Exhibit 10.20.1
TOYOTA DEALER AGREEMENT
This is an Agreement between Toyota Motor Sales, USA, Inc. (DISTRIBUTOR) and
Lithia Motors, Inc., DBA Lithia Toyota, (DEALER) corporation. If a corporation,
DEALER is duly incorporated in the State of Oregon and doing business as Lithia
Toyota.
PURPOSES AND OBJECTIVES OF THIS AGREEMENT
DISTRIBUTOR sells Toyota Products which are manufactured or approved by Toyota
Motor Corporation (FACTORY) and imported and/or sold to DISTRIBUTOR by Toyota
Motor Sales, U.S.A., Inc. (IMPORTER). It is of vital importance to DISTRIBUTOR
that Toyota Products are sold and serviced in a manner which promotes consumer
confidence and satisfaction and leads to increased product acceptance.
Accordingly, DISTRIBUTOR has established a network of authorized Toyota dealers,
operating at approved locations and pursuant to certain standards, to sell and
service Toyota Products. DEALER desires to become one of DISTRIBUTOR's
authorized dealers. Based upon the representations and promises of DEALER, set
forth herein, DISTRIBUTOR agrees to appoint DEALER as an authorized Toyota
dealer and welcomes DEALER to DISTRIBUTOR's -network of authorized dealers of
Toyota Products.
This Agreement sets forth the rights and responsibilities of DISTRIBUTOR as
seller and DEALER as buyer of Toyota Products. DISTRIBUTOR enters into this
Agreement in reliance upon DEALER's integrity, ability, assurance of personal
services, expressed intention to deal fairly with the consuming public and with
DISTRIBUTOR, and promise to adhere to the terms and conditions herein. Likewise,
DEALER enters into this Agreement in reliance upon DISTRIBUTOR's promise to
adhere to the terms and conditions herein. DISTRIBUTOR and DEALER shall refrain
from conduct which may be detrimental to or adversely reflect upon the
reputation of the FACTORY, IMPORTER, DISTRIBUTOR, DEALER or Toyota Products in
general. The parties acknowledge that the success of the relationship between
DISTRIBUTOR and DEALER depends upon the mutual understanding and cooperation of
both DISTRIBUTOR and DEALER.
I. RIGHTS GRANTED TO THE DEALER
Subject to the terms of this Agreement, DISTRIBUTOR hereby grants DEALER
the nonexclusive right:
A. To buy and resell the Toyota Products identified in the Toyota
Product Addendum hereto which may be periodically revised by
IMPORTER;
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B To identify itself as an authorized Toyota dealer utilizing approved
signage at the location(s) approved herein;
C To use the name Toyota and the Toyota Marks in the advertising,
promotion, sale and servicing of Toyota Products in the manner
herein provided.
DISTRIBUTOR reserves the unrestricted right to sell Toyota Products and to
grant the privilege of using the name Toyota or the Toyota Marks to other
dealers or entities, wherever they may be located.
II. RESPONSIBILITIES ACCEPTED BY THE DEALER
DEALER accepts its appointment as an authorized Toyota dealer and agrees
to:
A. Sell and promote Toyota Products subject to the terms and conditions
of this Agreement;
B Service Toyota Products subject to the terms and conditions of this
Agreement;
C. Establish and maintain satisfactory dealership facilities at the
locations set forth herein; and
D. Make all payments to DISTRIBUTOR when due.
III. TERM OF AGREEMENT
This Agreement is effective this 15th day of February, 1996 and shall
continue for a period of Six (6) Years and shall expire on February 14,
2002, unless ended earlier by mutual agreement or terminated as provided
herein. This Agreement may not be continued beyond its expiration date
except by written consent of DISTRIBUTOR and IMPORTER.
IV. OWNERSHIP OF DEALERSHIP
This Agreement is a personal service Agreement and has been entered into
by DISTRIBUTOR in reliance upon and in consideration of DEALER's
representation that only the following named persons are the Owners of
DEALER, that such persons will serve in the capacities indicated, and that
such persons are committed to achieving the purposes. goals and
commitments of this Agreement:
OWNERS' PERCENT OF
NAMES TITLE OWNERSHIP
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Sidney B. DeBoer President 62.5%
Manfred Heiman Vice President 37.5%
V. MANAGEMENT OF DEALERSHIP
DISTRIBUTOR and DEALER agree that the retention of qualified management is
of critical importance to satisfy the commitments made by DEALER in this
Agreement. DISTRIBUTOR, therefore, enters into this Agreement in reliance
upon DEALER's representation that Sidney B. DeBoer and no other person,
will exercise the function of General Manager, be in complete charge of
DEALER's operations, and will have to make all decisions on behalf of
DEALER with respect to DEALER's operations. DEALER further agrees that the
General Manager shall devote his or her full effort to DEALER's
operations.
VI. CHANGE IN MANAGEMENT OR OWNERSHIP
This is a personal service contract. DISTRIBUTOR has entered into this
Agreement because DEALER has represented to DISTRIBUTOR that the Owners
and General Manager of DEALER identified herein possess the personal
qualifications, skill and commitment necessary to ensure that DEALER will
promote, sell and service Toyota Products in the most effective manner,
enhance the Toyota image and increase market acceptance of Toyota
Products. Because DISTRIBUTOR has entered into this Agreement in reliance
upon these representations and DEALER's assurances of the active
involvement of such persons in DEALER operations, any change in ownership
no matter what the share or relationship between parties, or any changes
in General Manager from the person specified herein, requires the prior
written consent of DISTRIBUTOR, which DISTRIBUTOR shall not unreasonably
withhold.
DEALER agrees that factors which would make DISTRIBUTOR's withholding of
consent reasonable would include, without limitation, the failure of a new
Owner or General Manager to meet DISTRIBUTOR'S standards with regard to
financial capability, experience and success in the automobile dealership
business.
VII. APPROVED DEALER LOCATIONS
In order that DISTRIBUTOR may establish and maintain an effective network
of authorized Toyota dealers, DEALER agrees that it shall conduct its
Toyota operation only and exclusively in facilities and at locations
herein designated and approved by DISTRIBUTOR. DISTRIBUTOR hereby
designates and approves the following facilities as the exclusive
location(s) for the sale and servicing of Toyota Products and the display
of Toyota Marks:
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New Vehicle Sales and Showroom Used Vehicle Display and Sales
------------------------------ ------------------------------
360 E. Jackson Street 400 North Central
Medford, OR 97501 Medford, OR 97501
Sales and General Office Body and Paint
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360 E. Jackson Street None
Medford, OR 97501
Parts Service
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345 Apple Street 345 Apple Street
Medford, OR 97501 Medford, OR 97501
Other Facilities
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325 East Jackson
Medford, OR 97501
DEALER may not, either directly or indirectly, display Toyota Marks or
establish or conduct any dealership operations contemplated by this
Agreement. including the display, sale and servicing of Toyota Products,
at any location or facility other than those approved herein without the
prior written consent of DISTRIBUTOR. DEALER may not modify or change the
usage or function of any location or facility approved herein or otherwise
utilize such locations or facilities for any functions other than the
approved functions without the prior written consent of DISTRIBUTOR.
VIII. PRIMARY MARKET AREA
DISTRIBUTOR will assign DEALER a geographic area called a Primary Marker
Area ("PMA"). The PMA is used by DISTRIBUTOR to evaluate DEALER's
performance of its obligations, among other things. DEALER agrees that it
has no exclusive right to any such PMA. DISTRIBUTOR may add new dealers,
relocate dealers, or adjust DEALER's PMA as it reasonably determines is
necessary. DEALER's PMA is set forth on the PMA Addendum hereto.
Nothing contained in this Agreement, with the exception of Section XIV(B),
shall limit or be construed to limit the geographical area in which, or
the persons to whom, DEALER may sell or promote the sale of Toyota
products.
IX. STANDARD PROVISIONS
The "Toyota Dealer Agreement Standard Provisions" are incorporated herein
and made
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part of this Agreement as if fully set forth herein.
X. ADDITIONAL PROVISIONS
In consideration of DISTRIBUTOR's agreement to appoint DEALER as an
authorized Toyota dealer, DEALER further agrees:
1. Dealer agrees to achieve, within twelve months of the effective date of
this Agreement and to thereafter maintain throughout the duration of this
Agreement, a satisfactory customer satisfactory performance, as measured
by all applicable standards established by Toyota Motor Sales USA Inc. and
which are modified from time to time.
Undertaking by IMPORTER: In the event of termination of this Agreement by virtue
of termination or expiration of DISTRIBUTOR's contract with IMPORTER, IMPORTER,
through its designee, will offer DEALER a new agreement of no less than one
year's duration and containing the terms of the Toyota Dealer Agreement then
prescribed by IMPORTER.
TOYOTA MOTOR SALES, U.S.A., INC.
Date: February 15, 1996
By: /s/
Shinji Sakai
President
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