Chrysler Corporation
TERM SALES AND SERVICE AGREEMENT
Fair Chrysler Plymouth Partnership t/a Danbury Fair Dodge located at 100B
Federal Road, Danbury, Connecticut a(n) Partnership hereinafter called DEALER,
and Chrysler Corporation, a Delaware corporation, hereinafter sometimes referred
to as "CC", agree as follows:
INTRODUCTION
The purpose of the relationship established by this Term Sales and Service
Agreement ("Term Agreement") is to provide a means for the sale and service of
specified CC vehicles and the sale of CC vehicle parts and accessories in a
manner that will maximize customer satisfaction and be of benefit to DEALER and
CC.
While the following provisions, each of which is material, set forth the
undertakings of this relationship, the success of those undertakings rests on a
recognition of the mutuality of interests of DEALER and CC, and a spirit of
understanding and cooperation by both parties in the day to day performance of
their respective functions. As result of such considerations, CC has entered
into this Term Agreement in reliance upon and has placed its trust in the
personal abilities, expertise, knowledge and integrity of DEALER's principal
owners and management personnel, which CC, anticipates will enable DEALER to
perform the personal services contemplated by this Term Agreement.
It is the mutual goal of this relationship to promote the sale and service of
specified CC products by maintaining and advancing their excellence and
reputation by earning, holding and furthering the public regard for CC and all
CC dealers.
DEALER acknowledges that CC is relying upon DEALER to provide representation
which conforms to the standards set forth herein and in the Additional Terms and
Provisions of the Chrysler Corporation Sales and Service Agreement (Terms and
Provisions), which are incorporated herein by reference in Paragraph 5 of this
Term Agreement.
DEALER wishes an opportunity to qualify for the standard Chrysler Corporation
Sales and Service Agreement for specified CC vehicle and understands that, for
this purpose, DEALER must first fulfill all of DEALER's undertakings hereinafter
described.
1. PRODUCTS COVERED
DEALER has the right to order and purchase from CC and to sell at retail only
those specific models of CC vehicles, sometimes referred to as "specified CC
vehicles," listed on the Motor
Vehicle Addendum, attached hereto and incorporated herein by reference. CC may
change the models of CC vehicles listed on the Motor Vehicle Addendum by
furnishing DEALER a superseding Motor Vehicle Addendum. Such a superseding
Motor Vehicle Addendum will not be deemed or construed to be an amendment to
this Term Agreement.
2. DEALERS'S MANAGEMENT
CC has entered into this Term Agreement relying on the active, substantial and
continuing personal participation in the management of DEALER's organization by:
NAME POSITION
Thomas Campbell General Manager/Dealer Principal
DEALER represents and warrants that at least one of the above named individuals
will be physically present at DEALER's facility (sometimes referred to as
"Dealership Facilities") during most of its operating hours and will manage all
of DEALER's business relating to the sale and service of CC products. DEALER
will not change the personnel holding the above described position(s) or the
nature and extent of his/her/their management participation without the prior
written approval of CC.
3. DEALER'S CAPITAL STOCK OR PARTNERSHIP INTEREST
If DEALER is a corporation or partnership, DEALER warrants that the persons
named below own beneficially the capital stock or partnership interest of DEALER
in the percentages indicated below. DEALER warrants that there will be no
change affecting more than 50% of the ownership interest of DEALER, nor will
there be any other change in the ownership interest of DEALER, which may affect
the managerial control of DEALER without CC's prior written approval.
Name Voting Non-Voting Partnership Active
Stock Stock Interest Yes/No
DiFeo Partnership, Inc. 70% No
JS2, Inc. 30% No
Total 100%
-2-
4. SALES LOCALITY
DEALER shall have the non-exclusive right, subject to the provisions of this
Term Agreement, to purchase from CC those new specified CC vehicles, vehicle
parts, accessories and other CC products for resale at the DEALER's facilities
and location described in the Dealership Facilities and Location Addendum,
attached hereto and incorporated herein by reference. DEALER will actively and
effectively sell and promote the retail sale of specified CC vehicles, vehicle
parts and accessories in DEALER's Sales Locality. As used herein, "Sales
Locality" shall mean the area designated in writing to DEALER by CC from time to
time as the territory of DEALER's responsibility for the sale of specified CC
vehicles, vehicle parts and accessories, although DEALER is free to sell said
products to customers wherever they may be located. Said Sales Locality may be
shared with other CC dealers of the same line-make as CC determines to be
appropriate.
5. ADDITIONAL TERMS AND PROVISIONS
The additional terms and provisions set forth in the document entitled "Chrysler
Corporation Sales and Service Agreement Additional Terms and Provisions" marked
"Form 91 (C-P-D)," as may hereafter be amended from time to time, insofar as
they are not inconsistent with the terms, provisions and conditions of this Term
Agreement, constitute a part of this Term Agreement with the same force and
effect as if set forth at length herein, and the term "this Term Agreement"
includes said Additional Terms and Provisions.
6. FORMER AGREEMENTS, REPRESENTATIONS, WAIVERS, STATEMENTS, MODIFICATIONS OR
AMENDMENT
This Chrysler Corporation Term Agreement and other documents, (or their
successors as specifically provided for herein) which are specifically
incorporated herein by reference is the entire agreement between the parties
relating to the purchase by DEALER of those new specified CC vehicles, parts and
accessories from CC for resale; and it cancels and supersedes all earlier
agreements, written or oral, between CC and DEALER relating to the purchase by
DEALER of specified CC vehicles, parts and accessories, except for (a) amounts
owing by CC to DEALER, such as payments for warranty service performed and
incentive programs, or (b) amounts owing by DEALER to CC due to DEALER's
purchase from CC of vehicles, parts, accessories and other goods or services, or
(c) amounts DEALER owes to CC as a result of other extensions of credit by CC to
DEALER.
No representations or statements, other than those expressly set forth herein or
those set forth in the applications for this Term Agreement submitted to CC by
DEALER or DEALER's representatives, are made or relied upon by any party hereto
in entering into this Term Agreement.
-3-
No waiver, modification or change of any of the terms of this Term Agreement or
change or erasure of any printed part of this Term Agreement or addition to it
(except the filling in of blank spaces and lines) will be valid or binding on CC
unless approved in writing by the President or a Vice President or the National
Dealer Placement Manager of Chrysler Corporation.
DEALER and CC recognize that the passage of time, changes in the industry, ways
of doing business and other unforeseen circumstances may cause CC to determine
that it should amend all Chrysler Corporation Sales and Service Agreements
pertaining to specified CC vehicles. Therefore, CC will have the right to amend
this Term Agreement to the extent that CC deems advisable, provided that CC
makes the same amendment in Chrysler Corporation Sales and Service Agreements
pertaining to specified CC vehicles generally. Each such amendment will be
issued in a notice sent by certified mail or delivered in person to DEALER and
signed by the President or a Vice President or the National Dealer Placement
Manager of Chrysler Corporation. Thirty-five (35) days after mailing or
delivery of such notice to DEALER, this Term Agreement will be deemed amended in
the manner and to the extent set forth in the notice.
7. ARBITRATION
Any and all disputes arising out of or in connection with the interpretation,
performance or non-performance of this Term Agreement or any and all disputes
arising out of or in connection with transaction in any way related to this Term
Agreement (including, but not limited to, the validity, scope and enforceability
of this arbitration provisions, or disputes under rights granted pursuant to the
statutes of the state in which DEALER is licensed) shall be finally and
completed resolved by arbitration pursuant to the arbitration laws of the United
States of America as codified in Title 9 of the United States Code, Sections 1-
14, under the Rules of Commercial Arbitration of the American Arbitration
Association (hereinafter referred to as the "Rules") by a majority vote of a
panel of three arbitrators. One arbitrator will be selected by DEALER (DEALER's
arbitrator). One arbitrator will be selected by CC (CC's arbitrator). These
arbitrators must be selected by the respective parties within ten (10) business
days after receipt by either DEALER or CC of a written notification from the
other party of a decision to arbitrate a dispute pursuant to this Term
Agreement. Should either CC or DEALER fail to select an arbitrator within said
ten-day period, the party who so fails to select an arbitrator will have its
arbitrator selected by the American Arbitrator Association upon the application
of the other party. The third arbitrator must be an individual who is familiar
with business transactions and be a licensed attorney admitted to the practice
of law within the United States of America, or a judge. The third arbitrator
will be selected by DEALER's and CC's arbitrators. If said arbitrators cannot
agree on a third arbitrator within thirty (30) days from the date of the
-4-
appointment of the last selected arbitrator, then either DEALER's or CC's
arbitrator may apply to the American Arbitration Association to appoint said
third arbitrator pursuant to the criteria set forth above. The arbitration
panel shall conduct the proceedings pursuant to the then existing Rules.
Notwithstanding the foregoing, to the extent any provision of the Rules conflict
with any provision of this Paragraph 7, the provisions of this Paragraph 7 will
be controlling.
CC and DEALER agree to facilitate the arbitration by: (a) each party paying to
the American Arbitration Association one-half (1/2) of the required deposit
before the proceeding commence; (b) making available to one another and to the
arbitration panel, for inspection and photocopying all documents, books and
records, if determined by the arbitrator to be relevant to the dispute; (c)
making available to one another and to the arbitration panel personnel directly
or indirectly under their control, for testimony during hearings and prehearing
proceedings if determined by the arbitration panel to be relevant to the
dispute; (d) conducting arbitration hearings to the greatest extent possible on
consecutive business days; and (e) strictly observing the time periods
established by the Rules or by the arbitration panel for the submission of
evidence and of briefs.
Unless otherwise agreed to by CC and DEALER, a stenographic record of the
arbitration shall be made and a transcript thereof shall be ordered for each
party, with each party paying one-half (1/2) of the total cost of such recording
and transcription. The stenographer shall be state-certified, if certification
is made by the state, and the party to whom it is most convenient shall be
responsible for securing and notifying such stenographer of the time and place
of the arbitration hearing(s).
If the arbitration provisions is invoked when the dispute between the parties is
either the legality of terminating this Term Agreement or of adding a new CC
dealer of the same line-make or relocating an existing CC dealer of the same
line-make, CC will stay the implementing of the decision to terminate this Term
Agreement or add such new CC dealer or approve the relocation of an existing CC
dealer of the same line-make until the decision of the arbitrator has been
announced, providing DEALER does not in any way attempt to avoid the obligations
of this Paragraph 7, in which the case the decision at issue will be immediately
implemented.
Except as limited hereby, the arbitration panel shall have all powers of law and
equity, which it can lawfully assume, necessary to resolve the issues in dispute
including, without limiting the generality of the foregoing, making awards of
compensatory damages, issuing both prohibitory and mandatory orders in the
nature of injunctions, and compelling the production of documents and witnesses
for pre-arbitration discovery and/or presentation at the arbitration hearing on
the merits of the case. The
-5-
arbitration panel shall not have legal or equitable authority to issue a
mandatory or prohibitory order which: (a) extends or has effect beyond the
subject matter of this Term Agreement, or (b) will govern the activities of
either party for a period of more than two years; nor shall the arbitration
panel have authority to award punitive, consequential or damages whatsoever
beyond or in addition to the compensatory damages allowed to be awarded under
this Term Agreement.
The decision of the arbitration panel shall be in written form and shall include
findings of fact and conclusions of law.
It is the intent and desire of DEALER and CC to hereby and forever renounce and
reject any and all recourse to litigation before any judicial or administrative
forum and to accept the award of the arbitration panel as final and binding,
subject to no judicial or administrative review, except on those grounds set
forth in 9 USC Section 10 and Section 11. Judgment on the award and/or orders
may be entered in any court having jurisdiction over the parties or their
assets. In the final award and/or order, the arbitration panel shall divide all
costs (other than attorney fees, which shall be borne by the party incurring
such fees and other costs specifically provided for herein) incurred in
conducting the arbitration in accordance with what the arbitration panel deems
just and equitable under the circumstances. The fees of DEALER's arbitrator
shall be paid by DEALER. The fees of CC's arbitrator shall be paid by CC.
8. EFFECTIVE DATE, NECESSARY CONDITIONS, TERMINATION
This Term Agreement will become effective on the date of execution hereof and,
if not previously terminated as provided herein or in Paragraph 28 of said Terms
and Provisions, will continue in effect until ______________________, at which
time this Term Agreement will terminate automatically without notice to or by
either party.
If the Term Agreement is not terminated as provided herein or in Paragraph 28 of
said Terms and Provisions, and thus continues in effect for the period set forth
in the immediately foregoing Paragraph, CC, at the expiration of such period,
will enter into the standard Chrysler Corporation Sales and Service Agreement
current at the date of said expiration, for such specified CC vehicles with
DEALER, provided that DEALER has fulfilled each and every condition set forth in
subparagraphs 8(A) through 8(F) set forth below, which Dealer understands and
agrees to be reasonable and necessary and DEALER has otherwise complied with all
of the provisions of this Term Agreement. Furthermore, DEALER fully understands
and agrees that DEALER's failure to meet any of the conditions set forth in
subparagraphs 8(A) through 8(F) including, without limiting the generality of
the foregoing, failure to meet those conditions within the time period, if any,
specifically set forth in each condition, is grounds for termination of this
Term Agreement upon sixty (60) days' written
-6-
notification to DEALER by CC as if failure to meet said conditions were
specifically set forth under Paragraph 28 of said Terms and Provisions.
8(A) DEALER shall provide CC regularly, on forms satisfactory to CC, a monthly
financial statement of DEALER's vehicle business by the tenth (10th) day of the
month following the month covered by each statement.
SEE ATTACHMENT TO SALES AGREEMENT INCORPORATED
HEREIN BY REFERENCE.
8(F) DEALER is otherwise qualified for such (a) standard CC Sales and Service
Agreement(s).
9. NO OBLIGATION OR TERMINATION
If DEALER fails to carry out fully the terms, provisions, obligations, and
conditions of this Term Agreement, then CC, whether or not it has pursued other
remedies, shall have not obligation to DEALER to extend this Term Agreement in
whole or in part or to enter into any standard Chrysler corporation Sales and
Service Agreement with DEALER or any other obligation of any kind.
The termination or expiration of this Term Agreement in any manner shall not
impose upon CC any liability or obligations under Paragraph 30 ("Disposition of
Dealer's Premises"), Paragraph 32 ("Successors to Dealer") and Paragraph 33
("Surviving Spouse's Financial Interest") of said Terms and Provisions or any
liability or obligation of any kind.
DEALER acknowledges that DEALER has read each and every term, provision and
condition of this Term Agreement and that DEALER understands and accepts all
such terms, provisions and conditions.
10. SIGNATURE
This Term Agreement becomes valid only when signed by the President or a Vice
President or the National Dealer Placement Manager of Chrysler Corporation and
by a duly authorized officer or executive of DEALER if a corporation; or by one
of the general
-7-
partners of DEALER if a partnership; or by DEALER if an individual.
IN WITNESS WHEREOF, the parties hereto have signed this Term Agreement which is
finally executed at Detroit, Michigan, in triplicate, on August 16,1995.
Fair Chyrsler Plymouth Partnership
b/a Danbury Fair Dodge
- --------------------------------------------
(DEALER Firm Name and D/B/A, if applicable)
By /s/ Carl Spielvogel
------------------------------------------
(Individual Duly Authorized to Sign)
- --------------------------------------------
(Title)
CHRYSLER CORPORATION
By /s/ Illegible
------------------------------------------
National Dealer Placement Manager
- --------------------------------------------
(Title)
-8-
ATTACHMENT TO TERM AGREEMENT
FAIR CHRYSLER PLYMOUTH PARTNERSHIP
T/A DANBURY FAIR DODGE
PARAGRAPH 8
(B) DEALER shall (a) within twenty-four (24) months after this
Agreement becomes effective, achieve a three (3) month Customer
Satisfaction Index ("CSI") score which is equal to or greater
than the average rating for the National Sales level group in
which each dealership is included within its dealership's sales
zone, and (b) after DEALER has achieved the above rating at any
of its dealerships within the time period allowed, DEALER will
maintain or exceed that rating at its dealership for the
following consecutive twelve (12) months.
(C) DEALER shall make a good faith effort to ensure that by December
31, 1995, all service personnel have completed forty (40) hours
of technical training program(s) offered to Chrysler dealers.
For service personnel hired late in 1995, DEALER shall make a
goof faith effort to begin and complete as much of the technical
training as possible by December 31, 1995. Subsequent to 1995,
DEALER shall act in good faith to train all of its service
personnel in accordance with the standard objectives set by
Chrysler Corporation for the training of all dealer service
personnel. A good faith effort as used in this paragraph is to
be determined by the Chrysler Zone Manager.
(D) DEALER shall make a good faith effort to ensure the ninety (90)
percent of the sales attend sales training and complete sales
certification by July 31, 1995. Subsequent to July 31, 1995,
DEALER shall act in good faith to ensure that ninety (90) percent
of its sales personnel maintain and/or update their sales
certification on a continuous basis. A good faith effort as used
in this paragraph is to be determined by the Chrysler Zone
Manager.
(E) DEALER shall continue with the Ryan CSI program throughout 1995,
and continue with the program thereafter throughout the duration
of the Term Agreement whenever it is unable to maintain Customer
Satisfaction Index ("CSI") scores, and Sales Satisfaction Index
("SSI") scores as defined by Chrysler Corporation programs.
________________________
Signature
December 15, 1993
Mr. James G. Hetherington
Fair Chrysler Plymouth Partnership
t/a Fair Dodge
100 Federal Road
Danbury, Connecticut 06810
Dear Mr. Hetherington:
As you know, Chrysler Corporation ("CC") entered into a Dodge Dealer Agreement
with your company on June 9, 1993.
Paragraph 3 of this Agreement shows the beneficial ownership of all of the
capital stock or partnership interest in your company as follows:
NAME OWNERSHIP INTEREST
- ---- ------------------
JS2, Inc. 30%
DiFeo Partnership, Inc. 70%
In this regard, you have requested that CC make an exception to its policy that
the controlling ownership interest in a dealer corporation or partnership with
which it enters into Dealer Agreements must be vested in natural persons, and
not corporations or partnerships.
This is to advise you that CC hereby approved the above described ownership of
FAIR CHRYSLER PLYMOUTH PARTNERSHIP T/A FAIR DODGE
subject to, and in reliance upon
Fair Chrysler Plymouth Partnership t/a Fair Dodge
JS2, Inc.
DiFeo Partnership, Inc.
EMCO Motor Holdings, Inc.
'21' International Holdings, Inc.
agreeing that the provisions of Paragraph 28 of the Dodge Agreement executed
between Fair Chrysler Plymouth Partnership t/a Fair Dodge and CC, concurrent
with the signing of this letter by CC and to the extent that it refers to
changes in controlling ownership interests, shall be deemed to refer to the
ownership of
'21' International Holdings, Inc. and
EMCO Motor Holdings, Inc. and
DiFeo Partnership, Inc. and
JS2, Inc. as well as the ownership of
Fair Chrysler Plymouth Partnership t/a Fair Dodge.
The beneficial ownership of all the capital stock or partnership interest in
JS2, Inc. is as follows:
NAME % OF OWNERSHIP
- ---- --------------
Samuel X. DiFeo 37.5%
Joseph C. DiFeo 37.5%
James G. Hetherington 25.0%
The beneficial ownership of all the capital stock or partnership interest of
DiFeo Partnership, Inc. is as follows:
NAME % OF OWNERSHIP
- ---- --------------
EMCO Motor Holdings, Inc. 100.0%
The beneficial ownership of all the capital stock or partnership interest of
EMCO Motor Holdings, Inc. is as follows:
NAME % OF OWNERSHIP
- ---- --------------
'21' International 34.36%
Ezra P. Mager 1.56%
Harvard 27.48%
Lion Advisors 17.49%
BNP 1.20%
Jeremy Grantham 1.00%
Jules Kroll 1.00%
Andrea Farace .50%
Carl Spielvogel .25%
Jerome Markowitz .05%
Philip Halperin .05%
Derek Lemke-von Ammon .025%
Frank Dunlevy .025%
Thomas Sullivan .01%
Options 15.00%
-------
100.000%
The beneficial ownership of all the capital stock or partnership interest of
'21' International Holdings, Inc. is as follows:
NAME % OF OWNERSHIP % OF VOTING CONTROL
- ---- -------------- -------------------
51 Individuals, trusts
and corporations 54.7580% 23.4851%
Marshall S. Cogan 45.2420% 76.5149%
If all the above is agreeable to you, please indicate your understanding and
acceptance thereof by signing the copies of this letter in the space provided
below:
-2-
ACCEPTED:
JS2, INC.
By: /s/ [Illegible]
-------------------------------------
DiFEO PARTNERSHIP, INC.
By: /s/ E.P. Mager
-------------------------------------
EZRA P. MAGER, President
EMCO MOTOR HOLDINGS, INC.
By: /s/ E.P. Mager
-------------------------------------
EZRA P. MAGER, President
'21' INTERNATIONAL HOLDINGS, INC.
By: /s/ M.S. Cogan
-------------------------------------
MARSHALL S. COGAN
Chairman of the Board
FAIR CHRYSLER PLYMOUTH PARTNERSHIP t/a FAIR DODGE
By: /s/ E.P. Mager
-------------------------------------
EZRA P. MAGER, Chief Executive Officer
CHRYSLER CORPORATION
By: /s/ [Illegible]
-------------------------------------
Title: National Dealer Placement Manager
----------------------------------
Date:
-----------------------------------