EXHIBIT 10.5
[LOGO] MITSUBISHI
MOTOR SALES OF AMERICA. Inc.
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DEALER SALES AND SERVICE AGREEMENT
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THIS AGREEMENT is made and entered into by and between MITSUBISHI MOTOR SALES OF
AMERICA, INC. a California corporation, with headquarters at 6400 Katella
Avenue, Cypress, California 90630 (hereinafter referred to as "MMSA"), and
FAA SERRAMONTE, INC.
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(Name of Dealer)
a California Corporation x, Partnership , Individual
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(State)
doing business as Serramonte Mitsubishi
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(Name)
at 1500 Collins Avenue, Colma,
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(Number and Street) (City)
San Mateo County, California 94014
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(County) (State) (Zip)
(hereinafter referred to as "DEALER").
1. BASIS OF AGREEMENT
This Agreement provides for the nonexclusive right of DEALER to sell and
service motor vehicles which are listed on the most recent MMSA Product List as
issued by MMSA from time to time, and related parts, accessories and options
distributed in the United States by MMSA. DEALER acknowledges that Mitsubishi
Motors Corporation and other manufacturers supplying motor vehicles to MMSA may
now or in the future distribute motor vehicles or related products in the United
States through distributors other than MMSA, and that entering into this
Agreement confers no rights or benefits upon DEALER with respect to the sale or
servicing of such motor vehicles or products.
2. TERM
This Agreement shall continue in effect for a period of three (3) years
from its effective date, unless earlier terminated by DEALER pursuant to Section
X.A. of the accompanying MMSA DEALER Sales and Service Agreement Standard
Provisions (hereinafter referred to as the ("Standard Provisions")or earlier
terminated by MMSA pursuant to Section X.B. of the Standard Provisions. Unless
earlier terminated by MMSA or DEALER, MMSA shall, not less than three (3) months
prior to the expiration of this Agreement, conduct an evaluation of DEALER'S
performance to determine whether DEALER qualifies for renewal of this Agreement
for an additional three (3) year term. Criteria considered in such evaluation
shall be as set forth in the Dealer Development Plan then in effect for DEALER.
If MMSA determines that DEALER qualifies for renewal of its MMSA Dealership,
DEALER and MMSA shall execute an MMSA DEALER Sales and Service Agreement in the
form then used by MMSA, which agreement will include similar provisions for
further re-qualification and renewal.
If, at any time, MMSA determines that a different or revised form of DEALER
sales and service agreement would better serve the interests of the parties,
MMSA may, upon a minimum of thirty (30) days' notice to DEALER, terminate this
Agreement and offer the new or amended form of agreement to DEALER in its stead.
DEALER must accept the new or amended form of agreement within thirty (30) days
of receipt thereof.
Agreement Date JUN 13 1997
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3. OWNERSHIP OF DEALER
MMSA and DEALER recognize that the ability of DEALER to satisfactorily
perform this Agreement is conditioned upon the continued active involvement in
and/or ownership of DEALER by the following person(s) in the percentage(s) shown
(hereinafter referred to as the "Owners"):
Involvement
Percentage of in Management
Name Title Ownership (Active or Inactive)
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FirstAmerica Automotive, - 100% No
Inc.
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Thomas A. Price President - Yes
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Steven S. Hallock Vice-President - Yes
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Al Babbington Secretary/Treasurer - Yes
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This Agreement has been entered into by MMSA in reliance upon, and in
consideration of, the personal qualifications and representations of the above-
named Owners. Accordingly, except as otherwise provided herein, no change in the
active involvement in DEALER'S management by the Owners and no change in the
ownership of DEALER by the Owners which results in a change in majority control
or interest shall be permitted by DEALER or any Owner without the prior written
approval of MMSA, which approval shall not be unreasonably withheld.
4. MANAGEMENT OF DEALER
DEALER represents that Al Babbington exercises the functions of general
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manager and Tom Price exercises the functions of Dealer Principal
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(hereinafter referred to as the "Executive Managers") of its MMSA Dealership and
that each has complete authority to make all decisions on behalf of DEALER with
respect to the Dealership operations.
MMSA has entered into this Agreement in reliance upon, and in consideration
of, the personal qualifications and representations of the above-named Executive
Managers. Accordingly, DEALER agrees that there shall be no change in the
Executive Managers without MMSA'S prior written consent. DEALER shall give MMSA
prior written notice of any proposed change in Executive Managers (including the
name and qualifications of the person proposed to be appointed as a replacement
Executive Manager) and MMSA shall have the right, in its sole and reasonable
discretion, to determine whether the proposed candidate possesses the requisite
qualifications and experience for the position.
5. SALES LOCALITY
Subject to and in accordance with the terms and conditions hereof, MMSA has
established the following Sales Locality as the non-exclusive, primary area of
responsibility for DEALER'S promotion and sale of MMSA Products:
City of: Colma
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County or Parish of San Mateo State of California
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Except as may be otherwise required by applicable law, MMSA reserves the
right to sell and/or lease MMSA Products to others (including, without
limitation, public or private fleet purchasers and employees of MMSA or its
affiliates) and to enter into MMSA Dealer Sales and Service Agreements with
others within and without the Sales Locality. MMSA and DEALER agree that
additional MMSA Dealers may be appointed in or near the Sales Locality when MMSA
determines, in accordance with applicable law, that additional MMSA sales and
service facilities are warranted.
Nothing contained in this Agreement shall require or be construed to
require Dealer's approval of MMSA entering into MMSA Dealer Sales and Service
Agreements or any other agreements with others within or without the Sales
Locality.
[LOGO] MITSUBISHI
Agreement Date JUN 13 1997 MOTORS SALES OF AMERICA, INC. 2
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6. DEALERSHIP PREMISES
MMSA has approved the following premises as the location of DEALER'S MMSA
sales and service operations (hereinafter referred to as the "Dealership
Premises").
MMSA NEW VEHICLE SALES FACILITIES
1500 Collins Avenue
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Colma, California 94014
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PARTS AND SERVICE FACILITIES
455 Serramonte Boulevard
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Colma, California 94014
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SALES AND GENERAL OFFICES
1500 Collins Avenue
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Colma, California 94014
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USED VEHICLE DISPLAY AND SALES FACILITIES
1500 Collins Avenue
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Colma, California 94014
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STORAGE FACILITIES
1500 Collins Avenue
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Colma, California 94014
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[LOGO] MITSUBISHI
Agreement Date JUN 13 1997 MOTOR SALES OF AMERICA, INC. 3
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BODY AND PAINT FACILITIES
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OTHER
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MMSA and DEALER recognize that DEALER may sell MMSA Products to customers
wherever they may be located. However, in order that MMSA may establish and
maintain an effective network of MMSA Dealers for the sale and servicing of MMSA
Products, DEALER specifically agrees that, without the prior written approval of
MMSA, it shall not display MMSA Trademarks or, either directly or indirectly,
establish any place or places of business for the conduct of any of its MMSA
Dealership operations, except on the Dealership Premises in the manner and for
the purposes described above.
DEALER shall maintain all requirements and conditions of this MMSA Dealer
Sales and Service Agreement as outlined in DEALER'S most recent Dealer
Development Plan, including but not limited to exclusive facility, management
and capital requirements.
7. LICENSES
DEALER agrees to secure and maintain all licenses required for the
operation of its business as contemplated by this Agreement in any state or
jurisdiction where its MMSA Dealership operations are to be conducted. If any
such license or licenses are required, this Agreement shall not become
effective, unless and until all such required licenses have been obtained and
DEALER furnishes MMSA with a copy of all such licenses together with written
notice specifying the date and number, if any, of all such licenses. DEALER
shall notify MMSA immediately in writing if DEALER fails to secure, maintain or
renew any such license. If any required license is suspended or revoked, DEALER
shall notify MMSA immediately in writing of the effective date of such
suspension or revocation.
8. SCOPE OF AGREEMENT
DEALER agrees to be bound by and comply with each and every term of this
MMSA Dealer Sales and Service Agreement, all schedules hereto, the Standard
Provisions, the Dealer Development Plan, the most recent Product List and all
Product Addenda, the Warranty Manual and all other manuals heretofore or
hereafter issued by MMSA, all modifications, extensions or renewals of any of
the foregoing, and each and every bulletin or directive heretofore or hereafter
issued to DEALER by MMSA. MMSA may from time to time deliver to DEALER a Product
Addendum setting forth special terms and conditions applicable to particular
MMSA Vehicles designated in the Product Addendum. Such special terms and
conditions shall supersede and control any inconsistent terms and conditions in
this Agreement with respect to the MMSA Vehicles designated in the Product
Addendum. Each Product Addendum shall be effective as of the date specified in
the Product Addendum and shall remain effective (1) until it is amended or
terminated by its own terms or by a new Product Addendum, (2) until the MMSA
Vehicles designated in the Product Addendum are no longer distributed by MMSA,
or (3) until termination of this Agreement.
9. DEFINITIONS
Italicized terms used herein shall have the meanings set forth in Section
II of the Standard Provisions
10. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
[LOGO] MITSUBISHI
Agreement Date JUN 13 1997 MOTOR SALES OF AMERICA, INC. 4
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11. JURISDICTION
MMSA and DEALER agree that all litigation between MMSA and DEALER which may
arise out of or in connection with this Agreement or any transaction between
them shall be subject to the exclusive jurisdiction of the courts of the State
of California or of the federal courts sitting therein, and each hereby consents
to the jurisdiction of such courts. DEALER agrees that any and all process
directed to it in any such litigation may be served upon it outside of
California with the same force and effect as if such service had been made
within California.
12. LEGAL EFFECT
This Agreement terminates and supersedes all prior written or oral
agreements and understandings, if any, between MMSA and DEALER, except (1) any
agreements expressly referred to and incorporated herein, (2) any indebtedness
which may be owing by either MMSA or DEALER to the other, and (3) any of
DEALER'S unfilled orders with MMSA for any MMSA Products placed with MMSA
pursuant to the provisions of any sales agreement terminated or superseded by
this Agreement. Except as herein otherwise provided, upon execution of this
Agreement by DEALER and in consideration of MMSA'S entering into this Agreement,
DEALER releases MMSA from any and all claims, demands, contracts and liabilities
(including, but not limited to, statutory liabilities), known or unknown, of any
kind or nature whatsoever, arising from or out of or in connection with any such
prior agreements, business transactions, course of dealing, discussions or
negotiations between the parties prior to the effective date hereof. DEALER
expressly acknowledges and waives the application of California Civil Code
(S)1542 which provides as follows: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor."
13. NOTICES
Any notice to be given hereunder may be delivered to the party if a sole
proprietor, to a partner of the party if a partnership, or to an officer of the
party if a corporation, or may be given by sending such notice by registered or
certified mail or by telegram or tested telex addressed, if to DEALER, to its
principal office as above stated, and if to MMSA, to its headquarters as above
stated, marked "Attention President". Except as otherwise provided in this
Agreement, any notice so given shall be considered to have been given when
delivered or mailed as provided above.
14. AUTHORITY OF DEALER
If DEALER is a partnership or corporation, DEALER shall provide MMSA with a
certified copy of the partnership authorization, corporate resolution or other
document evidencing the authority of DEALER to enter into and adhere to the
terms of this Agreement.
15. VALIDITY
No representative of MMSA shall have authority, other than by a writing
signed by the President or an Executive Vice President or two Vice Presidents of
MMSA, to renew, extend or terminate this Agreement, or to amend, modify or waive
any provision of this Agreement or any performance required hereby, or to make
any agreement which imposes obligations on either MMSA or DEALER not
specifically imposed by this Agreement.
[LOGO] MITSUBISHI
Agreement Date JUN 13 1997 MOTOR SALES OF AMERICA, Inc. 5
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IN WITNESS OF THE FOREGOING, the parties hereto have executed this
Agreement in duplicate. THIS AGREEMENT SHALL NOT BECOME EFFECTIVE UNTIL IT HAS
BEEN SIGNED BY THE PRESIDENT OR AN EXECUTIVE VICE PRESIDENT OR TWO VICE
PRESIDENTS OF MMSA. DEALER WILL BE NOTIFIED IN WRITING BY MMSA WHEN THIS
AGREEMENT HAS BEEN SO SIGNED, WHICH NOTICE WILL SPECIFY THE EFFECTIVE DATE OF
THIS AGREEMENT.
FAA SERRAMONTE, INC.
dba Serramonte Mitsubishi
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(DEALER'S Firm Name)
By /s/ Date 6/2/97
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Title President
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By _______________________________ Date ______________________________
Title _______________________________ /s/ 6/2/97
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(Witness)
MITSUBISHI MOTOR SALES OF AMERICA, INC.
By ___________________________________ Date ______________________________
(President)
OR
By /s/ Date JUN 13 1997
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(Executive Vice President)
OR
By ___________________________________ Date ______________________________
(Vice President)
and
By ___________________________________ Date ______________________________
(Vice President)
[LOGO] MITSUBISHI
Agreement Date JUN 13 1997 MOTOR SALES OF AMERICA, Inc. 6
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