EX-10
Exhibit 10.16.2 VW Standard Provisions
Exhibit 10.16.2
Article 1
Basic Obligations of VWoA
Supply of Authorized Products
(1) VWoA will sell and deliver Authorized Products to Dealer in
accordance with this Agreement.
Assistance
(2) VWoA will actively assist Dealer in all aspects of Dealer's
Operations through such means as VWoA considers appropriate, including:
(a) Annual reviews of Dealer's compliance with this
Agreement, the Operating Standards;
(b) Recommendations; and
(c) Schools, special training and meetings for
Dealer's personnel.
Compliance with Ethical Standards
(3) In the conduct of its business, VWoA will:
(a) Safeguard and promote the reputation of
Authorized Products and the Manufacturer;
(b) Refrain from all conduct which might be harmful to the reputation
or marketing of Authorized Products or inconsistent with the public interest;
and
(c) Avoid all discourteous, deceptive, misleading,
unprofessional or unethical practices.
Article 2
Basic Obligations of Dealer
Sales, Service and Parts Supply
(1) Dealer assumes the responsibility in Dealer's Area for the
promotion and sale of Authorized Products and for the supply of Genuine Parts
and customer service for Authorized Products. This Agreement does not give
Dealer any exclusive right to sell or service Authorized Products in any area
or territory.
Compliance with Ethical Standards
(2) In the conduct of its business, Dealer will:
(a) Safeguard and promote the reputation of Authorized Products,
the Manufacturer and VWoA;
(b) Refrain from all conduct which might be harmful to the
reputation or marketing of Authorized Products or inconsistent with the public
interest; and
(c) Avoid all discourteous, deceptive, misleading,
unprofessional or unethical practices.
Operating Standards and Operating Plan
(3) The Operating Standards and Operating Plan are part of this
Agreement and are incorporated herein by this reference.
Disclaimer of Further Liability by VWoA
(4) Except as expressly provided in this Agreement, VWoA is not liable
for any expenditure made or liability incurred by Dealer in connection with
Dealer's performance of its obligations under this Agreement.
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Article 3
General Management and Facility Requirements
Dealer's General Management
(1) In the conduct of its business, Dealer will have the
following minimum staff:
(a) An Authorized Representative (provided, that such Authorized
Representative may be one of Dealer's Owners); and
(b) Such additional department managers and other employees as
set forth in the Operating Standards and the Operating Plan.
Dealer's Premises
(2) Dealer's Premises, in sales, service and parts, will conform to
the requirements of this Agreement, the Operating Standards, the Operating
Plan and such other reasonable standards as VWoA may prescribe from time to
time, after review with Dealer.
(3) Unless otherwise agreed by VWoA in writing, Dealer will operate
Dealer's Premises during the customary business hours of the trade in Dealer's
Area.
Article 4
Identification; Advertising
Use of Authorized Trademarks
(1) VWoA will supply Dealer, from time to time, with trademark
standards to assist Dealer in the proper usage of Authorized Trademarks.
Dealer will use Authorized Trademarks only in connection with the promotion
and sale of new Authorized Products and customer service for Authorized
Products pursuant to this Agreement, and only in the manner and for the
purposes VWoA specifies. Dealer will not use any Authorized Trademark as part
of its corporate or business name without the prior written consent of VWoA.
Dealer also may use Authorized Trademarks in connection with the sale of used
automobiles if Dealer complies fully with VWoA's requirements relating to used
car sales under the Authorized Trademarks. If Dealer does not comply fully
with these requirements, Dealer may not use any Authorized Trademarks in
connection with its used car sales, except that Dealer may use the word
"Volkswagen" to describe Authorized Automobiles, if this word appears in
characters and colors different from those usually employed by the
Manufacturer, VWoA and authorized dealers of VWoA. This Agreement does not
grant Dealer any license or permission to use Authorized Trademarks except as
mentioned herein, and Dealer has no right to grant any such permission or
interest.
Signs
(2) Dealer will display conspicuously at Dealer's Premises such
Authorized Signs at such locations as VWoA reasonably may require. Dealer
will use its best efforts to obtain all governmental approvals necessary for
such display. If Dealer transfers any of Dealer's Premises to another
location, Dealer immediately will remove all Authorized Signs and other
references to Authorized Products displayed at or around the prior location.
Stationery
(3) All stationery and business forms used in Dealer's Operations will
be prepared in accordance with Recommendations. Dealer's use of Authorized
Trademarks on stationery and business forms will be in accordance with
trademark standards supplied by VWoA.
Advertising
(4) Dealer will advertise Authorized Products and customer service for
Authorized Products only in accordance with reasonable guidelines and policies
established by VWoA. Dealer will refrain from all false, deceptive,
misleading or unlawful advertising. Dealer's advertising will include, among
other things, a listing in a principal local classified telephone directory in
Dealer's Area. Authorized Trademarks will be used for identification in all
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product and customer service advertising, in accordance with the provisions of
this Agreement. VWoA will provide or sell to Dealer sufficient quantities of
all legally required brochures, as well as all current sales, service and
parts literature and promotional materials, and Dealer shall prominently
display them and make them readily available.
Article 5
Sales
Sales Promotion
(1) Dealer will use its best efforts to promote the sale of Authorized
Automobiles in Dealer's Area, through regular contacts with owners, users, and
prospective owners and users of Authorized Products; through promotion,
prospecting, and follow-up programs; and through such means and at such levels
as may be indicated from time to time by the Operating Standards, Operating
Plan and Recommendations.
Sales Performance
(2) Dealer will achieve the best sales performance possible in
Dealer's Area for each model and type of Authorized Automobile. The
measurement for Dealer's yearly sales performance will be the objective
established in the applicable annual Operating Plan.
Sales Outside Area
(3) Subject to Dealer's performance of its obligations under Article
5(2), VWoA does not restrict Dealer's sale of Authorized Products within the
50 United States. VWoA hereby informs Dealer, however, that VWoA has no
authority to sell any products for distribution outside the United States, and
it is VWoA's policy not to do so. Dealer acknowledges its understanding that
this is intended to preserve the integrity of the orderly worldwide
distribution network for the products supplied to VWoA, and to maximize
customer satisfaction by ensuring that Authorized Products meet the
certification and operational standards to which they were designed. Dealer
therefore is authorized to sell new Authorized Products only in the 50 United
States, and is not authorized to, and agrees it will not, sell any new
Authorized Product for sale or use elsewhere.
Defective or Damaged Authorized Products
(4) If any Authorized Product sold by VWoA to Dealer should become
defective or damaged prior to its delivery by Dealer to a customer, Dealer
agrees to repair such defect or damage so that such Authorized Product is
placed in first-class salable condition prior to such delivery. Dealer
immediately will notify VWoA of any substantial defects or damage and will
follow such procedures for making damage claims as VWoA may establish from
time to time. VWoA shall have the option to repurchase any Authorized
Products with substantial defects or damage at the price at which they were
originally sold by VWoA, less any prior refunds or allowances made by VWoA and
less any insurance proceeds received by Dealer in respect of such defect or
damage. VWoA will make an equitable adjustment with respect to damage which
Dealer can demonstrate occurred prior to the time of delivery to Dealer. VWoA
will disclose to Dealer as may be required any damage which VWoA repaired
before delivering an Authorized Automobile to Dealer. Dealer will properly
disclose such repair prior to delivering such Authorized Automobile to a
customer, and will hold VWoA harmless from any claims that required disclosure
was not made.
Changes by Dealer to Authorized Products
(5) VWoA may request Dealer to make changes, or not to make changes,
to Authorized Products, and Dealer agrees to comply promptly with such
requests. Dealer also agrees to take such steps as VWoA may direct it to take
to comply with any law or regulation pertaining to safety, emissions, noise,
fuel economy or vehicle labeling. VWoA will reimburse Dealer at the
then-current rate of reimbursement specified by VWoA for Dealer for Genuine
Parts and for labor which may be used by Dealer in making such required
changes on Authorized Products. Parts and other materials necessary to make
such changes may be shipped to Dealer without Dealer's authorization and
Dealer will accept them. Dealer will receive credit for parts so shipped
which prove unnecessary, provided they are returned or disposed of in
accordance with VWoA's instructions. If the laws of the state in which Dealer
is located or a vehicle is to be registered require motor vehicles to carry
equipment not installed or supplied as standard equipment by the Manufacturer
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or VWoA, upon VWoA's request Dealer will, prior to selling any Authorized
Automobiles on which such installation is required, properly install at its
own or its customers' expense equipment conforming to such laws and to VWoA's
standards. Dealer agrees to indemnity the Manufacturer and VWoA and hold them
harmless against and from any and all liabilities that may arise out of
Dealer's failure or alleged failure to comply with any obligation assumed by
Dealer in this paragraph.
Product Changes by Dealer Neither Requested by VWoA nor Required by Law
(6) If Dealer installs on a new Authorized Automobile any equipment,
accessory or part other than a Genuine Part; sells any new Authorized
Automobile which has been modified; or sells in conjunction with a new
Authorized Automobile a service contract not offered or specifically endorsed
in writing by VWoA, then Dealer will advise the customer of the identity of
the warranter of such modification, equipment, accessory or part, or, in the
case of a service contract, of the identity of the provider of its coverage.
Dealer will indemnity VWoA against claims that may be asserted against VWoA in
any action by reason of such modification, equipment, accessory, part or
service contract. ANY UNAUTHORIZED MODIFICATION TO AUTHORIZED PRODUCTS BY
DEALER WHICH ADVERSELY AFFECTS THE SAFETY OR EMISSIONS OF AN AUTHORIZED
AUTOMOBILE WILL BE A VIOLATION OF THIS AGREEMENT AND CAUSE FOR TERMINATION
PURSUANT To ARTICLE 14(3).
Used Car Operations
(7) Dealer will use its best efforts to acquire, promote, and
sell at retail used Authorized Automobiles and other used automobiles.
Dealer's used car operations will conform to the requirements of the Operating
Standards, Operating Plan, Recommendations and such other reasonable standards
as VWoA may prescribe, after review with Dealer.
Article 6
Parts
Parts Promotion
(1) Dealer will use its best efforts to promote the sale of Genuine
Parts in Dealer's Area, through regular contacts with owners, users, and
prospective owners and users of Authorized Products; through promotion,
prospecting and follow-up programs; and through such means as may be indicated
from time to time by Recommendations.
Parts Department
(2) Dealer's parts department will conform to the requirements of the
Operating Standards, the Operating Plan and such other reasonable standards as
VWoA may prescribe, after review with Dealer.
Sales of Non-genuine Parts
(3) Dealer will not sell any parts which are not equivalent in quality
and design to Genuine Parts, if such parts are necessary to the mechanical
operation of Authorized Automobiles. Dealer will not represent as new Genuine
Parts any parts which are not new Genuine Parts. If Dealer sells a part or
accessory which is not a Genuine Part, Dealer will advise the customer of the
identity of the warrantor of such part or accessory.
Parts Inventory
(4) Dealer will maintain an inventory of Genuine Parts which is
sufficient to perform reasonably anticipated warranty -service and wholesale
trade requirements in Dealer's Area for Genuine Parts. VWoA will make
Recommendations for Dealer's inventory of Genuine Parts based on particular
conditions in Dealer's Area, and Dealer will give due consideration to such
Recommendations.
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Article 7
Service
Quality and Promotion of Service
(1) Dealer will provide the best possible customer service for all
owners of Authorized Automobiles and automobiles of the same make formerly
sold by VWoA, and will use its best efforts to promote its customer service.
Dealer's service facilities, equipment, and personnel will conform to the
requirements of the Operating Standards, Operating Plan and such other
reasonable standards as VWoA may prescribe, after review with Dealer.
Tools and Equipment
(2) Special tools and general workshop equipment meeting VWoA's
standards shall be available at Dealer's Premises in working condition.
VWoA's minimum standards shall be found in the Operating Standards and the
Operating Plan, which will be updated from time to time.
Use of Non-genuine Parts
(3) Dealer will not use in the repair or servicing of Authorized
Automobiles any parts which are not equivalent in quality and design to
Genuine Parts, if such parts are necessary to the mechanical operation of such
Authorized Automobiles. DEALER WILL USE ONLY GENUINE PARTS IN PERFORMING
WARRANTY SERVICE ON AUTHORIZED AUTOMOBILES DEALER WILL NOT REPRESENT AS NEW
GENUINE PARTS ANY PARTS USED BY IT IN THE REPAIR OR SERVICING OF AUTHORIZED
AUTOMOBILES WHICH ARE NOT NEW GENUINE PARTS.
Owner's Documents
(4) Upon delivering a new Authorized Automobile to a customer, Dealer
will provide the Owner's Documents supplied by VWoA for such Authorized
Automobile, properly completed by Dealer. Dealer will take all steps required
prior to delivery of the Authorized Automobile, and, in particular, will
perform properly the pre-delivery services specified by VWoA.
Maintenance and Other Services Without Customer Charge
(5) In accordance with bulletins, issued from time to time by VWoA and
VWoA's Warranties, certain maintenance services and other repairs following
delivery of a new Authorized Automobile may be free of charge to the
customer. Upon presentation of an appropriate Owner's Document, Dealer will
perform properly the services required, whether or not the Authorized
Automobile to be serviced was sold by Dealer. Upon the submission of
appropriate claims, VWoA will reimburse Dealer for performing such services at
the then-current rate of reimbursement specified by VWoA for Dealer. VWoA
will establish procedures for submitting and processing such claims and
transmitting reimbursements to Dealer. Dealer agrees to comply with these
procedures.
Requested Repairs
(6) Dealer will notify VWoA in writing or by electronic mail of
repairs to Authorized Automobiles pursuant to VWoA's Warranties under each of
the following circumstances:
(a) The Authorized Automobile has been brought to Dealer a
specified number of times for the same complaint; or
(b) The Authorized Automobile has been in Dealer's custody for
all repairs pursuant to VWoA's Warranties a specified number of days.
Such notification shall be made at the times and by the means VWoA
may have instructed in any then-current dealer warranty manual issued by VWoA.
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Article 8
Dealer's Purchases and Inventories
Purchase Prices
(1) VWoA will sell Authorized Products to Dealer at places and upon
terms established by VWoA from time to time. If VWoA increases its established
prices, Dealer may cancel all orders for Authorized Products affected by the
increase which are unfilled at the time Dealer receives notice of the
increase, by giving VWoA written notice of cancellation within ten days from
the time Dealer receives notice of the price increase.
Orders and Acceptance
(2) Dealer will transmit orders for Authorized Products to VWoA
electronically, at the times and for the periods, that VWoA reasonably
requires. With each order, Dealer represents that it is solvent. VWoA may
accept orders in whole or in part. Except as otherwise expressly provided in
Article 8(1), all orders of Dealer will be binding upon it until they are
rejected in writing by VWoA; however, in the event of a partial acceptance by
VWoA, Dealer will not be bound by the portion of the order not accepted.
Inventories
(3) Dealer will maintain in inventory at all times the assortment and
quantity of Authorized Products required by the Operating Standards, Operating
Plan or Recommendations.
Product Allocation
(4) Dealer recognizes that certain Authorized Products may not be
available in sufficient supply from time to time because of factors such as
product importation, consumer demand, component shortages, manufacturing
constraints, governmental regulations, or other causes. VWoA will endeavor to
make a fair and equitable allocation and distribution of the Authorized
Products available to it.
Taxes
(5) Dealer is responsible for any and all sales taxes, use taxes,
excise taxes (including luxury taxes) and other governmental charges imposed,
levied, or based upon the sale of Authorized Products by VWoA to Dealer.
Dealer represents and warrants, as of the date of the purchase of each
Authorized Product, that all Authorized Products purchased from VWoA are
purchased by Dealer for resale in the ordinary course of Dealer's business and
that Dealer has complied with all laws relating to the collection and payment
of all sales taxes, use taxes, excise taxes (including luxury taxes) and other
governmental charges applicable to the purchase of such products and will
furnish evidence thereof upon request. If any Authorized Products are put to
taxable use by Dealer, or are purchased by Dealer for purposes other than
resale in the ordinary course of Dealer's business, Dealer will make timely
return and payment to the appropriate taxing authorities of all applicable
taxes and other governmental charges imposed, levied, or based upon the sale
of such Authorized Products by VWoA to Dealer and will hold VWoA harmless with
respect thereto.
Payments to Dealer or Dealer's Personnel
(6) From time to time, VWoA may conduct incentive programs which
involve payments to Dealer or to Dealer's personnel. Dealer acknowledges that
regardless of the nature of such programs or payments, Dealer's personnel are
not employees, contractors or agents of VWoA. All matters relating to the
employment or retention of Dealer's personnel are solely Dealer's
responsibility. In the case of payments by VWoA to Dealer, Dealer alone will
be responsible for the payment of any and all applicable taxes. In the case
of payments to Dealer's personnel, VWoA will make appropriate information or
other returns to appropriate taxing authorities. In the event Dealer does not
want VWoA to make direct payments to Dealer's personnel, Dealer will notify
VWoA to that effect in writing. After receiving such written notice, VWoA
will pay directly to Dealer any subsequent payments coming due Dealer's
personnel. Dealer represents and warrants that it will pass such payments
directly through to Dealer's personnel as intended; that it will make any
necessary returns to any taxing authority; and that it will hold VWoA harmless
from any claims whatsoever that such payments were not received by the
intended recipients or that appropriate withholdings were not made. In the
event it is determined by any taxing authority that VWoA should not have made
payments to Dealer's personnel or that VWoA should have collected taxes in
respect of such payments, then VWoA will be responsible for such taxes.
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Payment by Dealer
(7) Dealer will pay for Authorized Products in the manner, at the
time, and upon the conditions specified in the terms of payment established
from time to time by VWoA. Delivery of instruments of payment other than cash
will not constitute payment until VWoA has collected the full amount in cash.
Dealer will pay all collection charges, including reasonable attorney's fees,
and costs of exchange, if any, incurred in connection with its payments.
Passing of Title; Security Interest
(8) Title to Authorized Products will remain with VWoA until VWoA has
collected their full purchase price in cash. Dealer will execute and deliver,
and VWoA is authorized to execute and deliver on behalf of Dealer or, to the
extent permitted by law, to file without the signature of Dealer, all
financing statements and other instruments which VWoA may deem necessary to
evidence its ownership of such Authorized Products. Dealer hereby grants VWoA
a purchase money security interest in all Authorized Products for which VWoA
has not collected in full, authorizes VWoA to take such steps as VWoA deems
necessary to perfect such security interests, and agrees to cooperate fully
with VWoA in connection therewith. VWoA may take possession at any time of
Authorized Products to which it has title.
Passing of Risks
(9) Authorized Products will be at Dealer's risk and peril from the
time of their delivery to Dealer or Dealer's agent. It will be up to Dealer
to insure such risks for its benefit and at its expense.
Responsibility for Defects and Damage
(10) VWoA assumes responsibility for the quality and condition of
Authorized Products, to the extent of (a) defects caused by its own negligence
and (b) damage caused or repaired prior to delivery of the Authorized Products
to Dealer or Dealer's agent. VWoA will make any required disclosure thereof
to Dealer. If VWoA has insured against such defects in or damage to
Authorized Products, VWoA's liability to Dealer for such damage will be
limited to the amount actually paid by the insurance carrier to VWoA by reason
of such defect of damage, together with any deductible amount applicable to
such claim. Dealer may decline to accept any Authorized Products delivered to
Dealer in damaged condition or with respect to which VWoA has notified Dealer
that VWoA has repaired damage; however, should Dealer accept such Authorized
Product Dealer will, subject to the provisions of Article 5(5), repair all
such defects and damage fully as required by VWoA before any defective or
damaged Authorized Product is delivered to a customer. Dealer will make any
required disclosure to Dealer's customers of damage or repairs, and will hold
VWoA harmless with respect thereto. VWoA will notify Dealer promptly of the
amount thereof, or any other amount due from VWoA pursuant to this paragraph,
following Dealer's submission of such proof of repair as VWoA may require.
Claims for Incomplete Delivery
(11) Dealer will make all claims for incomplete delivery of Authorized
Products (including the delivery of Authorized Products with damage) in
writing not later than three business days after Dealer's receipt of shipment;
provided, however, that Dealer will make claims as to Genuine Parts within the
period specified in policies established by VWoA from time to time; and
provided, further, that Dealer will note claims for visible damage to
Authorized Automobiles on the delivery receipt.
Changes of Specifications
(12) VWoA will deliver Authorized Products to Dealer in accordance with
specifications applicable at the time of their manufacture. In the event of
any change or modification with respect to any Authorized Products, Dealer
will not be entitled to have such change or modification made to any
Authorized Products manufactured prior to the introduction of such change or
modification. VWoA expressly reserves, and Dealer acknowledges, the right to
make such changes and modifications, and Dealer's only right in such event
shall be the cancellation of any orders for Authorized Products affected by
the change or modification and not yet accepted by VWoA-
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Failure of or Delay in Delivery by VWoA
(13) VWoA will not be liable to Dealer for failure of or delay in
delivery under orders of Dealer accepted by VWoA, other than failure or delay
resulting from willful misconduct or gross negligence of VWoA.
Return or Diversion on Dealer's Failure to Accept
(14) If Dealer fails or refuses for any reason to accept delivery of
any Authorized Products ordered by Dealer (except as permitted under Article
8(11)), Dealer will be liable to VWoA for all expenses incurred as a result of
such failure or refusal, and will store such Authorized Products at no charge
to VWoA until VWoA can arrange for their removal. Dealer's liability pursuant
to this paragraph will be in addition to, and not in lieu of any other
liabilities which may arise from Dealer's failure or refusal to accept
delivery.
Article 9
Warranty to Customers
VWoA's Warranties
(1) VWoA warrants each new Authorized Product as set forth in VWoA's
Warranties.
Incorporation of VWoA's Warranties in Dealer's Sales
(2) Dealer will make all sales of Authorized Automobiles and Genuine
Parts in such a way that its customers acquire all rights in accordance with
VWoA's Warranties and, to the extent permitted by law, no other express or
implied warranties. Dealer will make the text of VWoA's Warranties part of
its contracts for the sale of Authorized Products and will display the text of
the warranties of all products it sells in customer contact areas where
Authorized Products are offered.
Warranty Procedures
(3) Dealer agrees to comply with the provisions of the various dealer
warranty manuals which VWoA may issue from time to time, and will follow the
procedures established by VWoA for processing warranty claims and returning
and disposing of defective Genuine Parts. Dealer will also comply with all
requests of VWoA for the performance of services pursuant to warranty claims
and will maintain detailed records of time and parts consumption and any other
records used as the basis for submitting warranty claims. Dealer will submit
warranty claims to VWoA electronically, and in accordance with procedures
established by VWoA. Upon Dealer's compliance with such requests and
maintenance of such records, VWoA will reimburse Dealer within a reasonable
time for warranty claims at the then-current rate of reimbursement specified
by VWoA for Dealer. Strict adherence to the procedures and means established
for processing warranty claims is necessary for VWoA to process such claims
fairly and expeditiously. VWoA will be under no obligation with respect to
warranty claims not submitted electronically and not made strictly in
accordance with such procedures.
Article 10
Dealer's Record Keeping and Reports; Inspection of Dealer's Operations
Dealer's Forms, Business Machines, Office Equipment and Bookkeeping
(1) Dealer will use accounting, sales, bookkeeping and service
workshop forms; business machines; data processing and transmission equipment;
and other office equipment which meets specifications, and which enables
Dealer and VWoA to communicate electronically for all purposes and which
otherwise provides information and functions in the manner prescribed by VWoA
and its affiliates in the Operating Standards, the Operating Plan and by other
means. VWoA will advise Dealer, or ensure that suppliers to VWoA advise
Dealer, periodically of the hardware and software requirements, communications
protocols, and other specifications which Dealer's data processing and
transmission equipment must meet in order to satisfy the requirements of this
paragraph, and Dealer will timely adhere to such requirements, protocols and
specifications. Dealer will keep accurate and current records in accordance
with VWoA's uniform accounting system and with accounting practices and
procedures reasonably satisfactory to VWoA, in order to enable VWoA to develop
comparative data and to furnish Dealer business management assistance.
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Financial Statements to be Supplied by Dealer,
(2) Dealer will transmit to VWoA (a) on or before the tenth day of
each calendar month, in such form and by such methods as VWoA reasonably may
require, a financial and operating statement reflecting the consolidated
operations of Dealer for the preceding month and from the beginning of the
calendar year to the end of the preceding month and (b) within three and
one-half months after the close of Dealer's fiscal or calendar year, a
consolidated balance sheet and profit and loss statement of Dealer, which
documents shall be certified by a certified public accountant if so requested
by VWoA at least 30 days prior to the close of Dealer's fiscal or calendar
year. DEALER'S FAILURE TO PROVIDE FINANCIAL AND OPERATING STATEMENTS IN THE
FORMAT AND BY THE METHOD REQUIRED BY VWoA MAY RESULT IN THE REVOCATION OF
DEALER'S OPEN PARTS AND ACCESSORIES ACCOUNT.
Reports to be Supplied by Dealer
(3) Dealer will furnish to VWoA, on such forms and by such methods as
VwoA reasonably may require, accurate timely reports of dealer's sales and
transfers of new Authorized Automobiles. Dealer also will furnish to VWoA, on
a timely and accurate basis, such other reports and financial statements as
VWoA reasonably may require.
Inspection of Dealer's Operations and Records
(4) Until the expiration or termination of this Agreement, and
thereafter until consummation of all transactions referred to in Article 15,
VWoA, through its employees and other designees, at all reasonable times
during regular business hours, may inspect Dealer's Operations, Dealer's
Premises and the methods, records and accounts of Dealer relating to Dealer's
Operations.
Article I 1
Dealer Performance Review
Evaluation and Assistance
(1) Each year, VWoA will prepare objectives for Dealer and will use
them as a basis for evaluating Dealer's performance of its obligations in each
of the areas described in this Article 11 and in the Operating Standards and
the Operating Plan. VWoA may evaluate Dealer's performance during the year
through periodic reviews. VWoA's evaluations of Dealer shall take place at
least annually. VWoA will review its evaluations with Dealer, so that Dealer
may take prompt action, if necessary, to improve its performance to such
levels as VWoA reasonably may require. Any written comments received from
Dealer on VWoA's evaluation of Dealer will become a part of such evaluation.
Evaluation of Dealer's Vehicle Sales, Service and Parts Performance
(2) VWoA will evaluate the effectiveness of Dealer's vehicle sales,
service and parts performance in accordance with factors and measures set
forth in the Operating Standards, the Operating Plan and Recommendations.
Evaluation of Dealer's Promises
(3) VWoA will evaluate Dealer's performance of its responsibilities
pertaining to Dealer's Premises, analyzing both separately and collectively
Dealer's sales facilities, service facilities, parts facilities,
administrative offices, storage, parking and signage. In making such
evaluation, VWoA will consider the factors set forth in the Operating
Standards, the Operating Plan and Recommendations.
Evaluation of Dealer's Customer Satisfaction
(4) VWoA will evaluate Dealer's performance of its responsibilities
pertaining to customer satisfaction, analyzing both separately and
collectively the satisfaction of customers with Dealer's sales activities and
service activities. In making such evaluation, VWoA will utilize a uniform
measure of customer satisfaction, which will be disclosed to Dealer, and will
consider the factors set forth in the Operating Standards, the Operating Plan
and Recommendations.
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Dealer's Evaluation of VWoA
(5) VWoA will implement measures by which Dealer may periodically
evaluate the performance of VWoA, and in particular the performance of those
VWoA employees who are responsible for administering VWoA's relationship with
Dealer.
Article 12
Succeeding Dealers
Procedure
(1) If Dealer chooses to transfer its principal assets or change
owners, VWoA has the right to approve the proposed transferees, the new owners
and executives and, if different from Dealer's, their premises. VWoA will
consider in good faith any such proposal Dealer may submit to it during the
term of this Agreement. In determining whether the proposal is acceptable to
it, VWoA will take into account factors such as the personal, business and
financial qualifications of the proposed new owners and executives as well as
the proposal's effect on competition. In such evaluation, VWoA may consult
with the proposed new owners and executives on any aspect of the transaction
of their proposed dealership operations. Notwithstanding anything set forth
in this paragraph to the contrary, VWoA shall not be obligated to consider
such proposal if it previously had notified Dealer in writing that it would
not appoint a succeeding dealer in Dealer's Area; provided, however, that such
notice shall be given only if there is good cause for discontinuing
representation of Authorized Automobiles in Dealer's Area.
Approvals
(2) VWoA will notify Dealer in writing of the approval or disapproval
of a proposal by Dealer for transfer of principal assets or change of owners
within 45 business days, or the exercise by VWoA of its right of first refusal
under Article 12(3) within 30 calendar days, after Dealer has furnished to
VWoA all applications and information reasonably requested by VWoA to evaluate
such proposal. If VWoA approves Dealer's proposal, VWoA shall be obligated to
grant the proposed transferees only a Dealer Agreement in substantially the
same form as this Agreement. If VWoA had previously notified Dealer in
writing that VWoA would not appoint a succeeding dealer in Dealer's Premises,
then VWoA's approval of Dealer's proposal may be conditioned on the proposed
transferees agreeing to provide different facilities for their dealership
operations. Upon the consummation of Dealer's approved proposal, Dealer will
deliver to VWoA a voluntary termination of this Agreement, a general release
in favor of VWoA and payment in full for any net balance then owing from
Dealer to VWoA.
Right of First Refusal
(3) Whenever Dealer proposes to transfer its principal assets or change
owners of a majority interest, VWoA shall have the right to purchase such
assets or ownership interest, as follows:
(a) VWoA may elect to exercise its purchase right by written
notice to Dealer within 30 calendar days after Dealer has furnished to VWoA
all applications and information reasonably requested by VWoA to evaluate
Dealer's proposal.
(b) If Dealer's proposed sale or transfer was to a successor
approved in advance by VWoA, to any of Dealer's Owners, to Dealer's employees
as a group or to Dealer's spouse, children or heirs, then Dealer may withdraw
its proposal within 30 calendar days following receipt of VWoA's notice of
election of its purchase right.
(c) VWoA's right under this Article 12(3) shall be a right of
first refusal, permitting VWoA to:
(i) assume the proposed transferee's rights and
obligations under its agreement with Dealer; and
(ii) cancel this Agreement and all rights granted Dealer
hereunder., except to the extent specifically inconsistent with the terms of
this Agreement, the price and all other terms of VWoA's purchase shall be as set
forth in any bona fide written purchase and sale agreement between Dealer and
its proposed transferee and in any related documents.
(d) Dealer shall furnish to VWoA copies of all applicable
liens, mortgages, encumbrances, leases, easements, licenses or other documents
affecting any of the property to be transferred, and shall assign to VWoA any
permits or licenses necessary for the continued conduct of Dealer's Operations.
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(e) VWOA may assign its right of first refusal to any party it
chooses, but in that event VWoA will remain primarily liable for payment of the
purchase price to Dealer.
(f) If VWoA exercises its purchase right, VWoA will reimburse
Dealer's proposed transferee for reasonable documented actual expenses which
such proposed transferee incurred through the date of such exercise which are
directly and solely attributable to the transaction Dealer proposed.
(g) Nothing contained in this Article 12(3) shall require VWoA
to exercise its right of first refusal in any case, nor restrict any right VWoA
may have to refuse to approve Dealer's proposed transfer.
Succession
(4) Article 14(l)(a) notwithstanding, in the event of the death of any
of Dealer's Owners, VWoA will not terminate this Agreement by reason of such
death if:
(a) The owner's interest in Dealer passes directly as specified
in any Successor Addendum to this Agreement; or
(b) The owner's interest in Dealer passes directly to his or her
surviving spouse or children, or any of them, and (i) Dealer's Authorized
Representative remains as stated in the Statement of Ownership and Management
or (ii) within 90 days after the death of such owner Dealer appoints another
qualified individual as Dealer's Authorized Representative; provided, however,
that in this event VWoA will evaluate Dealer's performance during the 12
months following the owner's death. After the expiration of this 12-month
period and VWoA's evaluation of the performance of Dealer's management during
such period, VWoA will review with Dealer the changes, if any, in the
management or equity interests of Dealer required by VWoA as a condition of
extending this Dealer Agreement with Dealer. Any new Dealer Agreement entered
into pursuant to this paragraph will be in substantially the same form as the
Dealer Agreements then currently offered by VWoA to its dealers in Authorized
Automobiles generally.
Modification of Terms of Payment
(5) Upon receipt of an application for a replacement dealer agreement,
VWoA may modify its terms of payment with respect to Dealer to the extent VWoA
deems appropriate, irrespective of Dealer's credit standing or payment
history.
Article 13
Dispute Resolution
General Policy
(1) VWoA and Dealer agree as a general matter to work together to
minimize disputes between them. While understanding that certain Federal and
state courts and agencies may be available to resolve any disputes, VWoA and
Dealer agree that it is in their mutual best interest to attempt to resolve
certain controversies first through arbitration. VWoA and Dealer therefore
agree that the dispute resolution process outlined in this Article shall be
used before seeking legal redress in a court of law or before an
administrative agency, for all disputes arising under the following: Article
9(3) (Warranty Procedures), Article 12 (Succeeding Dealers), Article 14
(Termination), Article 15 (Rights and Liabilities Upon Termination) and
payments to Dealer in connection with VWoA incentive programs. In the event
that a dispute arises in connection with any other provision of this
Agreement, VwoA and Dealer may mutually agree to first submit the dispute to
arbitration, in accordance with the provisions of this Article. Both VWoA and
Dealer agree that the ultimate mutual goal of arbitration is to obtain a fair
hearing and prompt decision of the dispute, in an efficient and cost-effective
manner, and both agree to work toward that goal at all times hereunder.
Involuntary Non-Binding Arbitration
(2) Upon the written request of either VWoA or Dealer, a dispute arising
in connection with this Agreement may be submitted to non-binding arbitration.
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Voluntary Binding Arbitration
(3) As an alternative to Article 13(2) above, upon the written request
of Dealer, a dispute arising in connection with this Agreement will be
submitted to binding arbitration.
Rules of Conduct
(4) Arbitrations will be adjudicated under the auspices and in
accordance with the rules of the American Arbitration Association or another
mutually acceptable arbitration service, as well as the following provisions:
(a) Written requests for arbitration shall set forth a clear and
complete statement of the nature of the claim and its basis; the amount
involved, if any; and the remedy sought.
(b) The place of arbitration shall be the state in which
Dealer's Premises are located, or such other place as may be agreed upon by
the parties.
(c) Both parties shall make every reasonable attempt to agree
upon one arbitrator, but if they are unable to agree each shall appoint an
arbitrator and these two shall appoint a third arbitrator.
(d) Expenses of arbitration shall be divided equally between the
parties. The prevailing party shall not be entitled to reasonable attorneys
fees.
(e) The arbitrator(s) shall pass finally upon all questions,
both of law and fact, and his or her (or their) findings shall be conclusive.
(f) Pre-arbitration discovery shall be available to both parties
and shall be governed by the Federal Rules of Civil Procedure. Information
obtained by either party during the course of discovery shall be kept
confidential, shall not be disclosed to any third party, shall not be used
except in connection with the arbitration proceeding, and at the conclusion of
the proceeding, shall be returned to the other party. Both Dealer and VWoA
shall make their agents and employees available upon reasonable times and
places for pre-trial depositions without the necessity of subpoenas or other
court orders. Such discovery may be used as evidence in the arbitration
proceeding to the same extent as if it were a court proceeding.
Time for Decision
(5) Unless VWoA and Dealer specifically agree to the contrary, and
subject to the rules and procedures of the arbitration service chosen, the
arbitration hearing shall be concluded not more than 60 days after the date of
the written request to arbitrate, and the arbitration decision shall be
rendered not more than 90 days after the written request to arbitrate.
Provisional Remedies
(6) Either VWoA or Dealer may, without prejudice to the above
procedures, file a complaint if in its sole judgment such action is necessary
to avoid irreparable damage or to preserve the status quo.
Despite such action the parties will continue to participate in good
faith in the procedures specified in this Article 13.
Tolling Statute of Limitations
(7) All applicable statutes of limitation and defenses based upon
passage of time shall be tolled while the procedures specified in this Article
13 are pending. The parties will take such action, if any, required to
effectuate such tolling.
Performance to Continue
(8) VWoA and Dealer agree to continue to perform their respective
obligations under this Agreement ending final resolution of any dispute
arising out of or relating to this Agreement.
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Article 14
Termination
Immediate Termination by VWoA
(1) Except to the extent a greater notice period is required by any
applicable statute, VwoA has the right to terminate this Agreement for cause,
with immediate effect, by sending notice of termination to Dealer, if any of
the following should occur:
(a) Death of any of Dealer's Owners or any change, whether
voluntary or by operation of law, in the record or beneficial ownership of
Dealer without VWoA!s prior written consent; any change in Dealer's Executives
without prior notice to VWoA; or the failure of Dealer's Executives to
continue to manage Dealer's Operations (unless, in any of these cases, the
provisions of Article 12(4) above have been satisfied);
(b) Dissolution or liquidation of Dealer, if a partnership or
corporation;
(c) Insolvency of Dealer or voluntary institution by Dealer of
any proceeding under the Bankruptcy Act or state insolvency law; or the
involuntary institution against Dealer of any proceeding under the Bankruptcy
Act or state insolvency law which is not vacated within ten days from the
institution thereof; or the appointment of a receiver or other officer having
similar powers for Dealer or Dealer's business who is not removed within ten
days of his appointment; or any levy under attachment, execution or similar
process which is not within ten days vacated or removed by payment or bonding.
(d) Any attempted transfer of this Agreement by Dealer, in whole
or in part, without VWoAs prior written consent;
(e) Any change in the location of any of Dealer's Premises or
the establishment of any additional premises for Dealer's Operations without
VWoAs prior written consent;
(f) Failure of Dealer to continue to operate any of Dealer's
Premises in the usual manner for a period of five consecutive business days,
unless caused by an Act of God, war, riot, strike, lockout, fire, explosion or
similar event;
(g) Dealer's failure, for a period of ten consecutive business
days, to have any license necessary for the conduct of Dealer's Operations;
(h) Conviction of Dealer or any of Dealer's Owners or Executives
of a felony or any misdemeanor involving fraud, deceit or an unfair business
practice, if in VWoAs opinion such conviction may adversely affect the conduct
of Dealer's business, or be harmful to the good will of the Manufacturer or
VWoA or to the reputation and marketing of Authorized Products;
(i) Any material misrepresentation by any of Dealer's Owners or
Executives as to any fact relied upon by VWoA in entering into this Agreement;
Submission by Dealer of fraudulent or knowingly false report
or statement or claim for reimbursement, refund or credit; or
(k) Failure or refusal of Dealer or Dealer's Owners, Executives,
agents or employees to provide VWoA, upon request, with access to and the
opportunity to inspect and copy all books, papers, instruments, certificates
or other documents evidencing the record or beneficial ownership of Dealer.
Termination by VWoA on 30 Days' Notice
(2) Except to the extent a greater notice period is required by any
applicable statute, VWoA has the right to terminate this Agreement upon 30
days' notice if any of the following shall occur:
(a) Any disagreement or personal difficulties of Dealer's Owners
or Executives which in VWoA's opinion may adversely affect the conduct of
Dealer's business, or the presence in the management of Dealer of any person
who in VWoA's opinion does not have appropriate qualifications for their
position;
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(b) impairment of the reputation or financial standing of Dealer
or any of Dealer's Owners or Executives or ascertainment by VWoA of any fact
existing at or prior to the time of execution of this Agreement which tends to
impair such reputation or financial standing; or
(c) The failure of Dealer to meet its minimum customer
satisfaction requirements, including, but not necessarily limited to, measures
for sales satisfaction and service satisfaction, as established by VWoA for
its dealers generally, from time to time, and as set forth in then current
Operating Standards issued by VWoA to its dealers generally, within 180 days
after notice by VWoA to Dealer that Dealer has not met such requirements.
Termination by VWoA on 90 Days' Notice
(3) Except to the extent a greater notice period is required by any
applicable statute, VWoA has the right to terminate this Agreement upon 90
days' notice in the event of the breach by Dealer of any obligation of Dealer
pursuant to this Agreement or any other agreement between VWoA or any of its
subsidiaries or affiliates and Dealer, other than those enumerated in Articles
14(1) or 14(2) above.
Discussions with Dealer
(4) Upon learning that any event or situation which would give VWoA
grounds to terminate this Agreement has occurred, VWoA will endeavor to
discuss such event or situation with Dealer. Thereafter, VWoA may give Dealer
written notice of termination.
Modification of Terms of Payment
(5) During the period a situation specified in Article 14(1), 14(2) or
14(3) continues to exist, VwoA may modify its terms of payment with respect to
Dealer to such extent as VWoA may consider appropriate, irrespective of
Dealer's credit standing or payment record.
No Waiver by Failure to Terminate
(6) Should VWoA be entitled to terminate this Agreement but fail to do
so, such failure shall not be considered a waiver of VWoA's right to terminate
this Agreement unless the situation entitling VWoA to terminate this Agreement
has ceased to exist and (a) six months have elapsed from the time VWoA
obtained knowledge of such situation or (b) VWoA has entered into a subsequent
written agreement with Dealer superseding this Agreement. Nevertheless, any
situation entitling VWoA to terminate this Agreement may be considered at any
subsequent time together with any subsequent events in determining VWoA's
right to terminate this Agreement.
Termination by Dealer
(7) Dealer has the right to terminate this Agreement without cause by
VWoA giving 60 days' written notice of such termination. Upon receipt of
Dealer's notice of termination, VWoA may, at VWoA's option, waive in writing
the 60 day notice period. In the event Dealer, in connection with its
termination of this Agreement, also wishes to terminate any other agreement
between Dealer and VWoA or any of VWoA's subsidiaries or affiliates, Dealer
must do so separately and subject to the provisions of Article 14(10) below.
Continuation of Business Relations after Termination
(8) Any business relations between VWoA and Dealer after the termination of
this Agreement without a written extension or renewal or a new written dealer
agreement will not operate as an extension or renewal of this Agreement or as a
new dealer agreement. Nevertheless, all such business relations, so long as they
are continued, will be governed by terms identical with the provisions of this
Agreement.
Superseding Agreements
(9) If any superseding form of Dealer Agreement is offered by VWoA to its
authorized dealers generally at any time, VWoA may, by written notice to Dealer,
terminate this Agreement and replace it with a Dealer Agreement in the
superseding form.
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Agreement with Affiliates of VWoA
(10) The termination of this Agreement by either party does not
necessarily waive or terminate any other agreement between Dealer and VWoA or
any of its subsidiaries or affiliates. Such other agreements may be
terminated only in accordance with their terms, and the parties' respective
obligations under any such other agreements will continue in accordance with
their terms until terminated.
Article 15
Rights and Liabilities upon Termination
VWoA's Obligations
(1) Within 90 days after the termination of this Agreement pursuant to
Article 14, VWoA will purchase from Dealer and (subject to the provisions of
Article 1 5(4) below) Dealer will sell to VWoA all the following:
Now Authorized Automobile Inventory
(a) All new, undamaged current model year Authorized Automobiles (introduced
in the United States no earlier than 12 months prior to the date of such
expiration or termination and not superseded by a later model year) in
Dealer's inventory on the date of such expiration or termination which are in
first-class salable condition, provided they (i) have 200 or fewer actual
miles; (ii) were sold by VWoA and purchased by Dealer from VWoA (or in the
ordinary course of business from other dealers of Authorized Automobiles
appointed by VWoA) and (iii) have never been sold by Dealer. The price for
such Authorized Automobiles will be the price at which they were originally
sold by VWoA, less all prior refunds or allowances made by VWoA, if any.
New Genuine Parts Inventory
(b) All the following new, unused and undamaged articles listed in VWoA's
current Genuine Parts Price List (other than articles listed as obsolete) in
Dealer's inventory on the date of such expiration or termination which are in
first-class salable condition and complete, provided they were purchased by
Dealer from VwoA and never sold by Dealer:
(i) New parts and new factory remanufactured replacement parts
supplied by VWoA for Authorized Automobiles;
(ii) Accessories considered by VWoA to be suitable for installation in
the current model year Authorized Automobiles specified in Article 1 5(l)(a);
and
(iii) other accessories, provided that VWoA has made sales of identical
articles during six of the last twelve full calendar months immediately
preceding such expiration or termination.
The price for all such articles will be the price then last established by
VWoA for the sale of identical articles, less a handling charge equal to ten
percent of such amount and less all prior refunds or allowances made by VWoA;
Tools and Equipment
(c) All special tools and equipment for servicing Authorized Automobiles
owned by Dealer on the date of expiration or termination which are in
operating condition and complete, provided they were purchased by Dealer from
VWoA or pursuant to written requests of VWoA. The price for such tools and
equipment will be the fair market value thereof; and
Authorized Signs
(d) All Authorized Signs which Dealer displayed publicly or at Dealer's
Premises. The price for such Authorized Signs will be the fair market value
thereof.
15
Terms of Sale
(2) Any and all items to be sold by Dealer to VWoA pursuant to this
paragraph will be delivered by Dealer to VWoA at Dealer's place of business
suitably packed for transportation. For such periods of time as VWoA
reasonably may determine, VWoA may enter Dealer's Premises for the purpose of
taking an inventory of all or any part of Dealer's stock of Authorized
Products and special tools and equipment. At the request of VWoA, Dealer will
comply in all respects with the provisions of all applicable bulk sales acts
or similar statutes protecting a transferee of personal property with respect
to liabilities of the transferor. Promptly following performance by Dealer of
all its obligations pursuant to this Article 15, the completion by VWoA of
all steps required to obtain possession of such items and the delivery to VWoA
of a bill of sale, documents of title and a general release of VWoA and the
Manufacturer from Dealer and Dealer's Owners, all in form satisfactory to
VWoA, WoA will pay Dealer the specified prices for the said items, less all
amounts owed by Dealer to VWoA, its subsidiaries or affiliates. VWoA will not
be required to purchase any item from Dealer pursuant to this paragraph unless
Dealer is able to convey to VWoA, within such 90-day period, title to such
item free and clear of all liens, claims, encumbrances and security interests.
Pending Orders and Dealer's Obligations
(3) Upon the expiration or termination of this Agreement, all pending
orders of Dealer for Authorized Products previously accepted by VWoA will be
canceled and Dealer immediately will:
Removal of Authorized Signs
(a) Remove at its own expense all Authorized Signs which it
displayed publicly or at its premises;
Authorized Trademarks
(b) Cease all usage of the Authorized Trademarks, cease to hold
itself out as an authorized dealer in Authorized Automobiles, destroy all
stationery and other printed material bearing any Authorized Trademark, and,
if its corporate or business name contains any Authorized Trademark, take all
steps to remove the same therefrom;
Orders and Files
(c) Transfer to VwoA
(i) all orders for sale by Dealer of
Authorized Products then pending with Dealer,
(ii) all deposits made thereon, whether
in cash or property;
(iii) all Dealer's warranty records for Authorized Products
or complete copies of all such records and files; and
(iv) all Dealer's customer service files. Upon the written
request of Dealer, VWoA will return such customer service files to Dealer
after VWoA has made copies of such flies at VWoA's expense;
Customer Lists
(d) Make available to VWoA in writing the names and addresses of
all its service customers and prospective customers for Authorized Products;
and
Literature
(e) Deliver to VWoA at Dealer's place of business, free of
charge, all technical or service literature, advertising and other printed
material relating to Authorized Products, including sales instruction manuals
or promotional material, then in Dealer's possession and which were acquired
by Dealer from VWoA.
None of the foregoing will result in any liability of VWoA to
Dealer for damages, commissions, loss of profits or compensation for services,
or in any other liability of VWoA to Dealer of any kind of nature whatsoever.
Direct Sales by Dealer
(4) Upon Dealer's written request, VWoA may waive Dealer's obligation
to sell certain assets to VWoA and will consent to Dealer's sale of any of or
all its assets to any party of Dealer's choosing; provided, however, that
Dealer may not sell any new Authorized Automobile, Authorized Sign nor any new
Genuine Parts to any person or entity other than another dealer in the same
line-make authorized by VWoA.
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Specific Performance
(5) Since Dealer's obligations under this Article 15 are of such a
nature that it is impossible to measure in money the damages which will be
suffered by VWoA if Dealer should fail to perform any of them, Dealer agrees
that, in the event of any such failure of performance on its part, VWoA will
be entitled to maintain an action to compel the specific performance by Dealer
of these obligations and Dealer agrees not to assert in any such action the
defense that VWoA has an adequate remedy at law.
Article 16
Definitions
Throughout this Agreement various abbreviations and abbreviated phrases
have been used. Their meanings are:
Authorized Automobiles
(1) "Authorized Automobiles" means motor vehicles of the Volkswagen
brand and comprising such models and types as may be supplied by VWoA during
the term of this Agreement.
Authorized Products
(2) "Authorized Products" means Authorized Automobiles and Genuine
Parts.
Authorized Representative
(3) "Authorized Representative" means a qualified representative of
Dealer whose full-time professional efforts are devoted to the conduct of
Dealer's Operations and who is authorized on behalf of Dealer to execute
documents, make all operational decisions with respect to Dealer's Operations,
and on whose authority VWoA is entitled to rely.
Authorized Signs
(4) "Authorized Signs" means displays of any Authorized Trademark, in
such material, type, presentation and colors as VWoA may prescribe from time
to time.
Authorized Trademarks
(5) "Authorized Trademarks" means any trademark, service mark or trade
name now or any other time hereafter used or claimed by the Manufacturer or
VWoA.
Dealer's Area
(6) "Dealer's Area" means the area designated by VWoA in the Operating
Plan for Dealer's Operations, corresponding to U.S. census tract information.
Dealer's Executives
(7) "Dealer's Executives" means all the persons named in Paragraphs 5
and 6 of the Statement of Ownership and Management as officers or the
Authorized Representative of Dealer, as well as any other person who succeeds
to any position in Dealer referred to in such paragraphs in accordance with
the provisions of this Agreement.
Dealer's Operations
(8) "Dealer's Operations" means all activities of Dealer relating to
the promotion and sale of Authorized Products, the supply of Genuine Parts,
customer service for Authorized Products and all other activities of Dealer
pursuant to this Agreement.
Dealer's Owners
(9) "Dealer's Owners" means all the persons named in Paragraph 4 of
the Statement of Ownership and Management as beneficial or record owners of
Dealer, as well as any other person who acquires or succeeds to any beneficial
interest or record ownership in Dealer in accordance with the provisions of
this Agreement.
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Dealer's Promises
(10) "Dealer's Premises" means all premises referred to in the Dealer
Premises Addendum and used by Dealer for or in connection with Dealer's
Operations, including sales facilities, service workshops, offices, facilities
for storage of Authorized Automobiles and Genuine Parts, used car sales
facilities and parking facilities.
Genuine Parts
(11) "Genuine Parts" means new and factory rebuilt replacement parts,
accessories and optional equipment for Authorized Automobiles if such parts,
accessories and optional equipment are supplied by VWoA.
Manufacturer
(12) "Manufacturer" means any supplier of Authorized Products to VWoA,
including as appropriate, but not limited to, Audi AG, a German corporation,
and Volkswagen AG, a German corporation.
Not Working Capital, Owner's Equity and Wholesale Credit
(13) "Net Working Capital," "Owner's Equity" and "Wholesale Credit"
shall have the meanings set forth in the Operating Standards, the Operating
Plan and in accordance with generally accepted accounting principles.
Operating Plan
(14) "Operating Plan" means the Dealer Operating Plan then-currently
established by VWoA for dealers of Authorized products, determined in
cooperation with Dealer, as well as any amendments thereof or additions
thereto by VWoA during the term of this Agreement.
Operating Standards
(15) "Operating Standards" means the Volkswagen Dealer Operating
Standards issued by VWoA to its Volkswagen dealers, including any amendments,
revisions or additions, from time to time during the term of this Agreement.
Owner's Documents
(16) "Owner's Documents" means all the documents which are supplied by
VWoA in respect of each Authorized Automobile and which are intended for the
customer, including, but not limited to, the Owner's Manual, Warranty Booklet
and Maintenance Booklet.
Recommendations
(17) "Recommendations" means written suggestions provided by VWoA to
Dealer from time to time during the term of this Agreement, as well as all
currently applicable written suggestions previously provided by VWoA.
VWoA
(18) "VWoA" means Volkswagen of America, Inc., a New Jersey
corporation, and includes, as appropriate, all divisions of that corporation.
VWoAs Warranties
(19) "VWoAs Warranties" means, with respect to each Authorized Product,
those express written warranties provided with such product or as set forth in
the Dealer Warranty Manual for Authorized Products in effect at the time such
product is first sold at retail, as well as any express written warranties
which VWoA may issue with respect to any product during the course of its
service life.
Article 17
General Provisions
Dealer Not an Agent
(1) Dealer will conduct all Dealer's Operations on its own behalf and
for its own account. Dealer has no power or authority to act for the
Manufacturer or VWoA.
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Authority to Sign
(2) Dealer acknowledges that only an Area Executive is authorized on
behalf of VWoA to execute this Agreement or to agree to any variation,
modification or amendment of any of its provisions or to sign any notice of
termination, and that such Agreement, variation, modification, amendment or
notice of termination must be countersigned by the President, a Vice
President, the Secretary, an Assistant Secretary or a Regional Team Leader of
VWoA.
Variations; Modifications; Amendments
(3) This Agreement may not be varied, modified or amended except by an
express instrument in wilting to that effect signed on behalf of both VWoA and
Dealer.
Entire Agreement
(4) This instrument contains the entire agreement between the
parties. No representations or statements other than those expressly set
forth or referred to herein were made or relied upon in entering into this
Agreement.
Release of Claims under Prior Agreement
(5) This Agreement terminates and supersedes all prior agreements with
respect to Authorized Products between the parties, if any. The parties
hereby waive, abandon and relinquish any and all claims of any kind and nature
arising out of or in connection with any such prior agreement, except for any
accounts payable by one party to the other as a result of the purchase of any
Authorized Products, audit adjustments or reimbursement for any services.
Agreement Non-transferable
(6) No part of this Agreement nor any interest in this Agreement may
be transferred by Dealer without the prior written consent of VWoA.
Defense and Indemnification
(7) VWoA will, upon Dealer's written request:
(a) Defend Dealer against any and all claims for breach of VWoAs
Warranties, bodily injury or death, or for physical damage to or destruction
of property, that. during the term of this Agreement, may be asserted against
Dealer in any action solely by reason of a manufacturing defect or design
deficiency in
(i) an Authorized Product; or
(ii) a product of the same line-make formerly supplied by
VWoA pursuant to a former dealer agreement; and
(b) Hold Dealer harmless from any and all settlements made and
final judgments rendered with respect to such claims; provided, that in each
case Dealer promptly notifies VWoA in writing of the commencement of such
action against Dealer and cooperates fully in the defense of such action in
such manner and to such extent as VWoA may require. However, such defense
and indemnification by VWoA will not be required if any fact indicates that
any negligence, error, omission, act, failure, breach, statement or
representation of Dealer may have caused or contributed to the claim asserted
against Dealer or if VWoA determines that such action seeks recovery for
allegations other than those described in Article 17(7)(a).
Notices
(8) Any notices under or pursuant to the provisions of this Agreement
will be directed to the respective addresses of the parties stated herein, or,
if either party shall have specified another address by notice in writing to
the other party, to the address thus last specified. Unless otherwise provided
herein, notices shall be deemed effective if sent by certified mail with
return receipt requested; by overnight service having a reliable means of
confirming delivery; or by personal delivery to any of Dealer's Owners or
Executives. Notices shall be deemed effective when received.
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Waivers
(9) The waiver by either party of any breach or violation of or
default under any provision of this Agreement will not operate as a waiver of
such provision or of any subsequent breach or violation thereof or default
thereunder. The failure or refusal of VWoA to exercise any right or remedy
shall not be deemed to be a waiver or abandonment of any such right or remedy.
Titles
(10) The titles appearing in this Agreement have been inserted for
convenient reference only and do not in any way affect the construction,
interpretation or -meaning of the text.
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