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EXHIBIT 10.2.11
MERCEDES-BENZ USA, INC.
MERCEDES-BENZ
PASSENGER CAR RETAILER AGREEMENT
TABLE OF CONTENTS
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RETAILER AGREEMENT PAGE
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MERCEDES-BENZ STATEMENT OF COMMITMENT (i)
A. APPOINTMENT OF RETAILER (ii)
B. TERM (ii)
C. ADDITIONAL PROVISIONS (ii)
D. RETAILER OWNERSHIP (ii)
E. RETAILER MANAGEMENT (ii)
F. MERCEDES-BENZ CENTER FACILITIES (iii)
G. MERCEDES-BENZ PARTNERSHIP GROUPS (iii)
H. MODIFICATION OF AGREEMENT (iii)
I. EXECUTION OF AGREEMENT (iv)
J. MUTUAL RELEASE (iv)
K. CERTIFICATION (iv)
FINAL PARAGRAPH (v)
STANDARD PROVISIONS
1. ACQUISITION, DELIVERY AND INVENTORY OF MERCEDES-
BENZ PASSENGER CAR PRODUCTS 1
A. PRICES AND TERMS OF SALE 1
B. AVAILABILITY AND ALLOCATION OF PRODUCTS 1
C. DELIVERY OF PRODUCTS 1
D. PASSAGE OF TITLE 1
E. RISK OF DAMAGE OR LOSS 2
F. DELAY OR FAILURE OF DELIVERY 2
G. DIVERSION AND STORAGE CHARGES 2
H. SECURITY INTEREST 2
1. GRANT OF SECURITY INTEREST 2
2. DEFAULT IN PAYMENT 3
3. ASSEMBLY OF COLLATERAL, PAYMENT OF COSTS AND NOTICES 3
4. RECORDING AND FURTHER ASSURANCES 3
5. RECORDS AND SCHEDULES OF INVENTORY 3
2
I. CHANGES OF DESIGN, SPECIFICATIONS OR OPTIONS 4
J. DISCONTINUANCE OF MANUFACTURE OR
IMPORTATION 4
K. MINIMUM VEHICLE INVENTORIES 4
L. PRODUCT MODIFICATIONS 4
II. RETAILER'S MARKETING AND SALES OF MERCEDES-
BENZ PASSENGER CAR PRODUCTS 4
A. RETAILER'S GENERAL RESPONSIBILITIES 4
B. EXPORT POLICY 5
C. MERCEDES-BENZ RETAILER ASSOCIATION 5
D. PRE-OWNED VEHICLES 6
E. AREA OF INFLUENCE 6
F. EVALUATION OF RETAILER'S MARKETING AND
SALES PERFORMANCE 6
III. RETAILER'S SERVICE OBLIGATIONS 6
A. CLIENT SERVICE STANDARDS 6
B. RETAILER'S SPECIFIC SERVICE OBLIGATIONS 7
1. PRE-DELIVERY INSPECTIONS AND SERVICE 7
2. WARRANTY REPAIRS AND POLICY SERVICE 7
3. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS 8
4. ROADSIDE ASSISTANCE PROGRAM 8
C. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICE 8
1. QUALITY STANDARDS 8
2. RETAILER'S DISCLOSURES AS TO USE OF AND
WARRANTIES FOR NON-GENUINE PARTS AND ACCESSORIES 9
D. COMPLIANCE WITH SAFETY AND EMISSION
CONTROL REQUIREMENTS 9
E. COMPLIANCE WITH CONSUMER PROTECTION
STATUTES, RULES AND REGULATIONS 9
IV. RETAILER'S SERVICE AND PARTS ORGANIZATION 10
A. ORGANIZATION AND STANDARDS 10
B. SERVICE EQUIPMENT AND SPECIAL TOOLS 10
C. PARTS STOCKING LEVEL 10
D. AFTER HOURS DELIVERY 10
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E. ASSISTANCE PROVIDED BY MBUSA 11
1. SERVICE MANUALS AND MATERIALS 11
2. FIELD PERSONNEL ASSISTANCE 11
F. EVALUATION OF RETAILER'S SERVICE
AND PARTS PERFORMANCE 11
G. ADDITIONAL FACILITIES OR LOCATIONS 11
V. CLIENT SATISFACTION RESPONSIBILITIES 12
A. RETAILER'S CLIENT SATISFACTION
OBLIGATIONS 12
1. RETAILER'S CLIENT SATISFACTION PLAN 12
2. EMPLOYEE TRAINING 12
3. CLIENT ASSISTANCE RESPONSE SYSTEM 12
B. EVALUATION OF RETAILER'S CLIENT
SATISFACTION PERFORMANCE 12
VI. MERCEDES-BENZ CENTER FACILITIES AND IDENTIFICATION 13
A. LOCATION AND FACILITIES 13
B. CHANGES AND ADDITIONS 13
C. RETAILER'S OPERATING HOURS 14
D. CORPORATE IDENTITY 14
E. EVALUATION OF MERCEDES-BENZ CENTER
FACILITIES 14
F. OWNERSHIP AND USE OF MERCEDES-BENZ MARKS 14
1. VALIDITY AND EXCLUSIVE OWNERSHIP OF
MERCEDES-BENZ MARKS 14
2. USE BY RETAILER 15
3. DISCONTINUANCE OF USE 15
4. ENFORCEMENT 16
VII. WARRANTIES 16
VIII. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS 16
A. NET WORKING CAPITAL 16
B. FLOORING AND LINES OF CREDIT 17
C. PAYMENT TERMS 17
D. UNIFORM ACCOUNTING SYSTEM 17
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E. RECORDS MAINTENANCE 18
F. EXAMINATION OF MERCEDES-BENZ CENTER
ACCOUNTS AND RECORDS 18
G. TAXES 18
H. CONFIDENTIALITY 18
I. MERCEDES-BENZ RETAILER COMMUNICATIONS
SYSTEM AND PROPRIETARY MANUFACTURER
SYSTEMS 18
J. SALES REPORTING 19
IX. TRANSFERS 19
A. SALE OF ASSETS OR OWNERSHIP INTEREST 19
B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE 19
1. RIGHTS GRANTED 19
2. EXERCISE OF MBUSA'S RIGHTS 20
3. RIGHT OF FIRST REFUSAL 20
4. OPTION TO PURCHASE 21
5. RETAILER'S OBLIGATIONS 21
X. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY 22
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF
OWNER 22
B. INCAPACITY OF OWNER 23
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH
OR INCAPACITY OF OWNER 23
XI. TERMINATION 24
A. VOLUNTARY TERMINATION BY RETAILER 24
B. TERMINATION FOR CAUSE 24
1. IMMEDIATE TERMINATION 24
2. TERMINATION UPON SIXTY DAYS NOTICE 26
3. TERMINATION FOR FAILURE OF PERFORMANCE 27
4. TERMINATION UPON DEATH OR INCAPACITY 27
C. TERMINATION UPON TERMINATION OF
DISTRIBUTORSHIP 27
D. TERMINATION FOR FAILURE OF MBUSA TO BE
LICENSED 27
E. TERMINATION UPON OFFERING TO ENTER INTO A
NEW OR AMENDED PASSENGER CAR RETAILER
AGREEMENT 28
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F. NOTICE OF TERMINATION 28
G. CONTINUANCE OF BUSINESS RELATIONS 28
H. REPURCHASE PROVISIONS 28
1. MBUSA'S OBLIGATIONS 28
2. RETAILER'S RESPONSIBILITIES 29
3. PAYMENT BY MBUSA 30
XII. DISPUTE RESOLUTION PROCESS 30
A. THE MERCEDES-BENZ BOARD 30
B. MANDATORY MEDIATION 31
C. OPTIONAL ARBITRATION 31
XIII. DEFENSE AND INDEMNIFICATION 32
A. DEFENSE AND INDEMNIFICATION BY MBUSA 32
B. DEFENSE AND INDEMNIFICATION BY RETAILER 33
C. CONDITIONAL DEFENSE AND/OR
INDEMNIFICATION 34
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS 34
E. TIME TO RESPOND AND RESPONSIBILITIES
OF THE PARTIES 34
XIV. NOTICE OF BREACH OR FAILURE TO ACT IN GOOD FAITH 35
XV. GENERAL PROVISIONS 35
A. NOTICES 35
B. NO IMPLIED WAIVERS 35
C. SOLE AGREEMENT OF THE PARTIES 35
D. RETAILER NOT AN AGENT OR REPRESENTATIVE 36
E. ASSIGNMENT OF RIGHTS OR DELEGATIONS OF
DUTIES 36
F. NO FRANCHISE FEE 36
G. BENEFIT 36
H. NEW JERSEY LAW 36
XVI. DEFINITIONS 37
XVII. ADDITIONAL PROVISIONS 38
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MERCEDES-BENZ USA, INC.
MERCEDES-BENZ PASSENGER CAR RETAILER AGREEMENT
STANDARD PROVISIONS
I. ACQUISITION, DELIVERY AND INVENTORY OF MERCEDES-BENZ
PASSENGER CAR PRODUCTS
A. PRICES AND TERMS OF SALE
MBUSA shall offer to sell to Retailer and Retailer shall have the
right to purchase from MBUSA Mercedes-Benz Passenger Car Products in
accordance with the provisions of this Agreement and the prices and
other terms of sale that MBUSA shall establish and revise from time to
time. Such revised prices or terms shall apply to any Mercedes-Benz
Passenger Car Product not invoiced to Retailer by MBUSA at the time
the notice of such change is given to Retailer (in the case of
Mercedes-Benz Passenger Cars), or upon issuance of a new or modified
parts price list or through change notices, letters, bulletins or
revision sheets (in the case of Genuine Mercedes-Benz Passenger Car
Parts and Accessories), or at such other times as may be designated in
writing by MBUSA.
B. AVAILABILITY AND ALLOCATION OF PRODUCTS
MBUSA will allocate Mercedes-Benz Passenger Car Products among its
passenger car retailers in a fair and equitable manner. MBUSA will,
upon Retailer's request, explain the considerations and method used to
allocate Mercedes-Benz Passenger Car Products to Retailer.
C. DELIVERY OF PRODUCTS
MBUSA will ship Mercedes-Benz Passenger Car Products to Retailer by
whatever mode of transportation, by whatever route, and from whatever
point MBUSA may select. Retailer shall pay MBUSA such charges as MBUSA
in its sole discretion establishes for such transportation services.
D. PASSAGE OF TITLE
Title to each Mercedes-Benz Passenger Car Product shall pass from
MBUSA to Retailer, or to the financial institution designated by
Retailer, upon MBUSA's receipt of payment for said Product and upon
delivery of said Product to Retailer or to a carrier for
transportation to Retailer.
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E. RISK OF DAMAGE OR LOSS
Retailer shall bear the risk of damage to or loss of Mercedes-Benz
Passenger Car Products during transportation from the point of
shipment; however, MBUSA will, if requested by Retailer in such manner
and within such time as MBUSA may specify, prosecute claims for damage
to or loss of Mercedes-Benz Passenger Cars during said transportation
against the responsible carrier for and on behalf of Retailer. To the
extent required by law, Retailer shall notify the purchaser of a
vehicle of any damage sustained by such vehicle prior to sale.
F. DELAY OR FAILURE OF DELIVERY
MBUSA shall not be liable for delay or failure to deliver
Mercedes-Benz Passenger Car Products that it has previously agreed to
deliver, where such delay or failure to deliver is the result of any
event beyond the control of MBUSA, including but not limited to any
law or regulation of any governmental entity, acts of God, foreign or
civil wars, riots, interruptions of navigation, shipwrecks, fires,
floods, storms, strikes, lockouts, or other labor troubles, embargoes,
blockades, or delay or failure of DCAG to deliver Mercedes-Benz
Passenger Car Products.
G. DIVERSION AND STORAGE CHARGES
Retailer shall be responsible for and shall pay all charges for
demurrage, storage and other expense accruing after shipment to
Retailer or to a carrier for transportation to Retailer. If diversions
of shipments are made upon Retailer's request or are made by MBUSA as
a result of Retailer's failure or refusal to accept shipments made
pursuant to Retailer's orders, Retailer shall pay all additional
charges and expenses incident to such diversions.
H. SECURITY INTEREST
1. GRANT OF SECURITY INTEREST
As security for the full payment of all sums from time to time
owed by Retailer to MBUSA under this Agreement, whether such sums
are now or hereafter become due and owing, Retailer hereby grants
to MBUSA a security interest in the following items for which
MBUSA has not received payment (collectively referred to as
"Collateral"):
(i) All Genuine Mercedes-Benz Passenger Car Parts and
Accessories and other related items delivered by MBUSA to
Retailer hereunder on account (all such inventory
hereinafter referred to collectively as "Inventory" and
individually as "Item of Inventory"); and
(ii) All proceeds from any of the foregoing, including without
limitation, insurance payable by reason of the loss, damage
or
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destruction of any Item of Inventory; and all accounts and
chattel paper of Retailer arising from its sale, lease or
other disposition of Inventory now existing or hereafter
arising, and all liens, securities, guarantees, remedies and
privileges pertaining thereto, together with all rights and
liens of Retailer relating thereto.
2. DEFAULT IN PAYMENT
Retailer shall be in default of this Section I.H if: (i) Retailer
shall fail to pay any amounts secured hereby when due or fail to
perform any obligations under this Section I in a timely manner; (ii)
there shall occur any material adverse change in the financial
condition of Retailer; or (iii) Retailer shall dissolve or become
insolvent or bankrupt; and, in any such case, MBUSA may declare all
sums secured by this Section I.H immediately due and payable and MBUSA
shall have all the rights and remedies afforded to a secured party
after default under the Uniform Commercial Code or other applicable
law in effect on the date of this Agreement.
3. ASSEMBLY OF COLLATERAL, PAYMENT OF COSTS AND NOTICES
Retailer shall, if requested by MBUSA upon the occurrence of any
default under Section I.H.2, assemble the Collateral and make it
available to MBUSA at a place or places designated by MBUSA. Retailer
also shall pay all costs of MBUSA, including without limitation,
attorneys fees incurred with respect to the enforcement of any of
MBUSA's rights under this Section I.H.
4. RECORDING AND FURTHER ASSURANCES
Retailer shall execute and deliver such financing statements and such
other instruments or documents and take any other action as MBUSA may
request in order to create or maintain the security interest intended
to be created by this Section I.H, or to enable MBUSA to exercise and
enforce its rights hereunder. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing
statement and may be filed in lieu of a financing statement in any and
all jurisdictions which accept such reproductions.
5. RECORDS AND SCHEDULES OF INVENTORY
Retailer shall keep accurate records itemizing and describing the
kind, type and quantity of Inventory and shall furnish to MBUSA
within five (5) days of receipt of MBUSA's request therefor, a current
schedule of inventory in form and substance satisfactory to MBUSA
("Schedule of
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Inventory"), which shall be true and accurate in all respects. A
physical inventory shall be conducted no less than annually in
connection with preparation of year-end financial statements of
Retailer and, at MBUSA's request, a report of such inventory shall be
promptly provided to MBUSA.
I. CHANGES OF DESIGN, SPECIFICATIONS OR OPTIONS
MBUSA may change the design or specifications of any Mercedes-Benz
Passenger Car Product or the options in any Mercedes-Benz Passenger
Car Product and shall be under no obligation to provide notice of same
or to make any similar change to Mercedes-Benz Passenger Car Products
previously purchased by or shipped to Retailer. No change shall be
considered a model year change unless so specified by MBUSA.
J. DISCONTINUANCE OF MANUFACTURE OR IMPORTATION
DCAG and/or MBUSA may discontinue the manufacture, importation or
distribution of all or part of any Mercedes-Benz Passenger Car
Product, whether passenger car parts, options or accessories,
including any model, series or body style of any Mercedes-Benz
Passenger Car at any time without any obligation or liability to
Retailer by reason thereof.
K. MINIMUM VEHICLE INVENTORIES
Retailer agrees that it shall, at all times, maintain in showroom
ready condition at least the minimum inventory of Mercedes-Benz
Passenger Cars that may be established by MBUSA from time to time.
L. PRODUCT MODIFICATIONS
Retailer agrees that it will not install aftermarket accessories or
make any modifications to Mercedes-Benz passenger cars that may impair
or adversely affect their safety, emissions, structural integrity or
performance.
II. RETAILER'S MARKETING AND SALES OF MERCEDES-BENZ PASSENGER CAR PRODUCTS
A. RETAILER'S GENERAL RESPONSIBILITIES
Retailer recognizes that client satisfaction and the successful
promotion and sale of Mercedes-Benz Passenger Car Products are
significantly dependent on Retailer's advertising and sales promotion
activities. Therefore, Retailer at all times shall:
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1. Actively and effectively promote and sell new and used Mercedes-Benz
Passenger Car Products to clients located within its Area of
Influence;
2. Advertise and merchandise Mercedes-Benz Passenger Car Products, and
use current Mercedes-Benz showroom displays, sales materials and other
promotional media;
3. Organize a complete sales organization of the highest quality, ensure
that its sale personnel meet the educational and management standards
established by MBUSA, and, at Retailer's expense, have such personnel
as are appropriate attend all training courses prescribed by MBUSA;
4. Comply with the Retailer Advertising Guidelines, maintain a high
standard of ethics in advertising, promoting and selling Mercedes-Benz
Passenger Car Products, and avoid engaging in any misrepresentation or
unfair or deceptive practices. Retailer shall discontinue any
advertising that MBUSA considers injurious to MBUSA's business or
reputation or to the Mercedes-Benz Marks, or that are likely to be
violative of applicable laws or regulations; and
5. Accurately represent to clients the total selling price of
Mercedes-Benz Passenger Car Products. Retailer agrees to explain to
clients of Mercedes-Benz Passenger Car Products the items that make up
the total selling price and to give the clients itemized invoices and
all other information required by law. Retailer understands and hereby
acknowledges that it may sell Mercedes-Benz Passenger Car Products at
whatever price Retailer desires.
B. EXPORT POLICY
Retailer is authorized to sell Mercedes-Benz Passenger Cars only to clients
residing in the United States of America. Retailer agrees that it will not
sell Mercedes-Benz Passenger Cars for resale or use outside the United
States of America. Retailer agrees to be bound by and comply with any
export policy established by MBUSA.
C. MERCEDES-BENZ RETAILER ASSOCIATION
MBUSA considers participation by Mercedes-Benz passenger car retailers in
Mercedes-Benz Passenger Car Retailer Advertising Associations to be a
fundamental part of an overall marketing strategy for their businesses and
Mercedes-Benz Passenger Car Products. MBUSA urges Retailer to cooperate in
the establishment of such an association and to fund its fair share of
advertising and merchandising programs undertaken by the association.
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D. PRE-OWNED VEHICLES
Retailer agrees to display and sell pre-owned Mercedes-Benz vehicles
at the Approved Location(s). Retailer shall participate in programs as
specified by MBUSA for the sale of such vehicles, and shall maintain
the minimum reasonable inventory established by MBUSA from time to
time for such operations. Retailer shall conduct its pre-owned
Mercedes-Benz vehicle operations in conformance with all standards set
forth in this Agreement.
E. AREA OF INFLUENCE
MBUSA will assign to Retailer a geographic area consisting of a
collection of zip codes that is called an Area of Influence ("AOI").
MBUSA may alter or adjust Retailer's AOI at any time. The AOI is a
tool used by MBUSA to evaluate Retailer's performance of its primary
obligations hereunder. Retailer agrees that it has no right or
interest in any AOI and that MBUSA may add new retailers to or
relocate retailers into Retailer's AOI. Any such addition or
relocation of a retailer will result in an alteration or adjustment of
Retailer's AOI.
F. EVALUATION OF RETAILER'S MARKETING AND SALES PERFORMANCE
MBUSA will periodically evaluate Retailer's sales and marketing
performance under this Agreement. Retailer's evaluation will be based
on such reasonable criteria as MBUSA may establish, including without
limitation: (i) Retailer's reasonable sales objectives that may be
established by MBUSA; (ii) Retailer's sales of Mercedes-Benz Passenger
Cars as a percentage of registrations of Mercedes-Benz Passenger Cars
or Competitive Vehicles in Retailer's AOI; (iii) the registrations of
Mercedes-Benz Passenger Cars as a percentage of registrations of
Competitive Vehicles in Retailer's AOI; (iv) Retailer's sales or
registrations of Mercedes-Benz Passenger Cars as compared to sales or
registrations of Mercedes-Benz Passenger Cars by authorized
Mercedes-Benz passenger car retailers in other areas, including but
not limited to the metropolitan area, market and/or region in which
Retailer is located; and (v) Retailer's performance in building and
maintaining consumer satisfaction with Retailer and Mercedes-Benz
Passenger Car Products. MBUSA will review such evaluations with
Retailer, and Retailer shall take prompt corrective action, if
required, to improve its performance.
III. RETAILER'S SERVICE OBLIGATIONS
A. CLIENT SERVICE STANDARDS
Retailer and MBUSA agree that client satisfaction and the future
growth of their respective businesses is substantially dependent upon
the ability of owners of
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Mercedes-Benz passenger cars to obtain high-quality servicing from
Retailer. Therefore, Retailer agrees to:
1. Provide prompt, efficient and courteous service of the highest
quality for all Mercedes-Benz passenger cars, regardless of where
purchased and whether or not under warranty;
2. Accurately diagnose and advise clients of the necessary repairs,
and obtain their consent prior to the initiation of such repairs;
3. Professionally perform the necessary repairs; and
4. Treat clients fairly at all times.
B. RETAILER'S SPECIFIC SERVICE OBLIGATIONS
1. PRE-DELIVERY INSPECTIONS AND SERVICE
Retailer shall perform pre-delivery inspections and service on
each Mercedes-Benz Passenger Car prior to sale and delivery
thereof by Retailer in accordance with the Warranty Manual.
2. WARRANTY REPAIRS AND POLICY SERVICE
Retailer shall promptly, courteously and efficiently perform (i)
warranty repairs on each Mercedes-Benz Passenger Car Product that
qualifies for such repairs under the provisions of any warranty
furnished therewith by MBUSA or DCAG, and (ii) such other
inspections, repairs or corrections on Mercedes-Benz Passenger
Car Products as may be approved or authorized by MBUSA to be made
at MBUSA's expense (hereinafter "policy service"). Retailer shall
perform such repairs and service on each such Mercedes-Benz
Passenger Car Product as and when requested by the owner or user
(or in the case of policy service when requested by MBUSA),
without regard to where such Mercedes-Benz Passenger Car Product
was purchased and in accordance with the Warranty Manual. MBUSA
agrees to compensate Retailer for all warranty repairs and policy
service, including labor, diagnosis and Genuine Mercedes-Benz
Passenger Car Parts and Accessories, in accordance with
procedures and at rates to be established from time to time by
MBUSA. Unless otherwise approved in advance by MBUSA, Retailer
shall use only Genuine Mercedes-Benz Passenger Car Parts and
Accessories when performing Mercedes-Benz warranty repairs and
policy service. Warranty repairs and policy service are provided
for the benefit of clients, and Retailer agrees that the client
shall not be obligated to pay any charges for such work or any
other
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services for which Retailer is reimbursed by MBUSA, except as
required by law.
3. SERVICE CAMPAIGN INSPECTIONS AND CORRECTIONS
Retailer agrees to perform service campaign inspections and/or
corrections for owners or users of all Mercedes-Benz Passenger
Car Products that qualify for such inspections and/or corrections
in accordance with MBUSA's directives and the applicable
procedures in the Warranty Manual. MBUSA agrees to reimburse
Retailer for all replacement parts and/or materials required and
used in connection with such work and for labor according to such
directives and the applicable provisions of the Warranty Manual.
4. ROADSIDE ASSISTANCE PROGRAM
Retailer agrees to participate in the Mercedes-Benz Roadside
Assistance Program as specified by MBUSA.
C. USE OF PARTS AND ACCESSORIES IN NON-WARRANTY SERVICE
Subject to provisions of Sections I.L and III.B.2, Retailer has the
right to sell, install or use for making non-warranty repairs products
that are not Genuine Mercedes-Benz Passenger Car Parts and
Accessories.
1. QUALITY STANDARDS
Retailer acknowledges, however, that its clients expect that any
parts or accessories that Retailer sells, installs or uses in the
sale, repair or servicing Mercedes-Benz passenger cars are, or
meet the high quality standards of, Genuine Mercedes-Benz
Passenger Car Parts and Accessories. Retailer agrees that in
sales, repairs or servicing where Retailer does not use Genuine
Mercedes-Benz Passenger Car Parts and Accessories, Retailer
will utilize only such other parts or accessories as:
1. Will not adversely affect the mechanical operation of the
Mercedes-Benz passenger car being sold, repaired or
serviced; and
2. Are equivalent in quality and design to Genuine Mercedes-
Benz Passenger Car Parts and Accessories.
Retailer further agrees that it will not offer to sell any parts
or accessories that for reasons of quality or image are
reasonably objected to by MBUSA.
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2. RETAILER'S DISCLOSURES AS TO USE OF AND WARRANTIES FOR
NON-GENUINE PARTS AND ACCESSORIES
In order to avoid confusion and to minimize potential client
dissatisfaction, in any non-warranty instance where Retailer
sells, installs or uses non-Genuine Mercedes-Benz Passenger Car
Parts or Accessories, Retailer shall disclose such fact to the
client and shall advise the client that the item is not included
in warranties furnished by MBUSA or DCAG. Such disclosure shall
be written, conspicuous and stated on the client's copy of the
service or repair order or sale document. In addition, Retailer
will clearly explain to the client the extent of any warranty
covering the parts or accessories involved and will deliver a
copy of the warranty to the client.
D. COMPLIANCE WITH SAFETY AND EMISSION CONTROL REQUIREMENTS
Retailer agrees to comply and operate consistently with all applicable
provisions of the National Traffic and Motor Vehicle Safety Act of
1966, and the Federal Clean Air Act, as amended, including applicable
rules and regulations issued from time to time thereunder, and all
other applicable federal, state, and local motor vehicle safety and
emission control statutes, rules, and regulations.
In the event that the laws of the state in which Retailer is located
require motor vehicle retailers or distributors to install in new or
used motor vehicles, prior to their sale, any safety devices or other
equipment not installed or supplied as standard equipment by DCAG,
then Retailer, prior to the sale of any Mercedes-Benz passenger car on
which such installations are required, shall properly install such
devices or equipment on such Mercedes-Benz passenger cars. Retailer
shall comply with state and local laws pertaining to the installation
and reporting of such equipment.
In the interest of motor vehicle safety and emission control, MBUSA
and Retailer agree to provide to each other such information and
assistance as may reasonably be requested by the other in connection
with the performance of obligations imposed on either party by the
National Traffic and Motor Vehicle Safety Act of 1966, and the Federal
Clean Air Act, as amended, and their rules and regulations, and all
other applicable federal, state and local motor vehicle safety and
emission control statutes, rules and regulations.
E. COMPLIANCE WITH CONSUMER PROTECTION STATUTES, RULES AND REGULATIONS
Retailer agrees to comply and operate consistently with all applicable
provisions of any repair or replace or other consumer protection
statutes, rules and
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regulations (hereinafter "consumer protection laws"). Because certain
client complaints may impose liability upon MBUSA under consumer
protection laws, Retailer agrees to provide prompt notice to MBUSA of
such complaints and take such other steps as MBUSA may require.
Retailer also agrees to provide applicable required client
notifications and disclosures as prescribed by consumer protection
laws. Retailer will do nothing to affect adversely MBUSA's rights
under consumer protection laws.
IV. RETAILER'S SERVICE AND PARTS ORGANIZATION
A. ORGANIZATION AND STANDARDS
Retailer agrees to organize and maintain a complete service and parts
organization of the highest quality, including a qualified service
manager, parts manager, diagnostic specialists, technicians and a
sufficient complement of qualified service and parts personnel as
recommended by MBUSA. Retailer's personnel will meet the educational,
management and technical training standards reasonably established by
MBUSA and, at Retailer's expense, will complete all service, parts
and client satisfaction training courses prescribed by MBUSA.
B. SERVICE EQUIPMENT AND SPECIAL TOOLS
Retailer agrees to acquire and properly maintain adequate service
equipment and such special service tools and instruments as are
reasonably specified by MBUSA. Anything herein to the contrary
notwithstanding, if MBUSA determines that Retailer requires special
tools and instruments to service a model of Mercedes-Benz Passenger
Car, Retailer acknowledges that it has no right to purchase such model
from MBUSA unless and until it has acquired all such special tools
and instruments, and completed all related training courses prescribed
by MBUSA.
C. PARTS STOCKING LEVEL
Retailer agrees to maintain its parts stock at minimum stocking levels
reasonably established by MBUSA.
D. AFTER-HOURS DELIVERY
Retailer agrees to provide MBUSA, upon request, access to a secure
area for after-hours parts or passenger car delivery.
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E. ASSISTANCE PROVIDED BY MBUSA
1. SERVICE MANUALS AND MATERIALS
MBUSA agrees to make available to Retailer copies of such
service manuals and bulletins, publications, computer software
and technical data as MBUSA shall deem to be necessary for the
needs of Retailer's service and parts organization. Retailer
shall be responsible for keeping such manuals and materials
current and available for consultation by its employees.
2. FIELD PERSONNEL ASSISTANCE
To assist Retailer in handling its responsibilities under this
Agreement, MBUSA agrees to make available qualified field
personnel who will, from time to time, advise and counsel
Retailer on service-related subjects, including service policies,
product and technical adjustments, repair and replacement of
product components, client relations, warranty administration,
service and parts merchandising, and personnel/management
training.
F. EVALUATION OF RETAILER'S SERVICE AND PARTS PERFORMANCE.
MBUSA will periodically evaluate Retailer's: (i) service performance
in areas such as client satisfaction, warranty administration, service
repairs, service management, facilities, operating procedures and new
vehicle pre-delivery service; and (ii) parts operations, facilities,
tools and equipment MBUSA will review such evaluations with Retailer,
and Retailer shall take prompt action to improve the service and parts
performance to satisfactory levels as MBUSA may require. Such action
shall, if requested by MBUSA, include an action plan by Retailer for
improvement of service and parts performance within a specific time
period approved by MBUSA, including but not limited to the
establishment of additional space, facilities or locations for such
operations.
G. ADDITIONAL FACILITIES OR LOCATIONS
If, with MBUSA prior written consent, Retailer establishes additional
facilities or locations for its service and parts operations, Retailer
shall meet the facilities, identification, organizational, equipment,
parts stocking and other standards reasonably established by MBUSA
from time to time for such facilities or locations.
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V. CLIENT SATISFACTION RESPONSIBILITIES
The "Three-Pointed Star" is the symbol of automotive excellence. In
furtherance of that image and reputation, MBUSA and Retailer agree to
conduct their respective businesses in a manner that achieves the highest
levels of client satisfaction by marketing the finest products and
providing the best service in the automotive industry.
A. RETAILER'S CLIENT SATISFACTION OBLIGATIONS
Retailer will be responsible for satisfying Mercedes-Benz clients in
all matters except those that are directly related to product design
and manufacturing. Retailer will take all reasonable steps to ensure
that each client is completely satisfied with Mercedes-Benz Passenger
Car Products and the services and practices of Retailer. Retailer will
not engage in any practice or method of operation if its nature or
quality may impair the reputation of MBUSA or Mercedes-Benz Passenger
Car Products.
1. RETAILER'S CLIENT SATISFACTION PLAN
Upon MBUSA's request, Retailer shall provide a detailed plan of
Retailer's client satisfaction program to MBUSA and shall
implement such program on a continuous basis. This plan shall
include an ongoing system for emphasizing client satisfaction to
all Retailer's employees, for training Retailer employees and for
conveying to clients that Retailer is committed to the
highest, possible level of client satisfaction.
2. EMPLOYEE TRAINING
Retailer agrees to participate and to have its employees
participate, at Retailer's expense, in Mercedes-Benz client
satisfaction training as required by MBUSA.
3. CLIENT ASSISTANCE RESPONSE SYSTEM
Retailer agree's to implement a system, approved by MBUSA, that
will respond immediately to requests for client assistance from
MBUSA.
B. EVALUATION OF RETAILER'S CLIENT SATISFACTION PERFORMANCE
MBUSA periodically will evaluate Retailer's client satisfaction
performance based on the following considerations and efforts by
Retailer.
1. MBUSA will provide Retailer with Client Relationship Index
("CRI") reports or such other equivalent data as will permit
Retailer to assess its
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performance and maintain the highest level of client
satisfaction. Retailer agrees to review with its employees on a
regular basis the results of the client satisfaction reports or
other data it receives.
2. Retailer shall continuously develop and implement specific
action plans to improve its client satisfaction performance and
results. The plans are to be reviewed with MBUSA on a basis that
MBUSA deems appropriate. Retailer will respond on a timely basis
to requests from MBUSA to take action on unsatisfactory client
satisfaction matters and to commit necessary resources to remedy
deficiencies reasonably specified by MBUSA.
VI. MERCEDES-BENZ CENTER FACILITIES AND IDENTIFICATION
A. LOCATION AND FACILITIES
Retailer shall provide Mercedes-Benz Center Facilities at the Approved
Location(s) that (i) will enable Retailer to effectively perform its
responsibilities under this Agreement, (ii) are satisfactory in
space, appearance, layout, equipment and corporate identification, and
(iii) are otherwise substantially in accordance with the Retailer
Operating Requirements Addendum, Retailer Facility Space Analysis
Addendum, Corporate Identity Manual and such other standards as
MBUSA may establish from time to time. Retailer shall conduct its
Mercedes-Benz Center Operations only from the Approved Location(s). If
the Approved Location(s) is comprised of more than one place of
business, Retailer shall use each such place of business only for the
purposes specified therefor in Paragraph F and the Final Paragraph of
this Agreement and, if applicable, in the Retailer Facility Space
Analysis Addendum.
B. CHANGES AND ADDITIONS
Retailer shall not move, relocate or change the designated usage or
function of the Approved Location(s) or any of the Mercedes-Benz
Center Facilities, or substantially modify any of the Mercedes-Benz
Center Facilities, nor shall Retailer or any person named in the
Final Paragraph of this Agreement directly or indirectly establish or
operate any other locations or facilities for the sale or servicing of
Mercedes-Benz Passenger Car Products or for the conduct of any other
of the Mercedes-Benz Center Operations contemplated by this Agreement,
without the prior written consent of MBUSA. Any changes in the
Approved Location(s) or the Mercedes-Benz Center Facilities that may
be agreed to by MBUSA and Retailer may be reflected in a new
Agreement or in a new Retailer Facility Space Analysis Addendum.
In particular, Retailer acknowledges that the addition of sales,
service or parts operations for another line of vehicles to the
Mercedes-Benz Center Facilities or
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at the Approved Location(s) could adversely affect Retailer's sales,
service and parts performance with respect to Mercedes-Benz Passenger
Car Products. Accordingly, to give MBUSA an adequate opportunity to
evaluate the effect of such a proposed addition and to determine
whether or not to consent thereto, Retailer agrees to notify MBUSA in
writing at least sixty (60) days before Retailer enters into any
agreement or letter of intent with respect to the addition of such
sales, service or parts operations to the Mercedes-Benz Center
Facilities or at the Approved Location(s).
C. RETAILER'S OPERATING HOURS
Retailer agrees to conduct Mercedes-Benz Center Operations during all
days and hours that are customary and lawful for such operations in
the community or locality in which Retailer is located and in
accordance with industry standards. In addition, when necessary to
accommodate client needs, Retailer shall exceed its operating hours.
D. CORPORATE IDENTITY
Subject to applicable governmental statutes, ordinances and
regulations, Retailer agrees to erect, display and maintain, at
Approved Location(s) only and at Retailer's sole expense, such
standard authorized product and service signs and other corporate
identity elements as are specified in the Corporate Identity Manual or
otherwise required by MBUSA from time to time.
E. EVALUATION OF MERCEDES-BENZ CENTER FACILITIES
MBUSA will periodically evaluate the Mercedes-Benz Center Facilities.
In making such evaluations, MBUSA may consider, among other things:
the actual building and land provided by Retailer for the performance
of its responsibilities under this Agreement, compliance with MBUSA's
current requirements for Mercedes-Benz Center Operations; the
appearance, condition, layout and signage of the Mercedes-Benz Center
Facilities; and such other factors as in MBUSA's opinion may relate to
Retailer's performance of its responsibilities under this Agreement.
MBUSA will discuss such evaluations with Retailer, and Retailer shall
take prompt action to comply with MBUSA's recommendations and minimum
facility standards.
F. OWNERSHIP AND USE OF MERCEDES-BENZ MARKS
1. VALIDITY AND EXCLUSIVE OWNERSHIP OF MERCEDES-BENZE MARKS
Retailer acknowledges the validity and DCAG's exclusive ownership
of the Mercedes-Benz Marks, and agrees not to contest the same
during the term of the Agreement or at any time thereafter.
Retailer and MBUSA
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agree to cooperate with each other in preventing any acts of
trademark infringement or unfair competition with respect to
any Mercedes-Benz Mark, but DCAG or MBUSA shall have sole control
over all actions and legal proceedings to redress infringement
of or any unfair competition with respect to any Mercedes-Benz
Mark.
2. USE BY RETAILER
MBUSA grants Retailer a non-exclusive license to use the
Mercedes-Benz Marks subject to the terms and conditions of the
Agreement and the Corporate Identity Manual. Retailer agrees that
it will use the Mercedes-Benz Marks only in connection with the
sale and servicing of Mercedes-Benz Passenger Car Products and
only in such manner, at such location, to such extent, and for
such purposes as MBUSA may specify from time to time. Retailer
shall promptly change or discontinue its use of any Mercedes-Benz
Marks upon MBUSA's request. Retailer shall not use the
Mercedes-Benz Marks as part of its corporate or business name
without MBUSA's prior written consent.
3. DISCONTINUANCE OF USE
Upon termination of this Agreement, Retailer agrees that it shall
immediately:
a. Discontinue the use of the word Mercedes-Benz and the
Mercedes-Benz Marks, or any semblance of same, including
without limitation, the use of all stationery, telephone
directory listing and other printed material referring in
any way to Mercedes-Benz or bearing any Mercedes-Benz
Mark;
b. Discontinue the use of the word Mercedes-Benz or the
Mercedes-Benz Marks, or any semblance of same, as part of
its business or corporate name, and file a change or
discontinuance of such name with appropriate authorities;
c. Remove all product signs bearing said word(s) or
Mercedes-Benz Marks at Retailer's sole cost and expense;
d. Cease representing itself as an authorized Mercedes-Benz
passenger car retailer; and
e. Refrain from any action, including without limitation, any
advertising, stating or implying that it is authorized to
sell or distribute Mercedes-Benz Passenger Car Products.
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4. Enforcment
In the event Retailer fails to comply with the terms and
conditions of this secton VI.F, MBUSA shall have the right, in
its sole discretion, to effect compliance through litigation
and/ or to enter upon Retailer's premises and remove, without
liability, all such product signs and identification bearing the
word Mercedes-Benz or any Mercedes-Benz Mark. Retailer agrees
that is shall reimburse MBUSA for any costs and expenses
incurred in such litigation and/or removal, including reasonable
attorney fees.
VII. WARRANTIES
The only warranties of MBUSA or DCAG applicable to Mercedes-Benz Passenger
Car Products shall be the New Vehicle Limited Warranty or such other
written warranties that may be expressly furnished by MBUSA or DCAG.
Except for its express limited liability under such written warranties,
MBUSA and DCAG do not assume any additional warranty obligations or
liabilities in connection with any Mercedes-Benz Passenger Car Products.
Retailer is not authorized to assume any additional obligations or
liabilities on behalf of MBUSA or DCAG. Any such additional obligations
assumed by Retailer shall be the sole responsibility of Retailer.
Retailer shall expressly incorporate in full and without modification any
warranty furnished by MBUSA or DCAG with a Mercedes-Benz Passenger Car as
a conspicuous part of each order form or other contact for the sale of
such a Mercedes-Benz Passenger Car by Retailer to any buyer. Retailer
shall make available to the buyer of each Mercedes-Benz Passenger Car
Product prior to the purchase of such Mercedes-Benz Passenger Car Product,
copies of such applicable warranties as may be furnished by MBUSA or DCAG.
Retailer shall also provide to the buyer of each Mercedes-Benz Passenger
Car Product, in full and without modification, any owner's manual,
warranty booklet or other owner information which MBUSA or DCAG may
provide to Retailer for delivery with such Mercedes-Benz Product. Retailer
agrees to abide by and implement in all other respects MBUSA's warranty
procedures then in effect.
VIII. CAPITAL, CREDIT, RECORDS AND UNIFORM SYSTEMS
A. NET WORKING CAPITAL
Retailer agrees to establish and maintain actual net working capital in an
amount not less than the minimum net working capital specified by MBUSA.
MBUSA will have the right to modify the amount of net working capital
required, and Retailer agrees promptly to establish and maintain the
required amount.
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B. FLOORING AND LINES OF CREDIT
Retailer agrees to obtain and maintain at all times a confirmed and
adequate flooring line with a bank or financial institution or other
method of financing acceptable to MBUSA to enable Retailer to perform
its obligations pursuant to this Agreement.
MBUSA may increase the required amounts of flooring or lines of
credit, and Retailer agrees promptly to establish and maintain the
increased amount.
Subject to the foregoing obligations, Retailer is free to do its
financing business, wholesale, retail or both, with whomever it
chooses and to engage in retail financing activity to the extent it
desires.
C. PAYMENT TERMS
All monies or accounts due Retailer from MBUSA will be considered net
of Retailer's indebtedness to MBUSA. MBUSA may deduct or offiet any
amounts due or to become due from Retailer to MBUSA, or any amounts
held by MBUSA, from or against any sums or accounts due or to become
due from MBUSA to Retailer; provided, however, that MBUSA shall not
deduct or offset such amounts for any transaction where MBUSA has
failed to provide written notice to Retailer of the amounts due
within six (6) months of the transaction. Payments by Retailer to
MBUSA shall be made in such a manner as prescribed by MBUSA and shall
be applied against Retailer's indebtedness in accordance with MBUSA's
policies and practices. If Retailer disputes any deduction or offset
imposed by MBUSA pursuant to this Section VIII.C, it shall provide
written notice of such dispute to MBUSA within ninety (90) days of the
date on which MBUSA imposed such deduction or offset. If Retailer
fails to provide such notice to MBUSA within that 90-day period, it
shall be deemed to have waived any right that it may have to challenge
such deduction or offset pursuant to Section XII or before any court,
administrative agency or governmental body.
D. UNIFORM ACCOUNTING SYSTEM
Retailer agrees to maintain its financial books and records in
accordance with the Mercedes-Benz Accounting Manual, as amended from
time to time by MBUSA. In addition, Retailer shall furnish to MBUSA
complete and accurate financial or operating information, including
without limitation, a financial and/or operating statement covering
the current month and calendar year-to-date operations and showing
the true and accurate condition of Retailer's business. Retailer shall
promptly furnish to MBUSA copies of any adjusted annual statements,
including any and all adjusted, year-end statements prepared for tax
or any other purposes. All such information shall be furnished by
Retailer to MBUSA via MBUSA's electronic communications network and in
such a format and at such times as
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prescribed by MBUSA. If requested by MBUSA, Retailer shall furnish to
MBUSA an audited annual financial statement.
E. RECORDS MAINTENANCE
Retailer agrees to keep complete, accurate and current records
regarding its sale, leasing and servicing of Mercedes-Benz Passenger
Car Products for a minimum of five (5) years, exclusive of any
retention period required by any governmental entity. Retailer shall
prepare, keep current and retain records in support of requests for
reimbursement for warranty and policy work performed by Retailer in
accordance with the Warranty Manual.
F. EXAMINATION OF MERCEDES-BENZ CENTER ACCOUNTS AND RECORDS
MBUSA shall have the right at all reasonable times and during regular
business hours to inspect the Mercedes-Benz Center Facilities and to
examine, audit and reproduce all records, accounts and supporting data
relating to all Mercedes-Benz Center operations for any line of
vehicles conducted in the Mercedes-Benz Center Facilities or at the
Approved Location(s), including without limitation, sales reporting,
service and repair of Mercedes-Benz Passenger Car Products by
Retailer.
G. TAXES
Retailer shall be responsible for and duly pay all sales taxes, use
taxes, excise taxes and other governmental or municipal charges
imposed, levied or based upon the purchase or sale of Mercedes-Benz
Passenger Car Products by Retailer, and shall maintain accurate
records of the same.
H. CONFIDENTIALITY
MBUSA agrees that it shall not provide any data or documents
submitted to it by Retailer to any third party unless authorized
by Retailer, required by law, or required to generate composite or
comparative data for analytical purposes. Retailer agrees to keep
confidential and not to disclose, directly or indirectly, any
information that MBUSA designates as confidential.
I. MERCEDES-BENZ RETAILER COMMUNICATIONS SYSTEM AND PROPRIETARY
MANUFACTURER SYSTEMS
MBUSA has established the Mercedes-Benz Retailer Communications System
("RCS") to retrieve information from and disseminate information to
Retailer. The RCS (which presently called MBNet) collects parts,
warranty and financial data from Retailer, and provides access to
various reports, data bases and
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administrative messages to Retailer. Retailer shall utilize the RCS to
provide such information to MBUSA as MBUSA shall specify from time to
time. Retailer shall acquire, install and maintain at its expense the
necessary equipment and systems compatible with the RCS, as well as
other proprietary manufacturer systems, which are deemed necessary by
MBUSA to transact business and serve clients in the most efficient
manner.
J. SALES REPORTING
Retailer agrees to accurately report to MBUSA, with such relevant
information as MBUSA may reasonably require, the delivery of each
Mercedes-Benz Passenger Car and pre-owned Mercedes-Benz vehicle to an
ultimate consumer by the end of the day in which the vehicle is
delivered to such ultimate consumer, and to furnish MBUSA with such
other reports as MBUSA may reasonably require in accordance with MBUSA's
Ultimate Consumer DDR Reporting Provision or such other sales reporting
requirements as MBUSA may establish from time to time.
IX. TRANSFERS
A. SALE OF ASSETS OR OWNERSHIP INTEREST
This is a personal service agreement that MBUSA has entered into in
reliance upon the personal qualifications, reputation, integrity,
expertise and commitment of Owners and Retailer Operator. For this
reason, Retailer agrees to obtain MBUSA's prior written consent to any
proposed sale or transfer of Retailer's principal assets or any
ownership interest of Owner, which consent shall not be unreasonably
withheld.
MBUSA shall not be obligated to execute a new Agreement with a proposed
transferee of such assets or ownership interest unless Retailer first
makes arrangements acceptable to MBUSA to satisfy any outstanding
indebtedness to MBUSA.
B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE
1. RIGHTS GRANTED
If a proposal to sell Retailer's principal assets or transfer the
majority ownership interest in Retailer is submitted by Retailer to
MBUSA, or in the event of the death of the majority Owner of
Retailer, MBUSA has a right of first refusal or option to purchase
such assets or ownership interest, including any leasehold interest
or realty. MBUSA's exercise of its right or option under this
Section IX.B supersedes Retailer's right to transfer its interest
in, or ownership of, the Mercedes-Benz Center. MBUSA's right or
option may be assigned by it to any third party and
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MBUSA hereby guarantees the full payment to Retailer of the purchase price
by such assignee. MBUSA may disclose the terms of any pending buy/sell
agreement and any other relevant Mercedes-Benz Center performance
information to any potential assignee. MBUSA's rights under this Section
IX.B will be binding on and enforceable against any assignee or successor
in interest of Retailer or purchaser of Retailer's assets.
Anything herein to the contrary notwithstanding, MBUSA shall not have a
right of first refusal or option to purchase Retailer's principal assets or
the majority interest in Retailer if the proposed transferee is the spouse
or a child of an Owner and such spouse or child meets the criteria then
currently used by MBUSA in qualifying owners of Mercedes-Benz passenger car
retailers. If the proposed transferee fails to meet such criteria due to
insufficient personal qualifications or expertise, MBUSA may, in its sole
discretion, approve the transfer subject to the proposed transferee's
successful completion of such training as MBUSA may require. If the
proposed transferee fails to complete such training successfully or
otherwise fails to meet the criteria then currently used by MBUSA in
qualifying such owners within the time period prescribed by MBUSA, MBUSA
may thereafter exercise its right of first refusal or option to purchase
under this Section IX.B.
2. EXERCISE OF MBUSA'S RIGHTS
MBUSA shall have thirty (30) days from the following events within which to
exercise its option to purchase or right of first refusal: (i) MBUSA's
receipt of all data and documentation customarily required by it to
evaluate a proposed transfer of ownership; (ii) MBUSA's receipt of notice
from Retailer of the death of the majority Owner of Retailer, or (iii)
MBUSA's disapproval of any application submitted by Owner's heirs pursuant
to Section X. MBUSA's exercise of its right of first refusal under this
Section IX.B neither shall be dependent upon nor require its prior refusal
to approve the proposed transfer.
3. RIGHT OF FIRST REFUSAL
If Retailer has entered into a bona fide written buy/sell agreement for its
Mercedes-Benz Center business or assets, MBUSA's right under this Section
IX.B is a right of first refusal, enabling MBUSA to assume the buyer's
rights and obligations under such buy/sell agreement, and to cancel this
Agreement and all rights granted Retailer. Upon MBUSA's request, Retailer
agrees to provide other documents relating to the proposed transfer and any
other information which MBUSA deems appropriate, including, but not limited
to, those reflecting other agreements or
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understandings between the parties to the buy/sell agreement. If Retailer
refuses to provide such documentation or to state in writing that no such
documents exist, it shall be conclusively presumed that the buy/sell
agreement is not a bona fide agreement. If Retailer withdraws its proposal
in writing within ten (10) days following Retailer's receipt of MBUSA's
notice exercising its right of first refusal, such right shall be null and
void.
If, as a result of MBUSA's exercise of its right of first refusal, Retailer
is contractually obligated to reimburse the initial buyer for reasonable
attorney's fees, broker's fees, title searches, property inspections, and
other similar costs and fees that the buyer incurred in connection with the
buy/sell agreement, MBUSA shall reimburse Retailer for such costs and fees
in an amount up to but not exceeding Fifty Thousand Dollars ($50,000.00).
Retailer shall provide MBUSA with all documents substantiating such costs
and fees as MBUSA may reasonably request
4. OPTION TO PURCHASE
In the event of the death of the majority Owner or if Retailer submits a
proposal which MBUSA determines is not bona fide or in good faith, MBUSA
has the option to purchase the principal assets of Retailer utilized in
Mercedes-Benz Center Operations, including real estate and leasehold
interest, and to cancel this Agreement and the rights granted Retailer
hereunder. The purchase price of the Mercedes-Benz Center assets will be
determined by good faith negotiations between the parties. If an agreement
cannot be reached, the purchase price will be determined pursuant to the
Dispute Resolution Process established in Section XII.
5. RETAILER'S OBLIGATIONS
Upon MBUSA's exercise of its right or option and tender of performance
under the buy/sell agreement or upon whatever terms may be expressed in
the buy/sell agreement, Retailer shall forthwith transfer the affected
real property by warranty deed conveying marketable title free and clear
of all liens, claims, mortgages, encumbrances, tenancies and occupancies.
The warranty deed shall be in proper form for recording, and Retailer
shall deliver complete possession of the property and deed at the time of
closing. Retailer shall also furnish to MBUSA all copies of any easements,
licenses or other documents affecting the property or Mercedes-Benz Center
Operations and shall assign any permits or licenses that are necessary or
desirable for the use of or appurtenant to the property or the conduct of
such operations. Retailer also agrees to execute and deliver to MBUSA
instruments satisfactory to MBUSA conveying title to all personal
property, including leasehold interests, involved in the transfer or sale
to MBUSA. If any personal property is subject to any lien or
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charge of any kind, Retailer agrees to procure the discharge and
satisfaction thereof prior to the closing of sale of such
property to MBUSA.
X. SUCCESSION RIGHTS UPON DEATH OR IN CAPACITY
A. SUCCESSION TO OWNERSHIP AFTER DEATH OF OWNER
In the event an Owner dies and his or her interest in Retailer passes
directly to any person or persons ("Heirs") who wish to succeed to
Owner's interest, then Owner's legal representative must notify MBUSA
within sixty (60) days of the death of Owner of such Heir's or Heirs'
intent to succeed Owner. The legal representative also must then
designate a proposed Retailer Operator for MBUSA's approval. The effect
of such notice from Owner's legal representative will be to suspend any
notice of termination provided for in Section XI.B.4 issued hereunder.
Upon delivery of such notice, Owner's legal representative shall
immediately request any person(s) identified by it as intending to
succeed Owner and the designated candidate for Retail Operator to
submit an application and to provide all personal and financial
information that MBUSA may reasonably and customarily require in
connection with its review of such applications. All requested
information must be provided promptly to MBUSA and in no case later than
thirty (30) days after receipt of such request from Owner's legal
representative. MBUSA shall have sixty (60) days after its receipt of
all requested information in which to: (i) review such application(s)
pursuant to the then current criteria generally applied by MBUSA in
qualifying owners and/or retailer operators of Mercedes-Benz passenger
car retailers, and (ii) either approve or disapprove the application(s);
provided, however, that if MBUSA does not receive such application(s)
and all requested information within thirty (30) days of Owner's legal
representative's request therefor, MBUSA shall have no obligation to
review and approve or disapprove such application(s). If MBUSA approves
the application(s), it shall offer to enter into a new Mercedes-Benz
Passenger Car Retailer Agreement with Owner's Heir(s) in the form then
currently in use, subject to such additional conditions and for such
term as MBUSA deems appropriate.
In the event that MBUSA does not approve the designated Heir(s) or
designated candidate for Retailer Operator, or if Owner's legal
representative withdraws his or her notice of the intent of Heir(s) to
succeed as Owner(s), or if the legal representative or any proposed
Owner or Retailer Operator fails to timely provide the required
information, MBUSA may reinstate or issue a notice of termination. This
Section X.A is subject to, and shall not be deemed to waive, MBUSA's
right to exercise it option to purchase as set forth in Section IX.
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If MBUSA has notified Retailer that it does not plan to continue to have a
Mercedes-Benz passenger car retailer in Retailer's AOI, MBUSA shall have
no obligation to execute a new Mercedes-Benz Passenger Car Retailer
Agreement with Owner's Heir(s) pursuant to this Section X.
B. INCAPACITY OF OWNER
The parties agree that, as used herein, incapacity shall refer to any
physical or mental ailment that, in MBUSA's opinion, adversely affects an
Owner's ability to meet his or her obligations under this Agreement. MBUSA
may terminate this Agreement when an incapacitated Owner also is the
Retailer Operator identified herein.
Prior to the effective date of any notice of termination, an incapacitated
Owner who is also the Retailer Operator, or his or her legal
representative, may propose a new candidate for the position of Retailer
Operator. Such proposal shall be in writing and shall suspend any pending
notice of termination until MBUSA advises Retailer of its approval or
disapproval of the new candidate. Upon receipt of such notice, MBUSA and
Retailer shall follow the qualification procedures set forth in Section
X.A.
C. NOMINATION OF SUCCESSOR PRIOR TO DEATH OR INCAPACITY OF OWNER
An Owner owning a majority of Retailer's stock may nominate a candidate to
assume ownership and/or the position of Retailer Operator of the
Mercedes-Benz Center upon his or her death or incapacity.
As soon as practicable after such nomination, MBUSA will request such
personal financial information from the nominated Owner and/or Retailer
Operator candidate as it reasonably and customarily may require in
evaluating such candidates. MBUSA shall apply criteria then currently used
by MBUSA in qualifying owners and/or retailer operators of Mercedes-Benz
passenger car retailers. Upon receipt of all requested information, MBUSA
shall either approve or disapprove such candidate. If MBUSA initially
approves the candidate, said approval shall be reflected in a Successor
Addendum and shall remain in effect for five (5) years if the proposed
candidate continues to comply with the then current criteria used by MBUSA
in qualifying such candidates. If MBUSA does not initially qualify the
candidate, MBUSA agrees to review the reason(s) for its decision with
Owner. Owner is free at any time to renew its nomination. However, in such
instances, the candidate must again qualify pursuant to the then current
criteria. Owner may, by written notice, withdraw a nomination at any time,
even if MBUSA has previously qualified said candidate.
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XI. TERMINATION
A. VOLUNTARY TERMINATION BY RETAILER
Retailer may voluntarily terminate this Agreement at any time by
written notice to MBUSA, such termination to be effective thirty (30)
days after receipt of the notice by MBUSA unless otherwise mutually
agreed in writing.
B. TERMINATION FOR CAUSE
1. IMMEDIATE TERMINATION
Retailer and MBUSA agree that the following conduct is within
Retailer's control and is so contrary to the goals, purposes and
objectives of this Agreement as to warrant its immediate
termination. Accordingly, Retailer agrees that if it engages in
any of the following types of conduct, MBUSA shall have the right
to terminate this Agreement immediately:
a. Any attempted or actual sale, transfer or assignment by
Retailer of this Agreement or any of the rights granted
Retailer hereunder, or any attempted or actual transfer,
assignment or delegation by Retailer of any of the
responsibilities assumed by it under this Agreement, without
the prior written consent of MBUSA;
b. Subject to the provisions of Section IX, a change by
operation of law or otherwise in the direct or indirect
ownership of Retailer, whether voluntary or involuntary, from
that set forth in the Final Paragraph of this Agreement,
except as expressly permitted herein, without the prior
written consent of MBUSA;
c. Removal, resignation, withdrawal or elimination from
Retailer for any reason of the Retailer Operator, provided,
however, MBUSA shall give Retailer a reasonable period of
time within which to replace such person with a Retailer
Operator satisfactory to MBUSA;
d. The failure of Retailer to conduct all Mercedes-Benz
Center Operations required by this Agreement during and for
not less than the customary and lawful hours for five (5)
consecutive business days, except in the event such closure
or cessation of operation is caused by some physical event
beyond the control of the Retailer, such as strikes, civil
war, riots, fires, floods, earthquakes, or other acts of God;
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e. Any undertaking by Retailer to conduct, directly or indirectly, any of the
Mercedes-Benz Center Operations at a location or facility other than those
specified in Paragraph F and the Final Paragraph of this Agreement for that
Mercedes-Benz Center Operation;
f. Insolvency of Retailer; voluntary institution by Retailer of any proceeding
under the federal bankruptcy laws or under any state insolvency law;
institution against Retailer of any proceeding under the federal bankruptcy
laws or under any state insolvency law which is not vacated within thirty
(30) days from the institution thereof; appointment of a receiver, trustee
or other officer having similar powers for Retailer or Retailer's business,
provided such appointment is not vacated within thirty (30) days of the
date of such appointment; execution by Retailer of an assignment for the
benefit of creditors; or any levy under attachment, foreclosure, execution
or similar process whereby a third party acquires rights to a significant
portion of the assets of Retailer necessary for the performance of
Retailer's responsibilities under this Agreement or to the operation or
ownership of Retailer, which is not within thirty (30) days from the date
of such levy vacated or removed by payment or bonding;
g. Any material misrepresentation by Retailer or any person named in the Final
Paragraph of this Agreement as to any fact relied on by MBUSA in entering
into, amending or continuing with this Agreement, including without
limitation any representation concerning the ownership, management or
capitalization of Retailer;
h. The conviction in a court of original jurisdiction of Retailer or Owner of
a crime affecting the Mercedes-Benz Center Operations or of any felony, or
any willful failure of Retailer to comply with the provisions of any laws,
ordinances, rules, regulations or orders relating to the conduct of
Mercedes-Benz Center Operations;
i. Submission by Retailer to MBUSA of: (i) a knowingly false or fraudulent
report or statement; (ii) a knowingly false or fraudulent claim (or
statement in support thereof) for payment, reimbursement or for any
discount, allowance, refund, rebate, credit or other incentive under any
plan that may be offered by MBUSA, whether or not Retailer offers or makes
restitution; (iii) false financial information; (iv) false sales reporting
data; or (v) any false report or statement relating to pre-delivery
inspection, testing, warranties, service, repair or maintenance required to
be performed by Retailer; or
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j. The failure of Retailer to obtain or maintain any license,
permit or authorization necessary for the conduct by Retailer of
Mercedes-Benz Center Operations pursuant to this Agreement, or
the suspension or revocation such license: permit or
authorization.
2. TERMINATION UPON SIXTY DAYS NOTICE
The following conduct violates the terms and conditions of this
Agreement and, if Retailer engages in such conduct, MBUSA shall have
the right to terminate this Agreement upon Sixty (60) days notice if
Retailer fails to cure such conduct within the sixty-day period
provided in such notice:
a. Failure of Retailer to pay MBUSA for any Mercedes-Benz Passenger
Car Products;
b. Failure of Retailer to establish or maintain the required net
working capital or adequate flooring, and lines of credit;
c. Any dispute, disagreement or controversy among managers, officers
or Owners of Retailer that, in the reasonable opinion of MBUSA,
adversely affects the ownership, operation, management, business,
reputation or interests of Retailer or MBUSA;
d. Impairment of the reputation or financial standing of Retailer
subsequent to the execution of this Agreement;
e. Refusal to permit MBUSA to examine or audit Retailer's accounting
records as provided herein upon receipt by Retailer from MBUSA of
written notice requesting such permission or information;
f. Failure of Retailer to timely furnish accurate sales or financial
information and related supporting data; or
g. Breach or violation by Retailer of any other term or provision of
this Agreement.
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3. TERMINATION FOR FAILURE OF PERFORMANCE
If, upon evaluation of Retailer's performance pursuant to Sections
II.F, IV.F, V.B or VI.E herein, MBUSA concludes that Retailer has
failed to perform adequately its marketing and sales, service or
client satisfaction responsibilities or to provide adequate
Mercedes-Benz Center Facilities, MBUSA shall issue to Retailer a
Retailer Improvement Addendum notifying it of such failure(s). MBUSA
will endeavor to review promptly with Retailer the nature and extent
of such failure(s) and will grant Retailer one hundred eighty (180)
days or such other period as may be required by law to correct such
failure(s). If Retailer fails or refuses to correct such failure(s) or
has not made substantial progress towards remedying such failure(s) at
the expiration of such period, MBUSA may terminate this Agreement upon
sixty (60) days notice or such other notice as may be required by law.
4. TERMINATION UPON DEATH OR INCAPACITY
Subject to certain exceptions identified in Section X, MBUSA may
terminate this Agreement in the event of the death of an Owner or upon
the incapacity of any Owner who is also the Retailer Operator, upon
written notice to Retailer and such Owner's legal representative.
Termination upon either of these events shall be effective ninety (90)
days from the date of such notice.
C. TERMINATION UPON TERMINATION OF DISTRIBUTORSHIP
MBUSA may terminate this Agreement at any time by written notice to
Retailer, such termination to be effective thirty (30) days after receipt
of notice by Retailer unless otherwise mutually agreed in writing, if any
licensing or distribution agreement pursuant to which MBUSA is distributor
for Mercedes-Benz Passenger Car Products in the United States of America
shall terminate or be terminated.
D. TERMINATION FOR FAILURE OF MBUSA TO BE LICENSED
If MBUSA fails to obtain or maintain any license, permit or authorization
necessary for MBUSA's performance of its obligations under this Agreement
or if such license, permit or authorization is suspended or revoked, and
such suspension or revocation continues for a period of five (5) days,
either party may immediately terminate this Agreement by giving notice to
the other party.
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E. TERMINATION UPON OFFERING TO ENTER INTO A NEW OR AMENDED PASSENGER CAR
RETAILER AGREEMENT
MBUSA may terminate this Agreement at any time by giving Retailer ninety
(90) days prior notice thereof and offering to enter into a new or
amended form of Passenger Car Retailer Agreement with Retailer in a form
being offered to Mercedes-Benz passenger car retailers.
F. NOTICE OF TERMINATION
Any notice of termination under this Agreement shall be in writing and
shall be mailed to the person(s) designated to receive such notice, via
overnight mail, or shall be delivered in person. Such notice shall be
effective upon the date of receipt. MBUSA shall state the grounds on which
it relies in its termination of Retailer, and shall have the right to amend
such notice as appropriate. MBUSA'S failure to refer to additional grounds
for termination shall not constitute a waiver of its right later to rely
upon such grounds.
G. CONTINUANCE OF BUSINESS RELATIONS
Upon receipt of any notice of termination, Retailer agrees to conduct
itself and its operation until the effective date of termination in a
manner that will not injure the reputation or goodwill of the Mercedes-Benz
Marks or MBUSA.
H. REPURCHASE PROVISIONS
1. MBUSA'S OBLIGATIONS
Upon the termination of this Agreement, MBUSA shall have the right to
cancel any and all shipments of Mercedes-Benz Passenger Car Products
scheduled for delivery to Retailer, and MBUSA shall repurchase from
Retailer the following:
a. New, unused, unmodified and undamaged Mercedes-Benz Passenger
Cars then unsold in Retailer's inventory that are of the then
current or prior model year. The prices of such passenger cars
shall be the same as those at which they were originally
purchased by Retailer, less all prior refunds other allowances
made by MBUSA to Retailer with respect thereto.
b. New, unused and undamaged Genuine Mercedes-Benz Passenger Car
Parts and Accessories then unsold in Retailer's inventory that
are in good and saleable condition and are listed in the current
parts catalog. The prices for such parts accessories shall be the
prices last established by MBUSA for the sale of identical parts
or
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accessories to Mercedes-Benz passenger car retailers in the area
in which Retailer is located.
c. Special service tools recommended by MBUSA and then owned by
Retailer and that are especially designed for servicing
Mercedes-Benz Passenger Cars. The prices for such special service
tools will be the price paid by Retailer less depreciation
calculated on a straight-line basis over a three-year period, or
such other price as the parties may negotiate.
d. Signs that MBUSA has recommended for identification of Retailer.
The price of such signs shall be the price paid by Retailer less
appropriate depreciation calculated on a straight-line basis over
a three-year period, or such other price as the parties may
negotiate.
2. RETAILER'S RESPONSIBILITIES
MBUSA'S obligations to repurchase the items set forth in this Section
XI.H are contingent upon Retailer fulfilling all of the following
obligations:
a. Within thirty (30) days after the effective date of termination
of this Agreement, Retailer shall deliver or mail to MBUSA a
detailed inventory of all items referred to in this Section XI.H
that it requests MBUSA repurchase and shall certify that such
list is true and accurate.
b. Retailer shall be entitled to request repurchase of only those
items that it purchased from MBUSA, unless MBUSA agrees
otherwise.
c. Retailer will deliver to MBUSA at MBUSA's place of business and
at Retailer's expense all Mercedes-Benz Passenger Cars Products
and special service tools to be repurchased by MBUSA. If Retailer
fails to do so, MBUSA may transfer such items and deduct the cost
therefor from the repurchase price.
d. Retailer will execute and deliver to MBUSA instruments
satisfactory to MBUSA conveying good and marketable title to the
aforesaid items to MBUSA. If such items are subject to any lien
or charge of any kind, Retailer will procure the discharge in
satisfaction thereof prior to their repurchase by MBUSA.
Retailer will comply with the requirements of any state or
federal laws that relate to the repurchase, including bulk sales
or transfer laws.
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e. Retailer will provide to MBUSA in writing the names and addresses
of all of its Mercedes-Benz passenger car service clients.
f. Retailer will deliver to MBUSA at MBUSA's place of business or to
a third person designated by MBUSA and at Retailer's expense any
and all sales instruction manuals, promotional materials,
technical or service literature, advertising and other printed
material, computer software or other media relating to
Mercedes-Benz Passenger Car Products then in Retailer's
possession and that were acquired or obtained by Retailer from
MBUSA.
g. Retailer will remove, at its own expense, all signage and
corporate identification from Retailer's Approved Location(s),
including all Mercedes-Benz Marks, before it is eligible for
payment hereunder.
3. PAYMENT BY MBUSA
MBUSA will pay Retailer for such items as Retailer may request be
repurchased and that qualify hereunder as soon as practicable upon
Retailer's compliance with all of the obligations set forth herein and
upon computation of any outstanding indebtedness of Retailer to MBUSA.
MBUSA shall have the right to offset from any amounts due to Retailer
hereunder the total sum of Retailer's outstanding indebtedness to
MBUSA.
If Retailer disagrees with MBUSA's valuation of any item herein, and
Retailer and MBUSA have not resolved their disagreement within ninety
(90) days of the effective date of termination of this Agreement,
MBUSA shall pay to Retailer the amount to which it reasonably believes
Retailer is entitled. Retailer's exclusive remedy to recover any
additional sums that it believes are due under this Section shall be
by resort to the procedures set forth in Section XII.
XII. DISPUTE RESOLUTION PROCESS
A. THE MERCEDES-BENZ BOARD
MBUSA and Retailer agree to minimize dispute between them. However, in
the event that disputes arise, MBUSA and Retailer agree that they will
attempt to resolve all matters between them before any formal action
is taken to initiate any judicial, administrative or governmental
proceedings.
A Mercedes-Benz Board ("Board") will act as the administrator of all
disputes between MBUSA and Retailer arising out of or relating to this
Agreement. The Board will consist of three representatives who will be
selected by MBUSA and
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three retailer operators of Mercedes-Benz passenger car retailers who
will be selected by the Mercedes-Benz Retailer Board. The board will
determine eligibility requirements, develop procedures to ensure a
fair and equitable decision ("ADR Procedures") and select individuals
to participate in a Dispute Resolution Panel ("Panel") to hear an
eligible dispute. The Panel shall consist of at least one MBUSA
representative, one retailer operator of a Mercedes-Benz passenger
car retailer, and one independent person who has been selected by the
Board.
The Board shall also monitor the Dispute Resolution Process, report to
MBUSA and the Mercedes-Benz Retailer Board annually on the
effectiveness of this process and, when required, make recommendations
for changes in this process.
There are two steps in the Dispute Resolution Process: mandatory
mediation and optional arbitration. All disputes must first be
submitted to mediation, unless that step is waived by written
agreement of the parties. If mediation does not resolve the dispute to
their mutual satisfaction, then Retailer may submit the dispute to
arbitration.
B. MANDATORY MEDIATION
Prior to initiating any judicial, administrative or governmental
proceedings, MBUSA and Retailer agree to mediate any dispute arising
out of or the relating to the Agreement. MBUSA and Retailer agree that
the procedures contained in the Retailer Dispute Resolution Guide
shall govern mediation under Section XII.B. Mediation will be
conducted by a Panel, which will evaluate each position and recommend
a solution. This recommended solution is not binding on either party.
If the parties are unable to resolve a dispute under this Section XII,
and a party elects to initiate a judicial, administrative or
governmental proceedings with respect to such dispute, the prevailing
party shall be entitled to recover its costs of such proceeding,
including its reasonable attorneys fee, from the other party.
The parties hereby agree and stipulate that the Panel's recommended
solution is admissible in any arbitration, judicial, administrative or
governmental proceedings with respect to the dispute.
C. OPTIONAL ARBITRATION
If a dispute has not been resolved after mediation, or if Retailer and
MBUSA have agreed in writing to waive mediation, Retailer may submit
the dispute to arbitration in accordance with the procedures in the
Retailer Dispute Resolution Guide. The award of the arbitration panel
shall be binding on MBUSA but not on Retailer, and shall be
non-appealable except as otherwise provided in the United States
Arbitration Act. Retailer may pursue its remedy in a judicial,
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administrative or governmental proceeding if Retailer chooses not to
be bound by the arbitration award. Judgment upon any award rendered by
the arbitrator(s) may be entered and enforced in any court having
jurisdiction.
XIII.DEFENSE AND INDEMNIFICATION
A. DEFENSE AND INDEMNIFICATION BY MBUSA
MBUSA agrees to assume the defense of Retailer and to indemnify and
hold Retailer harmless in any lawsuit naming Retailer as a defendant
and involving any Mercedes-Benz Passenger Car Product when the lawsuit
also involves allegations of:
1. Bodily injury or property damage arising out of an occurrence
allegedly caused solely by a defect or failure to warn of a
defect in design, manufacture or assembly of a Mercedes-Benz
Passenger Car Product, provided that the defect could not
reasonably have been discovered by Retailer during the
pre-delivery inspections and service of the Mercedes-Benz
Passenger Car Product or otherwise;
2. Any misrepresentation or misleading statement or unfair or
deceptive trade practice of MBUSA; or
3. Any substantial damage to a Mercedes-Benz Passenger Car Product
purchased by Retailer from MBUSA that was repaired by MBUSA and
where Retailer had not been notified of such damage in writing
prior to the delivery of the subject passenger car, part or
accessory to a retail client; and
Provided:
4. That Retailer delivers to MBUSA, in a manner to be designated by
MBUSA, within twenty (20) days of the service of any summons or
complaint, copies of such documents and requests in writing a
defense and/or indemnification therein (except as provided in
Section XIII.D below);
5. That the complaint does not involve allegations of Retailer
misconduct, including but not limited to, improper or
unsatisfactory service or repair, misrepresentation, or any claim
of Retailer's unfair or deceptive trade practice;
6. That the Mercedes-Benz Passenger Car Product which is the subject
of the lawsuit was not altered by or for Retailer;
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7. That Retailer agrees to cooperate fully in the defense of such
action as MBUSA may reasonably require; and
8. That Retailer agrees that MBUSA may offset any recovery on
Retailer's behalf against any indemnification that may be
required hereunder.
B. DEFENSE AND INDEMNIFICATION BY RETAILER
Retailer agrees to assume the defense of MBUSA or DCAG and to
indemnify and hold them harmless in any lawsuit naming MBUSA or DCAG
as a defendant when the lawsuit involves allegations of:
1. Retailer's failure to comply, in whole or in part, with any
obligation assumed by Retailer under this Agreement;
2. Retailer's negligent or improper inspection, preparation, repair
or servicing of a new or used Mercedes-Benz Passenger Car
Product, or such other motor vehicles or equipment as may be sold
or serviced by Retailer;
3. Retailer's alleged breach of any contract or warranty other than
that provided by MBUSA or DCAG;
4. Retailer's alleged misleading statements, misrepresentations, or
deceptive or unfair trade practices;
5. Any modification or alteration made by or on behalf of Retailer
to a Mercedes-Benz Passenger Car Product, except those made
pursuant to the express written instruction or with the express
written approval of MBUSA;
6. Any change in the employment status or in the terms or conditions
of employment of any officer, employee or agent of Retailer or of
any Owner or the Retailer Operator, including but not limited to
claims for breach of employment contract, wrongful termination or
discharge, tortious interference with contract or economic
advantage, and similar claims; and
Provided:
7. That MBUSA delivers to Retailer, within twenty (20) days of the
service of any summons or complaint, copies of such documents,
and requests in writing a defense and/or indemnification therein
(except as provided in Section XIII.D below);
8. That MBUSA agrees to cooperate fully in the defense of such
action as Retailer may reasonably require; and
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9. That the complaint does not involve allegations of liability
premised upon separate MBUSA's conduct or omissions.
C. CONDITIONAL DEFENSE AND/OR INDEMNIFICATION
In agreeing to defend and/or indemnify each other, Retailer and MBUSA
may make their agreement conditional on the continued existence of the
state of facts as then known to such party and may provide for the
withdrawal of such defense and/or indemnification at such time as
facts arise which, if known at the time of the original request for a
defense and/or indemnification, would have caused either Retailer or
MBUSA to refuse such request.
The party withdrawing from its agreement to defend and/or indemnify
shall give timely notice of its intent to withdraw. Such notice shall
be in writing and shall be effective upon receipt. The withdrawing
party shall be responsible for all costs and expenses of defense up
to the date of receipt of its notice of withdrawal.
D. THE EFFECT OF SUBSEQUENT DEVELOPMENTS
In the event that subsequent developments in a case make clear that
the allegations which initially preclude a request or an acceptance of
a request for a defense and/or indemnification are no longer at issue
therein or are without foundation, any party having a right to a
defense and/or indemnification hereunder may tender such request for a
defense and indemnification to the other party. Neither Retailer nor
MBUSA shall be required to agree to such subsequent request for a
defense and/or indemnification where that party would be unduly
prejudiced by such delay.
E. TIME TO RESPOND AND RESPONSIBILITIES OF THE PARTIES
Retailer and MBUSA shall have sixty (60) days from the receipt of a
request for a defense and/or indemnification to conduct an
investigation to determine whether or not, or under what conditions,
it may agree to defend and/or indemnify pursuant to this Section.
If local rules require a response to the complaint in the lawsuit
prior to the time provided hereunder for a response to such request,
the requesting party shall take all steps necessary, including
obtaining counsel, to protect its own interest in the lawsuit until
Retailer or MBUSA assumes the requested defense and\or
indemnification. In the event that Retailer or MBUSA agrees to assume
the defense and/or indemnification of a lawsuit, it shall have the
right to engage and direct counsel of its own choosing and, except in
cases where the request is made pursuant to Section XIII.D above,
shall have the obligation to reimburse the
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requesting party for all reasonable costs and expense, including
actual attorneys' fees, incurred prior to such assumption.
XIV. NOTICE OF BREACH OR FAILURE TO ACT IN GOOD FAITH
In the interest of maintaining a harmonious relationship between MBUSA and
Retailer, if Retailer believes that MBUSA has breached this Agreement or
has failed to act in good faith toward Retailer, Retailer shall report its
belief and the bases therefor promptly, in writing, to the President or a
Vice President of MBUSA. For the purposes of this Section XIV, the term
"good faith" shall mean MBUSA and its representatives acting in a fair,
honest, commercially reasonable, equitable, and impartial manner toward
Retailer. It is the intention of the parties that the purpose of the
requirement of such notification by Retailer is to afford MBUSA sufficient
opportunity to consider the claim of Retailer and if, in the sole
determination of MBUSA, such claim is found to be meritorious, to
undertake such measures as may be necessary to correct the condition of
which Retailer complains.
XV. GENERAL PROVISIONS
A. NOTICES
Except as otherwise specifically provided herein, any notice required
to be given by either party to the other shall be in writing, shall be
delivered personally or by mail to the party at its address as stated
in this Agreement, and shall be effective upon receipt by hand
delivery or upon mailing.
B. NO IMPLIED WAIVERS
The failure of either party at any time to require performance by the
other party of any provision herein shall in no way affect the right
of such party to require such performance at any time thereafter. The
waiver by any party of a breach of any provision herein shall not
constitute a waiver of any succeeding breach of the same or any other
provision or constitute a waiver of the provision itself.
C. SOLE AGREEMENT OF THE PARTIES
This Agreement terminates and supersedes all prior agreements between
the parties relating to the subject matters covered herein. There are
no prior agreements or understandings, either oral or written, between
the parties affecting this Agreement or relating to the sale or
service of Mercedes-Benz Passenger Car Products, except as otherwise
specifically provided for or referred to in this Agreement. Retailer
acknowledges that no representations or statements other than those
expressly set forth therein were made by MBUSA or any officer,
employee, agent, or representative thereof, or were relied upon by
Retailer in entering into this Agreement.
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D. RETAILER NOT AN AGENT OR REPRESENTATIVE
Retailer is an independent business. This Agreement does not constitute
Retailer the agent or legal representative of MBUSA or DCAG for any
purpose whatsoever. Retailer is not granted any express or implied
right or authority to assume or create any obligation on behalf of or
in the name of MBUSA or DCAG or to bind MBUSA or DCAG in any manner
whatsoever. No fiduciary obligations are created by this Agreement.
E. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
This is a personal service agreement and may not be assigned or sold in
whole or in part, directly or indirectly, voluntarily or by operation
of law, without the prior written consent of MBUSA. Any attempted
transfer, assignment or sale without MBUSA's prior written consent
will be void and not binding upon MBUSA.
F. NO FRANCHISE FEE
Retailer warrants that it has paid no fee, nor has it provided any
goods or services in lieu of same, to MBUSA in consideration of
entering into this Agreement. The sole consideration for MBUSA's
entering into this Agreement is Owner's and Retailer Operator's
ability, integrity, assurance of personal services, and expressed
intention to deal fairly and equitably with MBUSA and the public.
G. BENEFIT
This Agreement is entered into by and between MBUSA and Retailer for
their sole and mutual benefit. Neither this Agreement nor any specific
provision contained in it is intended or shall be construed to be for
the benefit of any third party.
H. NEW JERSEY LAW
This Agreement shall be deemed to have been entered into in the State
of New Jersey, and all questions concerning the validity,
interpretation, or performance of any of its terms, or of any
contractual rights or obligations of the parties hereto, shall be
governed by and resolved in accordance with the internal laws of the
State of New Jersey, including, without limitation, its statutes of
limitations.
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XVI. DEFINITIONS
As used in this Agreement, the parties agree that the following terms
shall be defined exclusively as set forth below.
A. RETAILER: The natural person or entity that executes the
Agreement and is authorized by MBUSA to sell and service
Mercedes-Benz Passenger Car Products as defined herein.
B. OWNER: The persons identified in Paragraph D and the Final
Paragraph of this Agreement.
C. RETAILER OPERATOR: The person identified in Paragraph E and
the Final Paragraph of this Agreement.
D. MERCEDES-BENZ CENTER FACILITIES: The buildings, improvements,
fixtures and equipment situated at the Approved Location(s)
and identified in Paragraph F and the Final Paragraph of this
Agreement.
E. APPROVED LOCATION(S): The location(s) and any facilities
thereon designated in Paragraph F and the Final Paragraph of
this Agreement that MBUSA has approved for the Mercedes-Benz
Center Operation(s) specified therein.
F. MERCEDES-BENZ CENTER OPERATIONS: All retailer functions
comtemplated by this Agreement including, without limitation,
sale and servicing of Mercedes-Benz Passenger Car Products,
use and display of Mercedes-Benz Marks and Mercedes-Benz
Passenger Car Products, rental and leasing of Mercedes-Benz
Passenger Cars, sale of pre-owned Mercedes-Benz vehicles, body
shop work, financing or insurance services and any other
activities undertaken by Retailer in connection with
Mercedes-Benz Passenger Car Products whether conducted
directly or indirectly by Retailer.
G. DCAG: DaimlerChrysler Aktiengesellschaft, a corporation of the
Federal Republic of Germany and the manufacturer of
Mercedes-Benz Passenger Cars, and any successor thereto.
H. MERCEDES-BENZ MARKS: The various Mercedes-Benz trademarks,
service marks, names, logos and designs that Retailer is
authorized to use in the sale and servicing of Mercedes-Benz
Passenger Car Products, including the "Three Pointed Star."
I. MERCEDES-BENZ PASSENGER CARS: All new Mercedes-Benz passenger
cars that MBUSA is authorized to sell to Mercedes-Benz
passenger car retailers in the United States of America
pursuant to a written distribution agreement between
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DCAG and MBUSA, and that MBUSA, in its sole discretion, sells
to Retailer for resale.
J. GENUINE MERCEDES-BENZ PASSENGER CAR PARTS AND ACCESSORIES: All
Mercedes-Benz passenger ear parts and accessories manufactured
by or on behalf of MBUSA or DCAG and such other parts and
accessories specifically approved by DCAG for use in servicing
Mercedes-Benz Passenger Cars that MBUSA sells to Retailer for
resale.
K. MERCEDES-BENZ PASSENGER CAR PRODUCTS: All Mercedes-Benz
Passenger Cars and Genuine Mercedes-Benz Passenger Car Parts
and Accessories that MBUSA sells to Retailer for resale.
L. COMPETITIVE VEHICLES: Those new vehicles that we considered by
MBUSA to be directly competitive with Mercedes-Benz Passenger
Cars.
M. WARRANTY MANUAL: The Mercedes-Benz Warranty Policies and
Procedures Manual.
XVII. ADDITIONAL PROVISIONS
In consideration of MBUSA's agreement to appoint Retailer as a
Mercedes-Benz passenger car retailer, Retailer further agrees:
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