EXHIBIT 10.2.1
{Infiniti Logo]
Automobile Dealer
Sales and Service
Agreement
{INFINITI LOGO] INFINITI
DEALER SALES AND SERVICE AGREEMENT
THIS AGREEMENT is entered into effective the day last set forth below by and
between the INFINITI DIVISION of NISSAN NORTH AMERICA, INC., a California
corporation, hereinafter called Seller, and the natural person or entity
identified as "Dealer" in the Final Article of this Agreement.
INTRODUCTION
The purpose of this Agreement is to establish Dealer as an authorized dealer
of Infiniti Products and to provide for the sale and servicing of Infiniti
Products in a manner that will best serve owners, potential owners and
purchasers of Infiniti Products as well as the interests of Seller, Dealer and
other Authorized Infiniti Dealers. This Agreement sets forth: the rights which
Dealer will enjoy as an Authorized Infiniti Dealer; the responsibilities which
Dealer assumes in consideration of its receipt of these rights; and the
respective conditions, rights and obligations of Seller and Dealer that apply to
Seller's grant to Dealer of such rights and Dealer's assumption of such
responsibilities.
This is a personal services Agreement. In entering into this Agreement and
appointing Dealer as provided below, Seller is relying upon the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations of the individual(s) named herein as Principal Owner(s) and
Executive Manager.
Infiniti Products are intended for discriminate owners with the expectation
that such owners will be loyal and proud, but also demanding toward Seller and
Dealer with respect to Infiniti Products and the manner in which they are sold
and serviced. Owners, potential owners and purchasers of Infiniti Products are
expected to want, and are entitled to do business with, dealers who enjoy the
highest reputation in their communities and have well located, attractive and
efficient places of business, courteous personnel and outstanding service and
parts facilities. Infiniti Products must be sold by enthusiastic dealers who are
not interested in short term results only but are willing to look toward long
term goals and who are devoted to creating and maintaining a positive total
ownership experience for owners of Infiniti Products. Seller's standard of
excellence for Infiniti Products must be matched by the dealers who sell them to
the public and who service them during their operative lives.
Achievement of the purposes of this Agreement is premised upon mutual
understanding and cooperation between Seller and Dealer. Dealer has entered into
this Agreement in reliance upon Seller's integrity and expressed intention to
deal fairly with Dealer and the consuming public. Seller has entered into this
Agreement in reliance upon Dealer's integrity and ability and expressed
intention to deal fairly with the consuming public and Seller.
It is the responsibility of Seller to market Infiniti Products throughout
the Territory. It is the responsibility of Dealer to actively promote the retail
sale of Infiniti Products and to provide courteous and efficient service of
Infiniti Products. The success of both Seller and Dealer will depend on how well
they each fulfill their respective responsibilities under this Agreement. It is
recognized that: Seller will endeavor to provide motor vehicles of excellent
quality and workmanship and to establish a network of Authorized Infiniti
Dealers that can provide an outstanding sales and service effort at the retail
level; and Dealer will endeavor to fulfill its responsibilities through
aggressive, sound, ethical selling practices and through conscientious regard
for customer service in all aspects of its Infiniti Dealership Operations.
Seller and Dealer shall refrain from engaging in conduct or activities which
might be detrimental to or reflect adversely upon the reputation of Seller,
Dealer or Infiniti Products and shall engage in no discourteous, deceptive,
misleading or unethical practices or activities.
For consistency and clarity, terms which are used frequently in this
Agreement have been defined in Section 1 of the Standard Provisions. All terms
used herein which are defined in the Standard Provisions shall have the meaning
stated in said Standard Provisions. These definitions should be read carefully
for a proper understanding of the provisions in which they appear.
To achieve the purposes referred to above, Seller and Dealer agree as follows:
ARTICLE FIRST: Appointment of Dealer
Subject to the conditions and provisions of this Agreement, Seller:
(a) appoints Dealer as an Authorized Infiniti Dealer and grants Deafer the
non-exclusive right to buy from Seller those Infiniti Products specified in
Dealer's current Product Addendum hereto, for resale, rental or lease at or from
the Dealership Locations established and described in accordance with Section 2
of the Standard Provisions; and
(b) grants Dealer a non-exclusive right, subject to and in accordance with
Section 5.L of the Standard Provisions, to identify itself as an Authorized
Infiniti Dealer, to display the Infiniti Marks in the conduct of its Dealership
Operations and to use the Infiniti Marks in the advertising, promotion and sale
of Infiniti Products in the manner provided in this Agreement.
ARTICLE SECOND: Assumption of Responsibilities by Dealer
Dealer hereby accepts from Seller its appointment as an Authorized Infiniti
Dealer and, in consideration of its appointment and subject to the other
conditions and provisions of this Agreement, hereby assumes the responsibility
for:
(a) establishing and maintaining at the Dealership Location the Dealership
Facilities in accordance with Section 2 of the Standard Provisions;
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(b) actively and effectively promoting the sale at retail (and, if Dealer
elects, the leasing and rental) of Infiniti Vehicles within Dealer's Primary
Market Area in accordance with Section 3 of the Standard Provisions;
(c) servicing Infiniti Vehicles and for selling and servicing Genuine Parts
and Accessories in accordance with Section 4 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and in Infiniti
Products in accordance with Sections 3, 4, and 5 of the Standard Provisions; and
(e) performance of the additional responsibilities set forth in this
Agreement, including those specified in Section 5 of the Standard Provisions.
ARTICLE THIRD: Ownership
(a) OWNERS. This Agreement has been entered into by Seller in reliance upon,
and in consideration of, the personal qualifications, expertise, reputation,
integrity, experience, ability and representations with respect thereto of the
Principal Owner(s) named in the Final Article of this Agreement and in reliance
upon Dealer's representations concerning the ownership of Dealer as follows:
(i) Dealer represents and agrees that the person(s) named as Principal
Owner(s) in the Final Article of this Agreement, and only those
person(s), shall be the Principal Owner(s) of Dealer.
(ii) Dealer represents and agrees that the person(s) named as Other
Owner(s) in the Final Article of this Agreement, and only those
person(s), shall be the Other Owner(s) of Dealer.
(b) HOLDING COMPANY. Seller requires that a natural person be named as the
Principal Owner(s) of Dealer because Seller relies on the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations of such individuals. If one or more of the Principal Owners of
Dealer is a corporation, partnership or other entity and not a natural person
(hereinafter called "Holding Company"), Dealer and Seller agree that the natural
persons listed in the Holding Company Addendum of this Agreement as owners of
the Holding Company shall be deemed to be the Principal Owner(s) and/or Other
Owner(s) of Dealer, as the case may be, and that the terms and conditions of
this Agreement, including without limitation the provisions of this Article
Third and Sections 11, 13 and 14 of the Standard Provisions, shall apply to the
owner(s) of the Holding Company as well as to Dealer. Dealer represents to
Seller and agrees that the Holding Company is owned as indicated in the Holding
Company Addendum to this Agreement.
(c) CHANGES IN OWNERSHIP. In view of the fact that this is a personal
services Agreement and in view of its objectives and purposes, this Agreement
and the rights and privileges conferred on Dealer hereunder are not assignable,
transferable or salable by Dealer, and no property right or interest is or shall
be deemed to be sold, conveyed or transferred to Dealer under this Agreement.
Dealer agrees that any change in the ownership of Dealer specified herein
requires the prior written consent of Seller, excepting only changes in the
record or beneficial ownership interests of Other Owners not effecting a change
in majority control or interest. Dealer shall give Seller prior notice of any
proposed change in said ownership requiring the consent of Seller and immediate
notice of the death or incapacity of any Principal Owner. No such change, and no
assignment of this Agreement or of any right or interest herein, shall be
effective against Seller unless and until embodied in an appropriate amendment
to or assignment of this Agreement, as the case may be, duly executed and
delivered by Seller and by Dealer. Seller shall not, however, unreasonably
withhold its consent to any such change. Seller shall have no obligation to
transact business with any person who is not named either as a Principal Owner
or Executive Manager of Dealer hereunder or otherwise to give effect to any
proposed sale or transfer of the ownership or management of Dealer prior to
having concluded the evaluation of such a proposal as provided in Section 14 of
the Standard Provisions.
ARTICLE FOURTH: Management
(a) EXECUTIVE MANAGER. Seller and Dealer agree that the retention by Dealer
of qualified management is of critical importance to the successful operation of
Dealer and to the achievement of the purposes and objectives of this Agreement.
This Agreement has been entered into by Seller in reliance upon, and in
consideration of, the personal qualifications, expertise, reputation, integrity,
experience, ability and representations with respect thereto of the person named
as Executive Manager in the Final Article of this Agreement and on Dealer's
representation to Seller and agreement that the person identified as Executive
Manager shall be Dealer's executive manager, shall have full managerial
authority for the Dealership Operations, and shall continually provide his or
her personal services in operating the dealership and will be physically present
at the Dealership Facilities on a full-time basis.
(b) CHANGES IN MANAGEMENT. In view of the fact that this is a personal
services Agreement and in view of its objectives and purposes, Dealer agrees
that any change in the Executive Manager from that specified in the Final
Article of this Agreement requires the prior written consent of Seller. Dealer
shall give Seller prior notice of any proposed change in Executive Manager and
immediate notice of the death or incapacity of any Executive Manager. No change
in Executive Manager shall be effective unless and until embodied in an
appropriate amendment to this Agreement duly executed and delivered by Seller
and by Dealer. Subject to the foregoing, Dealer shall make its own, independent
decisions concerning the hiring and firing of its employees, including, without
limitation, its Executive Manager.
To enable Seller to evaluate and respond to Dealer concerning any proposed
change in Executive Manager, Dealer agrees to provide, in the form requested by
Seller and in a timely manner, all applications and information customarily
requested by Seller to evaluate the proposed change. While Seller shall not
unreasonably withhold its consent to any such change, it is agreed that any
successor Executive Manager must possess personal qualifications, expertise,
reputation, integrity, experience and ability which are, in the opinion of
Seller, satisfactory. Seller will determine whether, in its opinion, the
proposed change is likely to result in a successful dealership operation with
capable management that will satisfactorily perform Dealer's obligations
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under this Agreement. Seller shall have no obligation to transact business with
any person who is not named as an Executive Manager of Dealer hereunder prior to
having concluded its evaluation of such person.
(c) EVALUATION OF MANAGEMENT. Dealer and Seller understand and acknowledge
that the personal qualifications, expertise, reputation, integrity, experience
and ability of the Executive Manager and his or her ability to effectively
manage Dealer's day-to-day Dealership Operations is critical to the success of
Dealer in performing its obligations under this Agreement. Seller may from time
to time develop standards and/or procedures for evaluating the performance of
the Executive Manager and of Dealer's personnel generally. Seller may, from time
to time, evaluate the performance of the Executive Manager and will advise
Dealer and the Executive Manager of the results of such evaluations and the way
in which any deficiencies affect Dealer's performance of its obligations under
this Agreement.
ARTICLE FIFTH: Additional Provisions
The additional provisions set forth in the attached "Infiniti Dealer Sales
and Service Agreement Standard Provisions," bearing form number IA-4S- D-7/89,
are hereby incorporated in and made a part of this Agreement. The Notice of
Primary Market Area, Dealership Facilities Addendum, Product Addendum, Dealer
Operating Requirements Addendum, Dealership Identification Addendum, Holding
Company Addendum, if applicable, and all Guides and Standards referred to in
this Agreement (including references contained in the Standard Provisions
referred to above) are hereby incorporated in and made a part of this Agreement.
Dealer further agrees to be bound by and comply with: the Warranty Manual;
Seller's Manuals or Instructions heretofore or hereafter issued by Seller to
Dealer; any amendment, revision or supplement to any of the foregoing; and any
other manuals heretofore or hereafter issued by Seller to Dealer.
ARTICLE SIXTH: Termination of Prior Agreements
This Agreement cancels, supersedes and annuls all prior contracts,
agreements and understandings except as stated herein, all negotiations,
representations and understandings being merged herein. No waiver, modification
or change of any of the terms of this Agreement or change or erasure of any
printed part of this Agreement or addition to it (except filling of blank spaces
and lines) will be valid or binding on Seller unless approved in writing by the
President or an authorized Vice-President of Seller.
ARTICLE SEVENTH: Term
This Agreement shall have a term commencing on the effective date hereof and
continuing until terminated by either party in accordance with Section 11 of the
Standard Provisions.
ARTICLE EIGHTH: License of Dealer
If Dealer is required to secure or maintain a license for the conduct of its
business as contemplated by this Agreement in any state or jurisdiction where
any of its Dealership Operations are to be conducted or any of its Dealership
Facilities are located, this Agreement shall not be valid until and unless
Dealer shall have furnished Seller with written notice specifying the date and
number, if any, of such license or licenses issued to Dealer, Dealer shall
notify Seller immediately in writing if Dealer shall fail to secure or maintain
any and all such licenses or renewal thereof or, if such license or licenses are
suspended or revoked, specifying the effective date of any such suspension or
revocation.
ARTICLE NINTH: Execution of Agreement
This Agreement, and any Addendum or amendment or notice with respect
thereto, shall be valid and binding on Seller only when it bears the signature
of either the President or an authorized Vice-President of Seller and, when such
signature is a facsimile, the manual countersignature of an authorized employee
of Seller at the Director level and a duplicate original thereof is delivered
personally or by mail to the Dealership Location. This Agreement shall bind
Dealer only when it is signed by: a duly authorized officer or executive of
Dealer if a corporation; one of the general partners of Dealer if a partnership;
or Dealer if an individual.
ARTICLE TENTH: Special Conditions
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FINAL ARTICLE
Dealer is ________________________________________________________________________________________________________________, a (an)
(Select One) [ ] individual [ ] partnership [ ] corporation [ ] limited liability company,
incorporated or formed under the laws of the State of ___________________________________________________________________________
doing business as _______________________________________________________________________________________________________________
("Dealer"). Dealer is located in _________________________________________________, ___________________________________________.
The Principal Owned(s) of Dealer are as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
______________________________________________________ _________________________________________________________ __________
The Other Owner(s) of Dealer are as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
______________________________________________________ _________________________________________________________ __________
The Executive Manager of Dealer is as follows:
PERCENTAGE
NAME RESIDENCE INTEREST
______________________________________________________ _________________________________________________________ __________
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in triplicate effective as of the ____ day of ___________,
______ at Carson, California.
(YEAR)
DEALER: SELLER:
INFINITI DIVISION
NISSAN NORTH AMERICA, INC.
______________________________________________________________ By ____________________________________________________________
Name Signature
By ___________________________________________________________ _______________________________________________________________
Signature Type Name & Title
______________________________________________________________ By ____________________________________________________________
Type Name & Title Signature
_______________________________________________________________
Type Name & Title
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[INFINITI LOGO]
INFINITI
DEALER SALES
AND
SERVICE AGREEMENT
STANDARD PROVISIONS
INFINITI DIVISION
NISSAN MOTOR CORPORATION IN U.S.A.
TABLE OF CONTENTS
Page
1. DEFINITIONS .......................................................... 1
2. DEALERSHIP LOCATION AND DEALERSHIP FACILITIES ........................ 2
A. Location and Facilities............................................ 2
B. Dealership Facilities Addendum .................................... 2
C. Changes and Additions ............................................. 2
D. Development of Market Studies ..................................... 2
E. Evaluation of Dealership Facilities and Location .................. 2
3. VEHICLE SALES RESPONSIBILITIES OF DEALER ............................. 2
A. General Sales Obligations of Dealer................................ 2
B. Sales of Infiniti Vehicles......................................... 3
C. Metropolitan Markets .............................................. 3
D. Additional Factors for Consideration .............................. 3
E. Used Motor Vehicle Sales .......................................... 3
F. Evaluation of Dealer's Sales Performance .......................... 3
4. RESPONSIBILITIES OF DEALER WITH RESPECT TO SERVICE AND PARTS.......... 3
A. General Service Obligations of Dealer ............................. 3
B. Specific Service Obligations of Dealer............................. 4
C. Service Operations of Dealer ...................................... 5
D. Parts Operations of Dealer ........................................ 5
E. Evaluation of Dealer's Service and Parts Performance .............. 5
5. OTHER SELLER AND DEALER RESPONSIBILITIES ............................. 6
A. Assistance Provided by Seller ..................................... 6
B. Advertising and Promotion ......................................... 6
C. Customer Satisfaction and Required Disclosures .................... 6
D. Dealer Personnel .................................................. 6
E. Signs ............................................................. 7
F. Hours of Operations ............................................... 7
G. Capital and Financing ............................................. 7
H. Dealer Systems .................................................... 7
1. Records and Reports ............................................... 7
J. Right of Inspection ............................................... 8
K. Confidentiality ................................................... 8
L. Use of Infiniti Marks ............................................. 8
6. PURCHASE AND DELIVERY ................................................ 8
A. Dealer Purchases .................................................. 8
B. Delays in Delivery ................................................ 9
C. Shipment of Infiniti Products ..................................... 9
D. Passage of Title .................................................. 9
E. Security Interest ................................................. 9
F. Charges For Storage and Diversions ................................ 10
G. Changes in Infiniti Products ...................................... 10
7. PRICING .............................................................. 10
A. Infiniti Vehicles.................................................. 10
B. Genuine Parts and Accessories ..................................... 10
C. Other Products and Services ....................................... 10
8. PAYMENT .............................................................. 10
A. Payment for Vehicles .............................................. 10
B. Payment for Parts and Accessories ................................. 10
C. Accounts Payable .................................................. 11
D. Collection of Taxes by Dealer ..................................... 11
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TABLE OF CONTENTS (CONTINUED)
Page
9. WARRANTIES ........................................................... 11
10. INDEMNIFICATION ...................................................... 11
A. Indemnification of Dealer ......................................... 11
B. Indemnification of Seller ......................................... 12
C. Conditions and Exceptions to Indemnification ...................... 12
11. TERMINATION .......................................................... 13
A. Termination Due to Certain Acts or Events ......................... 13
B. Termination By Seller for Non-Performance by Dealer ............... 14
C. Termination Because of Death or Physical or Mental Incapacity of
Principal Owner ................................................... 14
D. Termination for Failure of Seller or Dealer to be Licensed ........ ▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇ by Dealer ............................................. 14
F. Termination by Seller Because of a Change of Seller's Method of
Distribution or Decision by Seller to Cease Distribution of
Infiniti Vehicles ................................................. 14
G. Termination Upon Entering Into a New or Amended Sales and Service
Agreement or Addenda .............................................. 15
12. RIGHTS AND LIABILITIES UPON TERMINATION .............................. 15
A. Termination Procedures ............................................ 15
B. Repurchases by Seller Upon Termination ............................ 15
C. Dealer's Responsibilities with Respect to Repurchase .............. 16
D. Title to Repurchased Property ..................................... 16
E. Payment ........................................................... 16
F. Cancellation of Deliveries ........................................ 16
13. ESTABLISHMENT OF SUCCESSOR DEALER .................................... 16
A. Because of Death of Principal Owner ............................... 16
B. Consideration of Successor Addendum ............................... 17
C. Termination of Successor Addendum ................................. 17
D. Evaluation of Successor Dealership ................................ 17
E. Termination of Market Representation .............................. 17
F. Termination of Offer .............................................. 17
14. SALE OF ASSETS OR OWNERSHIP INTERESTS IN DEALER ...................... 17
A. Sale or Transfer .................................................. 17
B. Seller's Evaluation ............................................... 17
C. Effect of Termination ............................................. 18
D. Seller's Rights of First Refusal or Option to Purchase ............ 18
15. GENERAL .............................................................. 19
A. Notices ........................................................... 19
B. No Implied Waivers ................................................ 19
C. No Agency ......................................................... 19
D. Limitations of Seller's Liability ................................. 19
E. Entire Agreement .................................................. 19
F. California Law .................................................... 19
G. Changes Required by Law ........................................... 19
H. Severability ...................................................... 19
I. Assignment ........................................................ 19
J. No Franchise Fee .................................................. 19
K. Captions .......................................................... 19
L. Benefit ........................................................... 19
M. Notice of Failure to Act in "Good Faith" .......................... 20
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[INFINITI LOGO] INFINITI
DEALER SALES AND SERVICE AGREEMENT
The following Standard Provisions have by reference been incorporated in
and made a part of the Infiniti Dealer Sales and Service Agreement which they
accompany and which has been executed on behalf of Seller and Dealer.
SECTION 1. DEFINITIONS
Seller and Dealer agree that the following terms, as used in this
Agreement, shall be defined exclusively as set forth below.
A. "AUTHORIZED INFINITI DEALER(S)" shall mean dealers located in the
Territory that are authorized by Seller to conduct Dealership Operations in
connection with the sale of Infiniti Products, pursuant to a duly executed
Infiniti Dealer Sales and Service Agreement.
B. "INFINITI VEHICLE(S)" shall mean the new passenger vehicles specified in
the current Product Addendum.
C. "GENUINE PARTS AND ACCESSORIES" shall mean such parts, accessories and
other products for Infiniti Vehicles as are from time to time offered for sale
by Seller to Authorized Infiniti Dealers for resale under this Agreement.
D. "INFINITI PRODUCT(S)" shall mean Infiniti Vehicles, Genuine Parts and
Accessories, and such other products sold by Seller to Dealer and designated by
Seller as an Infiniti Product.
E. "COMPETITIVE VEHICLES" shall mean those new vehicles which are
considered by Seller to be directly competitive with respective Infiniti
Vehicles. Seller shall advise Dealer in writing of the lines and models of
vehicles which comprise Competitive Vehicles hereunder from time to time.
F. "INDUSTRY VEHICLES" shall mean all new vehicles of all manufacturers
which are sold and distributed within the United States, to the extent data
relating to registration thereof are reasonably available.
G. "DEALERSHIP LOCATION" shall mean the place or places of business of
Dealer established and described in accordance with Section 2 of this Agreement.
H. "DEALERSHIP FACILITIES" shall mean the land areas at the Dealership
Location and the buildings and improvements erected thereon provided by Dealer
in accordance with Section 2 of this Agreement.
I. "DEALERSHIP FACILITIES ADDENDUM" shall mean the addendum executed by
Seller and Dealer pursuant to Section 2 of this Agreement.
J. "DEALERSHIP OPERATIONS" shall mean all dealer functions contemplated by
this Agreement including, without limitation, sale and servicing of Infiniti
Products, use and display of Infiniti Marks and Infiniti Products, rental and
leasing of Infiniti Vehicles, sale of used vehicles, body shop work, financing
or insurance services and any other activities undertaken by Dealer in
connection with Infiniti Products whether conducted directly or indirectly by
Dealer.
K. "PRIMARY MARKET AREA" shall mean the geographic area which is designated
from time to time as the area of Dealer's sales and service responsibility for
Infiniti Products in a Notice of Primary Market Area issued by Seller to Dealer.
Seller reserves the right, in its reasonable discretion, to issue new,
superseding "Notices of Primary Market Area" to Dealer from time to time. Such
geographic area may at any time be applicable to Dealer and to other Authorized
Infiniti Dealers.
L. "PRINCIPAL OWNER(S)" shall mean the person(s) named as Principal
Owner(s) in the Final Article of this Agreement upon whose personal
qualifications, expertise, reputation, integrity, experience, ability and
representations concerning the management and operation of Dealer, Seller has
relied in entering into this Agreement.
M. "OTHER OWNER(S)" shall mean the person(s) named as Other Owner(s) in the
Final Article of this Agreement who will not be involved in the operation or
management of Dealer.
N. "EXECUTIVE MANAGER" shall mean the person named as Executive Manager in
the Final Article of this Agreement upon whose personal qualifications,
expertise, reputation, integrity, experience, ability and representations that
he or she shall devote his or her full-time efforts to and have full managerial
authority and responsibility for the day-to-day management and performance of
Dealer, Seller has relied in entering into this Agreement.
O. "SUCCESSOR ADDENDUM" shall mean the Successor Addendum, if any, executed
by Seller and Dealer pursuant to Section 13 of this Agreement.
P. "GUIDES" OR "STANDARDS" shall mean such reasonable criteria as may be
established by Seller for Authorized Infiniti Dealers from time to time under
its standard procedures with respect to Dealership Operations including, without
limitation, such matters as dealership facilities, tools, equipment, financing,
capitalization, inventories, systems operations and personnel. The execution of
this Agreement or of any addenda hereto (including without limitation any
Dealership Facilities Addendum) shall not, however, be construed as evidence of
Dealer's fulfillment of or compliance with said Guides or Standards or of
Dealer's fulfillment of its responsibilities under this Agreement.
Q. "WARRANTY MANUAL" shall mean the publication or publications of Seller,
as the same may from time to time be amended, revised or supplemented, which set
forth Seller's policies and procedures concerning the administration of Seller's
warranties and related matters.
R. "INFINITI ▇▇▇▇(S)" shall mean those trademarks, service marks, names,
logos and designs that Seller may, from time to time, use or authorize for use
by Dealer in connection with Infiniti Products or Dealership Operations
including, without limitation, the name "Infiniti".
S. "SELLER'S MANUALS OR INSTRUCTIONS" shall mean those bulletins, manuals,
programs or instructions issued by Seller to all Authorized
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Infiniti Dealers advising them of Seller's policies or procedures under this
Agreement including, without limitation, the Parts and Accessories Policy and
Procedure Manual, the Infiniti Dealer Accounting System Manual, the Facilities
Standards Manual, the Identity Standards Manual, the Human Asset Management
Manual, and the Environmental Properties Manual.
T. "TERRITORY" shall mean the geographic area in which Seller has been
authorized to distribute Infiniti Products.
U. "PRODUCT ADDENDUM" shall mean the Product Addendum issued by Seller to
Dealer which specifies those Infiniti Vehicles which shall be offered for sale
by Seller to Dealer for resale. Seller reserves the right, in its sole
discretion, to issue new, superseding Product Addenda to Dealer from time to
time.
V. "DEALERSHIP IDENTIFICATION ADDENDUM" shall mean the Dealership
Identification Addendum executed by Seller and Dealer pursuant to Section 5.E of
this Agreement.
W. "DEALER OPERATING REQUIREMENTS ADDENDUM" shall mean the Dealer Operating
Requirements Addendum executed by Seller and Dealer pursuant to Sections 5.C,
5.D and 5.1 of this Agreement.
SECTION 2. DEALERSHIP LOCATION AND DEALERSHIP FACILITIES
A. LOCATION AND FACILITIES.
Dealer shall provide, at the Dealership Location approved by Seller in
accordance with Section 2.B hereof, Dealership Facilities that (i) will enable
Dealer to effectively perform its responsibilities under this Agreement; (ii)
are satisfactory in space, appearance, layout, equipment, signage; and (iii) are
otherwise substantially in accordance with the Guides and Standards therefor
established by Seller and the Facilities Standards Manual, as the same may be
issued to Dealer from time to time. Dealer shall conduct its Dealership
Operations only from the Dealership Location specified in the Dealership
Facilities Addendum. If the Dealership Location is comprised of more than one
place of business, Dealer shall use each such place of business only for the
purposes specified therefor in the current Dealership Facilities Addendum.
B. DEALERSHIP FACILITIES ADDENDUM.
Dealer and Seller will execute a Dealership Facilities Addendum which
will include a description of the Dealership Location and the Dealership
Facilities, the approved use for each such place of business and facility, and
the current Guides therefor.
C. CHANGES AND ADDITIONS.
Dealer shall not move, relocate, or change the usage of the Dealership
Location or any of the Dealership Facilities, or substantially modify any of the
Dealership Facilities, nor shall Dealer or any person named in the Final Article
of this Agreement directly or indirectly establish or operate any other
locations or facilities for the sale or servicing of Infiniti Products or for
the conduct of any other of the Dealership Operations contemplated by this
Agreement, without the prior written consent of Seller. Any changes in the
Dealership Location or the Dealership Facilities that may be agreed to by Seller
and Dealer shall be reflected in a new, superseding Dealership Facilities
Addendum executed by Seller and Dealer.
Dealer acknowledges that the addition and maintenance of another line
of vehicles or another automobile dealership operating simultaneously with its
Infiniti Dealership Operations at the Dealership Location could adversely affect
Dealer's sales and service performance with respect to Infiniti Products.
Accordingly, Dealer agrees to notify Seller in writing at least sixty (60) days
before Dealer enters into any agreement or letter of intent with respect to the
addition of a new line or lines of vehicles to operate from the Dealership
Facilities.
D. DEVELOPMENT OF MARKET STUDIES.
Seller may, from time to time and in its sole discretion, conduct
studies of various geographic areas to evaluate market conditions. Such market
studies shall, where appropriate, take into account such factors as geographical
characteristics, consumer shopping patterns, existence of other automobile
retail outlets, sales opportunities and service requirements of the geographic
area in which Dealer's Primary Market Area is located, trends in marketing
conditions, current and prospective trends in population, income, occupation,
and such other demographic characteristics as may be determined by Seller to be
relevant to its study. Such studies will make recommendations concerning the
market, the Dealership Facilities, and the Dealership Location. Prior to
conducting a study which includes the geographic area in which Dealer's Primary
Market Area is located, Seller will notify Dealer of its intention to conduct
such a study. Dealer will be given the opportunity to present to Seller such
information pertaining to such study as Dealer believes may be relevant. Seller
will consider all relevant information timely provided by Dealer before
concluding its study.
E. EVALUATION OF DEALERSHIP FACILITIES AND LOCATION.
Seller will periodically evaluate Dealer's performance of its
responsibilities under this Section 2. In making such evaluations, Seller will
give consideration to: the actual land and building space provided by Dealer for
the performance of its responsibilities under this Agreement; the current Guides
and Standards established by Seller for the Dealership Facilities; the
appearance, condition and layout of the Dealership Facilities; the location of
the Dealership Facilities relative to the sales opportunities and service
requirements of the Primary Market Area; and such other factors, if any, as may
directly relate to Dealer's performance of its responsibilities under this
Section 2. Evaluations prepared pursuant to this Section 2.E will be discussed
with and provided to Dealer, and Dealer shall have an opportunity to comment, in
writing, on such evaluations, and Seller will consider Dealer's comments. Dealer
shall promptly take such action as may be required to correct any deficiencies
in Dealer's performance of its responsibilities under this Section 2.
SECTION 3. VEHICLE SALES RESPONSIBILITIES OF DEALER
A. GENERAL SALES OBLIGATIONS OF DEALER.
Dealer shall actively and effectively promote through its own
advertising and sales promotion activities the sale at retail (and if Dealer
elects, the leasing and rental) of Infiniti Vehicles to customers located
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Infiniti Standard Provisions
within Dealer's Primary Market Area. Dealer's Primary Market Area is a
geographic area which Seller uses as a tool to evaluate Dealer's performance of
its sales obligations hereunder. Dealer agrees: that it has no exclusive right
or interest in and such geographic area which Seller may designate; that Seller
may add, relocate or replace dealers in Dealer's Primary Market Area; and that
Seller may, in its reasonable discretion, change Dealer's Primary Market Area
from time to time.
B. SALES OF INFINITI VEHICLES.
Dealer's performance of its sales responsibility for Infiniti Vehicles
will be evaluated by Seller on the basis of such reasonable criteria as Seller
may develop from time to time, including for example:
(1) Achievement of reasonable sales objectives which may be established
from time to time by Seller for Dealer as standards for performance;
(2) Dealer's sales of Infiniti Vehicles in Dealer's Primary Market Area
and/or the metropolitan area in which Dealer is located, as applicable, or
Dealer's sales as a percentage of:
(i) registrations of Infiniti Vehicles;
(ii) registrations of Competitive Vehicles;
(iii) registrations of Industry Vehicles;
(3) A comparison of Dealer's sales and/or registrations to sales and/or
registrations of all other Authorized Infiniti Dealers combined in Seller's
Sales Region and District in which Dealer is located; and, where Section 3.C
applies, for all other Authorized Infiniti Dealers combined in the metropolitan
area in which Dealer is located, and
(4) A comparison of sales and/or registrations achieved by Dealer to
the sales or registrations of Dealer's competitors.
(5) Dealer's performance in building and maintaining consumer
confidence in Dealer and in Infiniti Products as compared with performance
levels achieved by other Authorized Infiniti Dealers in Seller's Region or
District in which Dealer is located as measured by surveys or indices of
consumer satisfaction or such other means as may be deemed appropriate by
Seller.
Seller shall advise Dealer in writing of the criteria used by Seller to
evaluate Dealers' sales performance hereunder from time to time. The sales and
registration data referred to in this Section 3 shall be those utilized in
Seller's records or in reports furnished to Seller by independent sources
selected by it and generally available for such purpose in the automotive
industry. If such reports of registration and/or sales are not generally
available, Seller may rely on such other registration and/or sales data as can
be reasonably obtained by Seller.
C. METROPOLITAN MARKETS.
If Dealer is located in a metropolitan or other marketing area where
there are located one or more Authorized Infiniti Dealers other than Dealer, the
combined sales performance of all Infiniti Dealers in such metropolitan or other
marketing area may be evaluated as indicated in Sections 3.B.2 and 3.B.3 above,
and Dealer's sales performance may also be evaluated on the basis of the
proportion of sales and potential sales of Infiniti Vehicles in the metropolitan
or other marketing area in which Dealer is located for which Dealer fairly may
be held responsible.
D. ADDITIONAL FACTORS FOR CONSIDERATION.
In evaluating Dealer's sales performance, Seller will take into account
such reasonable criteria as Seller may determine from time to time, including,
for example, the following: the Dealership Location; the general shopping habits
of the public in such market area; the availability of Infiniti Vehicles to
Dealer and to other Authorized Infiniti Dealers; any special local marketing
conditions that would affect Dealer's sales performance differently from the
sales performance of other Authorized Infiniti Dealers; the recent and long term
trends in Dealer's sales performance; the manner in which Dealer has conducted
its sales operations (including advertising, sales promotion, and treatment of
customers); and the other factors, if any, directly affecting Dealer's sales
opportunities and performance.
E. USED MOTOR VEHICLE SALES.
Dealer shall engage in used motor vehicle operations as and to the
extent reasonably required for Dealer to effectively perform its
responsibilities for the sale of Infiniti Vehicles. Subject to requirements and
guidelines established by Seller, Dealer shall be entitled to identify such used
motor vehicle operations as a part of its Dealership Operations and to apply the
Infiniti Marks relating to used motor vehicle operations.
F. EVALUATION OF DEALER'S SALES PERFORMANCE.
Seller will periodically evaluate Dealer's performance of its
responsibilities under this Section 3. Evaluations prepared pursuant to this
Section 3.F will be discussed with and provided to Dealer. Dealer shall have an
opportunity to comment, in writing, on such evaluations and Seller will respond
in writing to such written comment received from Dealer. Dealer shall promptly
take such action as may be required to correct any deficiencies in Dealer's
performance of its responsibilities under this Section 3.
SECTION 4. RESPONSIBILITIES OF DEALER WITH RESPECT TO SERVICE AND PARTS
A. GENERAL SERVICE OBLIGATIONS OF DEALER.
Dealer understands and acknowledges that future sales of Infiniti
Products depend, in part, upon the satisfaction of Dealer's customers with its
servicing of such Products. Dealer further recognizes that Seller has entered
into this Agreement in reliance upon Dealer's representations concerning its
ability and commitment to fair dealing and professional servicing. Accordingly,
Dealer shall develop and maintain a quality service organization and shall
render at the Dealership Facilities prompt, efficient and courteous service to
owners and users of Infiniti Products, regardless of the origin of purchase
including, without limitation, the specific obligations described in Section
4.B. In this regard, Dealer shall take all reasonable steps to insure that: the
service needs of its customer's Infiniti Vehicles are accurately diagnosed;
Dealer's customers are advised of such needs and that each customer's consent is
obtained prior to initiation of any repairs; necessary repairs and maintenance
are professionally performed; and Dealer's customers are treated courteously and
fairly.
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B. SPECIFIC SERVICE OBLIGATIONS OF DEALER.
(1) Pre-Delivery Inspections and Service.
Dealer shall perform pre-delivery inspections and service on each
Infiniti Vehicle prior to sale and delivery thereof by Dealer, in accordance
with the Standards and procedures relating thereto set forth in the applicable
pre-delivery inspection schedules furnished by Seller to Dealer from time to
time. The completion of such inspection and service shall be verified by Dealer
in a form or manner approved by Seller for this purpose. Dealer shall retain the
original or a legible copy of each such form in its records; transmit such data
to Seller as requested by Seller from time to time, and furnish a copy of such
form to the purchaser.
(2) Warranty Repairs and Goodwill Adjustments.
Dealer shall promptly, courteously and efficiently perform: (i)
warranty repairs on each Infiniti Product which qualifies for such repairs under
the provisions of any warranty furnished therewith by Seller or the manufacturer
of the Infiniti Product and (ii) such other inspections, repairs or corrections
on Infiniti Products as may be approved or authorized by Seller to be made at
Seller's expense (hereinafter referred to as "goodwill adjustments"). Dealer
shall perform such repairs and service on each such Infiniti Product as and when
required and requested by the owner or user (or in the case of goodwill
adjustments when requested by Seller), without regard to its origin of purchase
and in accordance with the provisions relating thereto set forth in the Warranty
Manual or in Seller's Manuals or Instructions issued to Dealer from time to
time. In performing such repairs and service on Infiniti Products for which
Seller has agreed to reimburse Dealer, Dealer shall use Genuine Parts and
Accessories unless Dealer receives prior authorization from Seller to use
non-genuine parts or accessories. Dealer will provide to each owner or user of
an Infiniti Product upon which any such repairs or service are performed a copy
of the repair order reflecting all services performed.
(3) Campaign Inspections and Corrections.
Dealer shall promptly, courteously and efficiently perform such
campaign inspections and/or corrections for owners and users of Infiniti
Products, regardless of their origin of purchase, as are: (i) described in owner
notifications and recall campaigns conducted by Seller in furtherance of any
federal or state law, regulation, rule or order; or (ii) requested by Seller on
Infiniti Products that qualify for such inspections and/or corrections. Once
Dealer has been notified that a recall or service campaign affects a particular
class or type of Infiniti Product, Dealer shall perform such campaign
inspections and/or corrections on all affected Infiniti Products then in or
which thereafter come into Dealer's inventory or which are delivered to Dealer
for repair or service. Dealer shall inquire, through the Infinitinet system or
otherwise, with respect to each such Infiniti Product to determine whether all
applicable campaign inspections and/or corrections have been performed on such
Infiniti Product and, if they have not been performed, Dealer shall perform
them.
Dealer shall advise Seller as and when such campaign inspections
and/or corrections are performed, in accordance with Seller's Manuals or
Instructions relating thereto and in accordance with the provisions relating
thereto set forth in the Warranty Manual. To enable Dealer to perform required
corrections as promptly as practicable, parts and/or other materials required
for each such campaign may be shipped in quantity and billed to Dealer. Dealer
shall accept and retain such parts and/or other materials for use in such
campaign. Upon completion of the campaign program, Dealer shall have the right
to return excess parts shipped by Seller to Dealer for such campaign, but only
to the extent that Dealer has not ordered and received additional parts from
Seller. Such a return of parts shall be apart from any other parts return
policies or programs which may be instituted by Seller. In performing such
campaign corrections for which Seller has agreed to reimburse Dealer for parts
and materials used in making such corrections, Dealer shall use Genuine Parts
and Accessories unless Dealer receives prior authorization from Seller to use
non-genuine parts and accessories.
(4) Maintenance and Repair Service.
Dealer shall promptly, courteously and efficiently maintain and
repair Infiniti Products as and when required and requested by the owner or user
thereof, without regard to their origin of purchase. Dealer shall provide all
owners and users for whom Dealer provides maintenance and repair service
itemized invoices reflecting all the services performed. In connection with its
sale or offering for sale of any maintenance services recommended by Seller for
the maintenance of an Infiniti Product, Dealer shall advise each customer
requesting such recommended maintenance service of: (i) a description of the
items included in maintenance recommended by Seller and Dealer's retail price
therefor; and (ii) the price and description of such additional maintenance or
repair being sold or recommended by Dealer which are in addition to that
recommended by Seller in published owner's manuals.
(5) Payments by Seller to Dealer.
For pre-delivery inspections and service, warranty repairs,
goodwill adjustments, and campaign inspections and corrections performed by
Dealer in accordance with this Section 4.B, Seller shall fairly and adequately
reimburse Dealer for the parts and/or other materials (or shall provide Dealer
with the parts and/or other materials and the labor required and used in
connection therewith in accordance with the provisions relating thereto set
forth in the Warranty Manual. Dealer understands and acknowledges that such
repairs are provided for the benefit of owners and users of Infiniti Products,
and Dealer shall not impose any charge on such owners or users for parts,
materials, or labor for which Dealer has received or will receive compensation
from Seller hereunder.
Dealer shall comply with the disposition instructions contained in
the Warranty Manual with respect to any Genuine Parts or Accessories acquired by
Dealer as a result of its performance of warranty repairs, goodwill adjustments
and campaign adjustments and/or corrections.
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C. SERVICE OPERATIONS OF DEALER.
(1) Compliance with Laws.
In performing the maintenance and service obligations specified in
Section 4.B, Dealer shall comply with all applicable provisions of federal,
state and local laws, ordinances, rules, regulations and orders affecting
Infiniti Products, including but not limited to laws relating to safety,
emissions control, noise control and customer service. Seller shall provide to
Dealer, and Dealer shall provide to Seller, such information and assistance as
may be reasonably requested by the other in connection with the performance of
obligations of the parties under such laws, ordinances, rules, regulations and
orders.
If applicable law requires the installation or supply of equipment not
installed or supplied as standard equipment by Seller or the manufacturer of an
Infiniti Vehicle, Dealer shall, prior to its sale of the Infiniti Vehicles on or
for which such equipment is required, install or supply such equipment at its
own expense and in conformance with such Standards as may be adopted by Seller.
Dealer shall comply with all applicable laws pertaining to the installation or
supply of such equipment, including without limitation, the reporting thereof.
(2) Tools and Equipment.
Dealer shall provide for use in its service operations such service
equipment and special tools, comparable to the type and quality recommended by
Seller from time to time, as are necessary to meet Dealer's service
responsibilities hereunder and as are substantially in accordance with Seller's
Guides. In addition, Dealer shall obtain and maintain for use in its service
operations all tools which are essential to the proper service, repair and
maintenance of Infiniti Vehicles and are identified by Seller as essential
tools. Seller shall ship such essential tools to Dealer as required due to new
model and component introductions and Dealer shall pay Seller therefor as
invoiced. If Dealer is in possession of a tool equivalent to any essential tool
shipped by Seller, Dealer may so notify Seller and Seller will exempt Dealer
from purchasing such essential tool from Seller upon Seller's determination that
Dealer's tool will satisfy the need for the specific repair procedure or
procedures for which the essential tool is intended. Dealer shall maintain all
such equipment and tools in good repair and proper calibration so as to enable
Dealer to meet its service responsibilities under this Section 4.
(3) Owner Relations.
In providing service on Infiniti Products, Dealer shall make every
effort to build and maintain good relations between Dealer and owners and users
of Infiniti Products. Dealer shall promptly investigate and handle all matters
brought to its attention by Seller, owners or users of Infiniti Products, or any
public or private agency, relating to the sale or servicing of Infiniti
Products, so as to develop and maintain owner and user confidence in Dealer,
Seller and Infiniti Products.
Dealer shall promptly report to Seller the details of each inquiry or
complaint received by Dealer relating to any Infiniti Product which Dealer
cannot handle promptly and satisfactorily. Dealer will take such other steps
with respect to such customer complaints as Seller may reasonably require.
Dealer will do nothing to affect adversely Seller's rights or obligations under
applicable laws, rules and/or regulations. Furthermore, Dealer shall participate
in and cooperate with such dispute resolution procedures as Seller may designate
from time to time and such other procedures as may be required by law.
Seller will promptly investigate all matters brought to its attention
by Dealer, owners or users of Infiniti Products, or any public or private
agency, relating to the design, manufacture or sale by Seller of Infiniti
Products, and Seller will take such action as it may deem necessary or
appropriate so as to develop and maintain owner confidence in Seller, Dealer and
Infiniti Products.
D. PARTS OPERATIONS OF DEALER.
(1) Parts Sales Responsibility of Dealer.
Dealer shall actively and effectively promote through its own
advertising and sales promotion activities the sale of Genuine Parts and
Accessories to service, wholesale, retail and other customers within Dealer's
Primary Market Area.
(2) Inventories of Parts and Accessories.
Dealer shall maintain at all times a stock of parts and accessories
which is adequate to meet its service and wholesale and retail parts sales
responsibilities under this Section 4. Dealer shall also maintain, subject to
the ability of Seller to supply the products ordered by Dealer, a stock of
Genuine Parts and Accessories of an assortment and in quantities adequate to
meet customer demand and for warranty repairs, goodwill adjustments and campaign
corrections made pursuant to this Section 4.
E. EVALUATION OF DEALER'S SERVICE AND PARTS PERFORMANCE.
Dealer's performance of its service and parts responsibilities will be
evaluated by Seller on the basis of such reasonable criteria as Seller may
develop from time to time, including for example:
(1) Dealer's performance in building and maintaining consumer
confidence in Dealer and in Infiniti Products as measured by surveys or indices
of consumer satisfaction as compared with performance levels achieved by other
Authorized Infiniti Dealers in Seller's Region or District in which Dealer is
located or such other means as may be deemed appropriate by Seller;
(2) Reasonable parts purchase or sales performance objectives which may
be established from time to time by Seller for Dealer;
(3) Dealer's advertising and promotion of its parts and service
operations;
(4) Dealer's performance of its service responsibilities and Dealer's
conduct of its service operations, including without limitation, the financial
results of its service operations, labor sales, warranty claims practices,
training of service personnel, qualification, performance and ability of service
personnel, and inventory of special and essential tools and service equipment,
as compared with Seller's Guides therefor where such have been established
and/or as compared with performance levels achieved
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by other Authorized Infiniti Dealers in Seller's Region or District in which
Dealer is located;
(5) Dealer's performance of its parts sales responsibilities and
Dealer's conduct of its parts operations, including without limitation, the
financial results of its parts operations, training of parts personnel, and
inventory of parts, as compared with Seller's Guides therefor where such have
been established and/or as compared with performance levels achieved by other
Authorized Infiniti Dealers in Seller's Region or District in which Dealer is
located; and
(6) Evaluation reports resulting from any audit or review of Dealer's
service or parts operations by Seller's representatives.
Seller will periodically evaluate Dealer's performance of its
responsibilities under this Section 4. Evaluations prepared pursuant to this
Section 4 will be discussed with and provided to Dealer, and Dealer shall have
an opportunity to comment, in writing, on such evaluations. Dealer shall
promptly take such action as may be required to correct any deficiencies in
Dealer's performance of its responsibilities under this Section 4.
SECTION 5. OTHER SELLER AND DEALER RESPONSIBILITIES
A. ASSISTANCE PROVIDED BY SELLER.
(1) Training Courses.
Seller will offer from time to time training courses for selected
Dealer personnel including, without limitation, sales, parts and service
training.
(2) Manuals.
Seller will make available to Dealer, for use by Dealer's personnel,
Seller's Manuals or Instructions concerning Dealer's Dealership Operations and
other sources of information and technical data as Seller deems necessary to
permit Dealer to perform its responsibilities under this Agreement. Dealer shall
keep such information and data current and available for consultation by
Dealer's employees.
(3) Field Personnel.
To further assist Dealer, Seller will provide to Dealer the advice
and counsel of its field personnel on matters relating to Dealership Operations
such as new vehicle sales, service, parts and accessories. Seller will also
provide advice and counsel in areas such as technical diagnosis, management,
merchandising, personnel training, owner relations, and facilities (including
standard layout plans, facility planning recommendations, and facility location
and planning) used for Dealer's Dealership Operations.
B. ADVERTISING AND PROMOTION.
(1) Advertising Standards.
Both Seller and Dealer recognize the need for maintaining the highest
standards of ethical advertising which is of a quality and dignity consonant
with the reputation and standing of Infiniti Products. Accordingly, neither
Seller nor Dealer shall knowingly publish or cause to be published any
advertising relating to Infiniti Products that is not in compliance with all
applicable federal, state and local laws, ordinances, rules, regulations and
orders or that is likely to mislead, confuse or deceive the public or impair the
goodwill of the manufacturer of the Product, Seller or Dealer or the reputation
of Infiniti Products or the Infiniti Marks.
(2) Display by Dealer.
Dealer shall prominently state upon its stationery and other printed
matter that it is an Authorized Infiniti Dealer.
(3) Sales Promotion.
Seller will establish and maintain comprehensive advertising programs
to promote the sale of Infiniti Vehicles and will from time to time offer
advertising, sales promotion and sales campaign materials to Dealer. In
addition, to effectively promote the sale of Infiniti Products and the
availability of service for Infiniti Vehicles, Dealer shall establish and
maintain its own advertising and sales promotion programs, including but not
limited to effective showroom displays, and Dealer will have available in
showroom ready condition at least one vehicle in each model line of Infiniti
Vehicles for purposes of demonstration to potential customers.
C. CUSTOMER SATISFACTION AND REQUIRED DISCLOSURES.
Dealer is responsible for building and maintaining consumer confidence in
Dealer and in Infiniti Products throughout all aspects of the Dealership
Operations. The Dealer Operating Requirements Addendum and Sections 3 and 4 of
this Agreement require Dealer to achieve satisfactory levels of consumer
satisfaction in all its Dealership Operations and provide means for measuring
Dealer's performance in these areas.
Dealer further understands and acknowledges that it is of vital
importance to Seller that Infiniti Products are sold and serviced in a manner
which promotes consumer satisfaction and which meet the high quality standards
associated with Seller, the manufacturer of Infiniti Products, the Infiniti
Marks and Infiniti Products in general. Accordingly, Dealer shall fully and
accurately disclose to its customers all material information concerning the
products and services sold by Dealer and the terms of purchase and sale,
including without limitation: the items making up the purchase price; the
source of products sold; and all warranties affecting products sold. Dealer
shall not make any misleading statements or misrepresentations concerning the
products sold by Dealer, the terms of sale, the warranties applicable to such
products, the source of the products, or the recommendations or approvals of
Seller or the manufacturer of Infiniti Products.
Nothing in this Agreement shall limit or be construed to limit the
products or services which Dealer may sell to its customers. Seller acknowledges
that Dealer is free to sell whatever products or services Dealer may choose in
connection with its sale and servicing of Infiniti Products, subject to Dealer's
obligations under Sections 3 and 4 of this Agreement.
D. DEALER PERSONNEL.
Dealer shall organize and maintain, substantially in accordance with
Seller's Standards, a complete dealership organization that includes,
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without limitation, a sufficient number of qualified and trained sales managers
and sales people, a competent, trained service manager, a sufficient number of
trained service and customer relations personnel, a competent, trained parts
manager, a sufficient number of trained parts personnel, and a sufficient number
of qualified and trained management and staff to enable Dealer to fulfill its
responsibilities under this Agreement and in accordance with the Dealer
Operating Requirements Addendum. Dealer shall designate at least one member of
its staff who shall be responsible for resolving consumer complaints on behalf
of Dealer. Dealer shall, without expense to Seller, have members of Dealer's
organization attend training courses offered by Seller and Dealer shall
cooperate with and participate in such training courses as may from time to time
be offered by Seller. Dealer agrees that its personnel will meet such
educational, management and technical training Standards as Seller may establish
or approve. Seller may, from time to time, comment on or advise Dealer
concerning the qualifications, performance and ability of Dealer's personnel as
the same affect Dealer's performance of its obligations under this Agreement.
E. SIGNS.
Dealer shall, at its expense, display at its Dealership Location, in such
number and at such locations as Seller may reasonably require signs which are
compatible with the design Standards established by Seller and published in
Seller's Manuals or Instructions from time to time. Dealer's use and operation
of signs displayed by Dealer at the Dealership Location and Dealer's display of
any Infiniti ▇▇▇▇ shall be subject to Seller's approval and shall be in
accordance with the terms and conditions of Section 5.L and the Dealership
Identification Addendum.
F. HOURS OF OPERATIONS.
Dealer recognizes that the service and maintenance needs of the owners of
Infiniti Products and Dealer's own responsibilities to actively and effectively
promote the sale of Infiniti Products can be met properly only if Dealer keeps
its Dealership Facilities open and conducts all of its Dealership Operations
required by this Agreement during hours which are reasonable and convenient for
Dealer's customers. Accordingly, Dealer shall maintain its Dealership Facilities
open for business and shall conduct all Dealership Operations required under
this Agreement during such days and hours as automobile dealers' sales and
service facilities are customarily and lawfully open in Dealer's Primary Market
Area or in the metropolitan area in which Dealer is located.
G. CAPITAL AND FINANCING.
Dealer recognizes that its ability to conduct its Dealership Operations
successfully on a day-to-day basis and to effectively perform its other
obligations under this Agreement, including without limitation, its obligations
with respect to Dealership Facilities, new vehicle sales, service and parts
sales, depends to a great extent upon the adequate capitalization of Dealer,
including its maintaining sufficient net working capital and net worth and
employing the same in its Dealership Operations. Dealer shall at all times
maintain and employ such amount and allocation of net working capital and net
worth as are substantially in accordance with Seller's Guides therefor and which
will enable Dealer to fulfill all of its responsibilities under this Agreement.
Dealer shall at all times during the term of this Agreement have flooring
arrangements (wholesale financing) satisfactory to Seller, in an amount
substantially in accordance with Seller's Guides therefor, with a financial
institution acceptable to Seller, and which will enable Dealer to fulfill its
obligations under this Agreement.
H. DEALER SYSTEMS.
(1) Accounting System.
It is in the mutual interest of Seller and Dealer that all Authorized
Infiniti Dealers install and maintain uniform accounting systems and practices,
so that Seller can develop Standards of operating performance which will assist
Dealer in obtaining satisfactory results from its Dealership Operations and
which will assist Seller in formulating policies in the interests of Seller and
all Authorized Infiniti Dealers. Accordingly, Dealer shall install and maintain
an accounting system, not exclusive of any other system, in accordance with
Seller's Infiniti Dealer Accounting System Manual, as the same may from time to
time be amended, revised or supplemented.
(2) Infinitinet System.
Seller has developed the Infinitinet System, which is a business
processing and electronic data communication system designed to facilitate
accurate and prompt reporting of dealership operational and financial data,
submission of parts orders and warranty claims, parts cataloging, dealership
training systems and processing of information with respect to the Dealership
Operations. Such data is used by Seller, among other things, to develop
composite operating statistics which are useful to Dealer and Seller in
assessing Dealer's progress in meeting its obligations under this Agreement, to
provide a basis for recommendations which Seller may make to Dealer from time to
time to assist Dealer in improving Dealership Operations, to assist Seller in
developing Standards of operating performance which will assist Dealer in
obtaining satisfactory results from its Dealership Operations, to assist Seller
in formulating policies in the interest of Seller and all Authorized Infiniti
Dealers, and to provide sales reporting information relied upon by Seller in
providing Infiniti Vehicles to Dealer. Accordingly, Dealer shall install and
maintain the Infinitinet System as configured by Seller from time to time.
I. RECORDS AND REPORTS.
(1) Financial Statements.
Dealer shall furnish to Seller, on or before the tenth (10th) day of
each month, in a manner acceptable to Seller, complete and accurate financial
and operating statements which fairly present, in accordance with generally
accepted accounting principles, Dealer's financial condition as of the end of
the preceding month and the results of Dealer's Dealership Operations for the
preceding month and for that portion of Dealer's fiscal year then ended. Dealer
shall also furnish for such periods reports of Dealer's sales and inventory of
Infiniti Products. Dealer shall also promptly furnish to Seller a copy of any
adjusted annual financial or operating statement prepared by or for Dealer.
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(2) Sales Records and Reports.
Dealer shall prepare and retain for a minimum of two (2) years,
complete and up to date records covering its sales of Infiniti Products. To
assist Seller in evaluating, among other things, current market trends, to
provide information for use in the adjustment of production and distribution
schedules, to provide information used by Seller in providing Infiniti Vehicles
to Dealer, and to provide Seller with accurate records of the ownership of
Infiniti Vehicles for various purposes including warranty records and ownership
notification, Dealer shall accurately submit to Seller such information with
respect to Dealer's sales of Infiniti Products as Seller may reasonably require
as and in the form or manner specified by Seller, at or as soon as possible
after the close of each business day on which such Infiniti Products are sold by
Dealer. If Dealer becomes aware that any information submitted by Dealer to
Seller hereunder is or has become inaccurate, Dealer will immediately take all
steps necessary to advise Seller of and to correct such inaccuracy. Should
Seller determine or discover that any report submitted hereunder by Dealer is or
has become inaccurate, Seller may take any steps it deems necessary or
appropriate to correct such inaccuracy and to adjust its records, calculations
or procedures with respect to Dealer's reported sales to correct the effect of
such inaccuracy or to prevent additional inaccurate reports from being made.
(3) Service Records.
Dealer shall prepare and retain for a minimum of two (2) years, in
accordance with the procedures specified in the Warranty Manual: records in
support of applications for payment for pre-delivery inspection and service,
warranty repairs and goodwill adjustments, and campaign inspections and
corrections performed by Dealer; claims for parts compensation; and
applications for discounts, allowances, refunds or credits.
(4) Business Plan.
Dealer shall develop and submit annually a business plan pursuant to
the Dealer Operating Requirements Addendum.
(5) Other Reports.
Dealer shall furnish to Seller such other records or reports
concerning its Dealership Operations as Seller may reasonably require from time
to time.
J. RIGHT OF INSPECTION.
Seller shall have the right, at all reasonable times during regular
business hours, to inspect the Dealership Facilities and to examine, audit and
make and take copies of all records, accounts and supporting data relating to
the sale, sales reporting, service and repair of Infiniti Products by Dealer.
Whenever possible, Seller shall attempt to provide Dealer with advance notice of
an audit or examination of Dealer's operations.
K. CONFIDENTIALITY.
Seller will not furnish to any third party financial statements or other
confidential data, excluding sales records or reports, submitted by Dealer to
Seller, except as an unidentified part of a composite or coded report, unless
disclosure is authorized by Dealer or is required by law, or unless such
information is pertinent to judicial or governmental administrative proceedings.
L. USE OF INFINITI MARKS.
Seller grants Dealer the non-exclusive right to identify itself as an
Authorized Infiniti Dealer and to display at the Dealership Location and use, in
connection with the sale and service of Infiniti Products, the Infiniti Marks.
The Infiniti Marks may not be used as part of Dealer's name or trade name
without Seller's written consent. No entity owned by or affiliated with Dealer
or any of its owners may use any Infiniti ▇▇▇▇ without Seller's prior written
consent. Dealer shall not make any use of any Infiniti ▇▇▇▇ which is
inconsistent with Seller's policies concerning trademark use. Dealer may not,
either directly or indirectly, display any Infiniti Marks at any location or
facility other than those identified in the Dealership Facilities Addendum to
this Agreement, without the prior written consent of Seller. Except as
authorized herein, Dealer shall not make use of any Infiniti ▇▇▇▇, and Dealer
shall neither have nor claim any rights in respect of any Infiniti ▇▇▇▇. Dealer
shall comply with any of Seller's Manuals or Instructions regarding the use of
Infiniti Marks as may be issued to Dealer from time to time. Dealer shall
promptly change or discontinue its use of any Infiniti Marks upon Seller's
request. Any authorization granted may be withdrawn by Seller at any time and,
in any event, shall cease immediately upon the effective date of termination of
this Agreement.
If Seller institutes litigation to effect or enforce compliance with this
Section 5.L, the prevailing party in such litigation shall be entitled to
reimbursement for its costs and expenses in such litigation, including
reasonable attorney's fees.
SECTION 6. PURCHASE AND DELIVERY
A. DEALER PURCHASES.
(1) Infiniti Vehicles.
From time to ▇▇▇▇ ▇▇▇▇▇▇ will advise Dealer of the number and model
lines of Infiniti Vehicles which Seller has available for sale to Dealer, and
subject to this Section 6, Dealer shall have the right to purchase such Infiniti
Vehicles. Seller will distribute Infiniti Vehicles to Authorized Infiniti
Dealers in accordance with Seller's written distribution policies and procedures
as the same may be in effect from time to time. Seller will provide to Dealer a
written explanation of the method used by Seller to distribute Infiniti Vehicles
to Authorized Infiniti Dealers. Dealer recognizes that there are numerous
factors which affect the availability of Infiniti Vehicles to Seller and to
Dealer including, without limitation, production capacity, sales potential in
Dealer's and other Primary Market Areas, varying consumer demand, weather and
transportation conditions, and state and federal government requirements. Since
such factors may affect individual dealers differently, Seller reserves to
itself sole discretion to distribute Infiniti Vehicles in a fair and consistent
manner, and its decisions in such matters shall be final.
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(2) Genuine Parts and Accessories.
Dealer shall submit to Seller firm orders for Genuine Parts and
Accessories in such quantity and variety as are reasonably necessary to fulfill
Dealer's obligations under this Agreement. All orders shall be submitted by
Dealer in the manner specified by Seller and in accordance with Seller's Parts
and Accessories Policy and Procedure Manual, may be accepted in whole or in part
by Seller, and shall be effective only upon acceptance thereof by Seller at its
home office in California (but without necessity of any notice of acceptance by
Seller to Dealer). Such orders shall not be cancellable by Dealer after
acceptance and shipment by Seller, except in accordance with Section 7 of this
Agreement.
(3) Other Products and Services.
Dealer may submit to Seller firm orders for such other products and
services as may be offered for sale by Seller to Dealer from time to time in
such quantity and variety as are reasonably necessary to fulfill Dealer's
obligations under this Agreement. All orders shall be submitted by Dealer in
the manner specified by Seller and in accordance with Seller's procedures
therefor, may be accepted in whole or in part by Seller, and shall be effective
only upon acceptance thereof by Seller at its home office in California
(but without necessity of any notice of acceptance by Seller to Dealer). Such
orders shall not be cancellable by Dealer after acceptance and shipment by
Seller, except in accordance with Section 7 of this Agreement.
B. DELAYS IN DELIVERY.
Seller shall not be liable for failure or delay in delivery to Dealer of
Infiniti Products which Seller has previously agreed to deliver to Dealer where
such failure or delay is due to cause or causes beyond the control or without
the fault or negligence of Seller.
C. SHIPMENT OF INFINITI PRODUCTS.
(1) Infiniti Vehicles.
Seller will ship Infiniti Vehicles to Dealer by whatever mode of
transportation, by whatever route, and from whatever point Seller may select.
Dealer shall pay to Seller in connection with Infiniti Vehicles delivered to
Dealer the applicable destination charges that are established for Dealer by
Seller and that are in effect at the time of shipment. Dealer shall bear the
risk of loss and damage to Infiniti Vehicles during transportation from the
point of shipment; however, Seller will, if requested by Dealer in such manner
and within such time as Seller shall from time to time specify, prosecute claims
for loss of or damage to Infiniti Vehicles during said transportation against
the responsible carrier for and on behalf of Dealer.
(2) Genuine Parts and Accessories.
Seller will ship Genuine Parts and Accessories to Dealer by whatever
mode of transportation, by whatever route, and from whatever point Seller may
select. Dealer shall bear the risk of loss and damage to Genuine Parts and
Accessories during transportation from the point of shipment.
D. PASSAGE OF TITLE.
Title to each Infiniti Product shall pass from Seller to Dealer, or to
the financial institution designated by Dealer, upon delivery of said Product to
Dealer or to a carrier for transportation to Dealer, whichever occurs first.
E. SECURITY INTEREST.
(1) Grant of Security Interest.
As security for the full payment of all sums from time to time owed
by Dealer to Seller under this Agreement, whether such sums are now, or
hereafter become due and owing, Dealer hereby grants to Seller a security
interest in the following (collectively referred to as "Collateral"):
(i) All non-vehicle inventory of Dealer, including without
limitation, all Genuine Parts and Accessories delivered by Seller to Dealer
hereunder on account (all such inventory hereinafter referred to collectively as
"Inventory" and individually as "Item of Inventory"); and
(ii) All proceeds from any of the foregoing, including without
limitation, insurance payable by reason of the loss, damage or destruction of
any Item of Inventory; and all accounts and chattel paper of Dealer arising
from its sale, lease, or other disposition of Inventory now existing or
hereafter arising, and all liens, securities, guarantees, remedies and
privileges pertaining thereto, together with all rights and liens of Dealer
relating thereto.
(2) Default in Payment.
Dealer shall be in default of this Section 6 if: (i) Dealer shall
fail to pay any amounts secured hereby when due or fail to perform any
obligations under this Section 6 in a timely manner; (ii) there shall occur any
material adverse change in the financial condition of Dealer; or (iii)Dealer
shall dissolve or become insolvent or bankrupt; and, in any such case, Seller
may declare all sums secured by this Section 6.E immediately due and payable and
Seller shall have all the rights and remedies afforded to a secured party after
default under the Uniform Commercial Code or other applicable law in effect on
the date of this Agreement.
(3) Assembly of Collateral, Payment of Costs, Notices.
Dealer shall, if requested by Seller upon the occurrence of any
default under the foregoing Section 6.E.2 assemble the Collateral and make it
available to Seller at a place or places designated by Seller. Dealer also shall
pay all costs of Seller, including without limitation, attorneys' fees incurred
with respect to the enforcement of any of Seller's rights under this Section 6.
(4) Recording, Further Assurances.
Dealer shall execute and deliver such financing statements and such
other instruments or documents and take any other action as Seller may request
in order to create or maintain the security interest intended to be created by
this Section 6.E or to enable Seller to exercise and enforce its rights
hereunder. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement
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and may be filed in lieu of a financing statement in any and all jurisdictions
which accept such reproductions.
(5) Records and Schedules of Inventory.
Dealer shall keep accurate records itemizing and describing the kind,
type and quantity of Inventory and shall furnish to Seller within five (5) days
of receipt of Seller's request therefor, with a current schedule of inventory in
form and substance satisfactory to Seller ("Schedule of Inventory"), which shall
be true and accurate in all respects. A physical inventory shall be conducted no
less than annually in connection with preparation of year-end financial
statements of Dealer and, at Seller's request, a report of such inventory shall
be promptly provided to Seller.
F. CHARGES FOR STORAGE AND DIVERSIONS.
Dealer shall be responsible for and shall pay all charges for
demurrage, storage and other expense accruing after shipment to Dealer or to a
carrier for transportation to Dealer. If diversions of shipments are made upon
Dealer's request or are made by Seller as a result of Dealer's failure or
refusal to accept shipments made pursuant to Dealer's orders, Dealer agrees to
pay all additional charges and expenses incident to such diversions.
G. CHANGES IN INFINITI PRODUCTS.
Seller shall have the right in its sole discretion to discontinue the
supply, or make changes in the design or component materials, of any Infiniti
Product at any time. Seller shall be under no liability to Dealer on account of
any such changes and shall not be required as a result of any such changes to
make any changes to Infiniti Products previously purchased by Dealer. No change
shall be considered a model year change unless so specified by Seller.
SECTION 7. PRICING
A. INFINITI VEHICLES.
At any time prior to shipment (or delivery to a carrier for
transportation to Dealer) of any Infiniti Vehicle, Seller may, without prior
notice and without incurring any liability to Dealer or anyone else, including
any customer of Dealer, change at any time and from time to time the price,
discount, allowance or other terms of sale of any Infiniti Vehicle offered for
sale by Seller. Except with respect to the establishment of initial prices for a
new model year vehicle or for any new model or body type, Seller will notify
Dealer by mailgram or other acceptable means of any such change in price as soon
as reasonably practicable, and Dealer may, by notice to Seller within ten (10)
days after such notification, cancel any offer to purchase Infiniti Vehicles
affected by such change, provided that Seller has not notified Dealer of its
acceptance of Dealer's offer on or prior to the date such notification by Dealer
is received by Seller.
B. GENUINE PARTS AND ACCESSORIES.
Seller may, without prior notice and without incurring any liability to
Dealer or anyone else, including any customer of Dealer, change at any time and
from time to time the price, discount, allowance or other terms of sale of any
Genuine Part or Accessory offered for sale by Seller, and any such change in
price, discount, allowance or other terms of sale shall apply to all such
Genuine Parts and Accessories whether or not an order has been submitted by
Dealer, but not to Genuine Parts and Accessories for which Seller has accepted
and processed Dealer's order prior to the effective date of such change. Seller
will notify Dealer of any such change in price as soon as is reasonably
practicable. Dealer may, by notice to Seller cancel any order for Genuine Parts
and Accessories affected by such change which was placed before such
notification was given, provided that such Genuine Parts and Accessories have
not been shipped to Dealer or delivered to a carrier for transportation to
Dealer on or prior to the date such notification by Dealer is received by
Seller.
C. OTHER PRODUCTS AND SERVICES.
Seller may, without prior notice and without incurring any liability to
Dealer or anyone else, including any customer of Dealer, change at any time and
from time to time the price, discount, allowance or other terms of sale of any
product or service (other than Infiniti Vehicles or Genuine Parts and
Accessories, terms concerning which are provided for separately herein) offered
for sale by Seller, and any such change in price, discount, allowance or other
terms of sale shall apply to such product or service whether or not an order has
been submitted by Dealer, but not to such products or services for which Seller
has accepted and processed Dealer's order prior to the effective date of such
change. Seller will notify Dealer of any such change in price as soon as is
reasonably practicable. Dealer may, by notice to Seller, cancel any order for
such product or service affected by such change which was placed before such
notification was given, provided that such product or service has not been
shipped or rendered to Dealer or delivered to a carrier for transportation to
Dealer on or prior to the date such notification of cancellation by Dealer is
received by Seller.
SECTION 8. PAYMENT
A. PAYMENT FOR VEHICLES.
Payment by Dealer for Infiniti Vehicles must be made in accordance with
the applicable prices, charges, discounts, allowances and other terms of sale
established by Seller either: (i) in accordance with wholesale financing
arrangements that at the time of delivery to Dealer or to a carrier for
transportation to Dealer of such Infiniti Vehicles, whichever shall first occur,
are in effect between Seller, Dealer and a financing institution; or (ii) prior
to delivery to Dealer or to a carrier for transportation to Dealer, whichever
shall first occur, by cash or such other medium of payment as Seller may agree
to accept.
B. PAYMENT FOR PARTS AND ACCESSORIES.
Parts, equipment, accessories and other products and services will
normally be billed by Seller to Dealer on Seller's invoices, which shall be due
the tenth (10th) of the month following the month of shipment of such products
and services; provided, however, Seller reserves the right to place any and all
sales of such items on a C.O.D. or cash in advance basis, without notice;
provided further, however,
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that Seller will endeavor to provide Dealer with prior notice if in Seller's
sole judgment such notice would be practicable.
C. ACCOUNTS PAYABLE.
(l) Right of Set Off.
In addition to any right of set off provided by law, all sums due Dealer
shall be considered net of indebtedness of Dealer to Seller, and Seller may
deduct any amounts due or to become due from Dealer to Seller or any amounts
held by Seller from any sums or accounts due from Seller to Dealer.
(2) Liquidated Damages.
(i) Liquidated Damages for Delinquent Payments.
In the event that Dealer fails to pay Seller in full any amounts
owed by Dealer to Seller when due, Dealer shall pay Seller a delinquency charge
of one percent (1%) per month of such amount or amounts to compensate Seller for
its costs of carrying and collection; provided, however, that Seller agrees that
it will not assess any deliquency charge on an overdue account which has a total
outstanding balance of less than $1,000.00, unless such account is more than
ninety (90) days overdue. Dealer and Seller agree that such charge is to be
assessed not as a penalty, but as liquidated damages under California Civil
Code ss. 1671(b) based on Seller's reasonable estimate of the losses which will
be suffered by Seller as a result of such delinquent payment or payments. The
imposition of such delinquency charges shall not imply or constitute any
agreement to forbear collection of a delinquent account.
(ii) Liquidated Damages for Improper Payments to Dealer.
Seller may, from time to time, conduct audits or reviews of
Dealer's books and records pursuant to Section 5.J of this Agreement. If any
such audit or review results in a determination by Seller that Dealer was or is
not entitled to receive payment from Seller, Seller may debit Dealer's account
in such amounts as Seller shall determine were improperly paid to Dealer. Such a
determination may be based on Dealer's failure to comply with applicable rules
or procedures or on Dealer's submission of false or inaccurate information to
Seller. In addition, Seller may assess and, if it does, Dealer will pay a
delinquency charge of one percent (1%) per month of such amount or amounts
improperly paid by Seller to Dealer to compensate Seller for its costs of
auditing, loss of funds and collection. Dealer and Seller agree that such charge
is to be assessed not as a penalty, but as liquidated damages under California
Civil Code ss. 1671 (b) based on Seller's reasonable estimate of the losses
which will be suffered by Seller as a result of such improper payment or
payments. The imposition of such delinquency charges shall not imply or
constitute any agreement to forbear collection of a delinquent account.
D. COLLECTION OF TAXES BY DEALER.
Dealer hereby represents and warrants that all Infiniti Products
purchased from Seller are purchased for resale in the ordinary course of
Dealer's business. Dealer further represents and warrants that Dealer has
obtained all licenses and complied with all other requirements to collect sales,
use or other taxes incurred in any such resale transaction, and that dealer will
furnish evidence thereof to Seller, at Seller's request. If Dealer purchases any
Infiniti Products other than for resale, or puts any Infiniti Products to a
taxable use, Dealer shall pay directly to the appropriate taxing authority any
sales, use or similar taxes incurred as a result of such use or purchase, to
file any tax returns required in connection therewith, and to hold Seller
harmless from any claims or demands with respect thereto.
SECTION 9. WARRANTIES
The only warranties that shall be applicable to Infiniti Products (or any
components thereof) shall be such written warranty or warranties as may be
furnished by Seller and as stated in the Warranty Manual or Seller's Parts and
Accessories Policy and Procedure Manual, as the same may be revised from time to
time. Except for its express limited liability under such written warranties,
neither the manufacturer of Infiniti Products nor Seller assumes, or authorizes
any other person or party, including without limitation Dealer, to assume on
their behalf any other obligation or liability in connection with any Infiniti
Product (or component thereof). Any obligations or liabilities assumed by Dealer
which are in addition to Seller's written warranties shall be solely the
responsibility of Dealer. Dealer shall expressly incorporate in full and without
modification any warranty furnished by Seller with an Ininiti Vehicle as a
conspicuous part of each order form or other contract for the sale of such
Infiniti Vehicle by Dealer to any buyer. Dealer shall make available to the
buyer of each Infiniti Product prior to the purchase of such Infiniti Product,
copies of such applicable warranties as may be furnished by Seller. Dealer shall
also provide to the buyer of each Infiniti Product, in full and without
modification, any owner's manual, warranty booklet or other owner information
which Seller may provide to Dealer for delivery with such Infiniti Product.
Dealer agrees to abide by and implement in all other respects Seller's warranty
procedures then in effect.
SECTION 10. INDEMNIFICATION
A. INDEMNIFICATION OF DEALER.
Subject to Section 10.C, and upon Dealer's written request, Seller
shall:
(1) Defend Dealer against any and all claims that during the term of
this Agreement may arise, commence or be asserted against Dealer in any action
concerning or alleging:
(a) Bodily injury or property damage arising out of an occurrence caused
solely by a manufacturing defect or alleged manufacturing defect in an Infiniti
Product supplied by Seller, except for any manufacturing defect in tires,
provided that the defect could not have reasonably been discovered by Dealer
during the pre-delivery inspection of the product required by Section 4.B.1 of
this Agreement;
(b) Bodily injury or property damage arising out of an occurrence caused
solely by a defect or alleged defect in the design of an Infiniti Product
supplied by Seller, except for a defect or alleged defect in the design of
tires; and
11
(c) Any substantial damage occurring to a new Infiniti Product and
repaired by Seller from the time the product left the manufacturer's assembly
plant to the time it was delivered to Dealer's designated location or to a
carrier for transportation to Dealer, whichever occurred first, provided Seller
failed to notify Dealer of such damage and repair prior to delivery of the
product to the first retail customer; and
(d) Breach of Seller's warranty of an Infiniti Product which is not, in
whole or part, the result of Dealer's sales, service or repair practices or
conduct; and
(2) Indemnify and hold Dealer harmless from any and all settlements made
which are approved by Seller and final judgments rendered with respect to any
claims described in Section 10.A.1; provided, however, that Seller shall have
no obligation to indemnify or hold Dealer harmless unless Dealer: (i) promptly
notifies Seller of the assertion of such claim and the commencement of such
action against Dealer; (ii) cooperates fully in the defense of such
action in such manner and to such extent as Seller may reasonably require; (iii)
consents to the employment of attorneys selected by Seller and agrees to waive
any conflict of interest then existent or which may later arise, thereby
enabling Seller's selected attorneys to represent Seller and/or the manufacturer
of an Infiniti Product throughout the defense of the claim; and (iv) withdraws
any actions (including cross-claims) filed against Seller or the manufacturer of
an Infiniti Product arising out of the circumstances for which Dealer seeks
indemnity. Dealer shall pay all costs of its own defense incurred prior to
Seller's assumption of Dealer's defense and thereafter to the extent that Dealer
employs attorneys in addition to those selected by Seller.
(3) Seller may offset any recovery on Dealer's behalf against any
indemnification that may be required under this Section 10 including, without
limitation, attorneys fees paid by Seller pursuant to this Section 10.A and the
amount of any settlement or judgment paid by Seller.
B. INDEMNIFICATION OF SELLER.
Subject to Section 10.C and upon Seller's written request, Dealer shall:
(1) Defend Seller against any and all claims that during the term of
this Agreement may arise, commence or be asserted against Seller in any action
concerning or alleging:
(a) Dealer's failure to comply, in whole or in part, with any
obligation of Dealer under this Agreement;
(b) Any negligence, error, omission or act of Dealer in connection
with the preparation, repair or service (including warranty service, goodwill
adjustments, and campaign inspections and corrections) by Dealer of Infiniti
Products;
(c) Any modification or alteration made by or on behalf of Dealer to
an Infiniti Product, except those made pursuant to the express written
instruction or with the express written approval of Seller;
(d) Dealer's breach of any agreement between Dealer and Dealer's
customer or other third party;
(e) Misleading, libelous or tortious statements, misrepresentations
or deceptive or unfair practices by Dealer, directly or indirectly, to Seller, a
customer or other third party including, without limitation, Dealer's failure to
comply with Section 5.B of this Agreement;
(f) Dealer's breach of any contract or warranty other than a
contract with or warranty of Seller or the manufacturer of an Infiniti Product;
or
(g) Any change in the employment status or in the terms or
conditions of employment of any officer, employee or agent of Dealer or of any
Principal Owner, Other Owner or Executive Manager including, but not limited to
claims for breach of employment contract, wrongful termination or discharge,
tortious interference with contract or economic advantage, and similar claims;
and
(2) Indemnify and hold Seller harmless from any and all settlements
made and final judgments rendered with respect to any claims described in
Section 10.B.1; provided, however, that Dealer shall have no obligation to
indemnify or hold Seller harmless unless Seller: (i) promptly notifies Dealer of
the assertion of such claim and the commencement of such action against Seller;
(ii) cooperates fully in the defense of such action in such manner and to such
extent as Dealer may reasonably require; (iii) consents to the employment of
attorneys selected by Dealer and agrees to waive any conflict of interest then
existent or which may later arise, thereby enabling Dealer's selected attorneys
to represent Dealer throughout the defense of the claim; and (iv) withdraws any
actions (including cross-claims) filed against Dealer arising out of the
circumstances for which Seller seeks indemnity. Seller shall pay all costs of
its own defense incurred prior to Dealer's assumption of Seller's defense and
thereafter to the extent that Seller employs attorneys in addition to those
selected by Dealer.
C. CONDITIONS AND EXCEPTIONS TO INDEMNIFICATION.
(1) If the allegations asserted in any action or if any facts
established during or with respect to any action would require Seller to defend
and indemnify Dealer under Section 10.A and Dealer to defend and indemnify
Seller under Section 10.B, Seller and Dealer shall each be responsible for its
own defense in such an action and there shall be no obligation or responsibility
in connection with any defense, judgment, settlement or expenses of such action
as between Seller and Dealer.
(2) In undertaking its obligations to defend and/or indemnify each
other, Dealer and Seller may make their defense and/or indemnification
conditional on the continued existence of the state of facts as then known to
such party and may provide for the withdrawal of such defense and/or
indemnification at such time as facts arise which, if known at the time of the
original request for a defense and/or indemnification, would have caused either
Dealer or Seller to refuse such request. In the event that subsequent
developments in a case make clear that the allegations which initially justified
acceptance of a request for a defense and/or indemnification are no longer at
issue therein or that the claims no longer meet the description of those for
which indemnification is required hereunder, any party providing a defense
12
and/or indemnification hereunder may terminate such defense and/or
indemnification of the other party. The party withdrawing from its defense
and/or indemnification to defend and/or indemnify shall give notice of its
withdrawal to the indemnifying party. Moreover, the withdrawing party shall be
responsible for all costs and expenses of defense up to the date of the other
party's receipt of the notice of withdrawal.
SECTION 11. TERMINATION
A. TERMINATION DUE TO CERTAIN ACTS OR EVENTS.
The following represent events which are within the control of or
originate from actions taken by Dealer or its management or owners and which are
so contrary to the intent and purpose of this Agreement that they warrant its
termination:
(1) Any actual or attempted sale, transfer, assignment or delegation,
whether by operation of law or otherwise, by Dealer of an interest in or right,
privilege or obligation under this Agreement, or of the principal assets
necessary for the performance of Dealer's responsibilities under this Agreement,
without, in either case, the prior written consent of Seller having been
obtained, which consent shall not be unreasonably withheld;
(2) Subject to the provisions of Section 14 hereof, a change, by
operation of law or otherwise, in the direct or indirect ownership of Dealer,
whether voluntary or involuntary, from that set forth in the Final Article of
this Agreement, except as expressly permitted herein, without the prior written
consent of Seller having been obtained, which consent shall not be unreasonably
withheld;
(3) Removal, resignation, withdrawal or elimination from Dealer for any
reason of the Executive Manager of Dealer; provided, however, Seller shall give
Dealer a reasonable period of time within which to replace such person with an
Executive Manager satisfactory to Dealer and Seller in accordance with Article
Fourth of this Agreement; or the failure of Dealer to retain an Executive
Manager who, in accordance with Article Fourth of this Agreement, in Seller's
reasonable opinion, is competent, possesses the requisite qualifications for the
position, and who will act in a manner consistent with the continued best
interests of both Seller and Dealer;
(4) The failure of Dealer to maintain the Dealership Facilities open for
business or to conduct all the Dealership Operations required by this Agreement
during and for not less than the hours customary and lawful in Dealer's Primary
Market Area or in the metropolitan area in which Dealer is located for seven (7)
consecutive days, unless such failure is caused by fire, flood, earthquake or
other act of God;
(5) Any undertaking by Dealer to conduct, directly or indirectly, any of
the Dealership Operations at a location or facility other than that which is
specified in the current Dealership Facilities Addendum for that Dealership
Operation;
(6) The failure of Dealer to establish or maintain wholesale financing
arrangements which are in accordance with Seller's Guides and which are
reasonably acceptable to Seller with banks or other financial institutions
approved by Seller for use in connection with Dealer's purchase of Infiniti
Vehicles, unless Seller shall have agreed to accept another medium of payment;
(7) Insolvency of Dealer; voluntary institution by Dealer of any
proceeding under the federal bankruptcy laws or under any state insolvency law;
institution against Dealer of any proceeding under the federal bankruptcy laws
or under any state insolvency law which is not vacated within thirty (30) days
from the institution thereof; appointment of a receiver, trustee or other
officer having similar powers for Dealer or Dealer's business, provided such
appointment is not vacated within thirty (30) days of the date of such
appointment; execution by Dealer of an assignment for the benefit of creditors;
or any levy under attachment, foreclosure, execution or similar process whereby
a third party acquires rights to a significant portion of the assets of Dealer
necessary for the performance of Dealer's responsibilities under this Agreement
or to the operation or ownership of Dealer, which is not within thirty (30)
days from the date of such levy vacated or removed by payment or bonding;
(8) Any material misrepresentation by Dealer or any person named in the
Final Article of this Agreement as to any fact relied on by Seller in entering
into, amending or continuing with this Agreement, including without limitation
any representation concerning the ownership, management or capitalization of
Dealer;
(9) The conviction in a court of original judrisdiction of Dealer or of
any Principal Owner or Executive Manager of a crime affecting the Dealership
Operations or of any felony; provided, however, that a convicted Executive
Manager's ownership interest in Dealer shall not be an event warranting
termination of this Agreement if the individual is no longer employed by Dealer
or involved in any way in the management or operation of Dealer and Dealer has
made reasonable efforts to obtain the individual's divestiture of his ownership
interest in Dealer; or any willful failure of Dealer to comply with the
provisions of any laws, ordinances, rules, regulations, or orders relating to
the conduct of its Dealership Operations including, without limitation, the sale
and servicing of Infiniti Products.
(10) Submission by Dealer to Seller of: (i) a knowingly false or
fraudulent report or statement; (ii) a knowingly false or fraudulent claim (or
statement in support thereof), for payment, reimbursement or for any discount,
allowance, refund, rebate, credit or other incentive under any plan that may be
offered by Seller, whether or not Dealer offers or makes restitution; (iii)
false financial information; (iv) false sales reporting data; or (v) any false
report or statement relating to pre-delivery inspection, testing, warranties,
service, repair or maintenance required to be performed by Dealer.
Upon the occurrence of any of the foregoing events, Seller may terminate
this Agreement by giving Dealer notice thereof, such termination to be effective
upon the date specified in such notice, or such later date as may be required by
any applicable statute.
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B. TERMINATION BY SELLER FOR NON-PERFORMANCE BY DEALER.
(1) If, based upon the evaluations thereof made by Seller, Dealer shall
fail to substantially fulfill its responsibilities with respect to:
(a) Sales of new Infiniti Vehicles and the other responsibilities of
Dealer set forth in Section 3 of this Agreement;
(b) Maintenance of the Dealership Facilities and the Dealership
Location set forth in Section 2 of this Agreement;
(c) Service of Infiniti Vehicles and sale and service of Genuine
Parts and Accessories and the other responsibilities of Dealer set forth in
Section 4 of this Agreement;
(d) The other responsibilities assumed by Dealer in this Agreement
including, without limitation, Dealer's failure to:
(i) Timely submit accurate sales, service and financial
information concerning its Dealership Operations, ownership or management and
related supporting data, as required under this Agreement or as may be
reasonably requested by Seller;
(ii) Permit Seller to make an examination or audit of Dealer's
accounts and records concerning its Dealership Operations after receipt of
notice from Seller requesting such permission or information;
(iii) Pay Seller for any Infiniti Products or any other products
or services purchased by Dealer from Seller, in accordance with the terms and
conditions of sale; or
(iv) Maintain net worth and working capital substantially in
accordance with Seller's Guides therefor; or
(v) Fulfill Dealer's obligations under the Dealer Operating
Requirements Addendum; or
(2) In the event that any of the following occur:
(i) any dispute, disagreement or controversy between or among Dealer and
any third party or between or among the owners or management personnel of
Dealer relating to the management or ownership of Dealer develops or exists
which, in the reasonable opinion of Seller, tends to adversely affect the
conduct of the Dealership Operations or the interests of Dealer or Seller; or
(ii) any other act or activity of Dealer, or any of its owners or
management occurs, which substantially impairs the reputation or financial
standing of Dealer or of any of its management subsequent to the execution of
this Agreement:
Seller will notify Dealer of such failure and will review with Dealer
the nature and extent of such failure and the reasons which, in Seller's or
Dealer's opinion, account for such failure.
Thereafter, Seller will provide Dealer with a reasonable opportunity to
correct the failure. If Dealer fails to make substantial progress towards
remedying such failure before the expiration of such period, Seller may
terminate this Agreement by giving Dealer notice of termination, such
termination to be effective at least ninety (90) days after such notice is
given.
During such period Dealer will commence such actions as may be
necessary so that the termination obligations of Seller and Dealer set forth in
this Agreement may be fulfilled as promptly as practicable.
C. TERMINATION BECAUSE OF DEATH OR PHYSICAL OR MENTAL
INCAPACITY OF PRINCIPAL OWNER.
This Agreement is a personal services agreement and has been entered
into by Seller in reliance on Dealer's being owned by the Principal Owner(s).
Seller (subject to Section 14 hereof) may terminate this Agreement by giving
notice to Dealer upon the death of any of the Principal Owner(s) or if Seller
in good faith determines that any Principal Owner is so physically or mentally
incapacitated as to be unable to discharge his or her responsibility to the
operating management of Dealer. Unless deferred as hereinafter provided, the
effective date of such termination shall be not less than ninety (90) days from
the date such notice is given to Dealer.
To facilitate the orderly termination of the business relationship
between Seller and Dealer and of the Dealership Operations, Seller may, in its
sole discretion, defer the effective date of such termination and continue to
operate with Dealer under the terms of this Agreement for a period of time, to
be determined by Seller, of up to one (1) year from the date such notice of
termination is given if, within sixty (60) days from the date of said notice,
the executor or representative of the deceased or incapacitated Principal Owner
or a surviving Principal Owner shall give to Seller written request for such
deferment. This Agreement shall automatically terminate without further notice
or action by Seller upon the expiration of any such deferment.
D. TERMINATION FOR FAILURE OF SELLER OR DEALER TO BE LICENSED.
If Seller or Dealer shall fail to secure or maintain any license, permit
or authorization required by either of them for their performance of any
obligation under or in connection with this Agreement, or if such license,
permit or authorization is suspended or revoked, irrespective of the cause, and
such suspension or revocation continues for a period of seven (7) days, either
party may immediately terminate this Agreement by giving notice to the other
party.
E. TERMINATION BY DEALER.
Dealer has the right to terminate this Agreement at any time by giving
notice to Seller, such termination to be effective thirty (30) days after the
giving of such notice (unless the thirty (30) day notice period is waived in
writing by Seller) or on such other date as may be mutually agreed to in writing
by Seller and Dealer.
F. TERMINATION BY SELLER BECAUSE OF A CHANGE OF SELLER'S METHOD OF
DISTRIBUTION OR DECISION BY SELLER TO CEASE DISTRIBUTION OF INFINITI
VEHICLES.
If Seller should elect or be required to discontinue its present method
of distributing Infiniti Vehicles, or if Seller should elect or be required to
cease selling or distributing Infiniti Vehicles, Seller may terminate this
Agreement by giving Dealer notice and such termination will be effective not
less than one (1) year after such notice is given.
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G. TERMINATION UPON ENTERING INTO A NEW OR AMENDED SALES
AND SERVICE AGREEMENT OR ADDENDA.
Seller may terminate this Agreement at any time by giving Dealer at
least ninety (90) days' prior notice thereof and offering to enter into a new
or amended form of Agreement or Addenda with Dealer in a form being offered
generally to Authorized Infiniti Dealers; provided, however, that Seller may
issue a new or revised Notice of Primary Market Area pursuant to Section 1.K or
a new or revised Product Addendum pursuant to Section 1.U.
Unless otherwise agreed in writing, the rights and obligations of Dealer
that may otherwise become applicable upon termination or expiration of the term
of this Agreement shall not be applicable if Seller and Dealer enter into a new
or superseding Dealer Sales and Service Agreement, and the rights and
obligations of the parties hereunder shall continue under the terms and
provisions of the new agreement.
Dealer's performance under any prior agreement may be considered by
Seller in evaluating Dealer's performance under this, or any succeeding,
agreement.
SECTION 12. RIGHTS AND LIABILITIES UPON TERMINATION
A. TERMINATION PROCEDURES.
(1) Upon termination of this Agreement by either Seller or Dealer for
any reason, Dealer shall cease to be an Authorized Infiniti Dealer, and Dealer
shall: (i) immediately discontinue the distribution and sale of Infiniti
Products as an Authorized Infiniti Dealer; and (ii) at its own expense (a) erase
or obliterate all Infiniti Marks and any word or words indicating that Dealer is
an Authorized Infiniti Dealer from the stationery, forms and other papers used
by Dealer or any business associated or affiliated with Dealer; (b) discontinue
all advertising of Dealer as an Authorized Infiniti Dealer; (c) take all steps
necessary to remove any listing in any telephone directory yellow pages
advertisement indicating that Dealer is an Authorized Infiniti Dealer; (d)
discontinue any use of any Infiniti ▇▇▇▇ in Dealer's firm or trade name and take
all steps necessary or appropriate in the opinion of Seller to change such firm
or trade name to eliminate any Infiniti ▇▇▇▇ therefrom; (e) discontinue or cause
to be discontinued all other use of the Infiniti Marks; (f) refrain from doing
anything, whether or not specified above, that would indicate that Dealer is or
was an Authorized Infiniti Dealer; and (g) refrain from using, either directly
or indirectly, any Infiniti Marks or any other confusingly similar marks, names,
logos or designs in a manner likely to cause confusion or mistake or to deceive
the public. If Dealer fails to comply with any requirements of this Section
12.A.1, Dealer shall reimburse Seller for all costs and expenses, including
reasonable attorney's fees, incurred by Seller in effecting or enforcing
compliance;
(2) Termination of this Agreement will not release Dealer or Seller
from the obligation to pay any amounts owing the other;
(3) Subject to Section 12.E, Seller shall process all claims and make
all payments due for all labor provided and all parts and/or other materials
used by Dealer pursuant to Sections 4.B.2 and 4.B.3 prior to the effective date
of termination as provided in the Warranty Manual
Dealer shall cease, as of the effective date of termination, to be
eligible to receive reimbursement for any work thereafter performed or parts
thereafter supplied under any warranty, campaign inspections or corrections and
any other adjustment previously authorized by Seller.
(4) Dealer shall, upon Seller's request, deliver to Seller or its
designee copies of Dealer's records with respect to pre-delivery, warranty,
goodwill, campaign and other service work of Dealer.
B. REPURCHASES BY SELLER UPON TERMINATION.
Upon termination, other than pursuant to a sale or transfer, Seller
shall buy from Dealer and Dealer shall sell to Seller, within ninety (90) days
after the effective date of termination:
(1) All new, unused, undamaged, unlicensed, then current and immediate
previous model year Infiniti Vehicles which were purchased by Dealer from Seller
and are then the unencumbered property of and in the possession of Dealer or
Dealer's flooring and/or financing institution. The price for such vehicles
shall be the invoice price previously paid by Dealer therefor, less Seller's
destination charges, all allowances paid or applicable allowances offered
thereon by Seller, any amount paid by Seller to Dealer for pre-delivery
inspection and service with respect to such vehicles pursuant to Section 4.B,
and any other charge for taxes or special items or service. Seller shall also
repurchase Genuine Accessories which have been installed in such Infiniti
Vehicles which accessories are listed in the current parts and accessories
price list (except those items marked "not eligible") at the prices set forth on
Seller's then current parts and accessories price list
(2) Subject to Section 12.C, all new, unused, undamaged and resalable
Genuine Parts and Accessories which are still in the original and undamaged
packages, were purchased from Seller, are listed in the current parts and
accessories price list (except those items marked "not eligible"), and are
then the unencumbered property of and in the possession of Dealer. The prices
for such Genuine Parts and Accessories shall be the prices set forth on Seller's
then current parts and accessories price list.
(3) Subject to Section 12.C, all special tools and equipment owned by
Dealer and which are unencumbered and in the possession of Dealer on the
effective date of termination which were designed especially for servicing
Infiniti Vehicles, are of the type recommended in writing by Seller and
designated as "essential" tools in accordance with Seller's Guides or other
notices pertaining thereto from Seller, are in usable and good condition, except
for reasonable wear and tear, and were purchased by Dealer from Seller within
the three (3) year period preceding the date of termination. Seller's purchase
price for such essential tools shall be calculated at Dealer's purchase price
reduced by straight-line depreciation on the basis of a useful life of
thirty-six (36) months
Dealer's and Seller's obligations with respect to the signs located at
the Dealership Facilities shall be determined in accordance with the Dealership
Identification Addendum between Seller and Dealer.
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C. DEALER'S RESPONSIBILITIES WITH RESPECT TO REPURCHASE.
Seller's obligation to repurchase Genuine Parts and Accessories and
essential tools from Dealer is conditioned on Dealer's fulfilling its
responsibilities under this Section 12.C as follows:
(1) Immediately following the effective date of termination of this
Agreement, Dealer shall furnish to Seller a list of vehicle identification
numbers and such other information and documents as Seller may require
pertaining to the Infiniti Vehicles subject to the repurchase obligations of
Section 12.B.1. Dealer shall deliver all such vehicles in accordance with
Seller's instructions.
(2) Within thirty (30) days after the effective date of termination of
this Agreement, Dealer shall deliver or mail to Seller a detailed inventory of
all of the items referred to in Sections 12.B.2 and 12.B.3. Within thirty (30)
days of its receipt of such inventory, Seller shall provide Dealer with
instructions as to the procedures to be followed in returning such items to
Seller. Dealer shall, at its expense, tag, pack and deliver all such items to
Seller at Seller's designated parts distribution center or such other location
as designated by Seller in accordance with such instructions.
Should Dealer fail to comply with the responsibilities listed above,
Seller shall have no obligation to repurchase any such items from Dealer;
provided however, that Seller shall have the right, but no obligation, to enter
into the Dealership Facilities for the purpose of compiling an inventory,
tagging, packing and shipping such items to Seller's designated parts
distribution center. If Seller undertakes any such responsibilities of Dealer,
the repurchase prices of such items shall be fifteen percent (15%) less than the
repurchase prices otherwise applicable under Section 12.B.
D. TITLE TO REPURCHASED PROPERTY.
With respect to any items of property repurchased by Seller pursuant to
this Section 12, Dealer shall take such action and shall execute and deliver
such instruments as may be necessary: (i) to convey good and marketable title to
all such items of property; (ii) to comply with the requirements of any
applicable law relating to bulk sales and transfers; and (iii) to satisfy and
discharge any liens or encumbrances on such items of property prior to delivery
thereof to Seller.
E. PAYMENT.
Seller shall make all payments to Dealer pursuant to this Section 12
within ninety (90) days after Seller's receipt of all items to be repurchased by
it and provided Dealer has fulfilled all of its obligations under this Section
12; provided, however, that Seller shall be entitled to offset against such
payments any and all indebtedness or other obligations of Dealer to Seller.
Seller may make any payment for any property repurchased pursuant to this
Section 12 directly to anyone having a security or ownership interest therein.
F. CANCELLATION OF DELIVERIES.
Upon termination of this Agreement Seller shall have the right to cancel
all shipments of Infiniti Products scheduled for delivery to Dealer. After the
effective date of termination, if Seller shall voluntarily ship any Infiniti
Products to Dealer, or otherwise transacts business with Dealer, all such
transactions will be governed by the same terms provided in this Agreement,
insofar as those terms would have been applicable had the Agreement not been
terminated. Nevertheless, neither the shipping of such Infiniti Products nor
any other acts by Seller shall be construed as a waiver of the termination or as
a renewal or extension of this Agreement.
SECTION 13. ESTABLISHMENT OF SUCCESSOR DEALER
A. BECAUSE OF DEATH OF PRINCIPAL OWNER.
If Seller shall terminate this Agreement pursuant to Section 11.C
because of the death of a Principal Owner, the following provisions shall apply:
(1) Subject to the other provisions of this Section 13, Seller shall
offer a two (2) year Term Sales and Service Agreement to a successor dealership
("Successor Dealership") comprised of the person nominated by such deceased
Principal Owner as his or her successor, together with the other Principal
Owner(s) and Other Owner(s), provided that:
(a) The nomination was submitted to Seller on a Successor Addendum,
was consented to by the remaining Principal Owner(s) and Other Owner(s), and was
approved by Seller prior to the death of such Principal Owner;
(b) Either (i) there has been no change in the Executive Manager of
Seller; or (ii) Seller has approved a candidate for Executive Manager having the
required qualifications, expertise, integrity, experience and ability to
successfully operate the dealership and perform Dealer's obligations under this
Agreement; and
(c) The Successor Dealership has capital and facilities
substantially in accordance with Seller's Guides therefor at the time the Term
Sales and Service Agreement is offered.
(2) If the deceased Principal Owner has not nominated a successor in
accordance with Section 13.A.1(a) above, but all of the beneficial interest of
the deceased Principal Owner has passed by will or the laws of intestate
succession directly to the deceased Principal Owner's spouse and/or children or
to one (1) or more other Principal Owners who each held not less than a
twenty-five percent (25%) beneficial ownership interest in the dealership prior
to the death of the deceased Principal Owner (collectively "Proposed New
Owners"), subject to the other provisions of this Section 13, Seller shall offer
a two (2) year Term Sales and Service Agreement to a Successor Dealership
composed of the Proposed New Owners, together with the other Principal Owners
and Other Owners, provided that:
(a) Either (i) there has been no change in the Executive Manager of
Dealer; or (ii) Seller has approved a candidate for Executive Manager having the
required qualifications, expertise, integrity, experience and ability to
successfully operate the dealership and perform Dealer's obligations under this
Agreement; and
(b) The Successor Dealership has capital and facilities substantially in
accordance with Seller's Guides therefor at the time the Term Sales and Service
Agreement is offered.
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B. CONSIDERATION OF SUCCESSOR ADDENDUM.
To be named in the Successor Addendum, proposed Principal Owner or
Executive Manager must (i) be employed by Dealer or a comparable automotive
dealership as his principal place of employment; (ii) be already qualified as a
Principal Owner or Executive Manager, as the case may be; and (iii) otherwise be
acceptable to Seller as provided below.
Upon receipt of a request from Dealer that one or more individuals be
named in a Successor Addendum, Seller shall request those named to submit an
application and to provide all personal and financial information that Seller
may reasonably and customarily require in connection with the review of such
applications. Seller, upon the submission of all requested information, will
determine whether to consent to a Successor Addendum naming such individuals by
applying its criteria for considering the qualifications of Principal Owners or
Executive Managers, as the case may be.
C. TERMINATION OF SUCCESSOR ADDENDUM.
Dealer may, at any time, withdraw a nomination of a Successor even if
Seller previously has qualified the candidate, or cancel an executed Successor
Addendum by giving notice to Seller of such withdrawal at any time prior to the
death or incapacity of any Principal Owner named in this Agreement. Seller may
cancel an executed Successor Addendum only if the proposed Principal Owner or
Executive Manager no longer complies with the requirements of this Section 13.
D. EVALUATION OF SUCCESSOR DEALERSHIP.
During the term of the Term Sales and Service Agreement, Seller will
evaluate the performance of the Successor Dealership and periodically review
with the new Dealer this evaluation. If the Successor Dealership's performance
is deemed to be satisfactory to Seller during the term of the Term Sales and
Service Agreement, Seller will offer a new Sales and Service Agreement to such
Successor Dealership in accordance with Article Twelfth of the Term Sales and
Service Agreement.
E. TERMINATION OF MARKET REPRESENTATION.
Notwithstanding anything stated or implied to the contrary in this
Section 13, Seller shall not be obligated to offer a Term Sales and Service
Agreement to any Successor Dealership if Seller notified Dealer prior to the
event causing the termination of this Agreement that Seller's market
representation plans do not provide for continuation of representation in
Dealer's Primary Market Area.
F. TERMINATION OF OFFER.
If the person or persons comprising a proposed Successor Dealership to
which any offer of a Term Sales and Service Agreement for Infiniti Products
shall have been made pursuant to this Section 13 do not accept same within
thirty (30) days after notification to them of such offer, such offer shall
automatically expire.
SECTION 14. SALE OF ASSETS OR OWNERSHIP INTERESTS IN DEALER
A. SALE OR TRANSFER.
Article Third of this Agreement provides that neither this Agreement nor
any right or interest herein may be assigned without the prior written consent
of Seller. However, during the term of this Agreement, Dealer may negotiate for
the sale of the assets of Dealer, or the owners of Dealer may negotiate the sale
of their ownership interests in Dealer, upon such terms as may be agreed upon by
them and the prospective purchaser. With respect to any sale or transfer which
requires Seller's prior written consent under Article Third of this Agreement,
Dealer shall notify Seller prior to any closing of the transaction called for by
the purchase and sale agreement, and the prospective purchaser shall apply to
Seller for a Sales and Service Agreement.
B. SELLER'S EVALUATION.
Seller is responsible for establishing and maintaining an effective body
of Authorized Infiniti Dealers to promote the sale and servicing of Infiniti
Products. Accordingly, Seller has the right and obligation to evaluate each
prospective dealer, its owner(s) and executive manager, the dealership location
and the dealership facilities to ensure that each of the foregoing is adequate
to enable Dealer to meet its responsibilities hereunder. Seller will evaluate
each prospective purchaser's qualifications and proposal for the conduct of the
Dealership Operations by applying the Standards set forth or referred to in this
Agreement. In determining whether it shall consent to such a sale or transfer,
Seller will take into account factors such as the personal, business and
financial qualifications, expertise, reputation, integrity, experience and
ability of the proposed Principal Owner(s) and Executive Manager as referred to
in Articles Third and Fourth of this Agreement, the capitalization and financial
structure of the prospective dealer, the prospective purchaser's proposal for
conducting the Dealership Operations, the prospective purchaser's customer
satisfaction history and Seller's interest in promoting and preserving
competition.
In evaluating the prospective purchaser's application for a Sales and
Service Agreement, Seller may, without liability to Dealer, Dealer's Owners or
the prospective purchaser, consult with the prospective purchaser regarding any
matter relating to the proposed dealership.
Seller shall notify Dealer of Seller's consent or refusal to consent to
Dealer's proposed sale or transfer within sixty (60) days after Seller has
received from Dealer (i) Dealer's written request for Seller's approval; and
(ii) all applications and information customarily or reasonably requested by
Seller to evaluate such a proposal, including, without limitation information
concerning each proposed owner's and/or the replacement dealer's identity,
character, business affiliations, business experience, financial qualifications
and proposals for conducting the Dealership Operations. Any material change in
such a proposal, including without limitation any change in the financial terms
or in the proposed ownership or management of any proposed replacement dealer,
shall be treated as a new proposal for purposes of this Section 14.B. If Seller
does not consent to Dealer's proposed sale or transfer, Seller will specify in
its notice to Dealer the reasons for its refusal to consent.
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(1) If Seller determines that the proposed dealership would not, at the
commencement of its operations, have capital or facilities in accordance with
Seller's Guides therefor and otherwise satisfactory to Seller, or if Seller
reasonably determines that the proposed dealership might not meet Seller's
performance Standards in sales, service or customer satisfaction, Seller may, in
its sole discretion and in lieu of refusing to consent to the proposed sale or
transfer, agree to enter into a Term Sales and Service Agreement with the
prospective purchaser. It Seller has recommended, pursuant to a market study
conducted in accordance with Section 2.D, that Dealer relocate its Dealership
Facilities, Seller may offer to the proposed dealer a Term Sales and Service
Agreement subject to the condition that its Dealership Facilities shall be
relocated within a reasonable time to a location and in facilities acceptable to
Seller and in accordance with the market study recommendations.
Notwithstanding anything stated or implied to the contrary in this
Section 14, Seller shall At be obligated to enter into a Sales and Service
Agreement with any purchaser of the assets or ownership interests of Dealer if
Seller has notified Dealer prior to its having received notice of the proposed
sale or transfer that Seller's market representation plans do not provide for
continuation of representation in Dealer's Primary Market Area.
C. EFFECT OF TERMINATION.
This Agreement shall end on the effective date of termination and,
except as otherwise set forth in Section 12, all rights, obligations, duties and
responsibilities of Dealer and Seller under this Agreement shall cease as of the
effective date of termination. No assignment, transfer or sale of Dealer's right
or interest in this Agreement shall have the effect of granting the assignee,
transferee or buyer any right or interest in this Agreement that is greater than
or in addition to that then held by Dealer. Any such assignment, transfer or
sale shall be subject to the terms of any written notice of deficiency under
Section 11.B or any written notice of termination under Sections 11.A, 11.B,
11.C, 11.D, 11.E or 11.F that was previously received by Dealer, including but
not limited to Dealer's obligation to correct any failure before the expiration
date of any period established in any such notice of deficiency. No such
assignment, transfer or sale shall correct any such deficiency or extend the
effective date of termination specified in any written notice of termination.
D. SELLER'S RIGHTS OF FIRST REFUSAL OR OPTION TO PURCHASE.
Whenever Dealer proposes to sell its principal assets or the owners of
Dealer propose to sell a majority ownership interest in Dealer, and in addition
to its rights under Articles Third and Fourth and Section 14.B, Seller shall
have the right and option to purchase the dealership assets or ownership
interests pursuant to this Section 14.D. Seller's rights under this Section 14.D
shall not affect the rights of nominated successor(s), surviving Principal
Owner(s) or a deceased Principal Owner's surviving spouse and/or children under
Section 13 or to Dealer's proposal to transfer the Dealer or assets to such
individual(s) apart from the death of a Principal Owner.
(1) If Seller chooses to exercise its option, it must do so in its
written refusal to consent to the proposed sale or transfer pursuant to Section
14.B. Dealer agrees not to complete any proposed change or sale prior to the
expiration of the period for exercise of Seller's option and without Seller's
prior written consent. Such exercise shall be null and void if Dealer withdraws
its proposal within thirty (30) days following Dealer's receipt of Seller's
notice exercising its option.
(2) After being exercised, Seller's option may be assigned to any party,
and Seller hereby agrees to guarantee the full payment of the purchase price by
such assignee. Seller's rights under this Section 14.D shall be binding on and
enforceable against any assignee or successor in interest of Dealer or purchaser
of Dealer's assets. Seller shall have no obligation to exercise its rights
hereunder.
(3) If Dealer has entered into a bona fide written buy/sell agreement
respecting its Infiniti dealership, Seller's right under this Section 14.D
shall be a right of first refusal, enabling Seller to assume the prospective
purchaser's rights and obligations under such buy/sell agreement. The purchase
price and other terms of sale shall be those set forth in such agreement and any
related documents. Seller may request and Dealer agrees to provide all other
documents relating to Dealer and to the proposed transfer, including, but not
limited to, those reflecting any other agreements or understandings between the
parties to the buy/sell agreement. If Dealer refuses either to provide such
documentation or to state in writing that no such documents exist, it shall be
presumed that the agreement is not bona fide.
(4) In the absence of a bona fide written buy/sell agreement, Seller
shall have the option, but no obligation, under this Section 14.D to purchase
the principal assets of Dealer utilized in the Dealership Operations, including
real property and leasehold interest, and to terminate this Agreement and all
rights granted Dealer hereunder. If the Dealership Facilities are leased by
Dealer from an affiliated company, the right to purchase the principal assets of
Dealer shall include the right to lease the Dealership Facilities. The purchase
price of Dealer's assets shall be at their fair market value as a going concern
as negotiated by the parties and the other terms of sale shall be those agreed
by Dealer and Seller. If Dealer and Seller are unable to reach a negotiated
settlement in a reasonable time, the price and other terms of sale shall be
established by arbitration in accordance with the rules of the American
Arbitration Association. If Seller determines that the buy/sell agreement is not
bona fide, Seller will so notify Dealer. Dealer shall have ten (10) days from
its receipt of such notice within which to withdraw its proposal. Seller's
exercise of its rights hereunder shall be null and void if Dealer withdraws its
proposal within such time period.
(5) Dealer shall transfer the affected property by Warranty Deed
conveying marketable title free and clear of liens, claims, mortgages,
encumbrances, tenancies and occupancies. The Warranty Deed shall be in proper
form for recording and Dealer shall deliver complete possession of the property
at the time of delivery of the Deed. Dealer shall also furnish to Seller copies
of any easements, licenses, or other documents affecting the property and shall
assign any permits or licenses which are necessary for the conduct of the
Dealership Operations.
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SECTION 15. GENERAL
A. NOTICES.
All notices or notifications required or permitted to be given by this
Agreement to either party shall be sufficient only if given in writing and
delivered personally or by mail to Dealer at the address set forth on the
Dealership Facilities Addendum to this Agreement and to Seller at its national
headquarters, or at such other address as the party to be addressed may have
previously designated by written notice to the other party. Unless otherwise
specified in the notice, such notices shall be effective upon receipt.
B. NO IMPLIED WAIVERS.
The waiver by either party, or the delay or failure by either party to
claim a breach, of any provision of this Agreement shall not affect the right to
require full performance thereafter, nor shall it constitute a waiver of any
subsequent breach, or affect in any way the effectiveness of such provision.
C. NO AGENCY.
Dealer is an independently operated business entity in which Seller has
no ownership interest. This Agreement does not constitute Dealer the agent or
legal representative of Seller or of the manufacturer of Infiniti Products for
any purpose whatsoever. Dealer is not granted any express or implied right or
authority to assume or create any obligation on behalf of or in the name of
Seller or the manufacturer of Infiniti Products or to bind Seller or such
manufacturer in any manner or thing whatsoever.
D. LIMITATIONS OF SELLER'S LIABILITY.
This Agreement contemplates that all investments by or in Dealer shall
be made, and Dealer shall purchase and resell Infiniti Products, in conformity
with the provisions hereof, but otherwise in the discretion of Dealer. Except as
herein specified, nothing herein contained shall impose any liability on Seller
in connection with the business of Dealer or otherwise or for any expenditures
made or incurred by Dealer in preparation for performance or in performance of
Dealer's responsibilities under this Agreement.
E. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein and may be amended only by a
written instrument executed by each of the parties or their respective personal
representatives, successors and/or assigns. This Agreement supersedes any and
all prior agreements with respect to the subject matter hereof, and there are no
restrictions, promises, warranties, covenants or undertakings between the
parties other than those expressly set forth in this Agreement; provided,
however, Seller shall have the right to amend, modify or change this Agreement
in case of changes in laws, government regulations or changes in circumstances
beyond the control of Seller that might affect materially the relationship
between Seller and Dealer as further provided in Section 15.G.
F. CALIFORNIA LAW.
This Agreement shall be deemed to have been entered into in the State of
California, and all questions concerning the validity, interpretation or
performance of any of its terms or provisions, or of any rights or obligations
of the parties hereof, shall be governed by and resolved in accordance with the
internal laws of the State of California, including without limitation the
statute of limitations.
G. CHANGES REQUIRED BY LAW.
Should Seller determine that any federal or state law or regulation or
any condition referred to in Section 15.E requires a change or changes in any of
the provisions of this Agreement, Seller may offer to Dealer an amendment or an
amended Agreement embodying such change or changes. If Dealer shall fail to
execute such amendment or amended Agreement and return it to Seller within
thirty (30) days after it is offered Dealer, Seller may terminate this
Agreement by giving notice to Dealer, such termination to be effective upon
receipt by Dealer of such notice.
H. SEVERABILITY.
If any term or provision of this Agreement, or the application thereof
to any person or circumstance, shall to any extent be found to be invalid, void
or unenforceable, the remaining provisions and any application thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way.
I. ASSIGNMENT.
Dealer shall not transfer or assign any right or transfer or delegate
any obligation of Dealer under this Agreement without the prior written approval
of Seller. Any purported transfer, assignment or delegation made without the
prior written approval of Seller shall be null and void.
J. NO FRANCHISE FEE.
Dealer represents and warrants that it has paid no fee, nor has it
provided any goods or services in lieu of a fee, as consideration for Seller's
entering into this Agreement and that the sole consideration for Seller's
entering into this Agreement was Dealer's Principal Owners' and Executive
Manager's abilities, integrity, assurances of personal services and expressed
intention to deal fairly and equitably with Seller and the public and any other
promises recited in this Agreement.
K. CAPTIONS.
The captions of the sections of this Agreement are for convenience and
reference only and shall in no way be construed to explain, modify, amplify, or
aid in the interpretation, construction or meaning of the provisions of this
Agreement or to be a part of this Agreement.
L. BENEFIT.
This Agreement is entered into by and between Seller and Dealer for
their sole and mutual benefit. Neither this Agreement nor any specific provision
contained in it is intended or shall be construed to be for the benefit of any
third party.
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M. NOTICE OF FAILURE TO ACT IN "GOOD FAITH".
In the interest of maintaining a harmonious relationship between Seller
and Dealer, Dealer shall report promptly, in writing, to the President or the
Vice President and General Manager, Infiniti Division of Seller any act or
failure to act on the part of Seller which Dealer deems not to have been, or
that Dealer proposes to use in support of a claim that Seller has not acted, in
good faith as to Dealer. For the purposes of this paragraph, the term "good
faith" shall mean Seller and its representatives acting in a fair, equitable,
and impartial manner toward Dealer so as to guarantee the Dealer freedom from
coercion or intimidation or threats of coercion or intimidation from Seller as
those words are employed in the context of the Automobile Dealers Franchise Act,
15 U. S. C. A.ss.1221, et seq. It is the intention of the parties that the
purpose of the requirement of such notification by Dealer is to afford Seller
sufficient opportunity to consider the claim of Dealer and if, in the sole
determination of Seller, such claim is found to be meritorious, to undertake
such measures which may be necessary to correct the condition complained of to
the end that Seller shall, at all times, act in good faith as to Dealer.
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