EXHIBIT 10.2.4.2
BMW OF NORTH AMERICA, INC.
DEALER STANDARD PROVISIONS
BMW OF NORTH AMERICA, INC.
DEALER STANDARD PROVISIONS
APPLICABLE TO DEALER AGREEMENT
TABLE OF CONTENTS
Page
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PARAGRAPH 1. DEFINITIONS 1
(a) BMW 1
(b) BMW NA 1
(c) BMW Dealers 1
(d) BMW Products 1
(e) BMW Vehicles 1
(f) Dealer 1
(g) Dealer Agreement 2
(h) Dealer's BMW Operations 2
(i) Dealer Forum 2
(j) Dealer's Officers 2
(k) Dealer Operating Requirements 2
(l) Dealer Operating Requirements Addendum 3
(m) Dealer Operator 3
(n) Dealer's Owners 3
(o) Dealer's Facility 3
(p) General Manager 4
(q) Improvement Addendum 4
(r) Net Purchase Price 4
(s) Original BMW Parts 5
(t) Primary Market Area 5
PARAGRAPH 2. BASIC OBLIGATIONS OF BMW NA 6
(a) Supply of BMW Products to Dealer 6
(b) Assistance to Dealer 6
(c) Allocation of Vehicles 7
PARAGRAPH 3. BASIC OBLIGATIONS OF DEALER 8
(a) BMW Sales, Service and Parts Supply 8
(b) Conduct of Business 8
(c) Compliance with Dealer Operating
Requirements and Standards 8
(d) Issuance of Improvement Addendum 9
PARAGRAPH 4. GENERAL REQUIREMENTS FOR DEALER'S OPERATIONS 10
(a) Business Hours 10
(b) Signs 10
(c) Insurance 10
(d) Exclusive Ownership of BMW Trademarks 11
(e) Use of BMW Trademarks by Dealer 11
(f) Evaluation of Dealer's Facility 12
(g) Sales of Used BMW Vehicles 12
(h) Training 12
(i) Advertising 13
(j) Compliance with Laws 13
PARAGRAPH 5. DEALER'S SALES OF BMW VEHICLES 14
(a) Sales Promotion 14
(b) Sales Performance 14
(c) Demonstrators 14
(d) Retail Business Plan 15
(e) Performance Evaluation 15
(f) Down Payments and Trade Ins 16
(g) Price Disclosure 16
PARAGRAPH 6. CUSTOMER SERVICE 17
(a) Scope and Quality 17
(b) Disclosure and Use of Original BMW Parts 17
(c) Pre-Delivery Inspection 19
(d) BMW Service Booklet and BMW Drivers Handbook 19
(e) Compliance with Consumer Protection Statutes 19
PARAGRAPH 7. DEALER RECORDS & REPORTS; ACCESS TO PREMISES 21
(a) Financial Records 21
(b) Management Information Systems Requirements 21
(c) Financial Statements 21
(d) Additional Reports 22
(e) Access to Dealer's Premises and Records 22
(f) Confidentiality 23
PARAGRAPH 8. DEALER'S PURCHASE OF BMW VEHICLES 24
(a) Dealer's Purchase Price 24
(b) Payment 24
(c) Line of Wholesale Credit 24
(d) Shipment to Dealer 24
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(e) Claims Processing 25
(f) Passing of Risk 26
(g) Repair and Sale of Damaged BMW Vehicles 26
(h) Option to Repurchase Damaged Vehicles 26
PARAGRAPH 9. DEALER'S INVENTORY AND PURCHASE OF BMW PARTS 28
(a) Minimum Inventory of Original BMW Parts 28
(b) Dealer's Purchase Price 28
(c) Payment 28
(d) Delivery 29
(e) Claims for Incomplete Delivery 29
(f) Return of Defective Original BMW Parts 29
(g) Right to Return Original BMW Parts 29
(h) No Return of Special Materials 30
PARAGRAPH 10. ADDITIONAL PROVISIONS GOVERNING DEALERS PURCHASE
OF BMW PRODUCTS; DEALER'S INVENTORIES 31
(a) State and Local Taxes 31
(b) BMW NA's Purchase Money Security Interest 32
(c) Return or Diversion of BMW Vehicles on
Failure to Accept 35
(d) Failure of or Delay in Delivery 35
(e) Changes in Specifications 36
(f) Changes by Dealer on BMW Products;
Compliance with Safety, Air Pollution,
Noise Control and Consumer
Warranty Requirements 36
(g) Inventories 37
PARAGRAPH 11. WARRANTY TO CUSTOMERS 38
(a) BMW Warrantees 38
(b) Incorporation of BMW Warrantees in
Dealer's Sales 38
(c) Warranty Procedures 39
PARAGRAPH 12. TERMINATION PRIOR TO EXPIRATION DATE; SUCCESSION 41
(a) Termination by Dealer 41
(b) Immediate Termination by BMW for Cause 41
(c) Termination by BMW NA on 60 Days' Notice 43
(d) No Waiver by Failure to Terminate 46
(e) Termination Upon Death or Permanent
Disability 47
(f) Successor to Dealer in Event of Death 48
(g) Successor Nominee 49
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PARAGRAPH 13. CONTINUATION OF BUSINESS RELATIONS 51
(a) Continuation of Business Relations
After Expiration or Prior Termination 51
PARAGRAPH 14. RIGHTS AND LIABILITIES UPON EXPIRATION OR
PRIOR TERMINATION 52
(a) Pending Orders 52
(b) Purchase of Dealer's Inventory of BMW
Products by BMW 54
(c) BMW NA's Right to Specific Performance 58
PARAGRAPH 15. TRANSFER OF AGREEMENT 59
(a) Transfer, Sale or Assignment of Agreement
by Dealer 59
PARAGRAPH 16. INDEMNIFICATION 60
(a) Indemnification by BMW NA 60
(b) Indemnification by Dealer 62
(c) Notification 64
(d) Allegation Involving Both BMW NA
and Dealer 65
PARAGRAPH 17. MISCELLANEOUS PROVISIONS 67
(a) Approval or Consent by BMW NA 67
(b) Divisibility 67
(c) Termination of Prior Agreements 67
(d) Notices 68
(e) No Implied Waivers 68
(f) Dealer Not an Agent; Disclaimer of
Further Liability by BMW 68
(g) Accounts Payable 69
(h) BMW NA's Continuing Security Interest 69
(i) Assignment of BMW NA's Security Interest 70
(j) Headings 70
(k) Entire Agreement; Representations 70
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The following Dealer Standard Provisions are made a part of and are incorporated
into the Dealer Agreement.
DEFINITIONS
PARAGRAPH 1
In addition to the definitions contained in
the Dealer Agreement, the following terms
shall have the following meanings:
BMW (a)"BMW" shall mean Bayerische Motoren Werke
AG, a company organized and existing under
and by virtue of the laws of Germany, having
its principal place of business at Munich,
Germany;
BMW NA (b)"BMW NA" shall mean BMW of North America,
Inc., a corporation organized under the laws
of the State of Delaware, the exclusive
importer and distributor of BMW Products in
the United States;
BMW DEALERS (c)"BMW Dealers" shall mean all of the
authorized BMW dealers which are signatories
to a Dealer Agreement with BMW NA;
BMW PRODUCTS (d)"BMW Products" shall mean BMW Vehicles and
Original BMW Parts;
BMW VEHICLE(S) (e)"BMW Vehicle(s)" shall mean new passenger
car(s) manufactured by BMW or one of its
manufacturing subsidiaries, sold by BMW NA
and bearing the trademarks of BMW;
DEALER (f)"Dealer" shall mean a dealer authorized to
sell BMW Products as appointed by BMW NA
pursuant to this Agreement;
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DEALER AGREEMENT (g)"Dealer Agreement" or "Agreement" shall
have the same meaning as set forth in Article
B of the Dealer Agreement;
DEALER'S BMW OPERATIONS (h)"Dealer's BMW Operations" or "BMW
Operations" shall mean all activities of
Dealer relating to the promotion and sale of
BMW Products, the supply of Original BMW
Parts, customer service for BMW Products,
and/or all other operations of Dealer
governed by this Agreement, such as sales of
used BMW Vehicles;
DEALER FORUM (i)"Dealer Forum" shall mean the elected
representatives of the BMW Dealers who
perform the responsibilities set forth in
Article F of the Dealer Agreement;
DEALER'S OFFICERS (j)"Dealer's Officers" shall mean all the
persons named in Article C of the Dealer
Agreement as officers of Dealer, as well as
any other person who succeeds to any such
executive and/or managerial position in
Dealer in accordance with the Agreement;
DEALER OPERATING REQUIREMENTS (k)"Dealer Operating Requirements" shall mean
the Facility, Personnel, Financial, Equipment
and Demonstrator Requirements published by
BMW NA, as amended, cancelled or superseded
from time to time by BMW NA following review
by the Dealer Forum;
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DEALER OPERATING REQUIREMENTS (l)"Dealer Operating Requirements
ADDENDUM Addendum" shall mean the Facility, Personnel,
Financial, Equipment and Demonstrator
Requirements applicable to Dealer, as amended
or superseded from time to time by BMW NA
following review with Dealer;
DEALER OPERATOR (m)"Dealer Operator" shall mean the person
named in Article C of the Dealer Agreement as
the person in charge of the Dealer's BMW
Operations with authority to make all
operating decisions on behalf of Dealer with
respect to Dealer's BMW Operations and is the
person upon whom BMW NA is relying to
represent BMW Products and to act on Dealer's
behalf, as well as any person who succeeds to
such position in accordance with this
Agreement;
DEALER'S OWNERS (n)"Dealer's Owners" shall mean all the
persons named in Article C of the Dealer
Agreement as the beneficial and record owners
of Dealer, as well as any other person who
acquires or succeeds to any beneficial
interest or record ownership of Dealer in
accordance with the Agreement;
DEALER'S FACILITY (o)"Dealer's Facility" shall mean the land
and building(s) which constitute the
authorized location established in accordance
with the provisions of Article D of the
Dealer Agreement for the conduct of the
Dealer's BMW Operations;
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GENERAL MANAGER (p)"General Manager" shall mean the person
named in Article C of the Dealer Agreement as
the person in charge of Dealer's BMW
Operations in the absence of the Dealer
Operator, as well as any person who succeeds
to such position in accordance with this
Agreement;
IMPROVEMENT ADDENDUM (q)"Improvement Addendum" shall mean the
Addendum to this Dealer Agreement which lists
the outstanding obligations of Dealer which
must be met to ensure the continuation of
this Agreement under Article G of this
Agreement;
NET PURCHASE PRICE (r)"Net Purchase Price" shall mean the actual
price at which Dealer purchased the certain
BMW Product from BMW NA, which price shall
include the addition or deduction of any and
all rebates, refunds, credit allowances,
discounts and other payments or adjustments
made by BMW NA relative to such BMW Product.
"Net Purchase Price" shall not include
payments or adjustments in connection with
Dealer Advertising Group (DAG) activities;
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ORIGINAL BMW PARTS BMW (s)"Original BMW Parts" shall mean (i) any
parts, accessories, and equipment for BMW
Vehicles manufactured and/or sold by BMW
and/or BMW NA and/or bearing the authorized
trademarks of BMW, which parts, accessories
and equipment usually are described as
"Original" in packaging; and (ii) any
equipment designed for use in BMW Operations
(including special BMW tools) and any non-
automotive accessories and other equipment
including lifestyle items bearing the
trademarks of BMW, which are supplied to
Dealer by BMW NA; and
PRIMARY MARKET AREA (t)"Primary Market Area" shall mean the area
designed by BMW NA in which the Dealer is
expected to focus its activities under this
Dealer Agreement. Evaluation of Dealer's
performance shall be primarily based upon
Dealer's activities in its Primary Market
Area;
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BASIC OBLIGATIONS OF BMW NA PARAGRAPH 2
SUPPLY OF BMW PRODUCTS TO (a)BMW NA agrees to sell and deliver BMW
DEALER Products to Dealer in accordance with this
Agreement and the ability of the Dealer to
store, display, sell and service BMW
Products, as reflected in its Dealer
Operating Requirements Addendum. BMW NA
shall have no obligations to supply and
Dealer shall not be entitled to receive BMW
Products which exceed Dealer's ability to
store, display, sell or service BMW Products
as evidenced by its Dealer Operating
Requirements Addendum.
ASSISTANCE TO DEALER (b)BMW NA will assist Dealer in Dealer's BMW
Operations through such means and upon such
terms and conditions as BMW NA considers
necessary and appropriate, including, among
other things
(1) Special training courses and meetings for
Dealer's personnel;
(2) Sales, service, and parts literature and
other printed materials relating to bmw
Products;
(3) National advertising campaigns for BMW
Vehicles;
(4) Periodic suggestions and evaluations to
assist Dealer in the conduct of its BMW
Operations; and
(5) Technical Assistance Hotline and Parts
Telephone Support.
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ALLOCATION OF VEHICLES (c) BMW NA agrees to sell and deliver BMW
Products to Dealer in accordance with the
provisions of this Agreement.
(1) In making such sales and deliveries, BMW
NA will consider Dealer's preferences, as
well as its compliance with the resale and
use restrictions of the Dealer Agreement, and
will endeavor to make a fair and equitable
allocation and distribution of the BMW
Products available to it among its BMW
dealers. BMW NA reserves the right to reduce
allocation of BMW Vehicles to dealers which
do not comply with the terms of the Dealer
Agreement or the dealer Operating
Requirements Addendum.
(2) Dealer recognizes the possibility that
from time to time BMW Products may not be
available in sufficient quantities. In such
event, Dealer agrees that BMW NA, in the
exercise of its business judgment, may
determine the method and manner of the
allocation of BMW Products between dealer and
BMW NA's other dealers. Upon Dealer's
written request, BMW NA agrees to provide
dealer with an explanation of the method used
to distribute such BMW Products.
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BASIC OBLIGATIONS OF DEALER PARAGRAPH 3
BMW SALES, SERVICE, AND PARTS (a) Dealer assumes the responsibility for the
SUPPLY promotion and sale of BMW Products, the
supply of Original BMW Parts, and customer
service for BMW Products.
CONDUCT OF BUSINESS (b) In the conduct of its business, Dealer
will:
(1) Safeguard and promote the reputation of
BMW Products and the trademarks of BMW;
(2) Refrain from negligent or willful conduct
which may be harmful to the reputation or to
the marketing of BMW Products or inconsistent
with the public interest; and
(3) Refrain from all deceptive, misleading,
or unethical practices
COMPLIANCE WITH DEALER (c) Dealer, recognizing that its
OPERATING REQUIREMENTS AND responsibilities under this Agreement demand
STANDARDS FOR BMW DEALERS the most effective use of its available
facilities, capital and personnel, agrees to
comply with its Dealer Operating Requirements
Addendum. Dealer shall review said Addendum
with BMW NA representatives at the Retail
Business Plan Review; satisfy outstanding
obligations under its Improvement Addendum,
if applicable; and further comply with all
reasonable standards established by BMW NA
from time to time relating to Dealer's BMW
Operations.
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ISSUANCE OF IMPROVEMENT (d) BMW NA will notify Dealer in writing if
ADDENDUM Dealer fails to comply with any obligation,
responsibility or requirement under the
Dealer Agreement or the Dealer Operating
Requirements Addendum ("Deficiency")
(1) If Dealer fails to remedy the Deficiency
following notice, BMW NA will issue to Dealer
an Improvement Addendum or amend an existing
Improvement Addendum, listing the
Deficiency(s) and providing Dealer a
reasonable date to satisfy the Deficiency(s).
(2) Should Dealer reasonably request an
extension of time in writing, a justified
request for extension will not be
unreasonably withheld; however under no
circumstances is BMW NA obligated to grant
more than 2 extensions.
(3) Dealer's failure to satisfy the
Deficiency(s) will jeopardize the Dealer's
ability to renew the Dealer Agreement and
could subject Dealer to early termination of
this Agreement.
(4) The Improvement Addendum will be
cancelled once Dealer remedies the
Deficiency(s).
(5) An Improvement Addendum may be superseded
by BMW NA at any time to reflect Dealer's
progress toward satisfaction of the
Deficiency(s).
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GENERAL REQUIREMENTS FOR PARAGRAPH 4
DEALER'S BMW OPERATIONS
BUSINESS HOURS (a) Throughout the term of the Agreement,
Dealer shall operate Dealer's Facility
during, and for not less than, the customary
business hours of the trade.
SIGNS (b) Dealer agrees to display conspicuously at
and around Dealer's Facility such BMW signs
as BMW NA shall reasonably require.
INSURANCE (c) Dealer shall maintain comprehensive and
excess liability insurance policies in an
amount sufficient to meet all reasonably
anticipated contingencies, including legal
judgments entered against Dealer. In no
event shall the aggregate value of the
policies be less than Three Million Dollars
($3,000,000.00). The policy must be issued
by an insurance company with a Best's
insurance rating of "B+" or better.
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EXCLUSIVE OWNERSHIP OF BMW (d) Dealer acknowledges BMW's exclusive
TRADEMARKS ownership, and the validity, of the BMW
trademarks (including, without limitation,
the BMW logo), both registered and common
law, and shall not contest the same during
the term of the Agreement or any time
thereafter. Dealer and BMW NA agree to
cooperate with each other in preventing any
acts of trademarks infringement or unfair
competition with respect to any BMW
trademark, but BMW (or BMW NA, as BMW's agent
with respect to trademark matters) shall
have sole control over all actions and legal
proceedings to suppress infringement of any
unfair competition with respect to any BMW
trademark.
USE OF BMW TRADEMARKS BY (e) BMW NA grants Dealer a non-exclusive
DEALER license to use the BMW trademarks subject to
the terms and conditions of the Agreement.
Dealer agrees that it will use the trademarks
in connection with the promotion and sale of
BMW Products and consumer service for BMW
Products only in such manner, at such
location, to such extent, and for such
purposes as BMW NA may specify from time to
time. No BMW trademark may be used except in
the color, size, form and style approved by
BMW NA. Moreover, without the express prior
written consent of BMW NA, Dealer will not
use any BMW trademark as part of its
corporate or business name.
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EVALUATION OF DEALER'S FACILITY (f) Recognizing the Dealer's facilities
affect Dealer's ability to discharge properly
its responsibilities under this Agreement and
the Dealer Operating Requirements Addendum,
Dealer will ensure that Dealer's Facility
complies with the applicable provisions of
this Agreement, including such reasonable
requirements and standards as BMW NA may
prescribe from time to time.
SALES OF USED BMW VEHICLES (g) Recognizing the importance to the success
of Dealer's business of a well-operated BMW
used car department, Dealer shall use its
best efforts to maintain in presentable
condition a properly illuminated used car
display area in which used BMW Vehicles will
be prominently displayed. Dealer shall not
use any BMW trademark in connection with the
sale of used BMW Vehicles unless Dealer
complies fully with all requirements of BMW
NA as to the standards, practices, and
facilities for used car sales under the BMW
trademarks.
TRAINING (h) Dealer agrees that its personnel will be
trained in such special training courses as
may be offered from time to time by BMW NA.
Dealer shall require its personnel to meet
with BMW NA personnel in the dealership or at
other appropriate locations for the purposes
of training and to use training materials as
may be suggested from time to time by BMW NA.
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ADVERTISING (i) Dealer agrees to advertise BMW Products
and customer service for BMW Products in
accordance with the standards set forth in
Paragraph 3(b) and such other reasonable
standards and guidelines as BMW NA may
establish from time to time. Such
advertising shall include, among other
things, listings in local classified
telephone directories identifying Dealer as
an authorized dealer in BMW Products.
Both BMW NA and Dealer recognize the need of
maintaining uniformly high standards of
ethical advertising of a quality and dignity
consistent with the reputation of BMW
Products in order to maintain public
confidence and respect in Dealer, BMW NA, and
BMW Products. Accordingly, Dealer agrees not
to publish or cause to be published any
advertising relating to BMW Products and
customer service for BMW Products which is
likely to deceive and mislead the public or
to impair the goodwill of BMW NA or BMW
Products. BMW NA reserves the right to
require Dealer to cease any advertising
inconsistent with this provision including
the right to prohibit Dealer from using BMW
Trademarks in advertising.
COMPLIANCE WITH LAWS (j) Dealer shall comply with all applicable
local, state and federal laws and
regulations, including, but not limited to,
laws and regulations requiring licensing
and/or registration. Dealer agrees to
disclose information as BMW NA may reasonably
request with respect to the foregoing.
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DEALER'S SALES OF BMW VEHICLES PARAGRAPH 5
SALES PROMOTION (a) Dealer will actively and effectively
promote the sale of the full line of BMW
Vehicles as it is authorized to promote and
sell primarily in its Primary Market Area
through regular contacts with owners and
prospective owners and users of BMW Products
consistent with the terms of this Dealer
Agreement, and through such other means as
reasonably may be required by BMW NA from
time to time.
SALES PERFORMANCE (b) Within the limitations, if any, resulting
from the quantity of BMW Vehicles made
available to Dealer by BMW NA, Dealer shall
achieve the best possible sales performance
obtainable for BMW Vehicles. Such sales
performance shall be evaluated on the basis
of such reasonable and equitable criteria as
may be determined from time to time by BMW
NA.
DEMONSTRATORS (c) For purposes of demonstration, Dealer
shall have available, at all times, such
number of the most current model BMW Vehicles
as required pursuant to the Dealer's
Operating Requirements Addendum. Dealer
shall maintain such BMW Vehicles in first-
class operating condition at all times.
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RETAIL BUSINESS PLAN (d) Each Dealer shall develop a Retail
Business Plan with objectives for the
following year. The annual Retail Business
Plan will be discussed with and presented to
the BMW NA representative at an annual retail
business plan review. The final Retail
Business Plan, as accepted by BMW NA, shall
represent the goals and objectives of Dealer
and contain the action plans developed by
Dealer to achieve those goals and objectives
and, in the case of an Improvement Addendum,
address the means of complying with the terms
of this Agreement.
PERFORMANCE EVALUATION (e) Dealer and BMW NA agree that their
primary purpose is to satisfy customers by
properly servicing and promoting the sale of
BMW Products within Dealer's Primary Market
Area. Dealer and BMW NA will work together
to achieve this purpose.
(1) Dealer's compliance with the Retail
Business Plan and Dealer's sales service and
customer satisfaction performance will be
reviewed and evaluated at least annually.
BMW NA will provide to Dealer, in writing,
its evaluation of Dealer's performance. Any
written comments submitted by Dealer to BMW
NA shall become part of a performance
evaluation report.
(2) BMW NA shall evaluate Dealer's
performance based on, but not limited to:
A. Dealer's sales of BMW Products in
Dealer's Primary Market Area;
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B. Registrations attributable to Dealer in
Dealer's Primary Market Area;
C. The sales and registrations of
competitive vehicles in Dealer's Primary
Market Area;
D. Feedback from Dealer's customers measured
by the results of the customer satisfaction
surveys provided to Dealer by BMW NA;
E. The trend of Dealer's performance over a
reasonable period of time;
F. Significant local conditions that may
have affected Dealer's performance;
G. The general vehicle purchasing trends of
the public; and
H. Dealer's compliance with its Dealer
Operating Requirements Addendum and its
Retail Business objectives.
DOWN PAYMENTS AND TRADE INS (f) Payments received from customers, whether
in money or in kind, which are to be applied
towards the subsequent purchase of a new BMW
Vehicle, shall be held for such customers in
accordance with applicable law until such
time as the transaction with respect to which
such payments were received is consummated.
PRICE DISCLOSURE (g) Dealer shall deliver to any purchaser of
a BMW Vehicle an itemized invoice and
disclose any other information or give any
notice required by law
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CUSTOMER SERVICE PARAGRAPH 6
SCOPE AND QUALITY (a) Dealer shall provide the best possible
customer service for all owners of BMW
Vehicles whether or not the BMW Vehicle was
sold by Dealer and shall promote its customer
service and the sale of Original BMW Parts.
Dealer shall not engage in any service
practice with respect to any BMW Products if
BMW NA has reasonably objected to the nature
or quality of such practice.
DISCLOSURE AND USE OF ORIGINAL (b) Dealer shall not use any parts other
BMW PARTS than genuine Original BMW Parts or parts
expressly approved by BMW NA in the
performance of warranty service in connection
with the BMW New Car Limited Warranty and/or
other BMW warranties.
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(2) Dealer recognizes that its customers
have a right to expect that any product that
they purchase from Dealer meets the high
quality standards associated with BMW
Products In order to avoid confusion and
minimize potential customer dissatisfaction,
in any case where Dealer sells for use in the
repair of any BMW Product any parts which are
not genuine Original BMW Parts or parts
approved by BMW or BMW NA, Dealer shall
disclose to the customer that such parts are
not genuine Original BMW Parts or parts
approved by BMW or BMW NA, and, consequently,
that such parts are not warranted by BMW NA.
Such disclosure shall be in writing,
conspicuous and set forth on the parts
invoice, service or repair order. Dealer
will also, by appropriate written notice,
advise the customer of the source of such
parts and extent of any warranty given by the
supplier or manufacturer of such parts.
(3) Dealer shall not represent in any
manner, sell or offer for sale as new,
genuine Original BMW Parts or parts approved
by BMW or BMW NA, any parts which are not in
fact new, genuine Original BMW Parts or parts
approved by BMW or BMW NA.
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PRE-DELIVERY INSPECTION (c) Before delivery to the customer, Dealer
shall inspect and condition each new BMW
Vehicle in accordance with quality
certification and other pre-delivery
inspection procedures furnished from time to
time by BMW NA to Dealer. Evidence of
completion will be determined at the
discretion of BMW NA, through customer
response to surveys or inspection documents
maintained in Dealer's vehicle history file.
BMW SERVICE BOOKLET; BMW (d) Upon delivery to a customer of a new BMW
DRIVER'S HANDBOOK Vehicle, Dealer will also deliver to the
customer the BMW Service Booklet supplied by
BMW NA for such BMW Vehicle, properly
completed and stamped with Dealer's corporate
or business name, the customer warranty
information, including notification of any
laws, rules or regulations addressed in
subparagraph (e) below when required by
applicable state law, and the appropriate BMW
Driver's Handbook.
COMPLIANCE WITH CONSUMER (e) Dealer acknowledges the existence and
PROTECTION STATUTES applicability of various "repair or replace"
laws or other consumer protection laws, rules
and regulations. Dealer agrees to comply
fully with the requirements of such laws,
rules and regulations and Dealer will take no
action which adversely affects BMW NA's
rights and duties under these laws, rules and
regulations.
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Moreover, Dealer agrees to use its best
efforts to notify BMW NA promptly in writing
of all situations in which "repair or
replace" laws are or may be applicable.
Dealer further agrees to take such other
actions as BMW NA may reasonably require.
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DEALER'S RECORDS AND REPORTS; PARAGRAPH 7
ACCESS TO DEALER'S PREMISES
FINANCIAL RECORDS (a) Dealer shall keep accurate and current
books of account in accordance with
accounting principles reasonably satisfactory
to BMW NA so as to enable BMW NA to develop
comparative data in order, among other
things, to furnish to Dealer, for Dealer's
benefit, business management assistance.
MANAGEMENT INFORMATION SYSTEMS (b) To facilitate the efficient operation of
REQUIREMENTS the BMW NA dealer network and the accurate
and prompt disclosure to BMW NA of dealership
operations and financial information, Dealer
agrees to install and maintain management
information system facilities which are
compatible with the computer system and
software used by BMW NA and comply with the
terms of the BMW Information Management
Manual.
FINANCIAL STATEMENTS (c) Dealer shall deliver or mail to BMW NA
the following:
(1) On or before the tenth (10th) day of each
calendar month, on such forms as BMW NA
reasonably may require, a financial and
operating statement reflecting Dealer's BMW
Operations for the preceding month and
Dealer's total BMW Operations from the
beginning of the calendar year to the end of
the preceding month; and
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(2) Within three and one-half (3-1/2) months
after the end of the calendar year, a
financial and operating statement for such
year. In the event BMW NA so requests in
writing, such statement shall be reviewed by
a certified public accountant.
ADDITIONAL REPORTS (d) Dealer will furnish to BMW NA, on such
forms and at such times as BMW NA reasonably
may require, complete and accurate reports of
dealer's sales and inventories of new BMW
Vehicles, of used BMW Vehicles, of Original
BMW Parts, and of other used automobiles.
Dealer will also furnish to BMW NA such other
reports as BMW NA reasonably may require from
time to time. Dealer shall maintain such
records for at least three years.
ACCESS TO DEALER'S (e) Until the expiration or prior
PREMISES AND RECORDS termination of the Agreement and thereafter
until consummation of all the transactions
referred to in paragraph 14 hereof, BMW NA,
through its representatives, employees, and
other designees, shall have the right, at all
reasonable times during regular business
hours, to inspect Dealer's BMW Operations,
including the Dealer's Facility, records and
accounts of Dealer relating to Dealer's BMW
Operations. Dealer shall cooperate fully
with, and take all actions necessary to
facilitate such inspections.
-22-
CONFIDENTIALITY (f) BMW NA will not furnish any data
submitted to it by Dealer to any third party
unless authorized by Dealer, required by law,
regulation or judicial, arbitral or
administrative process; or pertinent to
judicial, arbitral or administrative
proceedings.
-23-
DEALER'S PURCHASES OF BMW VEHICLES PARAGRAPH 8
DEALER'S PURCHASE PRICE (a) BMW NA will sell BMW Vehicles to Dealer
at such prices and upon terms as may be
established from time to time by BMW NA.
Dealer shall be responsible for payment of
any and all sales taxes, use taxes, excise
taxes and other governmental or municipal
charges imposed or levied or based upon the
sale of BMW Vehicles by BMW NA to or through
Dealer.
PAYMENT (b) Payment for each BMW Vehicle purchased by
Dealer shall be made in cash at the time of
delivery unless the invoice provides
otherwise, in which event the terms of the
invoice shall govern. Receipt of any check,
draft, or other commercial paper shall not
constitute payment until BMW NA has received
cash in full amount thereof. Dealer shall
pay all collection charges.
LINE OF WHOLESALE CREDIT (c) During the term of this Agreement, Dealer
shall maintain exclusively for BMW Vehicles,
an unrestricted line or lines of wholesale
credit with a financing institution or
institutions satisfactory to BMW NA in
amounts as specified in the Dealer Operating
Requirements Addendum.
SHIPMENT TO DEALER (d) BMW NA will endeavor, whenever
practicable, to follow Dealer's requests with
regard to route and method of shipment of BMW
Vehicles but BMW NA reserves the right to
ship BMW Vehicles purchased by Dealer
hereunder by whatever mode of transportation,
by whatever route, and from whatever point
BMW NA may select. All shipping charges for
BMW Vehicles will be borne
-24-
by Dealer.
CLAIMS PROCESSING (e) In order to facilitate the processing of
claims for damage against the carrier or
carrier's insurer, Dealer hereby authorizes
BMW NA to process, and BMW NA agrees that it
will so process at its own cost and expense,
all such claims in BMW NA's name but for
Dealer's account in such manner and on such
basis as BMW NA may reasonably determine.
BMW NA shall not, however, be obliged to
retain counsel or commence legal proceedings
against carrier or carrier's insurer with
respect to any such claims. Dealer also
authorizes BMW NA to settle or compromise any
such claims for less than the full amount
thereof as BMW NA may in its sole judgment
determine without the prior approval of
Dealer.
Immediately upon delivery of any BMW Products
to Dealer, Dealer shall make a careful
inspection of such Products and shall note
any deficiency or damage in the BMW Products
so delivered on the appropriate carrier
delivery forms, which shall be signed by both
the representatives of carrier and the
representatives of Dealer. Dealer shall also
follow any other pertinent procedures that
may be established from time to time by BMW
NA and will cooperate with BMW NA in
processing any claims. Failure by Dealer to
note any deficiency or damage upon delivery
to Dealer and failure to follow any other
pertinent procedures established by BMW NA
shall constitute a waiver by Dealer of BMW
NA's obligation to process any claim and
Dealer shall be solely responsible for
asserting and processing any such claims
against the carrier.
-25-
PASSING OF RISK (f) All BMW Vehicles sold to Dealer shall be
at Dealer's risk and peril from the time of
delivery at BMW NA's established place of
delivery whether to Dealer, Dealer's agent or
a common carrier and during all subsequent
transportation. It shall be the obligation
of Dealer to insure against such risks for
its benefit and at its expense.
REPAIR AND SALE OF (g) In the event that any BMW Vehicle sold by
DAMAGED BMW VEHICLES BMW NA to Dealer should become damaged prior
to its delivery by Dealer to a customer,
Dealer shall, applying BMW approved repair
practices and procedures, repair fully such
damage so that such BMW Vehicle shall be
placed in first-class salable condition prior
to delivery. Dealer shall not market any BMW
Vehicle if the quality or condition thereof
has been reasonably objected to by BMW NA.
Dealer shall comply with all state laws
applicable to such sales and shall disclose
to the customer all damage in accordance with
applicable state law. Dealer will also
disclose all damage when processing wholesale
or retail trades of BMW Vehicles.
OPTION TO REPURCHASE (h) In order to protect the integrity of BMW
DAMAGED VEHICLES Vehicles, Dealer's and BMW NA's reputation in
the marketplace, Dealer agrees to notify BMW
NA whenever any of Dealer's new and unused
BMW Vehicles are substantially damaged. For
the period of ten (10) business days from BMW
NA's receipt of such notice, BMW NA shall
have the first option to repurchase from
Dealer such damaged BMW Vehicles at a price
equal to the Net Purchase Price originally
paid by Dealer to BMW NA less any monies or
other consideration received by Dealer in
connection with or relating to such damaged
BMW Vehicles.
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Dealer agrees to assign its rights under any
insurance contract with respect to such BMW
Vehicles to BMW NA. In the event BMW NA
exercises its option to repurchase as granted
above, BMW NA reserves the right to make any
payment hereunder directly to any party
having a security interest in the BMW Vehicle
being repurchased. BMW NA shall not be
liable for any interest expense under this
Paragraph 8 on returned vehicles, unless
repurchased under this subparagraph (h).
-27-
DEALER'S INVENTORY AND PARAGRAPH 9
PURCHASE OF ORIGINAL BMW PARTS
MINIMUM INVENTORY OF (a) Dealer shall acquire and at all times
ORIGINAL BMW PARTS maintain a minimum inventory of available
Original BMW Parts necessary to satisfy
adequately the needs of the market.
DEALER'S PURCHASE PRICE (b) BMW NA shall sell Original BMW Parts to
Dealer at such prices and upon such terms as
may be established from time to time by BMW
NA. Dealer is responsible for any and all
sales taxes, excise taxes, use taxes and
other governmental or municipal charges
imposed or levied or based upon the sale of
Original BMW Parts by BMW NA to Dealer,
except federal excise taxes which may be
included in the purchase price of BMW NA to
Dealer. In the event of any increase in the
prices established by BMW NA for Original BMW
Parts, Dealer will have the right to cancel
all orders for Original BMW Parts affected by
the increase which are pending and unfilled
at the time Dealer obtains notice of the
increase, provided that BMW NA is notified in
writing of such cancellation within ten (10)
days from the time Dealer obtains such
notice.
PAYMENT (c) Dealer's orders for Original BMW Parts
will be filled on the basis of payment terms
established from time to time by BMW NA for
Dealer's account. Such terms may provide for
open account, limited open account, C.O.D.,
or cash. Dealer will be invoiced at the time
of shipment through the electronic Dealer
Communications System. Dealer shall receive
a month-end statement by the tenth day of the
month following the date of invoice. Dealer
shall render
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payment for the total amount of the monthly
statement in accordance with the terms stated
therein.
DELIVERY (d) Delivery of Original BMW Parts ordered by
Dealer shall be made by common carrier or US
mail and/or, if practical, in accordance with
Dealer's specific request. If freight
charges are to be paid by BMW NA, the most
economical transportation will be selected.
CLAIMS FOR INCOMPLETE DELIVERY (e) All claims for incomplete delivery of
Original BMW Parts must be made by Dealer in
writing immediately upon Dealer's receipt of
shipment.
RETURN OF DEFECTIVE (f) Dealer shall not sell, offer for sale or
ORIGINAL BMW PARTS install any Original BMW Parts if the nature
or quality thereof has been reasonably
objected to by BMW NA. Dealer may, after
receipt of written authorization from BMW NA,
return defective Original BMW Parts to BMW NA
for credit, together with the original
invoice indicating Dealer's purchase price of
such Original BMW Parts. Such Original BMW
Parts shall be shipped, shipping charges
prepaid, to the destination specified by BMW
NA. Dealer will be reimbursed for shipping
charges prepaid by it on authorized returns
of defective Original BMW Parts based on the
lowest applicable rate of transportation by
common carrier.
RIGHT TO RETURN (g) Dealer will notify BMW NA of any Original
ORIGINAL BMW PARTS BMW Parts ordered by Dealer in error within
thirty five (35) days after receipt of
shipment. Dealer may return such Original
BMW Parts, no later than thirty five(35) days
after Dealer's receipt of specific
authorization from BMW NA, for
-29-
credit, which credit shall be applied based
on the invoiced price of the returned
Original BMW Parts. Such Original BMW Parts
shall be returned, shipping charges prepaid,
to the destination specified by BMW NA.
Dealer may also return, after receipt of
written authorization from BMW NA, Original
BMW Parts shipped to Dealer due to BMW NA
shipping error. Such Original BMW Parts
shall be shipped, shipping charges prepaid,
to the destination specified by BMW NA and
Dealer shall be credited for such prepaid
shipping charges as well as for the invoiced
prices of the returned Original BMW Parts.
NO RETURN OF SPECIAL MATERIAL (h) Dealer will not be entitled to return (1)
any materials which have been acquired or
specially fabricated by BMW NA upon Dealer's
order, or (2) unlisted Original BMW Parts or
assemblies.
-30-
ADDITIONAL PROVISIONS GOVERNING PARAGRAPH 10
DEALER'S PURCHASE OF BMW
PRODUCTS; DEALER'S INVENTORIES
STATE AND LOCAL TAXES (a) With regard to each purchase of BMW
Products, Dealer represents and warrants
that:
(1) Such BMW Products are being purchased
from BMW NA by Dealer for resale in the
ordinary course of Dealer's business;
(2) Dealer has complied with all of the
applicable provisions of local and state laws
prerequisite to the collection and payment by
Dealer of all sales, use, and excise taxes
and other governmental or municipal charges
applicable to all such resale transactions;
and
(3) Dealer has furnished to BMW NA all
resale certificates or similar documents
required to perfect an exemption from any
applicable sales and use tax.
Dealer shall be responsible for payment of
any and all taxes and other governmental or
municipal charges imposed or levied in
connection with the sale to Dealer by BMW NA
of BMW Products or equipment supplied to
Dealer by BMW NA.
In the event that any BMW Products are put to
a taxable use by Dealer or are in fact
purchased by Dealer for purposes other than
resale in the ordinary course of Dealer's
business, Dealer shall make timely return and
payment to the appropriate taxing
authorities, as required by Paragraph 8(a),
with respect to BMW Vehicles, and Paragraph
-31-
9(b), with respect to Original BMW Parts, of
all applicable sales, use and excise taxes,
and other governmental or municipal charges
imposed or levied or based upon the sale of
such BMW Products by BMW NA to Dealer, and
Dealer shall hold BMW NA harmless from any
and all claims and demands which may be made
by such taxing authorities against BMW NA
with respect thereto.
BMW NA'S PURCHASE MONEY (b) In order to assure its prompt and
SECURITY INTEREST unconditional payment to BMW NA upon the
terms and as and when due of any and all
indebtedness, obligations or liabilities of
Dealer to BMW NA for the purchase of each BMW
Product ("Obligation's"), Dealer hereby
grants, assigns and transfers to BMW NA a
continuing first and senior lien on and
security interest in each such BMW Product
sold on credit, open account or limited open
account to Dealer by BMW NA, all accessions
and additions thereto, and all proceeds and
products of each such BMW Product, whether
now owned or hereafter acquired as welll as a
security interest in cash incentives,
holdbacks, bonuses or other BMW NA payables
(the "Collateral"). In furtherance thereof
and in recognition of BMW NA's status as a
secured party having all the rights and
remedies of a secured party under Article 9
of the Uniform Commercial Code:
(1) In the event Dealer is in default of any
Obligations or any of the events described in
Paragraph 12(b) and (c) of this Agreement
shall occur, and at any time thereafter, BMW
NA may declare Dealer in default and may
exercise the following rights and remedies,
in addition to all other rights
-32-
and remedies it has a secured party under the
Uniform Commercial Code:
(i) To declare all Obligations of Dealer to
BMW NA immediately due and payable; and
(ii) To require Dealer to assemble the
Collateral and make it available to BMW NA
for possession at a place designated by BMW
NA which is reasonably convenient to both
parties.
(2) With respect to all proceeds of the
Collateral, including, without limitation,
payments received by Dealer from a customer
upon delivery of any BMW Product constituting
Collateral and cash deposits received from a
customer in anticipation of a future delivery
of a BMW Product constituting Collateral to
such customer, Dealer grants to BMW NA an
irrevocable power of attorney to endorse all
cash and non-cash proceeds of the Collateral
to effect collection thereof, it being
understood and intended by Dealer that such
power of attorney is coupled with an
interest; and Dealer shall:
(i) Upon demand by BMW NA, whether or not
Dealer is in default of any Obligations,
deposit not later than the business day
following receipt, all proceeds of the
Collateral or any portion thereof, in a
separate bank account designated for that
purpose and under the sole control of BMW NA;
(ii) Not commingle any proceeds of the
Collateral to which BMW NA is entitled with
other funds or property of Dealer until
delivery of such proceeds to BMW NA has been
-33-
completed, it being agreed and understood
that the proceeds to which BMW NA is entitled
shall be that portion of the proceeds upon
sale of a BMW Product constituting Collateral
which equals the Obligations with respect to
such BMW Product; and
(iii) Hold any proceeds of the Collateral to
which BMW NA is entitled under Paragraph
10(b)(2) hereof separate and apart and upon
express trust for BMW NA until such delivery
or deposit.
(3) Dealer shall hold in trust each deposit
of cash received from a customer in
anticipation of a future delivery of a BMW
Product constituting Collateral to such
customer until such delivery is consummated.
(4) Dealer shall not sell, pledge, assign,
transfer, lease, resell or otherwise dispose
of any type of Collateral herein described or
any interest in Collateral except in the
ordinary course of Dealer's business or as
may be authorized in writing by BMW NA.
(5) Dealer shall execute and deliver
promptly to BMW NA one or more financing
statements pursuant to the Uniform Commercial
Code in form suitable for filing to perfect a
purchase money security interest in the
Collateral and otherwise satisfactory to BMW
NA. Dealer irrevocably appoints BMW NA as
its attorney in fact, to sign and file, in
Dealer's name, financing statements at any
time with respect to the Collateral and the
proceeds thereof, it being understood and
intended by Dealer that such power of
attorney is coupled with an interest.
-34-
(6) The remedies provided in this Paragraph
10(b) shall be in addition to any other
rights and remedies provided in this
Agreement or under applicable law.
RETURN OR DIVERSION OF BMW (c) In the event Dealer should fail or
VEHICLES ON DEALER'S FAILURE refuse for any reason (other than an error by
TO ACCEPT BMW NA) to accept any BMW Vehicle delivered
to Dealer's Facility, Dealer will reimburse
BMW NA for all expenses incurred by BMW NA in
returning such BMW Vehicle to the original
point or in diverting it to another
destination, as the case may be; but in no
event shall Dealer be required to pay BMW NA
an amount in excess of the expense of
returning such BMW Vehicle to its original
point of delivery to Dealer. Dealer forfeits
any further rights it may have with respect
to such rejected BMW Vehicle(s).
FAILURE OF OR DELAY IN DELIVERY (d) BMW NA will not be under any liability
to Dealer for failure to deliver or for delay
in making delivery if such failure or delay
results from any event brought by causes
other than willful or grossly negligent
conduct of BMW NA, such as, for example, any
event in the nature of force majeure, acts of
God, acts of any government, foreign or civil
wars, riots, interruptions of navigation,
shipwrecks, strikes, lockouts, other labor
troubles, embargoes, blockades, fires,
explosions, sabotage, failures of BMW or of
any other supplier of BMW NA to deliver, or
delay of BMW or of any other supplier of BMW
NA in making delivery.
-35-
CHANGES IN SPECIFICATIONS (e) BMW Products will be delivered by BMW NA
to Dealer in accordance with standards
applicable at the time of their manufacture.
BMW NA and Dealer recognize and agree that
BMW and/or BMW NA shall have the right,
without limitation, at any time and from time
to time, to make changes or modifications in
the design specifications of BMW Products
without notice to BMW NA or Dealer. BMW NA
shall have no obligation to Dealer to make
such change or modification with respect to
BMW Products previously delivered to or
ordered by Dealer or to make any refund or
other adjustment for any BMW Products
previously purchased by Dealer or being
imported, manufactured or sold, whether or
not the price of such BMW Products is
affected thereby. No change shall be
considered a model year change unless so
specified by BMW.
CHANGES BY DEALER ON BMW (f) Dealer agrees not to make any
PRODUCTS; COMPLIANCE WITH modifications or alterations to BMW Vehicles
SAFETY, AIR POLLUTION, which alters the original engineering and/or
NOISE CONTROL AND CONSUMER operating specifications of the vehicle. BMW
WARRANTY REQUIREMENTS NA may request Dealer to make such changes or
refrain from making such changes on BMW
Products as may be prescribed from time to
time by BMW, and Dealer agrees to comply
promptly with such requests. Dealer also
agrees to take such steps and render such
reports in connection with the National
Traffic and Motor Vehicle Safety Act of 1966,
the Consumer Product Safety Act, the
Magnuson-Moss Warranty Act, or any other
legislation or regulation pertaining to
safety, air pollution, noise control or
warranties to consumers, as may be required
of automobile dealers or
-36-
manufacturers or as BMW or BMW NA may request
from time to time, and to comply with all
such legislation and regulations in
conducting Dealer's BMW Operations. BMW NA
will reimburse Dealer for the reasonable cost
of any Original BMW Parts, and labor in
accordance with current warranty rates and
procedures, which may be used by Dealer in
making changes on BMW Products requested by
BMW NA and/or BMW. Dealer agrees to
indemnify and hold harmless BMW and BMW NA
from and against any and all claims and
liabilities arising from Dealer's failure or
alleged failure to comply, in whole or in
part, with any obligation assumed by Dealer
pursuant to this paragraph. Dealer will
communicate to BMW NA all suggestions with
respect to improvements in BMW Products it
may have or develop as a result of its
experience.
INVENTORIES (g) Dealer agrees that, in addition to
maintaining the minimum inventory of Original
BMW Parts required under Paragraph 9(a),
Dealer will acquire, and at all times
maintain, such inventory of available BMW
Products as is necessary in accordance with
the current and reasonably foreseeable volume
of Dealer's business and to further Dealer's
sales activities and to assure satisfactory
customer service and supply of Original BMW
Parts.
-37-
WARRANTY TO CUSTOMERS PARAGRAPH 11
BMW WARRANTEES (a) Each BMW Vehicle supplied by BMW NA will
be warranted to the customer by BMW NA in
accordance with the New Car Limited Warranty
and the Limited Warranty on Emission Control
and the Limited Warranty Against Rust
Perforation. Each Original BMW Part supplied
by BMW NA will be warranted to the customer
by BMW NA in accordance with the Limited
Warranty on Original BMW Spare Parts or the
Limited Warranty on Original BMW Spare Parts
Purchased Over the Counter, as the case may
be.
INCORPORATION OF BMW (b) Dealer agrees to make all sales of BMW
WARRANTEES IN DEALER'S SALES Vehicles and Original BMW Parts in such a way
that its customers acquire all rights in
accordance with the New Car Limited Warranty,
the Limited Warranty on Emission Controls,
the Limited Warranty against Rust
Perforation, the Limited Warranty on Original
BMW Spare Parts or the Limited Warranty on
Original BMW Spare Parts Purchased Over the
Counter, as the case may be. Dealer will
supply consumers with a copy of such
warranties in such fashion as may from time
to time be required by BMW NA or by
applicable law. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EXCEPT FOR THE NEW CAR
LIMITED WARRANTY, THE LIMITED WARRANTY ON
EMISSION CONTROLS, THE LIMITED WARRANTY
AGAINST RUST PERFORATION, THE LIMITED
WARRANTY ON ORIGINAL BMW SPARE PARTS AND THE
LIMITED WARRANTY ON ORIGINAL BMW SPARE PARTS
PURCHASED OVER THE COUNTER, BMW NA MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, TO
CONSUMERS.
-38-
WARRANTY PROCEDURES (c) Dealer agrees to comply with the
provisions of the current Warranty Policies
and Procedures Manual supplied by BMW NA to
Dealer and to follow the procedures
established from time to time by BMW NA for
the processing and disposition of warranty
claims and the return and disposition of
Original BMW Parts claimed to be defective.
Dealer will also comply with all requests of
BMW NA for the performance of service in
response to warranty claims and will maintain
detailed records of time and parts
consumption as prescribed by BMW NA. Upon
complying with such procedures and requests
and maintaining such records, Dealer will be
entitled to reimbursement for warranty claims
at the current rate of reimbursement
specified by BMW NA for Dealer provided that
Dealer has the necessary equipment and
qualified service personnel, as specified by
BMW NA, to effect necessary warranty repairs.
Strict adherence to the procedures
established for processing warranty claims is
necessary in order for BMW NA to process such
claims fairly and expeditiously. BMW NA will
be under no obligation with respect to
warranty claims not made strictly in
accordance with such procedures. Dealer's
obligation hereunder extends to all BMW
Vehicles and BMW Products under warranty
presented to Dealer by a customer, regardless
of whether Dealer sold the BMW Vehicle or BMW
Product to such customer.
Dealer is not authorized to assume or incur
any other or additional warranty obligations
or liabilities on behalf of either BMW or BMW
NA. Any such other or additional obligations
-39-
assumed or incurred by Dealer shall be solely
the responsibility of Dealer, including the
disclosure of the identity of the supplier or
warrantor, the existence of a warranty, and
the specific terms and conditions of such
warranty to the consumer.
-40-
TERMINATION PRIOR TO EXPIRATION PARAGRAPH 12
DATE; SUCCESSION
TERMINATION BY DEALER (a) Dealer shall have the right to terminate
the Agreement at any time by sending notice
of such termination to BMW NA, by certified
mail, return receipt requested, telegram, or
overnight mail service sixty (60) days in
advance of the effective date thereof.
IMMEDIATE TERMINATION BY BMW (b) Except to the extent a greater notice
NA FOR CAUSE period is required by any applicable statute,
in which case the minimum notice period shall
be deemed to be the minimum period required
by such law, BMW NA shall have the right to
terminate the Agreement for cause, with
immediate effect, by sending notice of such
termination to Dealer by certified mail
return receipt requested, telegram, or
overnight mail service, if any of the
following events should occur:
(1) Any material misrepresentation by any of
the persons listed in Article C of the Dealer
Agreement as to any fact relied upon by BMW
NA in entering into this Agreement or
approving such persons;
(2) Conviction of Dealer or of any of the
persons listed in Article C of the Dealer
Agreement, or pleading guilty or pleading
nolo contendre by any of the foregoing, of
any felony or for any material violation of
law if BMW NA has reason to believe that such
conviction or plea may adversely affect the
conduct of Dealer's BMW Operations or would
tend to be harmful to
-41-
BMW, BMW NA, the reputation of BMW Products
or the marketing of BMW Products;
(3) Submission by Dealer to BMW NA of a
false or fraudulent report or statement or of
a false or fraudulent claim for
reimbursement, refund or credit, such as, for
example, a false or fraudulent warranty
claim;
(4) Grossly negligent or willful conduct on
the part of Dealer that BMW NA determines, in
the reasonable exercise of its discretion, to
be harmful to the goodwill of BMW or BMW NA,
the reputation of BMW Products or the
marketing of BMW Products;
(5) Closure or cessation of Dealer's BMW
Operations for a period of six (6)
consecutive business days, unless such
closure or cessation of operation is caused
by some event beyond the control of the
Dealer, such as strikes, civil war, riots,
fires, floods, earthquakes, or other acts of
God, and Dealer immediately resumes its
customary operations after the cause of the
closure or cessation of operations is
removed;
(6) Dissolution or liquidation of Dealer, if
a partnership or corporation;
(7) Insolvency or business failure of
Dealer, Dealer's inability to pay its debts
as such debts become due; appointment of a
receiver or custodian for all or any part of
the property of Dealer; assignment for the
benefit of creditors by Dealer; the
commencement of a case or proceeding under
any bankruptcy
-42-
or insolvency laws by or against Dealer or
any person or entity owning or holding,
beneficially or otherwise, a majority or
controlling interest in Dealer; or the
subjection of all or any BMW Products to
execution or other judicial process;
(8) Termination of BMW NA's authorization as
a BMW importer;
(9) The conduct, directly or indirectly, of
any dealership operation at any location,
other than that specifically approved herein
for such operation, without the prior written
approval of BMW NA; or
(10) Any attempted or actual sale, transfer
or assignment by Dealer of this Agreement or
any of the rights granted Dealer hereunder,
or any attempted or actual transfer,
assignment or delegation by Dealer of any of
the responsibilities assumed by it under this
Agreement without the prior written approval
of BMW NA.
TERMINATION BY BMW NA ON (c) Except to the extent a greater notice
60 DAYS' NOTICE period is required by any applicable statute,
in which case the notice period shall be
deemed to be the period required by such
statute, BMW NA shall have the right to
terminate the Agreement, on sixty (60) days
notice, if any of the following situations
exist and BMW NA has previously sent a
written notice to Dealer with respect
thereto:
-43-
(1) Any disagreement or personal
difficulties between or among any of the
persons listed in Article C of the Dealer
Agreement which BMW NA has a reasonable basis
to believe would have a materially adverse
effect on the conduct of Dealer's BMW
Operations or the presence in the management
of Dealer of any person who BMW NA has a
reasonable basis to believe does not have the
requisite qualifications for the position;
(2) Impairment of the reputation or
financial standing of Dealer or any of the
persons listed in Article C of the Dealer
Agreement or ascertainment by BMW NA of any
facts existing at or prior to the time of
execution of the Agreement which tend to
impair such reputation or financial standing;
(3) Any reduction in value of Dealer's BMW
Products or any act on the part of the
Dealer, including without limitation, the
existence of any liens or encumbrances upon
BMW Products, which to any degree imperils
the prospect of full performance or
satisfaction of the Obligations of Dealer to
BMW NA; or any change in the financial or
other condition of Dealer which BMW NA has
reason to believe unreasonably impairs BMW
NA's security or increases its risk
hereunder. By way of example such
impairments might include failure to pay for
BMW Products in accordance with the terms and
conditions of sales and failure to establish
and/or maintain for the duration of the
Agreement, net working capital, adequate
exclusive unrestricted wholesale lines of
credit;
-44-
(4) The importation, distribution or sale of
BMW vehicles which are not originally
manufactured or designed for use in the
United States or the sale of BMW Products for
resale or use outside the 50 United States or
other violation of any BMW NA Export Policy
established by BMW NA;
(5) Refusal to permit BMW NA to examine or
audit Dealer's accounts and records as
provided herein upon receipt by Dealer from
BMW NA of written notice requesting such
permission or information;
(6) Failure of Dealer to furnish accurate
sales or financial information and related
supporting data in a timely fashion;
(7) Subject to provisions contained herein
with regard to any change in ownership
occurring by reason of the death or permanent
disability of Dealer's Owner(s), any change
in Dealer's Owner(s) holding a majority or
controlling ownership interest in Dealer, or
any change, whether voluntary or by operation
of law, in the ownership of beneficial
interests in Dealer, or any appointment of
Dealer Operator, without the prior written
consent of BMW NA;
-45-
(8) Dealer's failure to take any actions
pursuant to the National Traffic and Motor
Vehicle Safety Act of 1966, the Consumer
Product Safety Act, the Magnuson-Moss
Warranty Act, or any other legislation or
regulation pertaining to safety, air
pollution, noise control, or warranties to
consumers which may be required of automobile
dealers or which BMW NA may request in
implementing any action undertaken by BMW NA
or BMW; or
(9) Any breach or violation of any material
obligation contained in the Agreement or in
connection with any transaction between BMW
NA and Dealer; or the failure of Dealer to
satisfy any deficiency(s) contained in the
Improvement Addendum, or any material failure
by Dealer to comply with a requirement
established by BMW NA and communicated to
Dealer in accordance with this Agreement.
During the period such a situation continues
to exist, BMW NA may modify its terms of
payment with respect to Dealer to such extent
as BMW NA may consider appropriate,
irrespective of Dealer's credit standing or
payment record.
NO WAIVER BY FAILURE (d) In the event BMW NA shall be entitled to
TO TERMINATE terminate the Agreement pursuant to the
provisions of Paragraph 12(b) or Paragraph
12(c) but shall fail to do so, such failure
shall not be considered a waiver of the
rights of BMW NA to so terminate the
Agreement.
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TERMINATION UPON DEATH (e) Death or permanent disability of any of
OR PERMANENT DISABILITY Dealer's Owners holding a majority or
controlling ownership interest in Dealer or
the permanent disability of Dealer Operator
may, at BMW NA's option, result in the
termination of this Agreement, upon written
notice by BMW NA to Dealer. BMW NA shall
provide such notice within a reasonable time
after such death or permanent disability.
Termination hereunder shall be effective
sixty (60) days from the date of such notice.
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SUCCESSOR TO DEALER (f) Notwithstanding the above Paragraph
IN EVENT OF DEATH 12(e), in the event of the death of any of
the Dealer's Owners, if the beneficial
interest in Dealer passes directly to the
surviving spouse and children, or to any of
them, and if:
(1) Either or both of the persons included
in Article C(iv) and (v) of the BMW Dealer
Agreement remain(s) unchanged; or
(2) Within ninety (90) days after the death
of such Owner, arrangements are completed for
the assumption of the management of Dealer by
persons acknowledged in writing by BMW NA to
be satisfactory to it, then BMW NA will not
terminate the Agreement by reason of such
death before the end of twelve (12) months
after the death of such Owner and, if the
Agreement expires sooner than twelve (12)
months after the death of such Owner, BMW NA
will offer to enter into a new Agreement with
Dealer for an extension period equal to the
difference between twelve months and the
number of days between the date of death of
such Owner and the expiration date of this
Agreement. Such new Agreement will be in
substantially the same form as the Agreement
then currently offered by BMW NA to its
Dealers. Prior to the expiration of such
extension period and after completion of BMW
NA's evaluation of the performance of
Dealer's management during such period, BMW
NA will review with Dealer the changes, if
any, in the management or equity interests of
Dealer required by BMW NA as a condition to
renewing or extending the aforementioned new
Agreement with Dealer.
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SUCCESSOR NOMINEE (g) Dealer may amend the Dealer Agreement to
nominate a Successor, designating proposed
Dealer Owner(s) of a Successor Dealer to be
established if this Agreement is terminated
because of death or permanent disability.
Dealer may also cancel a Successor Nominee by
providing notice to BMW NA that it intends to
amend the Dealer Agreement to delete and/or
substitute a new Successor Nominee. The
request to amend the Dealer Agreement or to
cancel a Successor Nominee must be executed
by all Dealer's Owners and be received by BMW
NA prior to such death or permanent
disability. In the case of the nomination of
a Successor, any proposed Dealer Owner(s)
must be acceptable to BMW NA. If Successor
Nominee is not acceptable to BMW NA, Dealer
and BMW NA will create a developmental plan
which, if successfully accomplished, will
qualify the Successor Nominee to eventually
become a Dealer Owner.
In the case of cancellation of a Successor
Nominee, BMW NA agrees to delete the name of
the party listed in Article C(iv) upon
receipt of that notice. If, due to changed
circumstances, BMW NA believes or has a
reasonable basis to believe the Successor
Nominee is or should be disqualified, BMW NA
will notify Dealer that the proposed owner is
no longer acceptable. A subsequent Successor
Nominee will be designated or a developmental
plan will be created by mutual agreement
between BMW NA and Dealer.
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If BMW NA has notified Dealer Owner's in
writing before the death or permanent
disability of such owners that BMW NA does
not plan to continue to have a dealer at
Dealer's location, BMW NA shall accept a
Successor Nominee upon the Successor's
written commitment to relocate Dealer's BMW
Operation within a reasonable time to a
mutually acceptable location.
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CONTINUATION OF PARAGRAPH 13
BUSINESS RELATIONS
CONTINUATION OF BUSINESS (a) The Agreement can be extended or renewed
RELATIONS AFTER EXPIRATION only through an express written instrument to
OR PRIOR TERMINATION that effect executed in accordance with
Article I of the Dealer Agreement. Any
business relations of any nature whatsoever
between BMW NA and Dealer after the
expiration of the Agreement, or after its
prior termination pursuant to Paragraph 12,
without such written instrument shall not
operate as an extension or renewal of the
Agreement. Nevertheless, all such business
relations, so long as they are continued,
shall be governed by terms identical with the
provisions of the Agreement.
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RIGHTS AND LIABILITIES UPON PARAGRAPH 14
EXPIRATION OR PRIOR TERMINATION
PENDING ORDERS (a) Upon the expiration or prior termination
of the Agreement, all pending orders of
Dealer for BMW Products previously accepted
by BMW NA will be considered canceled and
Dealer will immediately do the following:
BMW SIGNS (1) Remove, at its own expense, all BMW
signs displayed at Dealer's Facility and sell
and deliver the same to BMW NA at Dealer's
Facility in suitable condition and packing
for transportation. Promptly following such
delivery, BMW NA will pay to Dealer, Dealer's
purchase price for such signs reduced by
straight-line depreciation on the basis of a
seven-year useful life;
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DISCONTINUANCE OF USE OF BMW (2) Dealer acknowledges that the license and
TRADEMARKS right to the use of the BMW trademarks ceases
upon Dealer's voluntary resignation or
termination as a Dealer, or upon the
expiration of this Agreement, whichever
occurs first. In such event, Dealer will
immediately cease holding itself out as a BMW
dealer and refrain from the use of BMW
trademarks in any fashion whatsoever.
Moreover, Dealer agrees not to use any
similar trademarks and refrain from any other
activity which states or implies that it is
authorized to deal in or service BMW
Products. If Dealer shall refuse or neglect
to comply with the provisions of Paragraph
14(a)(1) and (2), Dealer shall reimburse BMW
NA for all costs and expenses (including
attorneys' fees) incurred by BMW NA in
connection with legal proceedings to require
Dealer's compliance;
ORDERS AND FILES (3) Transfer to BMW NA, or BMW NA's designee
or designees, all orders for sale by Dealer
of BMW Vehicles and Original BMW parts then
pending with Dealer, all deposits made
thereon, whether in cash or in kind, and all
of its warranty files and files of
prospective customers for BMW Products, or
complete copies of all such files;
CUSTOMER LISTS (4) Provide BMW NA with the names and
addresses of all customers who purchased BMW
Vehicles from or by Dealer and the service
records of all current and active service
customers; and
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LITERATURE (5) Deliver to BMW NA at BMW NA's place of
business, or to BMW NA's designee or
designees, free of charge, any and all
technical or service literature, advertising
and other printed material relating to BMW
Products then in Dealer's possession which
were acquired or obtained by Dealer from BMW
NA, such as, for example, sales instruction
manuals and promotional materials.
PURCHASE OF DEALER'S INVENTORY (b) Within 90 days of the expiration or
OF BMW PRODUCTS BY BMW NA prior termination of this Agreement and
provided further that all Dealer's
Obligations to BMW NA have been paid or
satisfied in full, BMW NA, upon Dealer's
compliance with the provisions hereinafter
set forth, will purchase from Dealer and
Dealer will sell and deliver to BMW NA, the
following:
NEW BMW VEHICLE INVENTORY (1) All new, unused, undamaged and
unmodified BMW Vehicles then unsold in
Dealer's inventory which are in first-class
salable condition and of the then current
model year or the immediately preceding model
year, provided that such BMW Vehicles were
purchased by Dealer from BMW NA (or in the
ordinary course of business, from other
Dealers). The price for such BMW Vehicles
shall be the Net Purchase Price at which they
were originally purchased from BMW NA;
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NEW ORIGINAL BMW PARTS INVENTORY (2) All new, unused and undamaged Original
BMW Parts (other than the special BMW tools
specifically covered in Paragraph 14(b)(3)
below), in original packaging not classified
as obsolete or "special" by BMW NA, and
listed in the then current BMW Parts Price
List, then unsold in Dealer's inventory which
are in first-class, salable condition;
provided such Original BMW Parts were
purchased by Dealer from BMW NA. The price
at which BMW NA will purchase such Original
BMW Parts shall be the price last established
by BMW NA under the BMW NA standard parts
order for the sale of identical Original BMW
Parts to Dealers, less a 15% handling and
restocking charge; and
SPECIAL BMW TOOLS (3) All required special BMW tools
applicable to BMW Vehicles including
electronic testing equipment (Suntester Model
2013) and computer hardware and software, if
any, provided that such tools were purchased
by Dealer from BMW NA, and provided any sets
of such tools are complete and no parts or
components are missing or otherwise unusable.
The price at which BMW NA will purchase such
special BMW tools shall be reasonably
determined by BMW NA, but in no event will
such price be less than Dealer's purchase
price for such tools reduced by straight-line
depreciation on the basis of a three-year
useful life.
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Any and all items to be sold by Dealer to BMW
NA pursuant to the provisions of this
Paragraph 14(b) shall be delivered by Dealer
to BMW NA at Dealer's Facilities in suitable
condition and boxed and/or packed for
transportation, which transportation shall be
at BMW NA's expense. In the event Dealer
fails to so box and pack any Original BMW
Parts or special BMW tools to be sold
hereunder, BMW NA may do so and deduct the
expenses of such boxing and packing from the
applicable price thereof.
As a condition precedent to the obligations
of BMW NA under this Paragraph 14(b) to
repurchase any BMW Vehicles, Original BMW
Parts or special BMW tools, Dealer shall
permit BMW NA and BMW NA's designee or
designees, at such time and for such periods
of time as BMW NA reasonably shall determine,
to enter Dealer's Facility for the purpose of
inspection and/or taking an inventory of all
or any part of Dealer's stock of BMW
Vehicles, Original BMW Parts and special BMW
tools. At the request of BMW NA, Dealer
shall comply in all respects with the
provisions of all applicable bulk sales acts
or similar statutes protecting a transferee
of personal properly with respect to
liabilities of the transferor.
In making payments in accordance with this
Paragraph 14(b), BMW NA reserves the right to
do the following:
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(i) To pay any financial institution
retaining a security interest in any of the
items to be repurchased by BMW NA such sums
as are necessary to obtain good, unencumbered
and marketable title to such items;
(ii) To pay any claimant, in accordance with
any applicable statute, such sums as may be
necessary to acquire good, unencumbered and
marketable title, free of any interest, right
or claim of such claimant, to the items being
repurchased by BMW NA; and
(iii) To set off the amount due Dealer
including, without limitation, amounts due
Dealer from BMW NA for the repurchase of BMW
Products hereunder against any amount which
may be due BMW NA from Dealer, including,
without limitation, reimbursement of expenses
incurred by BMW NA pursuant to (i) or (ii)
above.
Notwithstanding anything to the contrary
contained in this Paragraph 14(b), in no
event will BMW NA be required to purchase any
item from Dealer unless Dealer is able to
convey title to such item free and clear of
all liens, claims, encumbrances and security
interests.
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BMW NA's RIGHT TO SPECIFIC (c) Since Dealer's performance of its
PERFORMANCE obligations under this Paragraph 14 is of
such a nature that it is impossible to
measure, in money, the damages which will be
suffered by BMW NA in the event Dealer should
fail to perform any of these obligations,
Dealer agrees that, in the event of any such
failure or performance on its part, BMW NA
will be entitled to maintain an action or
proceeding to compel the specific performance
by Dealer of these obligations and Dealer
agrees not to urge in any such action or
proceedings the claim or defense that BMW NA
has an adequate remedy at law.
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TRANSFER OF AGREEMENT PARAGRAPH 15
TRANSFER, SALE OR ASSIGNMENT (a) Dealer shall not transfer, sell or
OF AGREEMENT BY DEALER assign, or attempt to transfer, sell or
assign, the Agreement or sell or transfer any
right or delegate any duty, or obligation or
responsibility of Dealer under the Agreement.
If a transfer, sale or assignment of Dealer's
BMW Operations is approved by BMW NA, then
BMW NA shall offer the transferee or assignee
of Dealer the right to enter into a new
Agreement in substantially the same form as
the Agreement then currently offered by BMW
NA to its dealers.
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INDEMNIFICATION PARAGRAPH 16
INDEMNIFICATION BY BMW NA (a) Subject to the provisions of this
Paragraph 16, BMW NA shall indemnify and hold
Dealer harmless against any judgment which
may be rendered against Dealer, plus
reasonable attorney fees and court costs,
resulting from lawsuits seeking monetary
damages commenced against Dealer by third
parties concerning:
(1) Bodily injury or property damage
(including damage to BMW Products) claimed to
have been caused by an alleged defect in the
design, manufacture or assembly of BMW
Products; provided, however, that any claimed
defect in manufacture or assembly was not
such as should have been detected by Dealer
in a reasonable inspection of the BMW
Products, whether in the performance of the
Dealer's pre-delivery inspection and
conditions or otherwise;
(2) Failure of BMW Products to conform,
because of changes in standard equipment or
material component parts, to any description
thereof set forth in advertisements or
product brochures made available to Dealer by
BMW NA and allegedly relied on by the first
retail purchaser thereof, unless Dealer shall
have received written notice of such changes
from BMW NA prior to the date of delivery of
the affected BMW Product to such purchaser,
or
(3) Any substantial damage to BMW Products
repaired by BMW NA prior to the time any
affected
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BMW Product is delivered to the Dealer,
unless Dealer shall have received written
notice of such damage and repair from BMW NA
prior to the date of delivery of the affected
BMW Product to the first retail purchaser
thereof.
In the event that any lawsuit making
allegations as set forth in (1) through (3)
above is brought naming Dealer as a
defendant, BMW NA will, following receipt of
notice as provided in subparagraph (c) of
this Paragraph 16, undertake at its sole
expense and through counsel selected or
approved by BMW NA, the defense of said
action on behalf of Dealer.
BMW NA is specifically authorized by Dealer
to settle or to continue to defend any such
lawsuit brought against Dealer, provided that
BMW NA shall be solely liable for the payment
of the amount of any settlement which it
effects or judgment that is rendered.
Should BMW NA for any reason refuse to
undertake the defense of Dealer when it is
otherwise obligated to do so under this
subparagraph, Dealer may conduct its own
defense and, in that event, BMW NA's
liability shall be limited solely to the
costs of such defense, including reasonable
attorney fees, court costs and the amount of
any judgment or final settlement paid by
Dealer (provided, however, that Dealer shall
notify BMW NA within twenty (20) days of such
judgment or settlement).
BMW NA shall have the right to decline to
accept Dealer's
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defense or, after accepting the defense but
prior to trial, to tender the defense back to
Dealer, and Dealer shall accept such tender
if BMW NA reasonably concludes that the
allegations or claims being pursued are no
longer those set forth in (1) through (3)
above.
INDEMNIFICATION BY DEALER (b) Subject to the provisions of this
Paragraph 16, Dealer shall indemnify and hold
BMW NA harmless against any judgment which
may be rendered against BMW NA, plus
reasonable attorney fees and court costs,
resulting from lawsuits seeking monetary
damages commenced against BMW NA by third
parties concerning:
(1) Dealer's alleged failure to perform or
negligent or willfully malfeasant performance
of (1) the service obligations assumed by it
pursuant to Paragraph 6 of the Dealer
Standard Provisions, or (2) any maintenance
or repair service on BMW Products or such
other motor vehicles or products as may be
sold or serviced by Dealer:
(2) Dealer's alleged breach of any contract
between Dealer and Dealer's customer,
provided, however, that the breach was not
caused by any act or omission on the part of
BMW NA concerning which BMW NA unreasonably
failed to notify Dealer prior to the date of
Dealer's entering into the contract with its
customer:
(3) Dealer's alleged independent warranties,
misleading statements, misrepresentations, or
unfair or deceptive acts or practices,
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whether through advertisements or otherwise,
affecting any individual or entity; provided,
however, that the alleged warranties,
statements, representations, deceptive acts
or practices or advertisements are-not based
on information or material produced or
supplied by BMW NA and not subsequently
superseded or withdrawn by BMW NA upon
written notification to Dealer.
In the event that any lawsuit making
allegations as set forth in (1) through (3)
above is brought naming BMW NA as a
defendant, Dealer will, following receipt of
notice as provided in subparagraph (c) of
this Paragraph 16, undertake at its sole
expense and through counsel selected by
Dealer and approved by BMW NA, the defense of
said action on behalf of BMW NA. Dealer is
specifically authorized by BMW NA to settle
or to continue to defend any such lawsuit
brought against BMW NA, provided that Dealer
shall be solely liable for the payment of the
amount of any settlement which it effects or
judgment that is rendered.
Should Dealer for any reason refuse to
undertake the defense on behalf of BMW NA
when it is otherwise obligated to do so under
this subparagraph, BMW NA may conduct its own
defense and, in that event, Dealer's
liability shall be limited solely to the
costs of such defense including reasonable
attorney fees, court costs and the amount of
any judgment or final settlement paid by BMW
NA (provided, however, that BMW NA shall
notify Dealer within twenty (20) days of such
judgment or settlement).
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Dealer shall have the right to decline to
accept BMW NA's defense or, after accepting
the defense but prior to trial, to tender the
defense back to BMW NA, and BMW NA shall
accept such tender, if Dealer reasonably
concludes that the allegations being pursued
are no longer those set forth in (1) through
(3) above.
NOTIFICATION (c) Whenever a lawsuit is commenced against
either BMW NA or Dealer or both of them, each
shall, within fifteen (15) days after service
of the complaint, notify the other in writing
of any request to assume its defense and to
indemnify it, and shall provide at the time
copies of any pleadings or any other court
papers which have been served upon the party
giving notice, as well as all information
then available regarding the first customer,
the plaintiff and the circumstances giving
rise to the suit.
IN THE EVENT THIS PROVISION IS FOR ANY REASON
NOT COMPLIED WITH, SUBPARAGRAPHS (a) AND (b)
OF THIS PARAGRAPH 16 SHALL NOT APPLY FOR
PURPOSES OF THAT LAWSUIT OR WITH RESPECT TO
ANY CLAIM OR LAWSUIT ARISING OUT OF
ALLEGATIONS OR TRANSACTIONS ANTEDATING THE
FIRST CLAIM OR LAWSUIT INVOLVING THE AFFECTED
BMW PRODUCT.
The request to assume the defense and to
indemnify shall be accepted or rejected, in
writing, by the party to whom it is delivered
within thirty (30) days following its
receipt. Prior to receipt of a response to
its request, each party agrees to take all
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reasonable steps to ensure that the defense
to the action is in no way prejudiced,
whether by action or inaction. If the
request is accepted, the party making the
request shall cooperate fully in the defense
of the suit in such manner and to such extent
as the party assuming the defense may
reasonably require; provided, however, that
subparagraphs (a) and (b) of this Paragraph
16 shall be applicable commencing with the
date on which the request is accepted and any
expenses or other obligations incurred prior
to such acceptance by the party making the
request shall be borne solely by such Party.
ALLEGATIONS INVOLVING BOTH BMW (d) If at any time in a lawsuit it is
NA AND DEALER alleged that there is liability on the part
of both BMW NA (on any or all of the bases
set forth in subparagraph (a) of this
Paragraph 16) and Dealer (on any or all of
the bases set forth in subparagraph (b) of
this Paragraph 16), each party shall be
responsible for its own defense, including
costs and attorneys fees, unless at any time
after the commencement of such suit one party
offers to undertake the total defense and the
other party agrees thereto in writing, in
which event the provisions of subparagraphs
(a) and (b) hereof shall be controlling, as
appropriate to the circumstances of such
agreement.
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The responsibility of BMW NA or Dealer for
its own defense pursuant to this
sub-paragraph (d), or pursuant to any other
circumstances not within the scope of this
Paragraph 16, shall in no way affect or alter
the legal rights, if any, either may have to
indemnification or contribution from the
other.
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MISCELLANEOUS PROVISIONS PARAGRAPH 17
APPROVAL OR CONSENT BY BMW NA (a) Any approval or consent given by BMW NA
must be in writing and signed by duly
authorized representatives of BMW NA.
DIVISIBILITY (b) If any provision of this Agreement
contravenes or is prohibited by the laws of
any state or other jurisdiction which are
held to be applicable to this Agreement, such
provision shall be limited to the extent
necessary so that it will not render this
Agreement invalid, unlawful or unenforceable,
in whole or part, under such laws, but all
other provisions of this Agreement shall
remain in full force and effect.
TERMINATION OF PRIOR AGREEMENTS (c) This Agreement terminates and supersedes
all prior written or oral agreements, if any,
between BMW NA (or any predecessor of BMW NA)
and Dealer relating to the subject matter
hereof, except with respect to any trade
indebtedness which may be owing by either BMW
NA or Dealer to the other and except that
this Agreement shall not operate to cancel
any of Dealer's unfilled orders with BMW NA
for any BMW Products placed with BMW NA
pursuant to the provisions of any agreement
terminated or superseded by this Agreement.
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NOTICES (d) Any notices under or pursuant to the
provisions of this Agreement shall be
directed to the respective addresses of the
parties as stated in the Dealer Agreement or,
if either of the parties shall have specified
another address by notice in writing to the
other party, to the address thus last
specified. The parties shall advise each
other promptly, in writing, of any change of
address.
NO IMPLIED WAIVERS (e) Except as otherwise provided in this
Agreement, the 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
the 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 or constitute a waiver of the
provision itself.
DEALER NOT AN AGENT; (f) Dealer will conduct its BMW Operations on
DISCLAIMER OF FURTHER its own behalf and for its own account.
LIABILITY BY BMW NA AND BMW Dealer has no power or authority to act for
or to bind BMW and/or BMW NA Except as
expressly provided in the Agreement, BMW NA
will not be liable for any expenditure made
or incurred by Dealer in connection with
Dealer's performance of its obligations
pursuant to the Agreement. Dealer is not an
agent of BMW NA, and BMW NW owes no fiduciary
duty to dealer.
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Dealer agrees that it has no rights, without
limitation, arising from or in connection
with any agreement between BMW NA and any
other BMW dealer and that Dealer is not a
third party beneficiary of any such
agreement. Nothing herein grants Dealer any
rights to enforce any such agreement. Dealer
also agrees that no third party shall have
any enforceable rights under this Agreement.
ACCOUNTS PAYABLE (g) All monies or accounts due Dealer shall
be net of Dealer's indebtedness to BMW NA,
its subsidiaries and affiliates. Following
thirty (30) days written notice to Dealer,
BMW NA may: (1) deduct any amounts due or to
become due from Dealer to BMW NA, its
subsidiaries and affiliates, and/or (2)
set-off any amounts due from Dealer which are
being held by BMW NA, its subsidiaries and
affiliates, relating to this Dealer Agreement
or any other agreement between dealer and any
of those parties.
BMW NA'S CONTINUING SECURITY (h) Except as specifically provided by any
INTEREST other provision of this Agreement, the
security interest granted to BMW NA hereunder
shall not be affected by any provision in any
other instrument, including, but not limited
to, invoices, purchase orders, purchase order
acknowledgments and other forms; and the
terms of this Agreement relating to such
security interest may only be modified,
amended or changed by a writing signed by
both parties and specifically referring to
this Agreement.
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ASSIGNMENT OF BMW NA'S (i) BMW NA may assign the security interest
SECURITY INTEREST granted to it under this Agreement or any
part thereof, including its security interest
in particular items of Collateral and, upon
notifying the Dealer, the assignee shall be
entitled to the full performance of the
covenants, rights and remedies contained in
Paragraph 10 of the Agreement in so far as
they apply to the Collateral assigned.
Dealer will not assert any claims, defenses
or offsets against the assignee that it may
have against BMW NA.
HEADINGS (j) The headings contained in this Agreement
have been inserted for convenient reference
only and shall not in any way affect the
construction, interpretation or meaning of
the text.
ENTIRE AGREEMENT; (k) This Agreement contains the entire
REPRESENTATIONS agreement between BMW NA and Dealer. Dealer
acknowledges that no representation or
statement has been made to it on behalf of
BMW, BMW NA and/or any agents,
representatives or employees of either BMW or
BMW NA that in any way tend to change or
modify any of the terms or provisions of the
Agreement or that in any manner prevents this
Agreement from becoming effective. Dealer
further acknowledges that there is no other
agreement or understanding, except those
specifically provided for in this Agreement,
either oral or written, between Dealer and
BMW and/or BMW NA affecting this Agreement or
relating to the subject matter hereof.
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