Chrysler Corporation
SALES AND
SERVICE
AGREEMENT
ADDITIONAL TERMS
AND PROVISIONS
INDEX
PAGE
11 SELLING, SERVICE, COMPLIANCE, FACILITIES AND
LOCATION, FINANCES, PERSONNEL AND SIGNAGE....................... 2
(a) SELLING..................................................... 2
(b) SERVICE..................................................... 5
(c) COMPLIANCE.................................................. 8
(d) FACILITIES AND LOCATION..................................... 8
(i) DEALER's Responsibilities.............................. 8
(ii) Changes in Facilities or Location...................... 10
(e) FINANCES.................................................... 10
(f) PERSONNEL................................................... 11
(g) SIGNAGE..................................................... 12
12 ADVERTISING..................................................... 12
13 REPORTS, RECORDS AND BUSINESS SYSTEMS........................... 13
14 ORDERS.......................................................... 15
15 DELIVERY........................................................ 15
16 ACCEPTANCE OF SHIPMENTS......................................... 16
17 OTHER CHARGES................................................... 16
18 DELAY OR FAILURE TO FILL ORDERS................................. 17
19 OPTION TO REPURCHASE DAMAGED VEHICLES........................... 17
20 CLAIMS FOR DAMAGE OR SHORTAGE................................... 18
21 PRICES, CHARGES, TERMS OF PURCHASE AND PAYMENT.................. 18
22 CHANGE IN PRICE................................................. 19
23 SALE AND SUPPLY OF PARTS........................................ 21
24 COLLECTION OF INDEBTEDNESS...................................... 22
25 TITLE........................................................... 23
26 WARRANTY AND INDEMNIFICATION
FOR PRODUCT LIABILITY LITIGATION................................ 23
(a) WARRANTY.................................................... 23
(b) INDEMNIFICATION FOR PRODUCT LIABILITY LITIGATION............ 24
(c) REPAIR/REPLACE REQUIREMENTS................................. 25
27 CHANGE OF MODELS, PARTS AND ACCESSORIES
DECLARED OBSOLETE OR DISCONTINUED............................... 26
28 TERMINATION..................................................... 26
29 REPURCHASE OBLIGATIONS UPON TERMINATION......................... 32
30 DISPOSITION OF DEALER'S PREMISES................................ 34
31 TRANSACTIONS AFTER TERMINATION.................................. 38
32 SUCCESSORS TO DEALER............................................ 38
33 SURVIVING SPOUSE'S FINANCIAL INTEREST........................... 40
34 SALE OF DEALERSHIP ASSETS OR OWNERSHIP INTERESTS................ 41
35 USE OF TRADE NAMES, TRADEMARKS, LOGOS, ETC...................... 44
36 DEALER IS NOT AGENT............................................. 45
37 INABILITY TO PERFORM............................................ 45
38 ASSIGNMENT...................................................... 46
39 NON-WAIVER...................................................... 46
40 SEVERABILITY.................................................... 46
41 TITLES.......................................................... 47
42 INTERPRETATION.................................................. 47
43 NOTICES......................................................... 47
CHRYSLER CORPORATION
SALES AND SERVICE AGREEMENT
ADDITIONAL TERMS AND PROVISIONS
The following additional terms and provisions apply to and are
part of the Chrysler Corporation Sales and Service Agreement(s)
to which DEALER is a signatory:
11 SELLING, SERVICE,
COMPLIANCE, FACILITIES
AND LOCATION, FINANCES,
PERSONNEL AND SIGNAGE
(a) SELLING
DEALER shall use its best efforts to promote energetically and sell
aggressively and effectively at retail (which includes lease and rental
units) each and every model of CC vehicles identified in the aforementioned
Motor Vehicle Addendum and CC vehicle parts, accessories and other CC
products and services, to private and fleet customers in DEALER's Sales
Locality. DEALER will sell the number of new CC vehicles necessary to
fulfill DEALER's Minimum Sales Responsibility for each passenger car line or
truck line represented by the vehicles listed on the Motor Vehicle Addendum,
as defined below.
DEALER's Minimum Sales Responsibility for each such line will be determined
as follows: From time to time, but at least once a year for each such line,
CC will compute the ratio of the number of new CC passenger cars
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and/or trucks registered in the most recent whole or partial calendar
year-to-date period for which registration figures are available in the CC
Sales Zone in which DEALER is located to the total number of new passenger
cars or, if CC deems it appropriate, the total number of those new passenger
cars or trucks which CC, in its sole discretion, determines to be competitive
with any or all of its passenger cars or trucks so registered in that Zone
during the same period. The ratio thus obtained will be applied to the
comparable category of the total number of new passenger cars or competitive
passenger cars and/or trucks, as appropriate, registered during the same
period in Dealer's Sales Locality. The resulting number will be DEALER's
Minimum Sales Responsibility for each of said lines during this same period,
subject to adjustment as described below.
Upon DEALER's written request, CC may adjust DEALER's Minimum Sales
Responsibility, if appropriate in CC's judgment, to take into account
extraordinary local conditions to the extent, in CC's opinion, such
conditions are beyond DEALER's control and have affected DEALER's sales
performance differently from the sales performance of other new vehicle
dealers in DEALER's Sales Locality or other like vehicle line CC dealers in
the Sales Zone in which DEALER is located.
If DEALER's Sales Locality is shared by one or more other CC dealer(s) of the
same line, DEALER's Minimum Sales Responsibility for such line will be the
number of new vehicles DEALER must sell
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in order to achieve DEALER's fair share of the Minimum Sales Responsibility
for all such CC dealers in the Sales Locality. The Minimum Sales
Responsibility for the total CC dealers of the same line in the Sales
Locality will be determined by using the same method described above in this
Paragraph 11(a). CC will determine DEALER's fair share by assessing the
relative importance of DEALER's immediate area of influence as compared with
the Sales Locality as a whole.
This assessment will then be converted to a percentage which will represent
DEALER's fair share of the Minimum Sales Responsibility for the Sales
Locality.
Registration figures used in these computations will be new vehicle
registrations as reported by any recognized reporting organization selected
by CC. If vehicle registration data is not reasonably available, CC may use
other records, generally accepted in the industry, for the purpose of
determining motor vehicle purchases and to establish DEALER's Minimum Sales
Responsibility. To the extent that registration figures or other records
generally accepted in the automotive industry for purposes of determining
motor vehicle purchases are not reasonably available for purposes of
considering any of the factors specified herein, CC may rely on other records
and data developed by CC that reasonably depict purchases of motor vehicles
in an applicable area to establish DEALER's Minimum Sales Responsibility.
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(b) SERVICE
DEALER shall service CC vehicles actively and effectively and provide and
maintain, for servicing CC vehicles, adequate facilities equipped with the
basic tools common to the trade and with special tools and equipment peculiar
to CC products and necessary for servicing and repairing specified CC
vehicles properly, efficiently and competitively. DEALER shall comply with
parts, service and warranty guides established by CC from time to time, make
a sincere effort to satisfy service customers, and render prompt, efficient
and courteous service to all owners or lessees of all CC vehicles badged
Chrysler, Plymouth or Dodge regardless of where such vehicle was purchased or
leased. DEALER shall perform all pre-delivery and road-ready services
recommended by CC on new CC vehicles DEALER sells.
After six (6) quarters of operation, including operation under any preceding
CC Dealer Agreement, DEALER shall, at all times during this Agreement, meet
its minimum service satisfaction requirements by maintaining a rating on
Chrysler Corporation's Customer Satisfaction Index, Prep-It-Right and
Deliver-It-Right evaluations (as determined by Chrysler Corporation from time
to time, based upon surveys conducted of DEALER's customers) which is equal
to or greater than the average Customer Satisfaction Index, Prep-It-Right and
Deliver-It-Right ratings for the national Sales Level Group (as those groups
are determined by CC from time to time) in which DEALER is included within
DEALER's
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Sales Zone (as said Sales Zone is determined by CC from time to time). CC
will review, at least once a year, DEALER's performance under the Customer
Satisfaction Index and DEALER's Prep-It-Right and Deliver-It-Right ratings.
DEALER shall supply to all purchasers from DEALER of new CC vehicles a copy
of CC's appropriate new vehicle warranty; make such certifications and
verifications of odometer readings and maintenance and service performed on
vehicles badged Chrysler, Plymouth or Dodge, or other matters as may be
required under the terms of the CC vehicle warranty and as CC may from time
to time otherwise prescribe; and provide owners of CC vehicles badged
Chrysler, Plymouth or Dodge all warranty service and campaign inspections or
corrections to which they may be entitled in accordance with the policies and
procedures set forth in Chrysler Corporation's Warranty Policy and Procedure
Manual and in bulletins and documents relating to service that CC may, from
time to time, supply to DEALER. The provisions of said Warranty Policy and
Procedure Manual, including any revisions thereto which shall be furnished to
DEALER by CC from time to time, constitute a part of this Agreement with the
same force and effect as if set forth in its entirety herein.
DEALER shall comply with all policies, procedures, directives and rulings of
the Chrysler Corporation Customer Arbitration Board.
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CC has placed its trust and confidence in the integrity and fidelity of
DEALER and, therefore, CC shall compensate DEALER for services claimed to
have been performed by DEALER under CC's warranties or campaign inspections
and corrections if claimed in accordance with CC's then current policies and
procedures described above. DEALER agrees to comply with all such policies
and procedures including, but not limited to, policies and procedures
relating to the keeping of books and records respecting claims DEALER may
make for compensation for service DEALER performs under CC's warranties or
campaign inspections and corrections. DEALER agrees that CC may inspect
DEALER's books and records regarding any warranty service or other claims for
compensation DEALER may submit to CC. CC may charge DEALER's account for
claims which have been disallowed as a result of such inspection.
DEALER shall perform all warranty, pre-delivery, road-ready, campaign
inspections and corrections, and other services hereunder as an independent
contractor and not as the agent of CC and shall assume responsibility for and
hold CC harmless from, all claims (including, but not limited to, claims
resulting from the negligent or willful acts or omissions of DEALER) against
CC arising out of or in connection with DEALER's performance of such service.
If DEALER modifies any CC vehicle or installs on any CC vehicle any
equipment, part or accessory that has not been supplied or
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approved by CC, or sells any CC vehicle which has been modified after leaving
the possession, custody or control of CC, or sells a non-Chrysler Corporation
service contract in connection with the sale of any CC vehicle, DEALER shall
disclose to the customer in writing that the modification, equipment,
accessory or part is not supplied or approved by CC and is not included in
warranties furnished by CC or, in the case of a service contract, the
coverage is not provided by Chrysler Corporation, its parent, subsidiaries or
its affiliates. DEALER will write such disclosure on the purchase order and
on the customer's bill of sale. Notwithstanding the foregoing, DEALER may
not use parts which have not been authorized by CC in performing repairs
under CC warranties.
(c) COMPLIANCE
DEALER shall comply with all applicable federal, state and local laws, rules
or regulations in the operation of the dealership.
(d) FACILITIES AND LOCATION
(i) DEALER's Responsibilities
DEALER shall provide facilities for the sale and service of CC products and
related activities ("Dealership Operations") at the location set forth in the
aforementioned Dealership Facilities and Location Addendum. The entire
Dealership Facilities including, but not in limitation of the foregoing, new
and used vehicle display area, salesrooms, service area, parts and
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accessories area, building exterior and grounds will be satisfactory to CC as
to appearance and layout, and will be maintained and used as set forth in the
Dealership Facilities and Location Addendum. DEALER shall at all times
maintain the Dealership Facilities so that they are of adequate capacity to
accommodate DEALER's total vehicle sales volume and are relatively equivalent
in their attractiveness, level of maintenance, overall appearance and use to
those facilities maintained by DEALER's principal competitors.
DEALER shall conduct its Dealership Operations only from the dealership
location and dealership facilities above mentioned and in the manner and at
least during the hours usual in the trade in DEALER's Sales Locality. DEALER
shall not, except as provided for in subparagraph 11(d)(ii) hereunder, either
directly or indirectly, establish any place or places of business for the
conduct of its Dealership Operations other than at the Dealership Facilities
and Dealership Operations location as set forth in the Dealership Facilities
and Location Addendum.
If all of the Dealership Facilities are not at the same location, DEALER
shall not utilize any separate portion of the Dealership Facilities for the
conduct of any Dealership Operations other than as specified in the current
Dealership Facilities and Location Addendum. The Dealership Facilities and
Location Addendum shall identify any other purposes for which the
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Dealership Facilities are to be used and the actual space and areas to be
allocated for such purposes.
(ii) Changes in Facilities or Location
DEALER shall not make any change in the location of Dealership Operations or
make any change in the area and use of Dealership Facilities without the
prior written approval of CC. Any written approval of a change in the
location or in the area or use of Dealership Facilities shall be valid only
if in the form of a new Dealership Facilities and Location Addendum or a
separate written agreement signed by DEALER and one of the authorized
representatives of CC identified in Paragraph 10 hereinabove.
(e) FINANCES
DEALER shall maintain and employ in connection with DEALER's business such
net working capital, net worth, and wholesale credit and retail financing
arrangements necessary for DEALER to carry out successfully DEALER's
undertakings pursuant to this Agreement and in accordance with guides
therefor as may be issued by CC from time to time. At no time shall DEALER's
net working capital be less than the amount specified in the Minimum Working
Capital Agreement executed in conjunction with this Agreement and
incorporated herein by reference, or the amount thereafter established by any
superseding Minimum Working Capital Agreement.
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(f) PERSONNEL
DEALER shall employ in accordance with the volume of DEALER's business such
number of competent technicians in DEALER's repair shops as may be required
to assure prompt, satisfactory and competitive customer service for all
owners of CC vehicles who may request such service from DEALER. In
particular and without limitation to the generality of the foregoing, DEALER
shall cause its service personnel to receive such training from time to time
required by CC to maintain their technical expertise to render competent
customer service, including the use of improved methods of repair, or the
repair of new parts or systems, developed by CC.
Failure to comply with the service training requirements of the immediately
preceding subparagraph of this Paragraph 11(f) may result in suspension of
deliveries of CC vehicles until DEALER complies with such training
requirements. Protracted failure to comply with such training requirements
may result in termination of this Agreement pursuant to Paragraph 28
hereunder. The immediately foregoing sentence shall not be construed as in
any way limiting the general applicability of Paragraph 28 to any of the
other provisions of this Paragraph 11.
DEALER shall employ and maintain for its retail business a number of trained
and competent new and used motor vehicle sales, lease, service, parts and
general management personnel that are sufficient for DEALER to carry out
successfully all of DEALER's
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undertakings in this Agreement. In particular and without limitation of the
generality of the foregoing, DEALER shall cause its sales personnel to
receive such training from time to time as may be required by CC to maintain
their sales expertise to render satisfactory sales.
(g) SIGNAGE
DEALER shall display and maintain brand signs, fascia and other signage in
compliance with the policies and guidelines of Chrysler Corporation's
Dealership Identification Program, including any modification or revisions to
such policies and guidelines, which shall from time to time be furnished to
DEALER by CC.
12 ADVERTISING
CC, in promoting the sale and lease of its products by DEALER and other CC
dealers, shall seek to advertise in the most effective manner to develop
public interest and confidence in its dealers and products.
DEALER shall engage in advertising and sales promotion programs and shall use
effective showroom displays to help fulfill DEALER's responsibility to
promote CC products and services vigorously and aggressively. In advertising
in support of DEALER's selling, leasing and servicing CC products, DEALER
shall advertise only in a manner that will develop customer confidence
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in DEALER and CC products and shall not use any advertising tending to
mislead or deceive the public or violate any applicable federal, state or
local laws, rules or regulations, nor shall DEALER disparage CC or any
company, or products of such company, directly involved in the manufacture of
CC vehicles. DEALER shall discontinue any advertising that CC may find to be
injurious to CC's business or likely to deceive the public or violative of
any applicable federal, state or local laws, rules or regulations.
DEALER shall at all times be a member in good standing of the Dealer
Advertising Association, for the lines set forth in the Motor Vehicle
Addendum, which covers a geographical area that encompasses, in whole or
significant part, DEALER's Sales Locality and which has been approved by CC.
13 REPORTS, RECORDS AND
BUSINESS SYSTEMS
DEALER shall submit to CC for confidential use by CC and its affiliates, in
such manner, in such form, and at such times as CC may reasonably request,
complete and accurate reports of sales and stocks of new and used vehicles on
hand and other reports, including monthly financial statements and operating
reports.
DEALER shall use and keep accurate and current at all times a uniform
accounting system and will follow accounting practices, satisfactory to CC,
which will enable CC to develop comparative
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information in order, among other things, to provide business management
assistance to dealers for the mutual benefit of DEALER and CC. DEALER agrees
that CC may at any time for confidential use inspect DEALER's books and
records to determine whether they are kept in such manner that the data shown
in them can be used in CC's business management assistance to dealers, to
assess DEALER's financial condition, and to verify invoices or other claims
DEALER may render to CC. CC may, during the course of such inspection, make
copies of such books and records and retain such copies for CC's confidential
use.
DEALER shall maintain an electronic data storage, transmission and
communication system in the manner and form required from time to time by CC.
CC and its affiliates shall not, without approval of DEALER, disclose the
contents of DEALER's financial records to persons not a party or an affiliate
of a party to this Agreement except when required by compulsory process from
a court, government agency or arbitrator, or when CC, in its discretion,
considers it appropriate to disclose said financial records in an
adjudicatory or arbitration proceeding involving the parties to this
Agreement.
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14 ORDERS
CC shall ship specified CC vehicles, parts and accessories to DEALER only on
DEALER's order.
DEALER shall submit to CC, in the manner and form required by CC, current
orders for CC vehicles, parts and accessories, and estimates of DEALER's
future vehicle requirements at such times and for such periods as CC
reasonably may request for the mutual benefit of all CC dealers and CC. All
orders are subject to acceptance by CC, which acceptance may be in whole or
in part.
Except as otherwise allowed by this Agreement, CC shall use its best efforts
to fill accepted orders for specified CC vehicles, parts and accessories.
Notwithstanding the foregoing, in the event that demand exceeds supply of
specified CC vehicles, DEALER acknowledges that CC has the right to allocate
such supply in any reasonable manner CC deems fit in any geographical market.
15 DELIVERY
CC may deliver specified CC vehicles by rail, truck, boat or any other means
of transport, or deliver them for driveaway, endeavoring, when exceptional
circumstances arise and the cost is not increased, to meet DEALER's
preference as to mode of transportation. CC may deliver specified CC
vehicles to a carrier that CC selects, for shipment to DEALER at DEALER's
place of business or to the city or town where DEALER's place of
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business is located (or to the nearest practicable unloading point) "to CC's
order, notify DEALER," or may deliver such vehicles at any other point that
CC may establish.
CC may deliver parts and accessories to DEALER by delivering them to a
carrier that CC selects for shipment to the city or town where DEALER's place
of business is located, or by delivering them to DEALER at any point that CC
may establish.
16 ACCEPTANCE OF SHIPMENTS
If DEALER requests diversion of CC products shipped to DEALER or if CC is
required to divert any CC products because DEALER fails, refuses or is unable
to accept delivery of such products, or if there is a failure to pay as
required for the products that DEALER has ordered, or a failure to accept
C.O.D. shipments of products DEALER has ordered, CC may divert the shipments
and charge DEALER the demurrage, transport, storage and other expense arising
by reason of any such diversion.
17 OTHER CHARGES
DEALER shall be responsible for and will pay any and all charges for
demurrage, storage or other charges accruing after arrival of shipment at the
distribution point established by CC.
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18 DELAY OR FAILURE
TO FILL ORDERS
CC 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 event beyond the
control of CC including, but not in limitation of the generality of the
foregoing, any law, regulation or administrative or judicial order, or any
acts of God, wars, riots, wrecks, fires, strikes, lockouts, other labor
troubles, embargoes, blockades, delay or failure of any other supplier or
carrier of CC to deliver or make delivery of CC products, or any material
shortage or curtailment of production, including those due to economic
conditions, or any discontinuance of manufacture or sale of products by CC or
its suppliers. Furthermore, CC will not be liable for delay or failure to
fill orders when such delay or failure is pursuant to any provision under
this Agreement.
19 OPTION TO REPURCHASE
DAMAGED VEHICLES
DEALER shall notify CC if any new and unused CC vehicle in DEALER's
possession has sustained major damage as defined in the Warranty Policy and
Procedure Manual. To preserve the quality and value of new CC vehicles
ordered for the public, CC shall have the option to divert such a vehicle
prior to delivery to DEALER or repurchase from DEALER all or any of such
vehicles at a price equal to the net purchase price paid by DEALER to CC.
DEALER agrees to assign its rights under any insurance contract
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related to the repurchased CC vehicles to CC. CC shall make appropriate
payment for repurchased CC vehicles directly to any lien holder or, if there
is no lien, directly to DEALER.
20 CLAIMS FOR DAMAGE
OR SHORTAGE
CC shall not be liable for loss of or damage to CC products sold hereunder
occurring after delivery thereof to DEALER, DEALER's agent, or a carrier
within the North American Continent for shipment to DEALER, as provided in
Paragraph 15 of this Agreement. Should any products sold under this
Agreement be delivered in damaged condition or with shortages, claims for
said damages or shortages shall be made in accordance with CC's then current
policies and procedures. To the extent required by law, DEALER shall notify
the purchaser of a vehicle of any damage sustained by such vehicle prior to
sale. DEALER shall indemnify and hold CC harmless from any liability
resulting from DEALER's failure to so notify such purchasers.
21 PRICES, CHARGES, TERMS OF
PURCHASE AND PAYMENT
CC shall notify DEALER from time to time of the prices, charges and terms of
purchase for products sold under this Agreement and shall charge DEALER for
such products according to the prices, charges and terms of purchase in
effect at the date of shipment. CC reserves the right, without prior notice,
to change prices,
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charges and terms of purchase for any product sold under this Agreement.
DEALER shall pay CC for products sold under this Agreement in lawful money of
the United States of America by such method and/or in such manner as CC may
announce from time to time or approve in writing, with collection charges, if
any, added.
If not included in the price, DEALER shall pay all excise or other taxes
which may be levied on the products purchased hereunder or on the sale,
shipment, ownership or use thereof. Further, DEALER certifies as of the date
of each purchase hereunder that all products purchased hereunder are
purchased for resale, retail lease or demonstration purposes.
22 CHANGE IN PRICE
Should CC reduce the wholesale price at factory of any CC vehicle (not
including accessories and optional equipment) of a particular yearly model,
line and body style then currently in production, CC shall refund to DEALER
in cash or by a credit against DEALER's indebtedness to CC, for each new,
unused and unsold CC vehicle (not including demonstrators) of that particular
model, line and body style that at the time of the reduction is in DEALER's
stock or in transit to DEALER, an amount equal to the difference between the
reduced wholesale price and the wholesale price paid to CC by DEALER.
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If, at the time of the official model introduction date (as determined by CC)
of a new yearly model, CC announces a wholesale price of any CC vehicle (not
including accessories and optional equipment) of any particular body style
and line of the new model which is below the wholesale price of a vehicle of
the same body style and line of the discontinued yearly model, CC shall
refund to DEALER in cash or by credit against DEALER's indebtedness to CC an
amount equal to the difference between the reduced wholesale price and the
wholesale price of the same body style and line of the discontinued yearly
model. Such refund will apply only to new, unused and unsold CC vehicles
(not including demonstrators) of the particular body style and line of the
discontinued yearly model that on the official model introduction date (as
determined by CC) of the new yearly model is in DEALER's stock or in transit
to DEALER, unless CC determines that the line or particular body style of the
new yearly model is so changed in size, design, equipment, specifications or
price as, for all practical purposes, to make the line a new and different
line or to make the particular body style a new and different body style of
the discontinued yearly model.
Notwithstanding the provisions of the two paragraphs immediately above, in
any case where items considered standard equipment on a current vehicle or on
a vehicle of the discontinued yearly model are not included as standard
equipment on the corresponding vehicle with a reduced wholesale price or on
the corresponding
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vehicle of the new model, any wholesale price decrease resulting from the
exclusion of such standard equipment will not be included in any refund under
this paragraph 22.
In order to qualify for a refund in either case set forth above, DEALER must
make a written claim, supported by adequate evidence, within thirty (30) days
of the effective date of the reduction in price or the official model
introduction date of the new yearly model.
Should CC increase the wholesale price of any CC vehicle, said price increase
will not apply to an order submitted to CC by DEALER prior to the date the
notification of such price increase was issued if the order was submitted for
the specific purpose of fulfilling a valid and legitimate purchase agreement
between DEALER and a retail purchaser and if such an order was properly
identified in the manner required by CC and was delivered to the ordering
retail purchaser.
23 SALE AND SUPPLY OF PARTS
DEALER shall not represent, sell, offer for sale or use in repairing CC
vehicles, parts which are represented as new or remanufactured Chrysler
Corporation or Mopar parts or parts which are represented to be manufactured
or produced by any company directly involved in the manufacture of the
vehicles specified in the Motor Vehicle Addendum to this Agreement, unless
such parts are in fact manufactured, remanufactured or designed for or by
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Chrysler Corporation, Mopar or a company directly involved in the manufacture
of said specified vehicles and are properly identified as Chrysler
Corporation or Mopar parts or parts of said directly involved companies with
the respective consent of each of the aforementioned organizations.
DEALER at all times shall keep on hand in DEALER's place of business the
number and assortment of Chrysler Corporation or Mopar parts, that, in CC's
judgment, is necessary to meet the service requirements of DEALER's CC
customers and to meet all of DEALER's obligations under this Agreement.
24 COLLECTION OF
INDEBTEDNESS
CC may apply to any amount owed by DEALER to CC or to any of CC's affiliates
any credit owing to DEALER by CC or any of its affiliates. As used in this
Agreement, "affiliate" means Chrysler Corporation and any of its subsidiaries
or their subsidiaries, or any other corporation, partnership or other legal
entity which has an ownership interest in CC or any corporation, partnership
or other legal entity in which CC has an ownership interest, or any
subsidiary thereof.
Should DEALER assign its right to amounts owed to DEALER by CC to any third
party, prior to executing such an assignment DEALER shall notify such third
party of CC's first priority right to such credits.
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25 TITLE
Title to products CC sells to DEALER hereunder and risk of loss will pass to
DEALER on delivery of the products to DEALER, DEALER's agent, or the carrier,
whichever occurs first. However, CC retains a lien for payment on the
products so sold until paid for in full, in cash. CC will receive negotiable
instruments only as conditional payment.
26 WARRANTY AND
INDEMNIFICATION FOR
PRODUCT LIABILITY
LITIGATION
(a) WARRANTY
CC's warranty on new CC vehicles, as in effect from time to time, will be as
set forth in Chrysler Corporation's Warranty Policy and Procedure Manual. CC
shall supply sufficient copies of CC's then current CC vehicle warranty to
DEALER to permit DEALER, in accordance with DEALER's obligation under
Paragraph 11 of this Agreement, to provide a copy to each purchaser from
DEALER of a new CC vehicle. EXCEPT FOR THE CC WARRANTY, THERE ARE NO OTHER
EXPRESS OR IMPLIED WARRANTIES MADE OR DEEMED TO HAVE BEEN MADE TO ANY PERSON
BY CC APPLICABLE TO PRODUCTS SOLD UNDER THIS AGREEMENT. THE CC WARRANTY WILL
BE EXPRESSLY IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE; AND THE REMEDIES SET FORTH IN SUCH WARRANTY
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WILL BE THE ONLY REMEDIES AVAILABLE TO ANY PERSON WITH RESPECT TO PRODUCTS
SOLD HEREUNDER. CC neither assumes nor authorizes any other person,
including DEALER, to assume for CC any other obligation or liability in
regard to such products.
(b) INDEMNIFICATION FOR PRODUCT
LIABILITY LITIGATION
If a product liability lawsuit is filed naming DEALER as a defendant and it
is determined that the bodily injury or property damage alleged by the
plaintiff was caused solely by a design defect or a defect created by CC in
the manufacture or assembly of a CC vehicle, part or accessory, which latter
defect was not reasonably susceptible of discovery by DEALER in either
DEALER's new car preparation or subsequent servicing during the warranty
period, then CC shall indemnify and hold DEALER harmless from losses, damages
and expenses, including reasonable attorneys' fees, resulting from such
product liability lawsuit. As used in this Paragraph 26(b), a "product
liability lawsuit" shall mean a lawsuit seeking damages for bodily injury or
property damage allegedly sustained in a motor vehicle accident, and which
injury or damage is alleged to have been caused in any part by a defect in
the design, manufacture or assembly of a CC vehicle, part or accessory.
Whenever DEALER intends to request CC to indemnify DEALER with respect to a
product liability lawsuit, DEALER shall file with the court an appropriate
response which will prevent a default
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judgment from being taken against DEALER, and DEALER shall, within thirty
(30) business days after service of the complaint, notify CC in writing and
shall provide at that time copies of any pleadings which may have been
served, together with all information then available regarding the
circumstances giving rise to such product liability lawsuit. Any such
notices shall be sent by certified mail to the attention of the Office of the
General Counsel, Chrysler Corporation, Post Office Box 1919, Detroit,
Michigan 48288 or such other address as CC may designate in writing to
DEALER. Upon such request for indemnification, CC shall have the option,
upon reasonable notice to DEALER, to retain counsel and assume full control
over the defense of the lawsuit. If CC is prevented by DEALER from
exercising this option, CC's obligation hereunder to indemnify DEALER shall
be rendered null and void and be of no force or effect.
(c) REPAIR/REPLACE REQUIREMENTS
This provision shall apply if DEALER is located in a state which has in
effect or hereafter adopts or enacts any law or regulation imposing liability
on a motor vehicle manufacturer, importer, distributor and/or dealer for sale
of a vehicle presumed under such law or regulation to be defective by reason,
inter alia, of repeated unsuccessful attempts to repair such vehicle within a
specified period of time or by reason of such vehicle being unavailable and
out of service to the purchaser for a specified period of time.
-25-
DEALER shall make a good faith effort to immediately notify CC in writing of
the existence of any vehicle which may become subject to such law or
regulation prior to a presumption of liability arising under such law or
regulation from the inability to repair or correct a nonconformity or
condition of a vehicle.
27 CHANGE OF MODELS, PARTS
AND ACCESSORIES DECLARED
OBSOLETE OR
DISCONTINUED
CC at any time may discontinue any or all models, lines or body styles and
may revise, change or modify their construction or classification. All
DEALER orders for specified CC vehicles shall refer to models, lines and body
styles in production at the time CC receives the orders unless DEALER
specifies otherwise. CC at any time may declare obsolete or discontinue any
or all parts, accessories and other merchandise. CC may act under this
Paragraph 27 without notice and, except as set forth in Paragraph 22 of this
Agreement, without any obligation to DEALER by reason of DEALER's previous
purchases.
28 TERMINATION
(a) DEALER may terminate this Agreement on not less than thirty (30) days
written notice.
(b) CC may terminate this Agreement on not less than sixty (60) days
written notice for the following reasons:
-26-
(i) in accordance with CC's ordinary and customary procedures, upon the
failure of DEALER to fully perform any of DEALER's undertakings under
Paragraph 11(a) of this Agreement or failure of DEALER to meet its minimum
service satisfaction requirements set forth in Paragraph 11(b) of this
Agreement within one hundred and eighty (180) days after notification by CC
that DEALER has not fully performed the aforementioned undertakings,
obligations or requirements, or
(ii) the failure of DEALER to perform fully any of DEALER's undertakings or
obligations as set forth in this Agreement including, but without limiting
the generality of the foregoing, the undertakings and obligations set forth
in Paragraphs 11(b) through 11(g) or Paragraphs 12, 13, 14, 23, 26(c) or 35
of this Agreement, or
(iii) the death of any person listed in Paragraph 2 of this Agreement
(other than the death of DEALER if DEALER is a sole proprietorship) or the
failure of any such person so listed to continue active and substantial
personal participation in the management of the Dealership Operation as
required by Paragraph 2, or
(iv) a misrepresentation of or change, whether voluntary or by operation of
law, in the ownership if DEALER is an individual, or of the ownership
interests listed in Paragraph 3 of this
-27-
Agreement resulting in a transfer of control or majority interest in the
capital stock or partnership interest of DEALER, unless CC has given prior
written approval to such change, or
(v) any material misrepresentation by any of DEALER's owners or executives
as to any fact relied upon by CC in entering into this Agreement, or
(vi) a disagreement, dispute or controversy between or among principals,
partners, managers, officers or stockholders of DEALER that, in the opinion
of CC, may adversely affect the operation, management or business of DEALER,
or
(vii) the conviction of DEALER or any individual named in Paragraph 2 or 3
herein of any crime that, in CC's opinion, may affect adversely the operation
or business of DEALER or the name, goodwill or reputation of Chrysler
Corporation, CC products, or DEALER, or
(viii) the failure of DEALER to pay any indebtedness of DEALER to CC in
accordance with the applicable terms and conditions required by CC, or
(ix) impairment of the reputation or financial standing of DEALER or any of
DEALER's owners or executives or discovery by CC of any facts existing prior
to or at the time of signing this
-28-
Agreement which, in CC's opinion, tend to impair such reputation or financial
standing, or
(x) any submission by DEALER to CC of a false or fraudulent application or
claim, or any claim or statements in support thereof, for payment including,
but not limited to, pre-delivery inspection or adjustments, warranty repairs,
special policy or campaign adjustments or repairs performed by DEALER, sales
incentives, parts compensation, or any other discount, allowance, refund or
credit under any plan, provision or other program offered by CC, whether or
not DEALER offers or makes to CC or CC seeks or obtains from DEALER
restitution of any payments made to DEALER on the basis of any such false or
fraudulent application, claim or statement, or
(xi) conduct by DEALER which, in DEALER's dealings with customers or the
public, is fraudulent or constitutes a deceptive or unfair act or practice, or
(xii) DEALER's failure to comply with requirements set forth in the
National Traffic and Motor Vehicle Safety Act of 1966 or any other
legislation or regulation pertaining to safety, air pollution or noise
control which may be imposed on automobile dealers or with reasonable
requests of CC made in conjunction with action being taken on its part to
comply with the aforementioned statutory or regulatory requirements, or
-29-
(xiii) the notification of termination or termination, for any reason, of
any other Chrysler Corporation Dealer Agreement(s) which may be in effect
between DEALER and Chrysler Corporation, or
(xiv) the failure of DEALER to comply fully with the policies, procedures,
directives and rulings of the CC Customer Arbitration Board, or
(xv) CC offers a new Sales and Service Agreement to all of its dealers
selling the line(s) of vehicles set forth on the Motor Vehicle Addendum.
Termination by CC will not be effective unless the President or a Vice
President or the National Dealer Placement Manager of Chrysler Corporation
signs the notice.
(c) Notwithstanding the provisions above, this Agreement will terminate
automatically without notice from either party on:
(i) the death of DEALER, if DEALER is a sole proprietorship, or
(ii) an attempted or actual assignment or transfer of this Agreement or an
attempted or actual transfer of a substantial portion of dealership assets by
DEALER without the prior written consent of CC, or
-30-
(iii) an assignment by DEALER for the benefit of creditors, or
(iv) the insolvency of DEALER, or the preparation of any petition by or
for DEALER for voluntary institution of any proceeding under the Bankruptcy
Act or under any State insolvency law, whether or not such petition is ever
filed; or the involuntary institution against DEALER of any proceeding under
the Bankruptcy Act or under any State insolvency law which is not vacated
within ten (10) days from the institution thereof; or the appointment of a
receiver or other officer having similar powers for DEALER or DEALER's
business which is not removed within ten (10) days from his/her appointment;
or any levy under attachment, execution or similar process which is not
within ten (10) days vacated or removed by payment or bonding, or
(v) the discontinuance by CC of the production or distribution of all CC
vehicles listed on the Motor Vehicle Addendum, or
(vi) the failure of DEALER to fully conduct its Dealership Operations for
seven (7) consecutive business days, or
(vii) the loss, termination or expiration of any license or permit
required by law for DEALER to perform DEALER's obligations under this
Agreement or otherwise conduct business as a new vehicle dealer for CC
products.
-31-
Termination of this Agreement will cancel all unfilled orders for vehicles,
parts and accessories.
The obligations of the parties to this Agreement as set forth in Paragraphs
9, (or Paragraph 7 in a Term Agreement), 21, 24, 26(a), 26(b), 29, 30, 31 and
35 shall remain in full force and effect after the effective date of
termination.
29 REPURCHASE OBLIGATIONS UPON TERMINATION
Except when termination of this Agreement will be followed by CC issuing to
DEALER, or to DEALER's successors, assigns, heirs or devisees, a new
agreement of any sort for the sale and service of CC vehicles, including, but
not in limitation of the generality of the foregoing, such an agreement with
a term of limited duration, CC agrees to buy and DEALER agrees to sell, free
and clear of any liens and encumbrances, within ninety (90) days after the
effective date of any termination under Paragraph 28:
(a) All new, unused and unsold specified CC vehicles (not including
demonstrators), unmodified and in good, undamaged condition, of the yearly
model current at the effective date of termination that were purchased by
DEALER from CC and that are on the effective date of termination the property
of and in the possession, custody and control of DEALER. The repurchase
price will be the dealer net invoice price at the time of DEALER's
-32-
purchase of each such vehicle from CC, less any applicable rebates, incentive
payments, adjustments or allowances paid or credited by CC to DEALER. CC
shall not be required to repurchase CC vehicles built on DEALER's special
order to other than CC standard specifications.
(b) All new, unused and undamaged CC parts that are priced and identified
as eligible for return in Chrysler Corporation's then current parts lists and
that were purchased by DEALER from CC and are on the effective date of
termination the property of and in possession, custody and control of DEALER,
at current listed prices (exclusive of transportation charges). CC shall add
to such current listed prices (exclusive of transportation charges) an
allowance of five percent (5%) of such prices for packing and crating by
DEALER and a credit for transportation charges paid by DEALER to ship such
parts to the destination CC designates. CC shall subtract from such current
listed prices (exclusive of transportation charges) all maximum allowable
discounts and the cost of any necessary refinishing, reconditioning or
repacking to restore the parts to their original salable condition, and CC's
cost of determining whether such parts are free and clear of all liens and
encumbrances. Prior to purchase by CC, DEALER shall deliver the parts
(tagged and inventoried in accordance with CC's instructions) for inspection
F.O.B. at any point CC may designate. CC's determination of the quantity and
value of the parts returned will be conclusive unless DEALER notifies CC in
writing within
-33-
fifteen (15) days of receiving the check or statement of account for such
parts returned of any error made in such determination.
(c) All new, unused and undamaged CC accessories or accessories packages
for the yearly model current at the effective date of termination, complete
as supplied to and purchased by DEALER from CC during the twelve (12) months
immediately preceding the effective date of termination and that are on the
effective date of termination the property of and in the possession, custody
and control of DEALER at the prices then applicable (less maximum allowable
discounts) and current at the effective date of termination, exclusive of
transportation charges. CC shall add to such currently applicable prices an
allowance of five percent (5%) of such prices (less maximum allowable
discounts) for packing and crating by DEALER and a credit for transportation
charges paid by DEALER in shipping such accessories to the destination CC
designates. CC shall subtract from such currently applicable prices (less
maximum allowable discounts) the cost of necessary refinishing,
reconditioning or repackaging of such accessories or accessories packages to
restore them to their original salable condition and CC's cost of determining
whether such accessories or accessories packages are free and clear of all
liens and encumbrances. Prior to purchase by CC, DEALER will deliver the
accessories or accessories packages, tagged and inventoried in accordance
with CC's instructions, for inspection F.O.B. at any point CC may designate.
CC's determination of the quantity and value of the
-34-
accessories or accessories packages returned will be conclusive unless DEALER
notifies CC in writing within fifteen (15) days of receiving the check or
statement of account for such accessories or accessories packages returned of
any error made in such determination.
(d) All signs of a type required by CC belonging to DEALER, showing the
name "Chrysler Corporation" or one of the designated trade names applicable
only to CC products or CC's affiliated companies. CC shall pay to DEALER for
such signs the fair market value or the price for which DEALER purchased such
signs, whichever is lower. CC shall have the right, upon termination of this
Agreement, to enter DEALER's premises peacefully and remove all such signs.
(e) Special tools (in complete sets), of a type recommended by CC, adapted
only to the servicing of CC vehicles and purchased by DEALER during the
thirty-six (36) months immediately preceding the effective date of
termination at a price and under terms and conditions to be agreed upon by CC
and DEALER.
CC will pay DEALER for any items purchased pursuant to this Paragraph 29
within ninety (90) days of CC's receipt and acceptance of said items, subject
to Paragraph 24 of this Agreement.
30 DISPOSITION OF DEALER'S PREMISES
-35-
On termination of this Agreement by CC on sixty (60) days' written notice
pursuant to Paragraph 28 hereof, except when termination results because
DEALER's facilities have been closed for seven (7) consecutive business days
or from a person named in Paragraph 2 of this Agreement ceasing to
participate in the management of DEALER, CC shall take the following action
respecting DEALER's premises as defined below (herein called the Premises),
if DEALER so requests, and provided that DEALER has paid to CC all monies
owing to CC:
(a) If, on DEALER's receipt of notice of termination, DEALER owns the
Premises:
CC shall assist DEALER in effecting an orderly and equitable disposition of
the Premises by a sale or lease. If necessary to effect such disposition,
CC, at its option, within a reasonable time shall lease the Premises from
DEALER for at least one (1) year or purchase the Premises, or cause them to
be leased or purchased, on fair and equitable terms. In such event, DEALER
and CC shall agree on the value or rental value of the Premises for the
purpose of either a sale or lease. If DEALER and CC are unable to so agree,
each shall appoint a disinterested qualified real estate appraiser and the
two so appointed will agree on the value or rental value of the Premises, as
the case may be. If the two appraisers are unable to agree, they shall
select a third disinterested qualified real estate appraiser who shall
determine such value. The value or rental value so determined shall be
-36-
final and binding on both DEALER and CC. If one or more appraisals are
necessary, DEALER and CC shall share equally the cost of such appraisals.
(b) If, on DEALER's receipt of notice of termination, DEALER is leasing
the Premises:
CC shall assist DEALER in effecting an orderly and equitable disposition of
DEALER's leasehold interest in the Premises. If necessary to effect such
disposition, CC, at its option, within a reasonable time, for the remainder
of the lease or for twelve (12) months, whichever period is shorter, shall
(1) sublet the Premises from DEALER, or (2) take an assignment of the lease
of the Premises from DEALER, or (3) pay DEALER monthly or otherwise, as the
parties may agree, the lower of the rental specified in the lease or the fair
rental value of the Premises determined in the manner provided in (a) above;
provided, however, that DEALER may receive such payments under only one
dealer agreement with Chrysler Corporation or any of their affiliates or
subsidiaries.
(c) If DEALER owns part of the Premises and leases part of them, section
(a) above will apply to the part owned and section (b) above to the part
leased.
CC shall have no obligation to DEALER under this Paragraph 30 if, after
receipt of notice of termination, (1) DEALER in any way encumbers the
Premises or DEALER's interest in them or takes any
-37-
other action respecting the Premises that would adversely affect any of CC's
obligations under this Paragraph 30, or performance thereof, or (2) DEALER
receives and refuses a bona fide offer to purchase, lease or sublet all or
substantially all of the Premises at a price and on terms that CC believes
are fair, or (3) DEALER's lease of the Premises or part thereof is continued,
renewed or extended by DEALER's act or failure to act, or (4) DEALER fails or
refuses to use DEALER's best efforts to sell, lease or sublease the Premises
or to notify CC of any offer to buy, lease or sublease the Premises; or if,
after the effective date of termination of this agreement, (a) the Premises
or part hereof are used or occupied by anyone for any purpose, or (b) DEALER,
if a proprietor, or any of the persons named in Paragraph 3 of this agreement
is in the business of selling and/or servicing new or used motor vehicles in
the Sales locality referred to in this agreement or the general area
surrounding it, or (c) DEALER, if a proprietor, or any of the persons named
in Paragraph 3 of this agreement occupies or could, in CC's opinion, occupy
all or substantially all of the Premises for any business in which one or
more of them engages.
"Premises" as used in this Paragraph 30 means the place or places of business
in the Sales Locality (1) that DEALER uses exclusively to carry out DEALER's
obligations in selling and servicing new products under this agreement or
jointly under this and any other agreement or agreements with CC on the date
of
-38-
DEALER's receipt of notice of termination and (2) are set forth in the
Dealership Facilities and Location Addendum (Addenda).
To receive CC's assistance as set forth in this Paragraph 30, DEALER must
have operated continuously as a CC dealer for the twelve (12) months
immediately preceding the effective date of termination and must have given
CC a written request for such assistance within thirty (30) days after
DEALER's receipt of the notice of termination of this Agreement. On receipt
of such request from DEALER, CC will initiate compliance with its obligations
under this Paragraph 30. If under section (b) above CC elects to make
monthly payments, then DEALER shall make written application for them on such
forms and at such times as CC reasonably may require. If DEALER requests
assistance under this Paragraph 30, then CC, at all reasonable times, shall
have full access to the Premises and DEALER's books and records pertaining to
the Premises.
31 TRANSACTIONS AFTER TERMINATION
After the effective date of termination, if CC, in its discretion, elects to
fill retail orders of DEALER or otherwise transacts business related to the
sale of CC products with DEALER, all such transactions will be governed by
the same terms that this Agreement provides, so far as those terms are
applicable. Notwithstanding any such transactions, CC shall not be deemed to
have waived or rescinded the termination or have renewed this Agreement.
-39-
32 SUCCESSORS TO DEALER
On termination of this Agreement by reason of the death of DEALER if an
individual, or on termination by CC because of the death of any of the
persons named in Paragraph 2 of this Agreement if DEALER is a partnership or
corporation:
(a) If DEALER had so requested in writing (signed by DEALER if an
individual or by those persons representing a majority of the ownership
interest in DEALER if DEALER is a partnership or corporation), delivered to
CC during the lifetime of such decedent, CC shall offer a Chrysler
Corporation Sales and Service Agreement (limited to a two (2) year term) to
any person DEALER has nominated in such written requests to CC as the person
DEALER desires to continue DEALER's business after such death, provided that
such nominated person has demonstrated operating qualifications satisfactory
to CC in the course of active, substantial and continuing participation in
the management of DEALER's organization, and possesses or is able to acquire
within a reasonable time after such death, capital and facilities that are
satisfactory to CC, and will be able to exercise as much control over the
operations and affairs of the dealership as the deceased exercised. Such
Chrysler Corporation Sales and Service Agreement(s) shall be limited to a
term of two (2) years and subject to earlier termination as provided therein.
At least ninety (90) days before the expiration of the two (2) year term
referred to above, CC shall determine if the person granted said
-40-
two (2) year agreement possesses the required capital and facilities
and has satisfactorily performed the obligations under said two (2) year
agreement. This determination will be based on said person's performance
during the aforementioned two (2) year period to qualify for the standard
Chrysler Corporation Sales and Service Agreement then in effect. If CC
determines that said person possesses all such qualifications, then CC shall
offer such standard agreement to said person.
(b) CC shall, if DEALER has not nominated a successor under this Paragraph
32 and has not named a person whose surviving spouse may hold a financial
interest under Paragraph 33, review the qualifications of any remaining
person named in Paragraph 2 of this Agreement. If any such person possesses
operating qualifications satisfactory to CC and possesses or is able to
acquire within a reasonable time facilities and capital necessary to qualify
as a CC dealer, CC shall offer such person a Chrysler Corporation Sales and
Service Agreement or Term Sales and Service Agreement, as CC deems
appropriate. If more than one such person qualifies, CC will select the
person or persons to whom an agreement will be offered.
33 SURVIVING SPOUSE'S FINANCIAL INTEREST
On termination of this Agreement by reason of the death of DEALER, if an
individual, or on termination by CC because of the death of any of the
persons named in Paragraph 2 of this Agreement if DEALER is a partnership or
corporation, the
-41-
surviving spouse of the person who died may hold a financial interest in any
successor dealership, provided that the following conditions are met:
(a) Prior to the death referred to above, DEALER had delivered to CC a
notice in writing signed by all the persons named in Paragraph 2 of this
Agreement naming the deceased person (who must also be named in Paragraph 2
of this Agreement) as the person whose surviving spouse may hold the
financial interest. DEALER may name only one person but may, on written
notice to CC, signed as above, change the person named.
(b) Within sixty (60) days of the date of such death, the surviving spouse
executes with the person or persons who will be named in Paragraph 2 of the
CC Sales and Service Agreement(s) between CC and the successor dealership a
written agreement in which the surviving spouse agrees not to participate in
any way in the management or operation of the successor dealership. Such
agreement shall be delivered to CC within fifteen (15) days after it has been
signed by both parties. Notwithstanding the immediately foregoing provisions
of this Paragraph 33(b), such an agreement not to participate need not be
made if CC has approved the surviving spouse as a person to be named in
Paragraph 2 of the CC Sales and Service Agreement(s) between CC and the
successor dealership.
-42-
Nothing contained herein will obligate CC to enter into a sales and service
agreement with the surviving spouse or any person not otherwise acceptable to
CC or require CC to continue this or any other agreement with the surviving
spouse or any other person for any period of time beyond the time when CC
would have a right to terminate such an agreement in accordance with the
terms thereof. "Successor dealership" as used in this Paragraph 33 means a
dealership (1) that qualifies for and enters into a Chrysler Corporation
Sales and Service Agreement with CC, (2) that possesses and has the right to
use the physical assets and organization that remain after the death first
referred to in this Paragraph 33, and (3) in which the surviving spouse
retains or acquires the financial interest as referred to above.
34 SALE OF DEALERSHIP ASSETS OR OWNERSHIP INTERESTS
CC acknowledges that DEALER may at any time negotiate for the sale of its
assets, and any of the owners of DEALER may at any time negotiate the sale of
their ownership interests in DEALER, with any purchaser on such terms as may
be agreed upon by them and the prospective purchaser. Any such sale,
however, will not create any obligation of CC to do business with any such
purchaser.
DEALER acknowledges that, in connection with any such sale to any such
purchaser, this Agreement is not assignable without the written consent of
CC. If the proposed purchase and sale arrangement contemplates or is
conditioned upon the prospective
-43-
purchaser being granted by CC an agreement similar to this Agreement, DEALER
shall provide CC written notice thereof prior to any completion or closing of
the transactions contemplated by such purchase and sale arrangement and the
prospective purchaser shall apply to CC, on forms provided by CC, for such an
agreement. In order that CC can determine whether effective dealership
operations will result if the prospective purchaser's application is
approved, CC may, in processing the application, without liability to DEALER
or any such owners, counsel with the prospective purchaser regarding any
matters including, but not limited to, matters relating to the investments in
the proposed dealership operations, the management and the facilities that
may be required by CC.
If DEALER or such owners have notified CC, and the prospective purchaser has
made application as provided above, CC shall consider and process such
application, together with the applications of any others for such an
agreement, in accordance with its established procedures and CC shall not
unreasonably withhold its approval of such an application. Any such approval
shall be conditioned upon payment in full by DEALER of all of DEALER's
obligations to CC, which payment shall be made as CC's option on or before
the sale to the prospective purchaser. If CC decides not to continue
authorized dealership operations at DEALER's premises, however, no such
application will be considered or processed by CC and CC shall so notify
DEALER or such owners and the prospective purchaser.
-44-
Notwithstanding the foregoing provision of Paragraph 34, even if the
prospective purchaser of DEALER's assets or ownership interests in DEALER
meets CC's qualifications for appointment as a dealer, CC may, at its
discretion, offer to purchase DEALER's assets or ownership interest in DEALER
on the same terms as said qualified prospective purchaser. If CC makes such
an offer, DEALER shall sell the dealership assets to CC on the aforementioned
same terms. However, if CC has not made such an offer within fifteen (15)
business days after CC's receipt of the aforementioned application and all
necessary information, CC shall be deemed to have declined to offer to
purchase DEALER's assets or ownership interests in DEALER. Within fifteen
(15) days after CC has communicated its offer to purchase DEALER's assets or
ownership interest in DEALER, as described above, DEALER may withdraw, by
written notification to CC, its proposal to sell said assets or ownership
interest to any purchaser, in which case CC's aforementioned offer to
purchaser will be null and void. Additionally, DEALER may request in writing
that CC predetermine whether a proposed purchaser would be acceptable to CC
prior to entering into an agreement to sell DEALER's assets or ownership
interests. If such a request is made, CC shall make such determination. If
CC determines that the proposed purchaser is acceptable to CC, CC shall
decline to make an offer to purchase such assets or ownership interest. Such
determination of acceptability and declination will not act to deny CC its
-45-
right not to approve the proposed purchase and sale arrangement as set forth
above.
35 USE OF TRADE NAMES, TRADEMARKS, LOGOS, ETC.
DEALER may use in DEALER's corporate, firm or trade name in a manner CC
approves in writing any trade name applicable to those CC products set forth
in the Motor Vehicle Addendum. DEALER shall discontinue immediately the use
of any such trade names in DEALER's corporate, firm or trade name when CC so
requests in writing and DEALER shall take such steps as may be necessary or
appropriate, in CC's opinion, to change such corporate, firm or trade name so
as to eliminate any trade name of CC products therefrom.
Except as specifically allowed herein, DEALER shall not use, in any manner,
the trademarks, trade names, insignias or the like of CC, its divisions,
affiliates or subsidiaries without CC's explicit and prior written consent.
DEALER shall discontinue immediately any and all use of any such trademark,
trade name, insignias or the like when CC so requests in writing. On
termination of this Agreement, DEALER shall discontinue immediately using any
trade names applicable to CC vehicles or other products in DEALER's
corporate, firm or trade name or using any trade names, trademarks or
insignias adopted or used by CC or its divisions, affiliates or subsidiaries,
and will take such steps as may be necessary or appropriate, in CC's opinion,
to change such corporate, firm or trade name so as to eliminate any
-46-
trade names applicable to CC products therefrom, and will discontinue using
any signs, stationery or advertising containing any such trade names,
trademarks or insignias or anything else that might make it appear that
DEALER is an authorized dealer for CC vehicles or products.
36 DEALER IS NOT AGENT
This Agreement does not create the relationship of principal and agent
between CC and DEALER, and under no circumstances is either party to be
considered the agent of the other.
37 INABILITY TO PERFORM
In addition to any other exemption from liability specifically provided for
in this Agreement, neither DEALER nor CC will be liable for failure to
perform its part of this Agreement when the failure is due to fire, flood,
strikes or other labor disputes, accident, war, riot, insurrection, acts of
government, governmental regulation or other circumstances beyond the control
of the parties.
38 ASSIGNMENT
DEALER may not assign or transfer this Agreement, or any part hereof, or
delegate any duties or obligations under this Agreement without the written
consent of CC, executed by the President or a Vice President or the National
Dealer Placement Manager of Chrysler Corporation.
-47-
39 NON-WAIVER
The waiver by either party of any breach or violation of or default under any
provision of this Agreement will not operate as a waiver of such provision or
of any subsequent breach or violation thereof or default thereunder.
40 SEVERABILITY
If any provision of this Agreement should be held invalid or unenforceable
for any reason whatsoever or to violate any law of the United States, the
District of Columbia or any State, this Agreement is to be considered
divisible as to such provision, and such provision is to be deemed deleted
from this Agreement or, in the event that it should be held to violate only
the laws of the District of Columbia or of any State, to be inapplicable
within the territory thereof, and the remainder of this Agreement will be
valid and binding as if such provision were not included herein or as if it
were included herein only with respect to territories outside of such
District or State, as the case may be. Notwithstanding the foregoing, when,
in the absence of this Paragraph 40, Federal law would otherwise be deemed to
preempt a state law which purports to limit or prohibit any right, obligation
or duty under any provision of this Agreement, then this Paragraph 40 shall
not be construed to delete any such provision of this Agreement and the
parties hereto will be
-48-
subject to the terms of such provision as if such a state law did not exist.
41 TITLES
The titles appearing in this Agreement have been inserted for convenient
reference only and do not in any way affect the construction, interpretation
or meaning of the text.
42 INTERPRETATION
In the event of a dispute hereunder, the terms of this Agreement shall be
construed in accordance with the laws of the State of Michigan.
43 NOTICES
Unless otherwise specifically required by the terms of this Agreement, any
notice required or permitted under this Agreement must be in writing and will
be sufficient if delivered personally, or sent through the United States mail
system, postage prepaid, addressed, as appropriate, either to DEALER at the
place of business designated in this Agreement, or at such other address as
DEALER may designate in writing to CC, or to Chrysler Corporation at Post
Office Box 857, Detroit, Michigan 48288 or such other address as CC may
designate in writing to DEALER.
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