EXHIBIT 10.2.3.2
MITSUBISHI
MOTOR SALES OF AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
2
TABLE OF CONTENTS
Page
I. GENERAL OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
II. DEFINITIONS . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 1
III. SALES OF MMSA PRODUCTS TO DEALER. . . . . . . . . . . . . . . . 4
A. Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
B. Deliveries . . . . . .. . . . . . . . . . . . . . . . . . . . . 5
1. Mode and Place of Delivery . . . . . . . . . . . . . . . . 5
2. Diversion of Deliveries. . . . . . . . . . . . . . . . . . 5
3. Delay or Failure to Deliver. . . . . . . . . . . . . . . . 5
4. Damage Claims Against Carriers . . . . . . . . . . . . . . 5
C. Prices and Other Terms of Sales . . . . . . . . . . . . . . . . . 6
1. Price Changes. . . . . . . . . . . . . . . . . . . . . . . 6
2. Payment for MMSA Vehicles. . . . . . . . . . . . . . . . . 6
3. Payment for MMSA Products other than MMSA Vehicles . . . . 6
4. Failure of Financing Arrangements. . . . . . . . . . . . . 7
5. Title and Risk of Loss . . . . . . . . . . . . . . . . . . 8
6. Collection of Indebtedness . . . . . . . . . . . . . . . . 8
7. Refunds. . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. Product Warranties. . . . . . . . . . . . . . . . . . . . . . . 9
E. Change of Design, Options or Specifications . . . . . . . . . .10
F. Vehicles Excluded . . . . . . . . . . . . . . . . . . . . . . .10
IV. DEALERSHIP PREMISES. . . . . . . . . . . . . . . . . . . . . . . . .11
A. Responsibilities of Dealer. . . . . . . . . . . . . . . . . . .11
B. Automobile Leasing or Rental Business . . . . . . . . . . . . .11
C. Related Activities of Dealer or Dealer's Owners or
Executive Managers. . . . . . . . . . . . . . . . . . . . . . .12
D. Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . .13
E. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .13
F. Maintaining Operations Open for Business. . . . . . . . . . . .14
i
G. Minimum Vehicle Inventories . . . . . . . . . . . . . . . . . .14
H. Signs. . . . . . . .. . . . . . . . . . . . . . . . . . . . . .15
I. Electronic Communications System. . . . . . . . . . . . . . . .15
J. Planning Assistance for Dealership Premises . . . . . . . . . .15
V. NET WORKING CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . .16
VI. ACCOUNTS, RECORDS AND REPORTS. . . . . . . . . . . . . . . . . . . .16
A. Uniform Accounting System . . . . . . . . . . . . . . . . . . .16
B. Sales Reporting . . . . . . . . . . . . . . . . . . . . . . . .16
C. Sales and Service Records . . . . . . . . . . . . . . . . . . .17
D. Examination of Accounts and Records . . . . . . . . . . . . . .17
VII. PROMOTING AND SELLING MMSA PRODUCTS . . . . . . . . . . . . . . . .17
A. Responsibilities of Dealer . . . . . . . . . . . . . . . . . .17
B. Sales and Performance Criteria. . . . . . . . . . . . . . . . .18
1. Dealer Development Plan . . . . . . . . . . . . . . . . .18
2. Determination of Minimum Sales Responsibility. . . . . . .18
C. Sales Operations. . . . . . . . . . . . . . . . . . . . . . . .19
1. Sales Organization . . . . . . . . . . . . . . . . . . . .19
2. Representations in the Sales of MMSA Vehicles. . . . . . .20
3. Customer Deposits. . . . . . . . . . . . . . . . . . . . .20
D. Advertising . . . . . . . . . . . . . . . . . . . . . . . . . .20
1. Misleading Advertising . . . . . . . . . . . . . . . . . .20
2. MMSA Dealer Advertising Association. . . . . . . . . . . .21
3. Dealer Cooperative Promotional Fund. . . . . . . . . . . .21
E. Assistance Provided by MMSA . . . . . . . . . . . . . . . . . . .22
1. Sales Training Assistance. . . . . . . . . . . . . . . . .22
2. Field Sales Personnel. . . . . . . . . . . . . . . . . . .22
VIII. SERVICING MMSA VEHICLES. . . . . . . . . . . . . . . . . . . . . .23
A. Responsibilities of Dealer. . . . . . . . . . . . . . . . . . .23
1. Warranty Service . . . . . . . . . . . . . . . . . . . . .23
2. New Motor Vehicle Pre-Delivery Service . . . . . . . . . .23
3. Free Maintenance . . . . . . . . . . . . . . . . . . . . .24
4. Use of Parts . . . . . . . . . . . . . . . . . . . . . . .24
5. Campaign Inspections and Corrections . . . . . . . . . . .25
ii
6. Compliance With Safety and Emission Control
Requirements . . . . . . . . . . . . . . . . . . . . . . .26
B. Service Operations. . . . . . . . . . . . . . . . . . . . . . . .27
1. Service and Parts Organization . . . . . . . . . . . . . .27
2. Paint and Body Facilities. . . . . . . . . . . . . . . . .27
3. Workshop . . . . . . . . . . . . . . . . . . . . . . . . .27
4. Handling of Service Complaints . . . . . . . . . . . . . .28
5. Stock of Parts . . . . . . . . . . . . . . . . . . . . . .28
6. Parts Inventory Control. . . . . . . . . . . . . . . . . .29
7. Service Rentals. . . . . . . . . . . . . . . . . . . . . .29
C. Assistance Provided by MMSA . . . . . . . . . . . . . . . . . .30
1. Service Training Assistance. . . . . . . . . . . . . . . .30
2. Service Manuals and Materials. . . . . . . . . . . . . . .30
3. Field Service Personnel Assistance . . . . . . . . . . . .30
IX. DISPLAY OF TRADEMARKS, SERVICE MARKS AND TRADE NAMES . . . . . . . .31
X. TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . .31
A. Dealer May Terminate This Agreement Upon Thirty (30)
Days Prior Written Notice To MMSA . . . . . . . . . . . . . . .31
B. MMSA May Terminate This Agreement For Cause . . . . . . . . . .31
1. Immediately. . . . . . . . . . . . . . . . . . . . . . . .32
2. By Giving Thirty (30) Days Prior Written Notice
Upon . . . . . . . . . . . . . . . . . . . . . . . . . . .32
3. By Giving Ninety (90) Days Prior Written Notice
Upon . . . . . . . . . . . . . . . . . . . . . . . . . . .35
C. Notice and Effect of Termination. . . . . . . . . . . . . . . .36
D. Establishment of Successor Dealer . . . . . . . . . . . . . . .36
1. Because of the Death of an Owner . . . . . . . . . . . . .36
2. Because of Death or Incapacity of Executive
Manager. . . . . . . . . . . . . . . . . . . . . . . . . .37
3. Evaluation of Successor Dealer . . . . . . . . . . . . . .38
4. Termination of Market Representation . . . . . . . . . . .38
5. Termination of Offer . . . . . . . . . . . . . . . . . . .38
E. Continuance of Business Relations . . . . . . . . . . . . . . .39
F. Discontinuance of Use of Marks. . . . . . . . . . . . . . . . .39
G. Repurchase Provisions . . . . . . . . . . . . . . . . . . . . .40
XI. POLICY REVIEW BOARD . . . . . . . . . . . . . . . . . . . . . . . .42
A. Establishment of Policy Review Board. . . . . . . . . . . . . .42
iii
B. Appeal of Dealer Appointment to Policy Review Board . . . . . .42
C. Appeal of Termination to Policy Review Board. . . . . . . . . .42
D. Arbitration of Claims by Dealer . . . . . . . . . . . . . . . .43
XII. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .45
A. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .45
B. No Implied Waivers. . . . . . . . . . . . . . . . . . . . . . .47
C. Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . .47
D. Dealer Not Agent or Representative. . . . . . . . . . . . . . .47
E. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . .47
F. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
G. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
iv
DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
The following Standard Provisions have been made a part of and are incorporated
by reference in the Mitsubishi Motor Sales of America, Inc. Dealer Sales and
Service Agreement and shall apply to and govern the transactions, dealings, and
relations between MMSA and Dealer.
I. GENERAL OBLIGATIONS
The purpose of this Agreement is to provide for the sale and servicing of
MMSA Products in a manner that will best serve the interests of MMSA,
Dealer, other Authorized MMSA Dealers, and the owners and purchasers of
MMSA Products.
Dealer has entered into this Agreement with confidence in MMSA's integrity
and expressed intention to deal fairly with Dealer and the consuming public
of MMSA Products and services. MMSA has entered into this Agreement with
confidence in Dealer's integrity, ability and expressed intention to deal
fairly with MMSA, other Authorized MMSA Dealers and the consuming public of
MMSA Products and services and with reliance upon Dealer's undertaking to
perform and carry out the duties, obligations and responsibilities of an
Authorized MMSA Dealer as set forth in this Agreement.
Dealer shall engage in no discourteous, deceptive, misleading or unethical
practices and shall actively promote the sale of MMSA Products. Dealer
shall give prompt, efficient and courteous service to all customers of MMSA
Products whether or not those customers purchased MMSA Products from
Dealer.
MMSA will actively assist Dealer in all aspects of Dealer's MMSA dealership
operations. MMSA shall offer suggestions and provide materials designed to
assist Dealer and its personnel, conduct periodic annual evaluations of
Dealer's premises, performance and facilities as described in Section
VII.B.1. hereof, and provide special training programs for the active
participation of Dealer and its sales, service and parts personnel.
II. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated:
A. MMSA shall mean Mitsubishi Motor Sales of America, Inc., a California
corporation which is the authorized distributor in the United States
of MMSA Products.
B. MMSA VEHICLE shall mean any new passenger car or truck with a Gross
Vehicle Weight Rating of under 7,000 pounds (whether or not
manufactured or supplied by MMC) distributed in the United States by
MMSA and set forth in the Product List.
C. MMSA PARTS AND/OR ACCESSORIES shall mean genuine new parts, components
and accessories, designed primarily for use on MMSA Vehicles and
distributed by MMSA.
D. MMSA PRODUCTS shall mean MMSA Vehicles , MMSA Parts and Accessories,
and other new products (whether or not manufactured or supplied by
MMC) which from time to time may be offered by MMSA to Dealer under
this Agreement.
E. MMSA TRADEMARKS shall mean the trademarks, service marks, design marks
and trade names which are used by MMSA in connection with MMSA
Products, including, without limitation, the names "Mitsubishi" and
"MMSA," and the Mitsubishi three-diamond logo.
F. MMC shall mean Mitsubishi Motors Corporation, a Japanese corporation
which manufactures or supplies to MMSA some or all of the MMSA
VEHICLES.
G. AUTHORIZED MMSA DEALER OR MMSA DEALER shall mean any dealer located in
the United States authorized by MMSA to conduct dealership operations
in connection with the sale of MMSA Products pursuant to an MMSA
Dealer Sales and Service Agreement.
H. OWNERS shall mean the persons named in Section 3 of the MMSA Dealer
Sales and Service Agreement.
I. EXECUTIVE MANAGERS shall mean the persons named in Section 4 of the
MMSA Dealer Sales and Service Agreement.
J. DEALERSHIP PREMISES shall mean the place or places of business
established by Dealer and approved by MMSA in accordance with Section
6 of the MMSA Dealer Sales and Service Agreement.
K. DEALERSHIP FACILITIES shall mean the buildings and other improvements
on the Dealership Premises provided
-2-
by Dealer in accordance with requirements set forth in the Dealer
Development Plan.
L. DEALER DEVELOPMENT PLAN shall mean the written development plan, as
amended from time to time by MMSA, setting forth the criteria relied
upon by MMSA to determine initially whether Dealer qualifies for
appointment as an MMSA Dealer and thereafter to evaluate whether
Dealer's performance hereunder qualifies Dealer for renewal(s) of its
MMSA dealership.
M. GROSS VEHICLE WEIGHT RATING shall mean the value specified by the
manufacturer of MMSA Vehicles as the loaded weight of a single
vehicle.
N. SALES LOCALITY shall mean the locality which is designated in Section
5 of the MMSA Dealer Sales and Service Agreement as the primary area
of Dealer's sales and service responsibility for MMSA Products.
O. WARRANTY MANUAL shall mean the MMSA Warranty Policy and Procedure
Manual, as the same may be amended from time to time by MMSA, which
sets forth policies and procedures concerning warranties on MMSA
Products.
P. PRE-DELIVERY INSPECTION MANUAL shall mean the MMSA Pre-delivery
Inspection Procedures Manual, as the same may be amended from time to
time by MMSA, which sets forth MMSA policies and procedures concerning
the servicing of MMSA Vehicles prior to their delivery to purchasers
of MMSA Vehicles.
Q. INVOICE PRICE shall mean, with respect to each MMSA Product to which
it refers, the price to Dealer for such product as from time to time
established by MMSA.
R. PARTS DISCOUNT AND PURCHASE TERMS SCHEDULE shall mean a listing of the
terms, discounts and conditions relating to the purchase of MMSA Parts
and Accessories supplied by MMSA to Dealer, as amended from time to
time by MMSA.
S. MMSA MASTER PARTS PRICE LIST shall mean a listing of the suggested
list prices and the prices of MMSA Parts and Accessories issued by
MMSA from time to time.
T. POLICY REVIEW BOARD shall mean the MMSA Policy Review Board described
in Section XI hereof.
U. THIS AGREEMENT shall mean the Mitsubishi Motor Sales of America, Inc.
Dealer Sales and Service Agreement, all
-3-
schedules thereto, these Standard Provisions, the Warranty Manual
and the Dealer Development Plan, the most recent Product List and all
Product Addenda, each as amended from time to time, and all other
guides, bulletins or directives issued from time to time by MMSA to
MMSA Dealers.
V. PRODUCT LIST shall mean a list of MMSA Products distributed by MMSA
which shall be provided to Dealers and amended or supplemented by MMSA
from time to time.
W. PRODUCT ADDENDUM or ADDENDA shall mean any addendum to this Agreement
which MMSA may issue to Dealers from time to time setting forth
special terms and conditions governing the sale or servicing only of
the particular vehicles or products designated in the Product
Addendum.
III. SALES OF MMSA PRODUCTS TO DEALER
A. Orders
Dealer shall submit to MMSA firm orders for MMSA Products in such
quantity and variety as are necessary to fulfill Dealer's obligations
under this Agreement. Dealer agrees to submit current orders and
estimated projections of Dealer's future requirements for MMSA
Products at such times and for such periods as MMSA may reasonably
request. Dealer will submit all orders and projections in the format
prescribed by MMSA.
All orders are subject to acceptance by MMSA. MMSA is under no
obligation to accept orders from Dealer and may accept any order in
whole or in part. Acceptance of any order may be by oral or written
notice to Dealer or by shipment of the MMSA Products ordered.
No order may be canceled by Dealer and each order shall remain binding
upon Dealer unless rejected in writing by MMSA.
Except as otherwise provided herein, MMSA agrees to ship MMSA Products
to Dealer only on Dealer's orders. MMSA will use its best efforts to
fill any orders which it has accepted, but nothing contained in this
Agreement shall obligate MMSA to deliver to Dealer any particular
number of MMSA Vehicles or MMSA Parts and Accessories.
-4-
B. Deliveries
1. Mode and Place of Delivery
MMSA shall select the distribution points, carriers and modes of
transportation in effecting delivery of MMSA Products to Dealer.
Dealer agrees to reimburse MMSA for any delivery, freight,
handling and other charges which appear on MMSA's invoice to
Dealer.
2. Diversion of Deliveries
If MMSA is required to divert any MMSA Product ordered by Dealer
because of Dealer's failure or refusal to accept such product,
Dealer agrees to assume responsibility for and pay any charges
incurred by MMSA as a result of such diversion including, without
limitation, charges incurred by MMSA in returning any such
product to the point of original shipment or other distribution
point selected by MMSA, plus all charges for demurrage or storage
related to such diversion.
3. Delay or Failure to Deliver
MMSA shall not be liable for delay or failure to fill orders that
have been accepted, where such delay or failure is the result of
any domestic or foreign laws, regulations, ordinances, rules,
orders or other governmental requests, acts of God, foreign or
civil wars, riots, interruptions of navigation, shipwrecks,
fires, strikes, lockouts or other labor troubles, embargoes,
blockades, delay or failure of MMC, other suppliers of MMSA or
any carrier to deliver MMSA Products, or any other event whether
similar or dissimilar to the foregoing which is beyond the
reasonable control of MMSA.
4. Damage Claims Against CarriersUnless otherwise specified in the
Warranty Manual, MMSA agrees, upon request by Dealer, to assist
Dealer in recovery against any carrier for loss or damage to MMSA
Products shipped hereunder.
-5-
C. Prices and Other Terms of Sales
1. Price Changes
MMSA reserves the right, without prior notice to Dealer, to
change prices, charges and terms of purchase of all MMSA Products
sold under this Agreement and, except as provided in Section
III.C.7. hereof, Dealer or its customer shall have no right of
cancellation or to any refund or credit with respect thereto.
MMSA will charge Dealer for MMSA Products according to the
prices, charges and terms of purchase in effect on the date of
shipment. Prices, charges and terms of purchase for MMSA Parts
and Accessories shall be established from time to time by MMSA in
the MMSA Master Parts Price List and in the Parts Discount and
Purchase Terms Schedule.
2. Payment for MMSA Vehicles
Unless otherwise permitted by MMSA in writing, payment for MMSA
Vehicles shall be by cash draft issued prior to shipment of each
MMSA Vehicle from its port of entry against Dealer's then
applicable wholesale credit line, which line shall be approved
by MMSA and established in Dealer's name with a financial
institution acceptable to MMSA. The minimum amount of such
credit line must be expressly approved by MMSA and must be
sufficient to meet MMSA's estimate of Dealer's anticipated sales
volume, as the same may be revised from time to time in the
Dealer's Development Plan.
MMSA may find it necessary, from time to time, to advise Dealer
that the amount of available credit required of Dealer must be
increased. Such decisions will be based upon criteria reasonably
established by MMSA, including the sufficiency of the existing
credit line and anticipated increases in sales. Dealer agrees to
cooperate fully with MMSA and to arrange promptly for all
required changes in its financial arrangements.
3. Payment for MMSA Products other than MMSA Vehicles
MMSA will invoice Dealer for all MMSA Products other than MMSA
Vehicles purchased by Dealer. Payment for invoices shall be due
by the tenth (10th) day of the month following the month in which
the products covered by the invoice are
-6-
delivered. MMSA reserves the right, at any time with or without
notice to Dealer, to place any and all sales of MMSA Products
other than MMSA Vehicles on a C.O.D. basis, cash in advance basis
or otherwise alter the credit terms available to Dealer.
Dealer's right to return MMSA Products (other than MMSA Vehicles)
shall be governed by the terms and provisions set forth in the
Parts Discount and Purchase Terms Schedule.
4. Failure of Financing Arrangements
It is Dealer's sole responsibility to institute appropriate
controls to ensure the uninterrupted availability of sufficient
funds under its approved credit line with Dealer's financial
institution. Should Dealer fail to pay for, or should any
applicable financing arrangement fail to provide credit for the
payment of, any MMSA Products ordered by Dealer when payment is
due therefor, MMSA may, with respect to any such MMSA Products
(i) cause the same to be stored at the sole risk and expense of
Dealer, or (ii) cause such MMSA Products to be shipped elsewhere
(including returning the same to MMSA) and Dealer shall pay to
MMSA promptly upon demand all expenses sustained by MMSA in
storing, handling and shipping occasioned thereby; or (iii)
without obligation to pay any sum to Dealer, sell such MMSA
Products directly to any other MMSA Dealer, person, firm or
corporation, all expenses or losses occasioned thereby to be
borne by Dealer.
In addition to the foregoing, in the event of an oral or written
refusal by Dealer's financing institution to make payment against
drafts for any MMSA Vehicle ordered by Dealer, MMSA may impose a
fixed administrative charge for each MMSA Vehicle refused. The
amount of such charge, which shall be in addition to otherwise
applicable delivery, storage and demurrage charges, shall reflect
a reasonable estimate of the average administrative cost incurred
by MMSA in arranging for alternative disposition of the MMSA
Vehicle so refused. Furthermore, any failure of Dealer's
financial institution to maintain for a period of sixty (60) or
more days the unrestricted availability to MMSA of Dealer's
credit line in an amount and in accordance with the terms
approved by MMSA shall constitute grounds for termination of this
Agreement under Section X.B.2.(f) hereof.
-7-
"Unrestricted availability" as used in this section shall mean
that upon presentment of MMSA's drafts to Dealer's financial
institution as contemplated hereunder, no approval of Dealer, the
financial institution itself or any other party will be required
before payment to MMSA is made.
5. Title and Risk of Loss
Title and risk of loss or damage to any MMSA Product sold to
Dealer shall pass to Dealer upon (i) its delivery to Dealer, (ii)
its delivery to a common carrier for delivery to Dealer, or (iii)
receipt by MMSA of payment therefor, whichever shall first occur.
MMSA shall retain, and Dealer hereby grants to MMSA, a security
interest in, and the right to retain or repossess, all MMSA
Products sold to Dealer by MMSA until MMSA is paid in full
therefor.
6. Collection of IndebtednessDealer agrees to execute and deliver
and shall, where appropriate, cooperate with MMSA in causing to
be filed with the appropriate authorities any and all statements
and documents required or permitted by the Uniform Commercial
Code and any other local laws for the protection of unpaid
sellers.
Dealer agrees that MMSA may apply toward payment of any amount
due MMSA from Dealer any credit owed to Dealer by MMSA, and MMSA
may, at its option, collect any sums owed by Dealer to MMSA by
making a separate draft or by including any such sums in any
draft issued for the sale of MMSA Products sold under this
Agreement. Dealer will pay the amount of each draft and all
exchange and collection charges. In addition, MMSA may impose an
interest charge for balances thirty (30) days or more overdue.
Such charge shall be assessed at the maximum rate permitted by
law. The foregoing rights of MMSA are in addition to, and not in
lieu of, any rights or remedies it may have by law as an unpaid
seller.
7. Refunds
Should MMSA reduce the Invoice Price of any MMSA Vehicle then in
current production, MMSA will give written notice of such
reduction to Dealer and
-8-
will refund to Dealer an amount equal to the difference
between any higher price paid by Dealer for such MMSA Vehicles
and the reduced price. Such refunds will be payable only for
MMSA Vehicles actually purchased by Dealer at a price higher than
the reduced price and which are new and unsold by Dealer on the
effective date of the price reduction set forth in MMSA's notice
thereof. To be entitled to such refund, Dealer must, within
thirty (30) days after receipt of notice of the price reduction,
make written claim therefor supported by evidence satisfactory to
MMSA.
MMSA shall have no obligation to make refunds or give credits
with respect to:
a) Any MMSA Vehicle used as a demonstrator and not promptly
registered with MMSA by Dealer when assigned to demonstrator
use;
b) Any reduction in the amount of MMSA charges for distribution
and delivery or taxes;
c) Any reduction in the amount of any contribution or any other
sum for advertising or sales promotion; or
d) Any reduction by MMSA in the suggested retail price or
Invoice Price established by MMSA by reason of any law,
order, or regulation of any government or any governmental
agency.
MMSA reserves the right to pay refunds to any financial
institution which has financed the purchase of, and retains a
lien or ownership interest in, any MMSA Vehicle for which
application for refund or credit is made by Dealer.
D. Product Warranties
Dealer understands and agrees that the only warranties applicable to
each new MMSA Product sold to Dealer by MMSA shall be the written
warranty or warranties expressly furnished by MMSA or by the
manufacturer of the MMSA Product and as stated in the Warranty Manual.
Anything in this Agreement to the contrary notwithstanding, all
warranties made by MMSA as set forth in the Warranty Manual shall
survive and, in accordance with their respective terms, continue in
-9-
full force and effect, despite any expiration or termination of this
agreement pursuant to Section X hereof.
E. Change of Design, Options or Specifications
MMSA reserves the right, at any time, to make changes in or
discontinue the supply of any design or specification of MMSA Products
(regardless of whether such products are MMSA Vehicles, MMSA Parts and
Accessories or options), without notice to Dealer and, unless required
by law, without obligation to make any changes with respect to MMSA
Vehicles and MMSA Parts and Accessories or options previously
delivered to Dealer or being imported, manufactured, or sold in
accordance with Dealer's orders. No change shall be considered a
model year change unless so specified by MMSA. Except as specifically
provided in Section III.C.7. hereof, MMSA shall be under no liability
to Dealer on account of any discontinuance or change and shall have no
obligation to Dealer to make any refund on MMSA Products previously
purchased by Dealer, whether or not the price of MMSA Products
previously sold by MMSA is affected thereby. Unless directed in
writing by MMSA or required to do so by law, Dealer shall not alter
any MMSA Product or change or substitute any of its components as sold
by MMSA, except for minor or cosmetic changes which do not affect the
mechanical operation, safety or structural integrity of any MMSA
Product.
F. Vehicles Excluded
Dealer acknowledges that this Agreement confers rights
or benefits with respect to vehicles or products of any kind
not distributed by MMSA, and that Dealer's right to purchase MMSA
Vehicles from MMSA shall at all times be limited to those MMSA
Vehicles listed on the most recent Product List. Without limiting the
generality of the foregoing, Dealer acknowledges that: (1) MMC
distributes in the United States trucks with a Gross Vehicle Weight
Rating of 7,000 pounds or more, truck tractors, buses, other heavy
vehicles, and parts and accessories therefor through a distribution
company known as Mitsubishi Fuso Truck America, Inc. ("MFTA"); (2)
this Agreement confers no right upon Dealer to purchase for resale or
lease, sell service or lease MFTA vehicles or products; (3) MFTA
vehicles are of a separate "line make" from MMSA Vehicles; and (4)
this Agreement confers no right upon Dealers to protest, object or
invoke any other administrative or judicial
-10-
process to bar or delay the establishment of any MFTA dealership
within or without Dealer's Sales Locality.
IV. DEALERSHIP PREMISES
A. Responsibilities of Dealer
MMSA and Dealer recognize the importance of establishing an effective
network of qualified Authorized MMSA Dealers meeting MMSA's
established standards. Accordingly, Dealer agrees that it shall not,
under any circumstance, establish an associate dealer or subdealer for
MMSA Products or establish any MMSA dealership premises or operations
other than those expressly approved by MMSA. Dealer agrees to operate
its MMSA dealership only the Dealership Premises, and to provide and
utilize the Dealership Facilities only in accordance with standards
established by MMSA set forth in the Dealer Development Plan. Dealer
recognizes that if it engages in other business activities in the
Dealership Facilities and/or on the Dealership Premises, the physical
facilities necessary for the sale and servicing of MMSA Products may
be adversely affected. Accordingly, Dealer agrees that it shall not
modify, relocate, change the usage of, reduce or expand the Dealership
Premises or the Dealership Facilities without first consulting with
MMSA and obtaining its written approval of such changes.
B. Automobile Leasing or Rental Business
Dealer may, as part of its MMSA dealership operations, engage in the
leasing of MMSA Vehicles on the Dealership Premises so long as Dealer
complies fully with all standards and requirements established by MMSA
in connection therewith. Dealer, its Owners and Executive Managers
shall not, however, without the prior written consent of MMSA, form or
acquire, directly or indirectly, a separate legal entity for the
purpose of conducting such leasing operations, whether within or
without the Dealership Premises. Nor shall Dealer, its Owners and
Executive Managers acquire for themselves or for members of their
respective families any substantial interest in such separate business
without the prior written consent of MMSA. If MMSA consents to the
operation or substantial ownership of such separate leasing business
by Dealer, its Owners, Executive Managers or their respective
families, such business shall be subject to the provisions of Section
IV.C. hereof.
-11-
C. Related Activities of Dealer or Dealer's Owners or Executive Managers
If Dealer or any of Dealer's Owners or Executive Managers should have
or should acquire, directly or indirectly, for themselves or for
members of their respective families, any substantial interest in an
enterprise the business of which is in any way connected with new or
used MMSA Products (hereinafter referred to as "Related Business"), or
any property which is being used or will be used in connection with
new or used MMSA Products (hereinafter referred to as "Related
Property"), or any beneficial interest in any Related Property, Dealer
will:
1. At the time this Agreement is executed by Dealer, or immediately
upon such acquisition, whichever may be later, require such
Related Business or the holder of legal title or beneficial
interest in the Related Property to execute and deliver to MMSA a
written instrument in which such Related Business or holder shall
assume the following obligations:
a) To refrain from all conduct which might be harmful to the
goodwill of MMSA or to the reputation of MMSA Products or
which might be inconsistent with the public interest;
b) To grant to MMSA, until the expiration or prior termination
of this Agreement, the right, through MMSA's employees and
other designees, to inspect, at all reasonable times during
regular business hours, the premises, as well as the records
and accounts, of such Related Business or holder; and
c) To refrain from any use of any MMSA Trademark.
2. Furnish to MMSA, at the time this Agreement is executed by Dealer
or immediately upon such acquisition, whichever may be later, a
written report setting forth in detail:
a) The ownership of beneficial interests in such Related
Business or Related Property; and
b) The business activities of such Related Business and the use
of such Related Property
-12-
including, among other things, the names of all Authorized
MMSA Dealers with which such Related Business has any
dealings or who use or have any interest in such Related
Property, and the terms of such dealings, use and interests.
3. In the event of any change in the ownership, activities or use of
the Related Business or Related Property, furnish to MMSA a
written report setting forth the details of such change.
4. Furnish to MMSA such other reports concerning the Related
Business or Related Property as MMSA may from time to time
require.
D. Personnel
Dealer agrees that it will employ qualified personnel in such
capacities and in such number as may be specified in the Dealer
Development Plan or as otherwise required by MMSA.
E. Insurance
Dealer shall obtain fire and casualty insurance issued by an insurer
of recognized responsibility satisfactory to MMSA, with coverage for
each occurrence and in an aggregate amount acceptable to MMSA, and
providing coverage for, among other things, death, bodily injury and
property damage claims which may arise in connection with Dealer's
operations. Such insurance shall be maintained in full force and
effect at Dealer's sole cost throughout the term of this Agreement and
all extensions or renewals hereof.
F. Maintaining Operations Open for Business
Since the transportation and maintenance needs of customers served by
Dealer can be properly met only if Dealer keeps the Dealership
Premises open for business, Dealer agrees to maintain its dealership
operations open for business during all days and hours which are
customary and lawful for such operations in the community or locality
in which the Dealership Premises are located. Any unexcused failure
to remain open for business during such hours in excess of five (5)
consecutive business days shall constitute grounds for termination of
this Agreement under Section X.B.1.(a) hereof.
-13-
G. Minimum Vehicle Inventories
Subject to the ability of MMSA to supply MMSA Vehicles ordered by
Dealer, Dealer agrees that it shall, at all times, maintain the
minimum inventory of MMSA Vehicles for immediate sale as set forth in
the Dealer Development Plan from time to time by MMSA after
consultation with Dealer. Dealer also agrees that it shall have
available at all times, for purposes of showroom display and
demonstration, the number of current models of MMSA Vehicles required
of Dealer as determined from time to time by MMSA after consultation
with Dealer. Dealer agrees to maintain all MMSA Vehicles in excellent
condition at all times. Failure of Dealer to maintain the required
minimum number of MMSA Vehicles shall constitute grounds for
termination of this Agreement under Section X.B.2.(n) hereof.
Dealer recognizes that it is the goal of all MMSA Dealers to meet
efficiently the needs of all customers of MMSA Products wherever
located and that, although an MMSA Dealer may attempt to continually
maintain its minimum inventory, occasionally its customers may request
a specific MMSA Vehicle or MMSA Part or Accessory which is not
currently in stock. Accordingly, Dealer agrees to use its best
efforts to cooperate with other MMSA Dealers by providing them with
access to information regarding its parts and MMSA Vehicle inventory
and whenever possible, trading its MMSA Products to satisfy the needs
of a customer of another MMSA Dealer.
H. Signs
Subject to applicable governmental ordinances, regulations and
statutes, Dealer agrees to buy or rent from MMSA or from sources
designated by MMSA and to erect and maintain on the Dealership
Premises, entirely at Dealer's expense, authorized sales and service
signs conforming to the requirements established and approved for
Dealer's use by MMSA. Dealer further agrees to obtain and maintain
any licenses or permits necessary to erect such signs. Failure to
obtain, erect, maintain, repair, illuminate and prominently display
such signs in a manner approved by MMSA shall constitute grounds for
termination of this Agreement under Section X.B.2.(j) hereof.
-14-
I. Electronic Communications System
MMSA has elected to implement an electronic data processing system to
facilitate communications between MMSA and each MMSA Dealer. Such a
system is designed to enable each MMSA Dealer to electronically
transmit current information regarding its sales and service
operations, including without limitation, orders for MMSA Vehicles and
MMSA Parts and Accessories, sales reports, and warranty claims data.
In recognition of the benefits of such a system, Dealer agrees to
acquire and install, at its sole expense, on the Dealership Premises a
dealer computer terminal approved by MMSA and to utilize the system in
accordance with MMSA's instructions.
J. Planning Assistance for Dealership PremisesTo assist Dealer in
planning, establishing and maintaining the Dealership Premises, MMSA
will, if feasible, make available to Dealer upon request, copies of
sample building layout plans, facility planning recommendations and an
identification program covering the placement, installation and
maintenance of recommended signs. In addition, representatives of
MMSA will be available to Dealer from time to time to advise Dealer
and dealership personnel in connection with Dealer's planning of the
Dealership Facilities and Dealership Premises.
V. NET WORKING CAPITAL
Dealer agrees to establish and maintain net working capital in an amount
not less than the minimum net working capital agreed upon by Dealer and
MMSA and specified in the Dealer Development Plan. If, because of changed
conditions, MMSA deems it necessary to increase or decrease the minimum
amount of Dealer's net working capital, the minimum net working capital
required of Dealer under the Dealer Development Plan may be revised by MMSA
after consultation with Dealer. If the amount thereof is increased, Dealer
agrees to meet the new minimum net working capital standard within the time
period reasonably prescribed by MMSA after consultation with Dealer.
VI. ACCOUNTS, RECORDS AND REPORTS
A. Uniform Accounting System
It is for the mutual benefit of Dealer and MMSA that uniform
accounting systems and practices be maintained
-15-
by all Authorized MMSA Dealers. Accordingly, Dealer agrees to
maintain such systems and practices as designated by MMSA in
accordance with the uniform accounting system and practices
established by MMSA for use by all MMSA Dealers. Dealer agrees that
it will furnish to MMSA by the tenth (10th) day of each month, in the
form prescribed by MMSA, true, complete and accurate financial and
operating statements covering the preceding month and showing
calendar-year-to-date operations.
B. Sales Reporting
To assist in the evaluation of current market trends and other
matters, Dealer agrees to:
1. Immediately upon delivery of an MMSA Vehicle to the purchaser
thereof, complete and transmit to MMSA a report of the retail
sale called the "Retail Delivery Report"; and
2. Furnish MMSA with such other reports or records which may
reasonably be required by MMSA.
C. Sales and Service Records
Dealer agrees to keep complete, accurate and current records regarding
the sale and servicing of MMSA Products. In order that policies and
procedures relating to applications for reimbursement for warranty and
policy work may be applied uniformly to all Authorized MMSA Dealers,
Dealer agrees to prepare, keep current and retain records in support
of requests for reimbursement for warranty and policy work performed
by Dealer in accordance with the policies and procedures prescribed in
the Warranty Manual and standards established by MMSA consistent with
said manual.
D. Examination of Accounts and Records
Dealer agrees that it will permit MMSA to make examinations and
audits of its accounts and records at any time during regular
business hours, and in connection therewith, to reproduce and take
for its own use copies of Dealer's records including, without
limitation, records supporting requests for reimbursement for
warranty and policy work performed or to be performed by Dealer. A
report of any such examination will be furnished to Dealer. Failure
to allow authorized personnel of MMSA to examine, audit, reproduce
and take copies for MMSA's use of Dealer's
-16-
records, whether or not located on the Dealership Premises, shall
constitute grounds for termination of this Agreement under Section
X.B.2(m) hereof.
VII. PROMOTING AND SELLING MMSA PRODUCTS
A. Responsibilities of Dealer
Dealer agrees to use its best efforts to promote, sell and service
MMSA Vehicles and MMSA Parts and Accessories in the Sales Locality.
Dealer recognizes that Dealer's fundamental obligation under this
Agreement is to stock, sell and service all models and types of MMSA
Vehicles distributed in the Sales Locality by MMSA. Accordingly,
Dealer expressly assumes responsibility for fulfilling this
obligation, and in connection therewith, Dealer expressly agrees to
develop that sales volume necessary to meet Dealer's Minimum Sales
Responsibility as outlined in this Agreement and as is more
particularly described in the Dealer Development Plan.
B. Sales and Performance Criteria
1. Dealer Development Plan
The parties hereto shall periodically, and in any event at least
annually, review Dealer's performance under this Agreement.
Dealer's performance will be evaluated on the basis of the
performance criteria set forth in the Dealer Development Plan,
which criteria shall include such factors as maintenance of
facilities, service and sale of MMSA Parts and Accessories and
sales performance.
During each such periodic review, MMSA shall note in writing any
deficiencies it finds in Dealer's performance and operations, and
MMSA will offer suggestions for the improvement thereof. MMSA
shall give Dealer a reasonable opportunity to implement its
suggestions and take other steps necessary to cure deficiencies
in Dealer's performance. Dealer agrees to cooperate with MMSA
during such evaluation and to furnish any data regarding the
Dealer's operations which may reasonably be requested by MMSA.
Dealer agrees that it will use its best efforts to meet the
performance standards established from time to time by MMSA and
to cure any deficiencies set forth in its Dealer Development
Plan. Failure by
-17-
Dealer to correct such deficiencies after having had a reasonable
opportunity to do so shall constitute grounds for termination of
this Agreement under Section X.B.3.(a) hereof.
2. Determination of Minimum Sales Responsibility
If Dealer is the only MMSA Dealer located in the Sales Locality,
calculation of Dealer's Minimum Sales Responsibility will be based
upon the ratio of sales and registrations of MMSA Vehicles to sales
and registrations of competitive vehicles and MMSA Vehicles in the
Sales Locality. In metropolitan markets where multiple MMSA Dealers
are located, Dealer (together with all other MMSA Dealers in the Sales
Locality) will be assigned a percentage share of responsibility for
total sales performance in the Sales Locality based upon Dealer's
trading area. MMSA may from time to time change the size and/or
boundaries of Dealer's trading area after appropriate analyses of new
car purchasing patterns in the Sales Locality. Such trading areas
will be used solely for the purpose of determining the percentage of
sales responsibility assigned to Dealer and should not be interpreted
as a market area assigned to Dealer. In evaluating Dealer's
performance, MMSA will consider recent trends in Dealer's sale
performance and any special local conditions which would uniquely
affect Dealer's performance.
To the extent that MMSA for any reason, other than Dealer's failure to
submit orders or arrange payment, delivers to Dealer less than the
number of new MMSA Vehicles that represents Dealer's Minimum Sales
Responsibility, Dealer's Minimum Sales Responsibility set forth in the
Dealer Development Plan will be reduced accordingly.
The term "competitive vehicles" as used in this section shall mean
those new vehicles which are from time to time designated by MMSA as
competitive with MMSA Vehicles. The term "Dealer's trading area" as
used in this section shall mean an area immediately surrounding the
Dealership Premises which is determined by MMSA from time to time
based upon an analysis of census tracts or other geographical
boundaries.
-18-
C. Sales Operations
1. Sales Organization
To enable Dealer to fulfill satisfactorily its responsibilities
under this Agreement, Dealer agrees to organize and maintain the
minimum number of trained sales and customer relations personnel
required by MMSA in the Dealer Development Plan.
2. Representations in the Sales of MMSA Vehicles
Dealer agrees that it will sell all MMSA Vehicles in accordance
with directives issued by MMSA designating model and model year
classifications and will not make any misleading statements or
misrepresentations regarding MMSA Products, including without
limitation, selling as new any MMSA Vehicle which is not in fact
new and unused, misrepresenting the model year or year of
manufacture, or the items or prices of the items making up the
total selling price of any MMSA Vehicle. Dealer shall not make
any statements tending to lead any customer to believe that a
greater portion of the selling price of an MMSA Vehicle
represents destination charges and/or factory handling charges
than the amounts of such items actually charged to and paid for
by Dealer.
3. Customer Deposits
Dealer will hold in trust until completion of sale any down
payment and all other property it may receive from customers in
connection with their purchases of MMSA Products. Dealer will
not sell or place any lien on any property taken as a trade-in
unless at the same time it segregates and holds in trust an
amount equal to the trade-in allowance agreed upon with the
customer for such property until completion of the sale for which
such property was taken as a trade-in. Dealer will ensure that
all purchase order forms signed by its customers contain
provisions binding Dealer to hold all down payments and other
property in the manner specified in this section.
-19-
D. Advertising
1. Misleading Advertising
Both MMSA and Dealer recognize the need for maintaining standards
of ethical advertising of a quality and dignity consonant with
the reputation and standing of MMSA Products in order to maintain
public confidence in, and respect for, Dealer, MMSA and MMSA
Products. Accordingly, neither MMSA nor Dealer will publish or
cause or permit to be published any advertising relating to MMSA
Products likely to mislead or deceive the public or to impair the
goodwill of MMSA or Dealer or the reputation of MMSA Products.
Dealer shall, promptly upon written notice from MMSA, discontinue
any advertising which MMSA, in its sole judgment, considers may
be injurious to Dealer's or MMSA's business, or to the reputation
of MMSA Products, or likely to mislead or deceive the public, or
at variance with the business, advertising or public relations
policies of MMSA.
2. MMSA Dealer Advertising Association
MMSA and Dealer recognize the benefits which may be derived from
a comprehensive joint advertising effort by MMSA Dealers.
Accordingly, MMSA agrees to assist MMSA Dealers in the formation
and effective operation of such cooperative dealer advertising
association. Dealer agrees to cooperate with MMSA in the
establishment of such a group and, once it is established, to
participate actively and contribute to it in accordance with the
bylaws of the association.
The MMSA dealer advertising association will finance its
advertising programs through the assessment of a fixed charge for
each new MMSA Vehicle purchased by member MMSA Dealers. As a
service to the dealer association, MMSA will collect the agreed
upon charge, provided that the dealer association maintains
control over both the amount of the assessment and the manner in
which such funds will be expended.
3. Dealer Cooperative Promotional Fund
MMSA will establish and maintain general advertising programs and
will make sales promotion and campaign materials available to
Dealer to
-20-
promote the sale of MMSA Vehicles. Dealer recognizes that it
will benefit from the simultaneous use by all Authorized MMSA
Dealers of new model announcement literature, catalogs, banners
and like materials and from the economies attendant upon
preparation and purchase by MMSA of such basic sales promotion
literature, parts and service manuals and other materials for all
dealers. Accordingly, Dealer agrees to cooperate in MMSA's
advertising programs and to fully utilize the materials offered
Dealer by MMSA. MMSA's sales promotion services will include the
supply, at no additional cost to Dealer, of new model
announcement and other sales promotion materials, and parts and
service materials as described from time to time in MMSA sales
letters. Dealer agrees to contribute to the cost of MMSA's sales
promotion services an amount established by MMSA from time to
time for each MMSA Vehicle sold by MMSA to Dealer. These amounts
do not include the cost of special campaigns or special
literature not described in MMSA sales letters.
E. Assistance Provided by MMSA
1. Sales Training Assistance
To assist Dealer in the fulfillment of its responsibilities
hereunder, MMSA shall offer general and specialized sales
management and sales training courses for the benefit and use of
Dealer's sales organization. Dealer understands the importance
of having a well trained and knowledgeable staff in the
successful operation of a dealership and, therefore, Dealer
agrees to require the attendance of all its sales personnel at
any special courses, meetings or training sessions offered for
their benefit from time to time by MMSA. Whenever possible, MMSA
will give Dealer thirty (30) days' advance notice of any such
mandatory event so that all sales personnel may make arrangements
to be present. Repeated failure by Dealer's sales personnel
(including but not limited to management) to participate fully in
such programs shall constitute grounds for termination of this
Agreement under Section X.B.2.(i) hereof.
-21-
2. Field Sales PersonnelTo assist Dealer in handling its sales
responsibilities under this Agreement, MMSA agrees to provide
field sales personnel from time to time to advise and counsel
Dealer regarding merchandising, training and sales management.
VIII. SERVICING MMSA VEHICLES
A. Responsibilities of Dealer
Dealer agrees to provide service and parts to all MMSA Vehicles
whether or not under warranty and whether or not the MMSA Vehicle to
be serviced was purchased from Dealer.
1. Warranty Service
Warranty and policy service shall be performed in accordance
with the Warranty Manual and any related bulletins and
directives issued from time to time by MMSA to Dealer. Dealer
shall furnish to the purchaser of each MMSA Product, at the time
each product is delivered, copies of any applicable warranties.
Dealer shall be responsible for the timely submission of warranty
claims in the format required by MMSA. MMSA agrees to compensate
Dealer for all warranty and policy work in accordance with
procedures and rates established from time to time by MMSA and in
accordance with applicable law; and Dealer agrees that such rates
shall constitute full and complete payment to Dealer for such
work. Dealer agrees that where MMSA reimburses Dealer for
warranty or policy work, the customer shall not be obligated to
pay any charges for warranty or policy work except as required by
law.
2. New Motor Vehicle Pre-Delivery Service
Dealer agrees that prior to delivery of each new MMSA Vehicle
to a retail customer, Dealer will conduct pre-delivery service
and inspections in accordance with the Pre-delivery Inspection
Manual. Dealer shall be reimbursed by MMSA for such pre-delivery
service and inspection in accordance with procedures and rates
established from time to time by MMSA and in accordance with
applicable law.
-22-
3. Free Maintenance
In accordance with directives to be issued from time to time by
MMSA, certain maintenance services, excluding lubricant and oil
filter costs, may be free of charge to the customer; if Dealer
delivers an MMSA Vehicle to a customer pursuant to such
directives, Dealer shall be reimbursed according to the terms of
such directives. In the event that such free maintenance
services are performed by another MMSA Dealer upon an MMSA
Vehicle sold by Dealer, Dealer shall pay to such other MMSA
Dealer the charge then in effect as established by MMSA for such
maintenance services. Conversely, in the event that Dealer
performs such free maintenance with respect to an MMSA Vehicle
sold by another MMSA Dealer, Dealer shall be entitled to receive
from such other MMSA Dealer the amount of such charge. All
claims for payment for such charges by or against Dealer shall be
processed through MMSA. All such free maintenance services shall
be performed in conformity with current service policies and
practices as outlined in service manuals, the Pre-delivery
Inspection Manual, the Warranty Manual and warranty bulletins or
technical service bulletins and directives issued from time to
time by MMSA.
4. Use of Parts
Dealer agrees not to use in the repair or servicing of MMSA
Vehicles parts other than MMSA Parts and Accessories or other
parts (including accessories) expressly approved by MMSA unless:
a) the replacement parts are equivalent in quality and design
to MMSA Parts and Accessories or parts expressly approved by
MMSA; or
b) the parts to be replaced are not necessary to the mechanical
operation of the MMSA Vehicle and the replacement parts will
not adversely affect the mechanical operation of the MMSA
Vehicle.
Failure by Dealer to use MMSA Parts and Accessories or parts
expressly approved by MMSA (or other parts equivalent
thereto in quality and design) in accordance with the
-23-
requirements of this section shall constitute grounds for
termination of this Agreement under Section X.B.2.(r)
hereof. In the event of any dispute or litigation between
Dealer and MMSA regarding the use by Dealer of parts other
than MMSA Parts and Accessories or parts expressly approved
by MMSA, Dealer agrees that it shall have the burden of
establishing either:
a. that parts used by it are equivalent in quality and
design to MMSA Parts and Accessories or parts expressly
approved by MMSA; or
b. that the parts replaced were not necessary to the
mechanical operation of the MMSA Vehicle and the replacement
parts would not adversely affect the mechanical operation of
the MMSA Vehicle.
Dealer agrees that it will not represent or offer to sell as
MMSA Parts and Accessories, or parts expressly approved by
MMSA, any parts used by it in the repair or servicing of
MMSA Vehicles which are not in fact genuine MMSA Parts and
Accessories, or parts expressly approved by MMSA.
If Dealer uses parts for the service or repair of MMSA
Vehicles which are not MMSA Parts and Accessories and which
have not otherwise been approved in writing by MMSA for use
in MMSA Vehicles, Dealer does so at its own risk and neither
MMSA nor any manufacturer of MMSA Products will be
responsible to Dealer or any third party for any products
liability, warranty or other claim which may arise as a
result of the installation and/or use of such parts and
Dealer agrees to indemnify and hold MMSA and any
manufacturer of MMSA Products harmless from any such claim
or liability.
5. Campaign Inspections and Corrections
Dealer agrees to perform campaign inspections and/or corrections
for owners and users of all MMSA Products that qualify for such
inspections and/or corrections, regardless of where or from whom
such products were purchased. Dealer further
-24-
agrees to comply with all procedures relating thereto set forth
in the Warranty Manual and applicable bulletins, manuals,
directives and technical data issued from time to time by MMSA to
Dealer. MMSA agrees to reimburse Dealer for all replacement
parts and/or other materials required and used in connection
therewith and for labor in accordance with the applicable
provisions of the Warranty Manual as supplemented by bulletins
and directives issued from time to time by MMSA to Dealers. The
term "campaign inspection and/or correction" as used in this
section shall mean specially designated service operations
initiated by MMSA to be performed by Dealer on specified
vehicles.
6. Compliance With Safety and Emission Control Requirements
Dealer agrees to comply with, and operate consistently with, all
applicable provisions of the National Traffic and Motor Vehicle
Safety Act of 1966, as amended, and the federal Clean Air Act, as
amended, including applicable rules and regulations issued from
time to time thereunder, and all other applicable federal, state
and local motor vehicle safety and emission control requirements.
In the event that the laws of the state in which Dealer is
located require motor vehicle dealers or distributors to install
in new or used motor vehicles, prior to the retail sale thereof,
any safety devices or other equipment not installed or supplied
as standard equipment by MMSA, then Dealer, prior to its sale of
any MMSA Vehicles on which such installations are so required,
shall properly install such equipment on such MMSA Vehicles.
Dealer shall comply with all state and local laws pertaining to
the installation requirements of any such equipment including,
without limitation, the reporting of such installation. MMSA
shall not be liable for any failure of Dealer or its employees to
comply with such state and local laws.
In the interests of motor vehicle safety and emission control,
MMSA agrees to provide to Dealer, and Dealer agrees to provide to
MMSA, such information and assistance as may reasonably be
requested by the other in connection with the
-25-
performance of obligations imposed on either party by the
National Traffic and Motor Vehicle Safety Act of 1966, as
amended, and the federal Clean Air Act, as amended, and the rules
and regulations issued thereunder, and all other applicable
federal, state and local motor vehicle safety and emission
control requirements.
B. Service Operations
1. Service and Parts Organization
Dealer agrees to organize and maintain a complete service and
parts organization, including a qualified service manager, a
qualified parts manager and the minimum number of competent
service and parts personnel established by MMSA in the Dealer
Development Plan.
2. Paint and Body Facilities
If permissible under local government ordinances, regulations and
statutes, Dealer will use its best efforts to provide paint and
body facilities for MMSA Vehicles. Such facilities will be
subject to MMSA's prior written approval and, once approved,
shall become part of the Dealership Premises and subject to the
terms and conditions of this Agreement. If local law does not
permit the operation of such services on the Dealership Premises,
Dealer agrees to enter into a contract for the services of an
independent company in order to provide complete warranty service
for MMSA Vehicles. The company selected by Dealer for paint and
body services must be approved in writing by MMSA.
3. Workshop
In the installation and operation of Dealer's workshop and body
and paint shop, if any, Dealer will comply with such standards
and requirements as MMSA may prescribe from time to time,
particularly with respect to:
a) Procurement and maintenance of general tools and equipment,
including hydraulic hoists and lubricating equipment;
b) Procurement and maintenance of special tools from time to
time designated by MMSA as
-26-
necessary to properly provide warranty and repair services
to MMSA Customers;
c) Use of workshop forms which may be prescribed by MMSA and
use of MMSA customer service promotional material, as well
as procurement and maintenance of at least one complete set
of MMSA service literature; and
d) Proper execution of all service and repair work with respect
to MMSA Products. Failure by Dealer to procure and maintain
necessary special tools, general tools and equipment shall
constitute grounds for termination of this Agreement under
Section X.B.2.(k) hereof.
4. Handling of Service Complaints
Dealer will receive, investigate and handle all complaints
received from MMSA customers with a view to securing and
maintaining the goodwill of the public toward Dealer, MMSA and
MMSA Products. All complaints received by Dealer which cannot be
readily remedied shall be promptly reported in detail to MMSA.
Dealer recognizes that the repeated failure to properly resolve
customer complaints shall constitute grounds for termination of
this Agreement under Section X.B.2.(l) thereof.
5. Stock of Parts
Dealer agrees to carry in stock at all times during the term of
this Agreement an inventory of MMSA Parts and Accessories and
MMSA approved parts and accessories adequate at any given time to
enable Dealer to fulfill customer demands, warranty repairs and
its other service obligations under this Agreement. For this
purpose, Dealer agrees to purchase each year an initial supply of
parts for the new models of MMSA Vehicles. MMSA shall at least
fifteen (15) days prior to the introduction of new models provide
a list of the parts which should be purchased by Dealer. MMSA
shall have the right to audit Dealer's inventory from time to
time and may require changes in the volume and contents thereof.
In addition, Dealer agrees to provide adequate equipment for an
effective parts supply operation. Failure to maintain an
adequate stock of parts in accordance
-27-
with standards and requirements established by MMSA shall
constitute grounds for termination of this Agreement under
Section X.B.2.(o) hereof.
6. Parts Inventory Control
MMSA has elected to implement an electronic data processing parts
inventory control system for the purpose of providing adequate
records regarding the availability of parts. In recognition of
the benefits of such a system, Dealer agrees to acquire and
install, at its sole expense, on the Dealership Premises a
computer terminal for the purpose of utilizing the parts
inventory control system offered by MMSA in accordance with
MMSA's instructions. Alternatively, at the dealer's own
discretion and to meet this requirement, Dealer may use at the
Dealership Premises another inventory control system provided
that (1) it is fully integrated with an automated accounting
system; (2) the inventory control and accounting system software
are already operating and controlling the operation of two or
more other dealerships which are owned by the Dealer, and (3) the
inventory control and accounting software are operated on a
single mainframe computer for all such dealerships. This
requirement shall not apply to Dealer if Dealer began doing
business as an authorized MMSA Dealer prior to November 1, 1985,
provided however, Dealer has already installed on the Dealership
Premises before said date a parts inventory control system
approved by MMSA.
7. Service Rentals
In accordance with standards established by MMSA, Dealer shall
maintain or have available for use by Dealer's service customers
a fleet of rental vehicles adequate to serve the needs of
customers who leave their MMSA Vehicles with Dealer for repair or
servicing.
C. Assistance Provided by MMSA
1. Service Training Assistance
Dealer and MMSA both recognize the importance of providing
consistent, dependable service of the highest quality to MMSA
customers. Accordingly, MMSA agrees to provide service training
assistance
-28-
to Dealer designed to continually improve the level of service
provided by Dealer's service and parts personnel. Since MMSA and
Dealer recognize that the maximum benefit from such training
programs may only be derived if all service and parts employees
attend the programs, Dealer agrees to require the attendance of
all such personnel. MMSA will endeavor to provide at least
thirty (30) days' prior notice of all such mandatory programs to
Dealer. Repeated failure of Dealer's service and parts personnel
including, but not limited to, management, to attend such
sessions shall constitute grounds for termination of this
Agreement under Section X.B.2.(i) hereof.
2. Service Manuals and Materials
MMSA agrees to provide Dealer with one copy of each service
manual or other publication MMSA deems necessary for the
operation of Dealer's service organization. Additional copies
may be purchased by Dealer at its option.
3. Field Service Personnel Assistance
To assist Dealer in handling its service responsibilities under
this Agreement, MMSA agrees to make available field service
personnel who from time to time will advise and counsel Dealer's
personnel on service-related subjects, including product quality,
technical adjustment, repair and replacement of product
components, owner complaints, warranty administration, service
and parts merchandising, training and service management.
IX. DISPLAY OF TRADEMARKS, SERVICE MARKS AND TRADE NAMES
Dealer acknowledges that MMSA is the exclusive owner of, or is authorized
to use and to permit Dealer and others to use, the MMSA Trademarks. During
the term of this Agreement, Dealer is granted a nonexclusive privilege of
displaying and otherwise using the MMSA Trademarks in connection with and
for the purpose of identifying, advertising and selling MMSA Products;
provided, however, that Dealer shall promptly discontinue the display and
use of any such MMSA Trademarks, and shall change the manner in which any
such MMSA Trademarks are displayed and used, whenever requested to do so by
MMSA. Dealer shall not use the MMSA Trademarks or the words "Mitsubishi"
or "MMSA" or any other word confusingly similar to "Mitsubishi" in its
corporate name if Dealer is a
-29-
corporation, or in its partnership name if Dealer is a partnership, or in
its proprietorship name if Dealer is a proprietorship; provided, however,
that if MMSA gives its prior written consent, Dealer may use the words
"Mitsubishi Motors" as part of the trade name under which it conducts its
business. If Dealer uses the words "Mitsubishi Motors" as part of its
trade name, upon the request of MMSA or upon the termination of this
Agreement for any reason whatsoever, Dealer shall cease to use the words
"Mitsubishi Motors" in its trade name and shall take or cause to be taken
all steps to eliminate such words therefrom.
Dealer will do nothing to impair the value of, or contest the right of MMSA
to the exclusive use of, any trademark, design mark, service mark, or trade
name at any time acquired, claimed, used or adopted by MMSA.
X. TERMINATION OF AGREEMENT
A. Dealer May Terminate This Agreement Upon Thirty (30) Days Prior
Written Notice To MMSA.
B. MMSA May Terminate This Agreement For Cause:
1. Immediately-
a) Upon failure of Dealer to keep its MMSA dealership
operations, or any part thereof, open for business for
a period in excess of five (5) consecutive business
days as required under Section IV.F. hereof, except in
the event such closure or cessation of operation is caused
by some physical event beyond the control of Dealer, such
as civil war, riots, fires, floods, earthquakes, or
other acts of God; or
b) Upon any change in location of the Dealership Premises or
upon any change in the amount or usage of the Dealership
Facilities or in the event Dealer directly or indirectly
conducts any of its MMSA dealership operations at any other
location or in any other facilities, without the prior
written consent of MMSA; or
c) Upon the effective date of the expiration or earlier
termination of MMSA's right to distribute MMSA Products.
-30-
2. By Giving Thirty (30) Days Prior Written Notice Upon-
a) Failure of Dealer to obtain or maintain any license, or the
suspension or revocation of any license, necessary for the
conduct by Dealer of its business pursuant to this Agreement; or
b) Failure of Dealer to pay MMSA for any MMSA Products in accordance
with the terms and conditions of this Agreement or the terms and
conditions governing the purchase of such products; or
c) The death of any Owner or upon the death or incapacity of any
Executive Manager (provided that the terms and conditions of
Section X.D. hereof shall apply in any such case); or
d) Any sale, transfer, relinquishment or other change, voluntary or
involuntary, by operation of law or otherwise, of any majority
interest in the direct or indirect ownership or in the management
of Dealer as set forth in Sections 3 and 4, respectively, of the
MMSA Dealer Sales and Service Agreement, without the prior
written consent of MMSA; or
e) The inability of Dealer to generally pay its debts as such debts
become due, or the filing of any voluntary or involuntary
petition under any bankruptcy law, or the execution by Dealer of
an assignment for the benefit of creditors, or the appointment
for Dealer of a receiver or trustee or other officer having
similar powers for Dealer who is not removed within thirty (30)
days from his appointment thereto, or any levy under attachment
or execution or similar process which is not within ten (10) days
vacated or removed by payment or bonding, or the conviction of
Dealer, or any principal officer or manager of Dealer, of any
crime tending to affect adversely the ownership, operation,
management, business or interests of Dealer or MMSA; or
f) Failure of Dealer to establish or maintain the unrestricted
availability of lines of
-31-
credit in the amount set forth in the Dealer Development Plan and
under terms approved by MMSA with financial institutions
acceptable to MMSA for use in connection with Dealer's purchase
and maintenance of its inventory of MMSA Products as required
under the provisions of this Agreement, including, but not
limited to, Sections III.C.2. and III.C.4. hereof; or
g) Impairment of the reputation or financial standing of Dealer or
any of its management subsequent to the execution of this
Agreement, or ascertainment by MMSA subsequent to the execution
of this Agreement of any fact existing at or prior to the time of
execution of this Agreement which tends to impair the reputation
or financial standing of Dealer or any of its management and
which would substantially impair the operation of the dealership;
or
h) Any submission by Dealer to MMSA of a false or fraudulent
dealership application report, statement or claim for
reimbursement, refund, credit, or financial information, or
submission to a customer of a false or fraudulent report or
statement of any kind, including but not limited to statements
concerning pre-delivery preparation, testing, servicing, repair
or maintenance; or
i) Repeated failure of Dealer's sales, service and parts personnel,
including but not limited to management, to fully participate in
any training and/or mandatory promotional programs offered by
MMSA to Dealer as required under Sections VII.E.1. and VIII.C.1.
hereof; or
j) Failure of Dealer to properly obtain, erect, maintain, repair and
illuminate signs and other displays in a manner approved by MMSA
as required under the provisions of this Agreement, including,
but not limited to, Section IV.H. hereof; or
k) Failure of Dealer to procure and maintain an adequate supply of
general and special tools and equipment designated by MMSA as
required under the provisions of this Agreement,
-32-
including, but not limited to, Section VIII.B.3. hereof; or
l) Failure of Dealer to maintain good relations with its customers,
including, but not limited to, failure to notify MMSA of
complaints by customers and repeated failure to properly resolve
customer complaints as required under Section VIII.B.4. hereof;
or
m) Failure of Dealer to permit authorized MMSA representatives to
examine, audit, reproduce and take for MMSA's use copies of
Dealer's records, whether or not located on the Dealership
Premises, as required under Section VI.D. hereof; or
h) Failure of Dealer to maintain the minimum inventory of MMSA
Vehicles, whether for showroom display, demonstration or
immediate sale, as required under Section IV.G. hereof; or
o) Failure of Dealer to maintain an adequate stock of parts as
required under section VIII.B.5. hereof; or
p) Failure of Dealer to accept an amended form of MMSA Dealer Sales
and Service Agreement or renewal thereof within thirty (30) days
after its presentation to Dealer, as required under Section 2 of
the MMSA Dealer Sales and Service Agreement; or
q) Failure of Dealer to promote effectively MMSA Products by using
sales promotional literature offered by MMSA; or
r) Failure of Dealer to use proper parts and accessories in the
repair and servicing of MMSA Vehicles as required under Section
VIII.A.4. hereof.
3. By Giving Ninety (90) Days Prior Written Notice Upon-
a) Failure of Dealer to reach and maintain its Minimum Sales
Responsibility as defined in the Dealer Development Plan or to
correct deficiencies described in the Dealer Development Plan, as
required under Section
-33-
VII.B.1. hereof, or failure of Dealer to otherwise conduct its
business in accordance with any of its obligations or
requirements set forth herein to the satisfaction of MMSA; or
b) Any material or continuing breach or violation by Dealer of any
other term or provision of this Agreement; or
c) Any dispute, disagreement or controversy between or among
partners, managers, officers or stockholders of Dealer which in
the good faith opinion of MMSA adversely affects the ownership,
operation, management, business or interests of Dealer or MMSA,
or the presence in the management of Dealer of any person who in
MMSA's good faith opinion no longer has the requisite
qualifications to discharge his or her responsibilities.
C. Notice and Effect of Termination
The date of any notice of termination shall be the date such notice is
mailed. Any notice of termination by MMSA shall inform Dealer of the
grounds therefor, and any such notice may be withdrawn if during the
applicable notice period Dealer cures to MMSA's satisfaction the
condition or conditions upon which the notice is based. If any period
of advance notice of termination required hereunder is less than that
required by applicable law, such period of advance notice shall be
deemed to be the minimum period required by such laws.
MMSA's election to terminate this Agreement shall be without prejudice
to any other right or remedy which may be available to MMSA hereunder
or under applicable law.
D. Establishment of Successor Dealer
1. Because of the Death of an Owner
In the event of termination of this Agreement by MMSA because of
the death of an Owner, pursuant to Section X.B.2.(c) hereof, the
following provisions shall apply:
a) Subject to the other provisions of this Agreement, MMSA
shall offer an MMSA Interim
-34-
Sales and Service Agreement (a conditional and temporary
sales and service agreement the term of which may not exceed
one (1) year) in the form then used by MMSA to a successor
dealer ("Successor Dealer") comprised of the person
nominated by such deceased Owner as his or her successor,
together with the other Owner(s), provided that:
(i) the nomination was submitted to MMSA in writing, was
consented to by all remaining Owners, and was
approved by MMSA prior to the death of such Owner;
(ii) either (a) there has been no change in the Executive
Managers of Dealer or (b) the provisions of Section
X.D.2. below have been complied with; and
(iii) the Successor Dealer has capital and facilities
substantially in accordance with MMSA's established
standards and requirements therefor at the time the
MMSA Interim Sales and Service Agreement is offered.
b) If the deceased Owner has not nominated a successor in
accordance with this section, but all of the beneficial
interest of the decreased Owner has passed by will or by the
laws of intestate succession directly to the deceased
Owner's spouse and/or children (the "Proposed New Owners"),
subject to the other provisions of this section, MMSA shall
offer an MMSA Interim Sales and Service Agreement in the
form then used by MMSA to a Successor Dealer comprised of
the Proposed New Owners, together with the other Owner(s),
provided that:
(i) Either (a) there has been no change in the
Executive Managers of Dealer or (b) the provisions
of Section X.D.2. below have been complied with;
and
(ii) The Successor Dealer has capital and facilities
substantially in accordance with MMSA's
established standards and requirements therefor at
the time the MMSA Interim Sales and Service
Agreement is offered.
-35-
2. Because of Death or Incapacity of Executive Manager
In the event of the termination of this Agreement by MMSA because
of the death, physical or mental incapacity of an Executive
Manager, subject to the other provisions of this section of this
Agreement, MMSA shall offer an MMSA Interim Sales and Service
Agreement to a Successor Dealer comprised of the Owners, provided
that:
a) Either (i) the Owners have nominated in writing a person to
succeed the deceased or disabled Executive Manager which
nomination was approved by MMSA prior to the event causing
the death, disability or incapacity of such Executive
Manager, or (ii) not later than one (1) month after the
occurrence of such death or disabling event a new Executive
Manager is proposed to MMSA by all of the Owners and such
person is approved by MMSA; and
b) The Successor Dealer has capital and facilities
substantially in accordance with MMSA's established
standards and requirements therefor at the time the MMSA
Interim Sales and Service Agreement is offered.
3. Evaluation of Successor Dealer
During the term of any MMSA Interim Sales and Service Agreement
offered pursuant to Sections X.D.1. or X.D.2. hereof, MMSA will
periodically review the performance of the Successor Dealer using
the standards set forth in the Successor Dealer's Dealer
Development Plan. If such Successor Dealer is able to
satisfactorily meet such standards and desires to continue the
dealership operation, the Successor Dealer will be given an
opportunity to enter into an MMSA Dealer Sales and Service
Agreement and such Successor Dealer shall be thereafter treated
in the same manner as any Authorized MMSA Dealer.
4. Termination of Market RepresentationNotwithstanding anything
stated or implied to the contrary in this Agreement, MMSA shall
not be obligated to offer a dealership agreement to any Successor
Dealer if MMSA notifies Dealer in
-36-
writing prior to the event causing the termination of this
Agreement that MMSA's market representation plans do not provide
for continuation of that Dealership operation in the Sales
Locality.
5. Termination of Offer
Any offer of an MMSA Interim Sales and Service Agreement to a
proposed Successor Dealer made under this section shall
automatically expire if not accepted within thirty (30) days
after presentation by MMSA.
E. Continuance of Business Relations
If, after the effective date of termination or expiration, MMSA
chooses to accept orders from Dealer to fill customers' orders
received prior to such date by Dealer, or if MMSA otherwise transacts
business with Dealer relating to the sale of MMSA Products, all such
transactions will be governed by the terms of this Agreement, so far
as those terms are applicable. Nevertheless, no such acceptance of
orders or other acts by MMSA shall waive termination or constitute a
renewal of this Agreement.
F. Discontinuance of Use of Marks
Upon expiration or termination of this Agreement, Dealer agrees that
it shall immediately:
1. Discontinue the use of the words "Mitsubishi," "MMSA" and all
other MMSA Trademarks, or any semblance of any of the foregoing,
including without limitation, the use of all stationery and other
printed material referring in any way to Mitsubishi, MMSA, or
MMC, any other manufacturer of MMSA Products, or bearing any MMSA
Trademarks; and
2. Discontinue any use of the words "Mitsubishi," "MMSA" or other
MMSA Trademarks, or any semblance of any of the foregoing, as a
part of its trade name, and file a change or discontinuance of
such name with appropriate authorities; and
3. Remove all product signs bearing any MMSA Trademarks from the
Dealership Premises at Dealer's sole cost and expense; and
-37-
4. Not represent itself as an Authorized MMSA Dealer; and
5. Refrain from any action including, without limitation, any
advertising stating or implying that it is authorized to sell or
distribute MMSA Products.
In the event Dealer fails to comply with the terms and conditions of
this Section X.F., MMSA shall have the right to enter upon the
Dealership Premises and remove all such signs bearing any MMSA
Trademarks without liability to Dealer; and Dealer agrees that it
shall reimburse MMSA for any costs and expenses incurred in connection
therewith, including but not limited to reasonable attorneys' fees.
G. Repurchase Provisions
Upon the expiration or termination of this Agreement, MMSA may at its
option purchase from Dealer all or any part of the following:
1. New, unused, undamaged current model year MMSA Vehicles then
unsold in Dealer's inventory. The prices of such vehicles shall
be the lower of (i) the price at which they were originally
purchased by Dealer from MMSA, or (ii) the Invoice Price last
established by MMSA for the sale of identical vehicles to MMSA
Dealers in the area in which Dealer is located, less in either
case all prior refunds or allowances, if any, made by MMSA with
respect thereto, and also less any costs and expenses required to
place the repurchased vehicles in new car condition.
2. New, unused and undamaged MMSA Parts and Accessories then unsold
in Dealer's inventory which are in good and saleable condition,
provided that they are listed in the then current MMSA Master
Parts Price List and have not been superseded by another part or
accessory. All such parts and accessories must be in the
original container bearing a label with the appropriate part
identification number. Should MMSA elect to purchase parts, the
repurchased price shall be the price last established by MMSA for
the sale of identical MMSA Parts or Accessories to MMSA Dealers
in the area in which Dealer is located, less the maximum dealer's
discount available under
-38-
the most favorable purchase terms available to Dealer and also
less handling and packing charges then in effect as established
by MMSA.
If Dealer purchased MMSA Parts and Accessories from sources other
than MMSA, Dealer must present to MMSA evidence of the price
which it paid for such parts before MMSA will consider
repurchasing such parts. In no event shall MMSA pay a price
which exceeds the price for any part as calculated hereinabove.
3. Tools and equipment especially designed for servicing MMSA
Vehicles. The prices for such tools and equipment shall be as
mutually agreed upon by MMSA and Dealer.
4. Signs recommended by MMSA for identification of Dealer. The
prices of such signs shall be as mutually agreed upon by MMSA and
Dealer.
Within thirty (30) days after the date of expiration or termination of
this Agreement, Dealer shall deliver or mail to MMSA a detailed
inventory of all items referred to in subsections 1, 2, 3 and 4 above
and Dealer shall certify the truth thereof. In the event Dealer fails
to supply such a list to MMSA within said period, MMSA shall have the
right to enter the Dealership Premises, without liability to Dealer,
for the purpose of compiling such an inventory list; and Dealer shall
reimburse MMSA for any costs and expenses incurred in connection
therewith. If, upon review of the inventory list, MMSA decides to
purchase any of the items in subsections 1-4 hereinabove, MMSA will,
within a reasonable period of time, provide Dealer with a written
offer specifying the items MMSA wishes to purchase. Dealer shall act
promptly in arranging for the sale and delivery of such items to MMSA.
If Dealer fails to promptly cooperate in effectuating the sale, MMSA
may, at its option, withdraw its offer to repurchase.
Any purchase made hereunder shall be deemed to be only with respect to
those items which were purchased by Dealer from MMSA, unless MMSA by
its notice of such purchase states otherwise. Dealer agrees that
products to be purchased by MMSA from Dealer shall be delivered by
Dealer to MMSA's place of business at Dealer's expense; or, if Dealer
fails to do so, MMSA may transport such products and deduct the costs
therefor from the repurchase price. Dealer agrees to execute
-39-
and deliver to MMSA instruments satisfactory to MMSA conveying title
to the aforesaid property to MMSA. If such property is subject to any
lien or charge of any kind, Dealer agrees to procure the discharge and
satisfaction thereof prior to the repurchase of such property by MMSA.
XI. POLICY REVIEW BOARD
A. Establishment of Policy Review Board
In the interest of maintaining harmonious relations between MMSA and
Dealer and to provide for the resolution of protests, controversies
and claims related to the transactions contemplated under this
Agreement, MMSA shall establish the Mitsubishi Motor Sales of America,
Inc. Policy Review Board (the "Policy Review Board") to be comprised
of two corporate officers and one MMSA Dealer representative. Dealer
agrees to abide by the procedures of the Policy Review Board, as they
may be revised from time to time by MMSA.
B. Appeal of Dealer Appointment to Policy Review Board
If, as a result of a market analysis undertaken by MMSA, MMSA proposes
to appoint an additional MMSA Dealer in the Sales Locality, and if
Dealer objects to such proposed addition, Dealer may file a written
objection to such proposed addition with the Policy Review Board in
accordance with the procedures established therefor within fifteen
(15) days from the date of Dealer's receipt of notice of MMSA's intent
to appoint such additional MMSA Dealer. MMSA will not appoint such
additional dealer until the Policy Review Board has rendered its
decision on the matter and any decision of the Policy Review Board
shall be binding on MMSA but not on Dealer.
C. Appeal of Termination to Policy Review Board
Any protests, controversies or claims by Dealer (whether for damages,
stays of action or otherwise) with respect to any termination of this
Agreement or the settlement of the accounts of Dealer with MMSA after
termination of this Agreement has become effective shall be appealed
by Dealer to the Policy Review Board within fifteen (15) days after
Dealer's receipt of notice of termination or, as to settlement of
accounts after termination, within six (6) months after the
termination has become effective. Appeal to
-40-
the Policy Review Board shall be a condition precedent to Dealer's
right to pursue any other remedy available under this Agreement or
otherwise available under law. MMSA, but not Dealer, shall be bound by
the decision of the Policy Review Board.
D. Arbitration of Claims by Dealer
If Dealer is dissatisfied with a decision of the Policy Review Board
in a case arising under Section XI.C. hereof, Dealer may submit the
matter to binding arbitration as hereinafter provided.
1. Arbitration shall be initiated by Dealer by filing a written
request therefor within fifteen (15) days after Dealer's receipt
of notice of the decision of the Policy Review Board issued under
Section XI.C. hereof. Dealer's written request to arbitrate,
together with the appropriate filing fee, shall be filed by
Dealer with the office of the American Arbitration Association
located nearest to the Dealership Premises, which shall then
become the site of the arbitration proceedings, unless otherwise
agreed to by the parties. The arbitration request shall set
forth a clear and complete statement of the nature of Dealer's
claim and its basis, the amount involved, if any, and the remedy
sought.
2. Arbitration shall be the sole and exclusive remedy of Dealer in
such cases, and the decision and award of the arbitrator shall be
final and binding on both parties.
3. The arbitration shall be conducted in accordance with the
Commercial Rules of the American Arbitration Association then in
effect (hereinafter referred to as the "Commercial Rules") and in
consonance with the United States Arbitration Act (9 U.S.C.
Section 1, et seq.).
4. The arbitration shall be heard by a single, impartial arbitrator
mutually agreeable to the parties, who shall be an attorney at
law admitted to practice for at least five (5) years and selected
from a panel of American Arbitration Association arbitrators. If
the parties shall fail to reach such an agreement within fifteen
(15) days of the Dealer's request to arbitrate, an arbitrator
meeting such qualifications shall be named by the American
Arbitration Association from
-41-
such panel in accordance with the Commercial Rules.
5. If the arbitrator finds that termination of this Agreement by
MMSA would be in accord with the provisions hereof, the standards
set forth in the Automobile Dealer Suits Against Manufacturers
Act, 15 U.S.C. Sections 1221-1225 (the "Dealer's Day in Court
Act"), and any applicable state or local law, the arbitrator
shall render an award in favor of MMSA, the termination shall
become effective on the date of such award, and the termination
shall be expressly recognized by Dealer as having been made by
MMSA without breach by MMSA of this Agreement, the Dealer's Day
in Court Act, or any applicable state or local law. If the
arbitrator shall render an award in favor of Dealer, MMSA's
notice of termination shall be void and shall not be deemed to
constitute a breach of this Agreement. The decision and award of
the arbitrator shall be conclusive as to all matters within the
arbitrator's jurisdiction in all other proceedings between the
parties, their successors or assigns, and judgment upon the award
may be entered in any Court of competent jurisdiction.
6. To facilitate the selection of a competent and experienced
arbitrator, the parties agree to make reasonable arrangements to
compensate the arbitrator for the time spent in the performance
of his or her duties. The compensation shall be commensurate
with the professional standing of the arbitrator and shall be
arranged in conformance with the Commercial Rules. The
compensation of the arbitrator, the administrative fees and
charges of the American Arbitration Association, and the other
expenses of the arbitration shall be borne by the parties as
provided in the Commercial Rules. The arbitrator shall, however,
have discretion in the arbitrator's award to assess such
compensation, administrative fees and charges and other expenses
of the arbitration against either party in such proportions (or
in their entirety) as the arbitrator may determine to be fair and
equitable, provided that in all cases each party shall pay the
fees and disbursements of its own legal counsel.
7. Unless MMSA and Dealer specifically agree to the contrary, and
subject to the Commercial Rules and the procedures of the
American Arbitration
-42-
Association, the arbitration hearing shall be concluded not more
than sixty (60) days after the date of Dealer's written request
to arbitrate.
XII. GENERAL PROVISIONS
A. Indemnification
1. Dealer shall defend and indemnify MMSA and any manufacturer of
MMSA Products and hold each of them harmless from any and all
liabilities that may be asserted or arise by reason or out of:
(a) Dealer's failure or alleged failure to comply, in whole or in
part, with any obligation assumed by Dealer pursuant to this
Agreement; (b) Dealer's negligent or improper, or alleged
negligent or improper, repairing or servicing of new or used MMSA
Vehicles or equipment, or such other motor vehicles or equipment
as may be sold or serviced by Dealer; (c) Dealer's breach, or
alleged breach, of any contract between Dealer and Dealer's
customer; or (d) Dealer's misleading statement or
misrepresentation, or alleged misleading statement or
misrepresentation, either direct or through advertisement, to any
customer of Dealer. This indemnification shall include all
attorneys' fees, court costs and expenses incurred by MMSA and/or
any manufacturer of MMSA Products in defending any claim or suit
asserted as a result of the foregoing.
In the event that any legal action arising out of any of the
foregoing causes or alleged causes is brought against MMSA, any
manufacturer of MMSA Products and/or any of their shareholders,
then Dealer shall undertake, at its sole expense, the defense of
said action on their behalf. Should any tender of such defense
be refused by Dealer, then MMSA, any manufacturer of MMSA
Products and/or any of their shareholders shall conduct such
defense; and Dealer shall be liable to MMSA, any manufacturer of
MMSA Products and/or any of their shareholders for costs of such
defense, including attorneys' fees, together with any judgment or
settlement paid by MMSA, any manufacturer of MMSA Products and/or
any of their shareholders.
Dealer shall have no obligation to indemnify MMSA and/or any
manufacturer of MMSA Products pursuant to this paragraph if the
injury or damage as to
-43-
which indemnification is demanded is alleged to have been caused
or contributed to in any way by any act or omission by MMSA
and/or any manufacturer of MMSA Products.
2. MMSA and/or any manufacturer of MMSA Products shall indemnify
Dealer and hold it harmless from any and all claims for personal
injury or property damage resulting from the alleged
malfunctioning of an MMSA Product claimed to have been caused by
a factory defect or deficiency in design of such product. This
indemnification shall include all attorneys' fees, court costs
and expenses incurred by Dealer in defending any claim or suit
asserted as a result of the foregoing.
In the event that any legal action arising out of any of the
foregoing causes or alleged causes is brought against Dealer
and/or any of their shareholders, then MMSA and/or any
manufacturer of MMSA Products shall undertake, at its sole
expense, the defense of said action on their behalf. Should any
tender of such defense be refused by MMSA and/or any manufacturer
of MMSA Products, the Dealer, and/or any of their shareholders,
shall conduct such defense; and MMSA and/or any manufacturer of
MMSA Products shall be liable to Dealer, and/or any of their
shareholders for costs of such defense, including attorneys'
fees, together with any judgment or settlement paid by Dealer,
and/or any of their shareholders.
MMSA and/or any manufacturer of MMSA Products shall have no
obligation to indemnify Dealer pursuant to this paragraph if the
injury or damage as to which indemnification is demanded is
alleged to have been caused or contributed to in any way by any
act or omission by Dealer, including, but not limited to,
improper or unsatisfactory service or repair, misrepresentation
or any claim of Dealer's unfair or deceptive trade practice.
3. Any party seeking indemnification shall promptly give written
notice to the proposed indemnitor of any lawsuit and provide
copies of any pleadings which have been served, together with all
information then available regarding the circumstances giving
rise to the suit. The proposed indemnitee shall at all times
take all reasonable steps to insure that the defense of such
lawsuit is not prejudiced by its action or
-44-
inaction. The parties shall cooperate fully in the defense of
such lawsuit in such manner and to such extent as the indemnitor
may reasonably require.
B. No Implied Waivers
Any failure of either party at any time to require performance by the
other party of any provision hereof shall in no way affect the full
right to require such performance at any time thereafter, nor shall
any waiver by either party of a breach of any provision hereof
constitute a waiver of any succeeding breach of the same or any other
provision, nor constitute a waiver of the provision itself. The
election by either party of a particular remedy on default (including
but not limited to termination of this Agreement) will not be
exclusive of any other remedy provided hereunder or by applicable law,
and all rights and remedies of the parties hereto will be cumulative.
C. Waiver of Trial by Jury
For all disputes, controversies or claims which may arise between MMSA
and Dealer out of, or in connection with, this Agreement, its
construction, interpretation, effect, performance or nonperformance,
termination or the consequences thereof, or in connection with any
transaction between them contemplated hereby, MMSA and Dealer hereby
waive, to the extent permitted by law, the right to trial by jury.
D. Dealer Not Agent or Representative
This Agreement does not make Dealer the agent or legal representative
of MMSA or any other manufacturer of MMSA Products for any purpose
whatsoever. Dealer is not granted any express or implied right or
authority to assume or to create any obligation or responsibility on
behalf of or in the name of MMSA or any other manufacturer of MMSA
Products or to bind either in any manner whatsoever.
E. Assignment
Neither party may assign this Agreement or any of its interest herein
without the prior written consent of the other party, except that MMSA
may assign this Agreement without such consent to any person, firm or
corporation succeeding to its business and to any subsidiary or
affiliated company of MMSA.
-45-
F. Expenses
Except as provided in this Agreement, MMSA shall not be under any
liability whatsoever for any expenditure made or incurred by Dealer in
connection with Dealer's performance of its obligations pursuant to
this Agreement.
G. Taxes
Dealer agrees that it shall be responsible for and shall duly pay any
and all sales taxes, use taxes, excise taxes, and other governmental
or municipal charges, whenever imposed, levied or based upon the sale
of MMSA Products by MMSA to Dealer and shall maintain accurate records
of same for reporting purposes. Dealer agrees to pay and to hold MMSA
harmless from any sales tax, use tax or similar tax, and any claims or
demands (whether or not lawful) made by tax authorities with respect
to such taxes, applicable with respect to the sale of MMSA Products
from MMSA to Dealer and from Dealer to its customers.
-46-