarks granted in Section 26 will
terminate automatically if, at any time:
(i) Retailer ceases to act as an Authorized Retailer in Company
Products;
(ii) Retailer sells or attempts to sell non-Company Vehicles or
non-Genuine Volvo Parts and Accessories as Company Products;
(iii) Retailer assigns or attempts to assign any interest in this
Agreement without the written consent of the Company; or
(iv) This Agreement expires or is terminated pursuant to Sections 1 or
10.
B. Delayed Termination.
The Company or AB Volvo, upon thirty (30) days prior written notice to
Retailer, may terminate the permission given by Section 26 at any
time.
C. Discontinue Use.
Upon termination of the rights granted by Section 26, Retailer will
immediately discontinue the use of the name "Volvo" in Retailer's
tradename, and will also immediately discontinue the use of any signs,
structures, and forms of advertising based upon Retailer's tradename
which include the name "Volvo." Immediately after termination,
Retailer will take all necessary and appropriate action to change
Retailer's tradename to eliminate the name "Volvo" or any combination,
variation, or similar name. Immediately after termination, Retailer
shall, at its expense, remove any signage containing or referring to
the name "Volvo."
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28. LINES OF CREDIT
During the term of this Agreement, Retailer will maintain a line of credit
with a responsible financing institution at a level permitting Retailer to
inventory Company Products commensurate with the Business Plan.
29. ACCOUNTING AND RECORD KEEPING
A. Accounting.
Retailer will keep accurate records of its business relating to the
marketing, promoting, selling or servicing of Company Products.
Retailer agrees to maintain a uniform accounting system in accordance
with Company Policies.
B. Inspection.
During regular business hours, the Company will have the right to
inspect Retailer Facilities and to examine, audit and make and take
copies of all records, accounts and supporting data relating to
Retailer Operations. Whenever reasonably possible, the Company will
provide Retailer with advance notice of an audit or inspection of
Retailer Facilities. Retailer may be present at any such audit or
inspection.
C. Financial Statements.
On or before the tenth (10th) day of each month, Retailer will deliver
to the Company, in a form prescribed by or acceptable to the Company,
accurate statements of the financial condition and operating results
of Retailer's Operations with regard to Company Products through the
last day of the previous month. Within ninety (90) days after the end
of Retailer's fiscal year, Retailer shall provide the Company with
financial statements that have been reviewed by an independent
Certified Public Accountant, as well as a copy of such accountant's
review report.
D. Sales and Inventory Reports.
Retailer shall furnish to the Company, on forms prescribed by or
acceptable to the Company, accurate response of Retailer's sales and
inventory of Company Products and Select Pre Owned Vehicles.
30. RETAILER INFORMATION SYSTEMS
Retailer agrees to install and maintain, at its expense, electronic data
processing equipment and software applications that are compatible with,
and supported by, the Company's computer network and business operational
strategies, as the Company may determine from time to time.
31. CHANGE IN PRICES
Upon ten (10) days prior written notice to Retailer, the Company may change
the Retailer Price and the Company's charge for distribution and delivery
of any Company Vehicle. Except with regard to any discounts authorized in
writing by the Company, the changed price and charge shall be the price and
charge in effect, and delivery to Retailer shall be deemed to have been
made and the order deemed to have been filled, upon Company's delivery to a
transport carrier for delivery to Retailer or its designee. The Company
will provide Retailer with price protection for Company Vehicles in
accordance with the Company Policies.
32. EXPORT OF COMPANY VEHICLES
Retailer is authorized to sell Company Products only to customers located
in the United States and agrees to abide by any export policy established
by the Company.
33. FACTORY SUGGESTED PRICE LABELS
If Retailer finds that any new Vehicle has been delivered to Retailer with
an incorrect label, or without a completed label affixed thereto pursuant
to the Federal Automobile Information Disclosure Act, 15 U.S.C. Section
1232, as amended (the "Act"), Retailer will immediately notify the Company.
If the Company gives written instructions to Retailer with respect to
replacing or affixing a label in a manner that conforms with the Act,
Retailer agrees to comply with such written instructions.
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34. INDEMNIFICATION
A. Indemnification by the Company.
The Company will indemnify and hold Retailer harmless from any and all
liability, loss, cost or expense, including, without limitation,
reasonable attorneys' fees, resulting from or relating to any legal
action against Retailer by third parties concerning bodily injury or
property damage arising out of an occurrence caused solely by a defect
in the design or manufacture of a Company Product; provided, however,
Retailer could not have discovered that defect in the reasonable
pre-delivery inspection or servicing of the Company Product.
If any legal action identified in this Section 34 is brought against
Retailer, and if Retailer promptly notifies the Company in writing of
the commencement of the action and cooperates fully in the defense of
the action as the Company may reasonably require, the Company agrees
to undertake, at its sole expense, the defense of said action on
behalf of Retailer when so requested by Retailer, and to indemnify and
hold Retailer harmless in the event of an adverse judgment. The
Company shall have the right to continue the suit in the name of
Retailer if the Company deems such action to be necessary. Should the
Company refuse to undertake the defense on behalf of Retailer,
Retailer may conduct its own defense and, if the Company is determined
to be solely liable, the Company shall be liable for the cost of the
defense, including, without limitation, reasonable attorneys' fees,
court costs and expenses of litigation, together with any verdict,
judgment or settlement paid by Retailer.
B. Indemnification by Retailer
Retailer shall indemnify the Company and/or Manufacturer (for purposes
of this Section 34, individually and collectively referred to as
"Indemnified Party(ies)") and hold each of them harmless from any and
all liability, loss, cost or expense, including, without limitation
reasonable attorneys' fees, court costs and costs of litigation,
resulting from or relating to any legal action against Volvo by third
parties alleging or concerning:
(i) Retailer's failure to comply, in whole or in part, with any
obligations assumed by Retailer pursuant to this Agreement; or
(ii) Retailer's negligent or improper inspection, repairing or
servicing of new or used Company Products; or
(iii) Retailer's breach of any contract between Retailer and
Retailer's customer or supplier; or
(iv) Retailer's unfair, misleading, deceptive or fraudulent trade
practices.
If any legal action arising out of the causes specified above is
brought against any Indemnified Party, and provided that the
Indemnified Party promptly notifies Retailer in writing of the
commencement of any such action, Retailer agrees to undertake, at its
sole expense, the defense of said action on behalf of the Indemnified
Party when so requested, and to indemnify and hold the Indemnified
Party harmless in the event of an adverse judgment. Should Retailer
refuse to undertake the defense on behalf of the Indemnified Party,
such party may conduct its own defense and Retailer shall be liable
for the cost of such defense, including, without limitation,
reasonable attorneys' fees, court costs and costs of litigation,
together with any verdict, judgment or settlement paid by the
Indemnified Party.
C. Joint Defense.
Whenever a legal action claims liability on the part of both the
Company, as described in Section 34A, and Retailer, as described in
Section 34B, each party shall be responsible for its own defense. Any
Indemnified Party's or Retailer's responsibility for its own defense
pursuant to this Section 34 shall in no way affect their respective
obligations to indemnify and hold harmless.
35. COMPLIANCE WITH LEGAL REQUIREMENTS
Retailer agrees to pay all taxes and to take all actions required by law,
including, without limitation, those actions required to comply with the
National Traffic and Motor Vehicle Safety Act of 1966, the Clean Air Act,
the Consumer Product Safety Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act (all as
amended from time to time), and any other federal, state or local leg-
21
islation or regulation pertaining to safety, air pollution, noise control,
water pollution, handling, transportation, storage and disposal of
hazardous and non-hazardous waste and materials, warranties to consumers,
the sale of Company Vehicles, or other actions which may be required of
automobile retailers or which the Company may reasonably request.
36. COMPLIANCE WITH CONSUMER PROTECTION LAWS AND REGULATIONS
Because certain Volvo Customer complaints may have legal significance for,
or impose liability upon, Retailer and/or the Company under various "Repair
or Replace" or other consumer protection laws and regulations. Retailer
agrees to provide the Company with prompt notice of all such complaints.
Retailer agrees to take other steps as the Company may reasonably require,
including, without limitation, providing notice to Retailer's regional
office when a vehicle is brought into Retailer which may become subject to
such law or regulation prior to a presumption of liability arising under
such law or regulation from the inability to repair or correct a
nonconformity or condition of a Vehicle. Retailer hereby agrees to do
nothing to affect adversely the Company's rights under such laws and
regulations, and recognizes that failure to comply with this Section 36 may
result in a chargeback from the Company for monies expended in remedying
such complaints which in the reasonable opinion of the Company were caused
wholly or predominantly by Retailer.
37. TRADE PRACTICES
The Company and Retailer each recognize the importance of dealing with each
other in an open and honest manner. In addition, each party understands the
importance of treating Volvo Customers and prospective Volvo customers with
the utmost respect and honesty. Retailer agrees to conduct its business in
a manner which will develop and maintain superior levels of customer
loyalty and satisfaction, continually striving to improve Retailer's
reputation, the Company, Company Products and the Volvo name, trademarks
and service marks. Retailer will not engage in any unfair, deceptive,
misleading, unethical, fraudulent or otherwise prohibited practice.
Retailer will immediately discontinue any such advertising or practice upon
written notice of objection from the Company. Any notice by the Company and
discontinuance by Retailer will not prejudice any other rights the Company
may have under this Agreement.
38. REPURCHASE OF COMPANY PRODUCTS BY THE COMPANY
Within sixty (60) days after termination of this Agreement under Section
10, the Company will repurchase the following:
All new, unused, undamaged, standard, current model year Company
Vehicles with less than 200 miles which Retailer may own or have an
interest in on the date of termination, at a price paid by Retailer to
the Company for such Company Vehicles less: (i) any price reduction
allowance credited or paid to Retailer (net discounts, allowances or
adjustments); and (ii) transportation charges paid by Retailer;
All current model year demonstrator vehicles (as defined by the
Company) and registered Volvo service loaners which are no more than
one year old;
All new, unused, standard, current model year Company Vehicles which
Retailer may own or has an interest in on the date of termination,
which were received by Retailer from the Company in a damaged
condition and were not repaired by Retailer to standard condition, at
the price specified in this Section 38, but provided that Retailer
shall subrogate all claims for the repair of such Company Vehicles to
the benefit of the Company;
All new, undamaged Genuine Volvo Parts and Accessories offered for
sale by the Company to its retailers on the date of termination which
Retailer may own or have an interest in on the date of termination, at
the then current wholesale price for such Genuine Volvo Parts and
Accessories on the date of termination, less: (i) a handling charge of
fifteen (15%) percent; and (ii) any charges actually paid by the
Company for transportation to the Company; and
All special tools, signs, and other special equipment and information
which are, because of design, applicable only to Company Products,
which Retailer may own or have an interest in on the date of
termination and which are in useable and good condition except for
reasonable wear and tear, at the price paid by Retailer less: (i) an
amount equal to the accrued straight line depreciation on such
equipment during Retailer's (assumed) ownership, if such equipment has
a useful life of at least five years; and (ii) any charges actually
paid by the Company for the transportation of such equipment from
Retailer's place of business to the Company's place of
22
business. Retailer will furnish to the Company satisfactory evidence
of the date on which Retailer acquired an interest in such equipment,
and of the price paid by Retailer.
For purposes of this Section 38, Company Vehicles, Genuine Volvo Parts and
Accessories, special tools and equipment specified in the four preceding
paragraphs are referred to collectively in this Section 38 as "Repurchase
Products."
As a condition precedent to the Company's obligations under this Section 38
to purchase the Repurchase Products, Retailer shall permit the Company and
Company's designee or designees, to enter the Retailer Facility at such
time as the Company may reasonably determine, for the purpose of inspecting
and/or taking an inventory of all or any part of Retailer's stock of
Company Products.
In connection with the Company's purchase of the Repurchase Products
pursuant to this Section 38:
(i) Retailer shall promptly deliver such Repurchase Products to the
Company;
(ii) Retailer shall comply with any and all applicable laws and
requirements which may be necessary or proper to transfer good title
to Repurchase Products to the Company, free and clear of any charge,
lien, or encumbrance; and
(iii) Promptly following Retailer's fulfillment of its obligations
under this Section 38, the Company shall pay Retailer for the
Repurchase Products acquired by it pursuant to this Section 38
(subject to all rights of set-off for any outstanding debt of Retailer
to the Company).
IV. MISCELLANEOUS PROVISIONS
39. LICENSING REQUIREMENTS
Retailer will procure and maintain any license(s) or other applicable
governmental authorization(s) necessary to operate as a new motor vehicle
retailer for Company Products.
40. INSURANCE
Retailer will acquire and maintain insurance as follows: (i) Worker's
Compensation insurance prescribed by law in the state in which Retailer is
located, and Employers Liability Insurance, each with a limit of at least
$500,000 per occurrence; (ii) Comprehensive general liability insurance in
a form approved by the Company with a combined single limit of $1,000,000;
(iii) automobile liability insurance in the amount of at least $1,000,000;
(iv) an umbrella policy to cover comprehensive general liability and auto
insurance in the amount of at least $5,000,000; (v) Casualty insurance
insuring Retailer Facilities in an amount, as determined by the Company,
necessary to repair any casualty in an expedited manner thus enabling
Retailer to continue the sales and service of Company Products; and (vi)
any other type of insurance as may be deemed reasonably necessary by the
Company. From time to time, the Company reserves the right to modify these
insurance requirements and limits in accordance with reasonably accepted
industry custom and practice.
41. TAXES
Retailer will comply with all applicable laws concerning collection or
payment by Retailer of taxes applicable to all transactions by Retailer
concerning Company Products, and Retailer shall furnish evidence of
compliance to the Company within thirty (30) days after delivery of a
written request.
42. WAIVER
Failure by either party at any time to require performance by the other
party, or to claim a breach of any provision of this Agreement, will not be
construed as a waiver of any subsequent breach, nor affect the
enforceability of any part of this Agreement, nor prejudice either party as
regards to any subsequent action.
43. AGENCY
Retailer is an independently operated business entity in which the Company
has no ownership interest. This Agreement does not make Retailer the legal
representative of the Company, or in any way create the relationship of
principal and agent between the Company and Retailer, nor does this
Agreement create any fiduciary or employment relationship between Retailer
and the Company. Retailer hereby agrees that it will not act or attempt to
act, or represent
23
itself directly or by implication, as agent of the Company or in any manner
create or attempt to create any obligation on behalf of, or in the name of,
the Company.
44. SUBRETAILERS
Retailer has no authority to establish an associate retailer or subretailer
for Company Products.
45. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
This Agreement is in the nature of a personal services agreement and
Retailer has no authority to assign the whole or any part of this
Agreement, or any right or interest hereunder, without the prior written
consent of an Officer, which shall not be unreasonably withheld.
46. NOTICE AND SERVICE OF NOTICE
Notice from Retailer to the Company will be effective only if: (i) signed
by the Principal Owner or General Manager; and (ii) directed to the Company
President or his authorized designee Notice from the Company shall be
effective only if; (i) signed by an Officer; and (ii) directed to a
Principal Owner or General Manager at the Retailer's address given on page
1 of this Agreement. Any such notice shall be sent by Certified Mail.
Return Receipt Requested or by overnight mail or carrier service. In the
case of Certified Mail, notice shall be deemed given upon the earlier of
actual receipt or seven (7) days after such notice is sent. In the case of
overnight mail or carrier service, notice shall be deemed given upon the
next business day after such notice is sent. Notice may be given by
facsimile, but only with the written consent of the other party.
47. APPLICABLE LAW AND SEVERABILITY
This Agreement will be construed in accordance with New Jersey law with
respect to its interpretation and construction, but in all other respects
governed by the laws of the state of Retailer's Facilities identified in
Section 5. If any provision of this Agreement is declared invalid,
unenforceable, or prohibited by the laws of the applicable state, such
provision shall be severable from the balance of this Agreement, which will
remain in full force and effect. Should the Company determine that any
federal or state law or regulation, or any condition referred to in Section
34 or 35 requires a change or changes in any of the provisions of this
Agreement, the Company may offer to Retailer an amendment or an amended
Agreement embodying such change or changes. If Retailer fails to execute
such amendment or amended Agreement and return it to the Company within
thirty (30) days after it is delivered to Retailer, the Company may
terminate this Agreement by giving notice to Retailer, with termination to
be effective upon receipt by Retailer of notice.
48. FINANCIAL INFORMATION
Retailer agrees that the Company may provide to, or obtain financial
information from, financial institution(s) which have an actual or
prospective relationship with Retailer.
49. ENTIRE AGREEMENT
This Agreement supersedes all prior agreements between the parties relative
to the sale and servicing of Company Products. This Agreement contains the
entire, integrated agreement between the parties and any amendment,
modification, or waiver of any provision of this Agreement must be in
writing and signed by an Officer, and on behalf of Retailer by a person
identified in Section 2A.
50. NO FRANCHISE FEE OR ADDITIONAL PAYMENTS
Retailer represents and warrants that it has paid no fee, nor has it
provided any funds, goods or services to any Company employee or agent in
lieu of a fee, as consideration for the Company's entering into this
Agreement, and that the sole consideration for the Company's entering into
this Agreement was Retailer's Principal Owners' and General Manager's
abilities, integrity, assurances of personal services and expressed
intention to deal fairly and equitably with the Company and the public and
all other promises recited in this Agreement. In addition, Retailer
represents and warrants that neither it nor any Principal Owner has
received any consideration, except as described in this Agreement, for
entering into this Agreement.
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51. CAPTIONS
The captions for the sections of this Agreement are for convenience and
reference only and will not be construed to explain, modify, amplify or aid
in the interpretation, construction or meaning of the provisions of this
Agreement, or be a part of this Agreement.
52. TIME OF THE ESSENCE
Time is of the essence with respect to each provision of this Agreement.
53. DATE OF PERFORMANCE
If any date for the performance of obligations by any party under this
Agreement falls on any day that is not a business day, the date on which
such obligation is to be performed will be deemed to be the next business
day.
54. RULES OF CONSTRUCTION
The following rules shall apply to the construction and interpretation of
this Agreement:
A. Singular words connote the plural number as well as the singular
and vice versa, and the masculine includes the feminine and the
neuter.
B. All references herein to particular articles, sections, subsections
or exhibits are references to articles, sections, subsections or
exhibits of this Agreement.
C. Each party and its legal counsel have reviewed and revised (or
requested revisions of) this Agreement and, therefore, any usual rules
of construction requiring that ambiguities are to be resolved against
a particular party shall not be applicable in the construction and
interpretation of this Agreement.
V. DEFINITIONS
55. DEFINITIONS
In addition to certain terms defined elsewhere in this Agreement, the
following definitions shall apply throughout this Agreement:
AREA OF RESPONSIBILITY: The non-exclusive area that the Company
designates from time to time as Retailer's primary geographic
territory for the marketing, promoting, selling and servicing of
Company products.
AUTHORIZED RETAILER(S): Retailers authorized by the Company to conduct
Retailer Operations in connection with the marketing, promoting,
selling and servicing of Company Products pursuant to the then
current, duly executed Authorized Retailer Agreement.
BUSINESS PLAN: The written business plan, in a form satisfactory to
the Company, and any updates thereto, produced by Retailer and
provided to the Company, which describes how Retailer will develop and
maintain its Volvo business.
COMPANY POLICY(IES): All guidelines, regulations, programs, manuals,
bulletins, policies, and procedures and subsequent amendments
established by the Company from time to time.
COMPANY PRODUCTS: Company Vehicles and Genuine Volvo Parts and
Accessories that bear the Volvo trademark(s), and special tools, all
of which from time to time the Company may offer to Retailer.
COMPANY VEHICLES: Volvo passenger cars manufactured by or for
Manufacturer, and offered by the Company to Retailer for purchase.
GENUINE VOLVO PARTS AND ACCESSORIES: Those parts and accessories,
bearing the Marks/Trademarks, manufactured by or for Manufacturer or
the Company, and offered for sale to Retailer by the Company.
MANUFACTURER: Volvo Car Corporation, Gothenburg, Sweden, and any
affiliate or successor in interest.
MARKET AREA: The non-exclusive area, encompassing one or more Areas of
Responsibility, that the Company designates from time to time as
Retailer's primary geographic territory for the marketing, promoting,
selling and servicing of Company products.
25
▇▇▇▇(S)/TRADEMARK(S): Any trademark or service ▇▇▇▇ that the Company
either owns, or is authorized to use and/or license, with rights of
enforcement.
MEDIATION GUIDELINES: The policies to be followed in mediating a
dispute between the Company and Retailer as described in Section 11.
MEDIATION PANEL: The panel of Retail Mediators, as described in
Section 11.
OFFICER: The president or any executive vice president, senior vice
president or vice president of the Company.
PARTNER(S)(SHIP)(ING): The terms partnership, partner(s) and
partnering, as used in this Agreement and the Preamble, shall refer to
the cooperative and mutually advantageous relationship that this
Agreement is intended to ▇▇▇▇▇▇ between the Company and Retailer. The
use of the terms partnership, partner(s) and partnering in this
Agreement is not intended to create a legal partnership or joint
venture between the parties to this Agreement. The Company and
Retailer understand that each party is and shall remain, during the
term of this Agreement, a wholly independent entity and that this
Agreement does not create a fiduciary or agency relationship between
the parties.
PRINCIPAL OWNER(S): Those owners of Retailer described in Section 2A.
REMAINING OWNER(S): Those owners of Retailer that remain after the
death or incapacity of a Principal Owner, as referenced in Section 11.
REPURCHASE PRODUCTS: Company Products, described in Section 38.
RETAILER: The entity that is authorized to market, promote, sell and
service Company Products under this Agreement.
RETAILER FACILITY(IES): Retailer's land, buildings, improvements, and
fixtures described in Section 6.
RETAILER FACILITIES GUIDE: The Company's guide for retail facilities,
as such may be issued from time to time.
RETAILER MEDIATORS: Retailers selected by the Company and a
representative group of Authorized Retailers to serve as mediators in
the resolution of a dispute between the Company and a Retailer in
accordance with Section 11.
RETAILER OPERATIONS: Retailer's business of marketing, promoting,
selling and servicing Company Products.
VOLVO: A trademark, tradename and service ▇▇▇▇ of AB Volvo, a Swedish
corporation.
VOLVO CUSTOMER: A person or entity that has purchased, leased or
obtained service for, any Company Product.
VOLVO SELECT PRE OWNED VEHICLE: A Volvo vehicle that has been
reconditioned by a participating Retailer in accordance with Company
Policies.
WORKING CAPITAL GUIDE: The guide produced by the Company to assist
Retailer in determining, establishing, modifying, and maintaining
Retailer's capital necessary to provide a superior ownership
experience for Volvo Customers in Retailer's Area of Responsibility or
Market Area.
This Agreement will not be binding unless it bears the signatures of an Officer
on behalf of the Company and of a person named in Section 2A on behalf of
Retailer.
VOLVO CARS OF NORTH AMERICA, INC. RETAILER European Motors, LLC
d/b/a Volvo of Chattanooga
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
------------------------------- ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Regional Vice President Title: Cheif Manager
------------------------------- ------------------------------
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