EXHIBIT 10.3
VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES
AND SERVICE AGREEMENT
VOLVO
P.O. Box 26115
Greensboro, NC 27402-6115
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VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
TABLE OF CONTENTS
DEFINITIONS....................................................................2
PREAMBLE.......................................................................4
Purpose of Agreement........................................................4
Company's Responsibilities..................................................4
Dealer's Responsibilities...................................................4
A Mutually Beneficial Relationship..........................................4
ARTICLE 1: SELLING PRIVILEGE..................................................5
1.1 Relationship Between Company and Dealer...............................5
1.2 Dealer Appointment....................................................5
1.2.1 Description of Appointment.....................................5
1.2.2 Role of Controlling Individual.................................6
1.3 Term of Agreement.....................................................6
1.4 Area of Responsibility................................................6
1.4.1 Definition of Area of Responsibility...........................6
1.4.2 Changing the Area of Responsibility............................6
1.5 Portfolio of Criteria.................................................7
1.6 Addenda and Attachments...............................................7
1.7 Fully Incorporated Policies and Procedures............................7
1.8 Modifying the Agreement...............................................7
1.9 Changing Product Offerings............................................7
ARTICLE 2: DEALERSHIP SALES AND SERVICE.......................................8
2.1 Dealer's Responsibilities.............................................8
2.2 Customer Relations....................................................8
2.3 Trucks................................................................9
2.3.1 Truck Sales....................................................9
2.3.2 Truck Inventory Guidelines.....................................9
2.3.3 Evaluating Truck Sales Performance.............................9
2.4 Volvo Engines and Components..........................................9
2.4.1 Engine and Component Sales.....................................9
2.4.2 Engine Sales Performance Objectives and Evaluation.............9
2.5 Used Trucks...........................................................9
2.6 Parts................................................................10
2.6.1 Parts Sales...................................................10
2.6.2 Parts Inventory Requirements..................................10
2.6.3 Parts Reporting...............................................10
2.6.4 Parts Information, Catalogs, and Manuals......................11
2.6.5 Parts Merchandising and Display...............................11
2.6.6 Evaluating Parts Sales Performance............................11
2.7 Service..............................................................11
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2.7.1 Customer Service..............................................11
2.7.2 Hours of Operation............................................12
2.7.3 Recall Service Procedure......................................12
2.7.4 Evaluating Service Performance................................12
2.8 Complaint Resolution.................................................12
2.8.1 Customer Complaints...........................................12
2.8.2 Service Disputes..............................................13
2.9 Sales and Service Personnel Requirements.............................13
2.9.1 Dealership Training Requirements..............................13
2.9.2 Sales.........................................................13
2.9.3 Service.......................................................13
ARTICLE 3: DEALERSHIP OPERATIONS.............................................14
3.1 Financial Requirements...............................................14
3.2 Business and Marketing Plan and Sales Objectives.....................14
3.3 Records and Reports..................................................15
3.3.1 Recordkeeping and Reporting Requirements......................15
3.3.1.1 Accounting Records...................................15
3.3.1.2 Operating Report.....................................15
3.3.1.3 Retail and Other Reports.............................15
3.3.1.4 Employee and Dealership Information..................15
3.3.1.5 Audited Financial Statement..........................15
3.3.1.6 Retaining Records....................................15
3.3.2 Making Records Available for Examination......................15
3.3.3 Failure to Comply.............................................16
3.3.4 Confidentiality and Disclosure................................16
3.4 Premises and Location................................................16
3.4.1 Facilities...................................................16
3.4.1.1 Maintenance Requirements.............................16
3.4.1.2 Environmental Compliance.............................17
3.4.1.3 Hours of Operation...................................17
3.4.1.4 Restrictions on Other Locations......................17
3.4.2 Relocating Facilities.........................................17
3.4.3 Representing Non-Volvo Product Lines..........................17
3.5 Inspections..........................................................17
3.6 Signs................................................................17
3.7 Electronic Dealer Communications.....................................18
3.7.1 Dealer Communication System Requirements......................18
3.7.2 Software Licensing Requirements...............................19
3.7.3 Systems Administrator Requirements............................19
3.7.4 Confidentiality...............................................19
3.7.5 Obligations upon Terminating Agreement........................19
3.8 Dealer Council.......................................................19
3.9 Company Meetings and Programs........................................19
3.10 Company Sales Support................................................20
3.11 Direct Sales.........................................................20
ARTICLE 4: TRADEMARKS........................................................21
4.1 Dealership Trade Name................................................21
4.2 Using Product Trademarks.............................................21
4.3 Trademark Validity...................................................21
4.4 Effects of Agreement Termination.....................................22
4.5 Nature of Trademark License..........................................22
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4.6 Liability for Failure to Comply......................................22
ARTICLE 5: TERMS OF SALE FOR PRODUCTS........................................23
5.1 Product Orders.......................................................23
5.1.1 Order Fulfillment.............................................23
5.1.2 Order Cancellations...........................................23
5.1.3 Installing Equipment Required by Law..........................23
5.2 Prices...............................................................23
5.3 Wholesale Credit Provisions..........................................23
5.4 Grant of Purchase Money Security Interest............................23
5.5 Delivery Schedules and Terms.........................................24
5.6 Payment and Other Terms of Sale......................................24
5.7 Sales and Use Taxes..................................................24
ARTICLE 6: PRODUCT WARRANTY..................................................25
6.1 Company Warranty.....................................................25
6.1.1 Product Warranty..............................................25
6.1.2 Product Warranty Documents....................................25
6.2 Dealer Warranty......................................................25
6.2.1 Product Warranty..............................................25
6.2.2 Service Warranty..............................................25
6.2.3 Indemnification...............................................25
6.3 Warranty and Special Policy Service..................................26
6.3.1 Providing Warranty Service....................................26
6.3.2 No Charge for Warranty Service................................26
6.3.3 Purchasing Warranty Repair Parts..............................26
6.3.4 Warranty Claims...............................................26
ARTICLE 7: ALTERNATIVE DISPUTE RESOLUTION....................................27
7.1 Sole and Exclusive Dispute Resolution Procedures.....................27
7.2 Negotiation..........................................................27
7.2.1 Negotiating Parties...........................................27
7.2.2 Negotiation Procedure.........................................27
7.3 Mediation............................................................28
7.3.1 Mediation Procedure...........................................28
7.3.2 Selecting an AAA Mediator.....................................28
7.3.3 Place of Mediation............................................28
7.3.4 Mediation Costs...............................................28
7.3.5 Confidentiality and Inadmissibility...........................28
7.3.6 Civil Actions.................................................28
7.4 Arbitration..........................................................29
7.4.1 Upon Failure of Mediation.....................................29
7.4.2 Governing Law.................................................29
7.4.3 Place of Arbitration..........................................29
7.4.4 Damage Awards.................................................29
7.4.5 Statute of Limitations........................................29
7.4.6 Arbitration Costs.............................................29
7.5 Continuing Performance of Obligations................................29
7.6 Right of Termination.................................................29
ARTICLE 8: TERMINATION OF AGREEMENT..........................................30
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8.1 Expiration of Agreement..............................................30
8.2 Termination by Mutual Consent........................................30
8.3 Termination by the Dealer............................................30
8.4 Termination by the Company for Cause.................................30
8.4.1 Reasons for Termination.......................................30
8.4.2 Failure to Perform Obligations................................32
8.5 Rights and Obligations upon Termination..............................33
8.5.1 Termination of Representation.................................33
8.5.2 Unfilled Orders...............................................33
8.5.3 Sums Due......................................................33
8.5.4 Product and Tool Repurchase...................................33
8.5.4.1 Repurchasing Trucks..................................33
8.5.4.2 Repurchasing Parts...................................34
8.5.4.3 Repurchasing Tools...................................34
8.5.4.4 Product Repurchase Policies..........................34
8.5.5 Removing Signs................................................34
8.5.6 Returning Company-Supplied Equipment..........................34
8.5.7 Settling Accounts.............................................34
ARTICLE 9: DEALERSHIP TRANSFER AND SUCCESSION RIGHTS.........................35
9.1 Notice of Dealership Transfer........................................35
9.2 Approval Rights......................................................35
9.3 Right of First Refusal...............................................35
9.3.1 Terms.........................................................35
9.3.2 Exercising the Right of First Refusal.........................35
9.3.3 Purchasing Assets.............................................35
9.3.4 Transferring the Right of First Refusal.......................36
9.3.5 In Case of Dealer Violation...................................36
9.4 Succession Rights....................................................36
9.4.1 Designated Successor..........................................36
9.4.2 Absence of a Successor Addendum...............................36
ARTICLE 10: INDEMNIFICATION AND LIMITATION...................................38
10.1 Indemnification......................................................38
10.1.1 Indemnification by the Company...............................38
10.1.1.1 Product Indemnification.............................38
10.1.1.2 Conditions for Indemnification......................38
10.1.1.3 Company's Obligations...............................38
10.1.2 Indemnification by the Dealer................................38
10.1.2.1 Type of Indemnification.............................38
10.1.2.2 Conditions for Indemnification......................39
10.2 Limitation of Remedies and Damages...................................39
ARTICLE 11: GENERAL PROVISIONS...............................................40
11.1 Modifying the Agreement..............................................40
11.2 Prohibition on Assignments...........................................40
11.3 Offsets..............................................................40
11.4 No Waivers Policy....................................................40
11.5 Confidentiality......................................................40
11.6 Attorney's Fees......................................................40
11.7 Governing Law........................................................40
11.8 Compliance with Local Law............................................40
11.9 Severability.........................................................41
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11.10 Notice...............................................................41
11.10.1 Methods of Communication....................................41
11.10.2 Addresses...................................................41
ADDENDUM 1: PRODUCT ADDENDUM.................................................43
ADDENDUM 2: TERM ADDENDUM....................................................44
ADDENDUM 3: AREA OF RESPONSIBILITY ADDENDUM..................................45
DEALER STATEMENT OF OWNERSHIP ADDENDUM
PORTFOLIO OF CRITERIA
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DEALER SALES AND SERVICE AGREEMENT 1
VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
AGREEMENT BETWEEN:
THE "COMPANY": Volvo Trucks North America, Inc.
(a Delaware corporation)
THE "DEALER": _______________________________________
at: _______________________________________
_______________________________________
_______________________________________
EFFECTIVE DATE: _______________________________________
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2 DEALER SALES AND SERVICE AGREEMENT
DEFINITIONS
AGREEMENT This Dealer Sales and Service Agreement,
including:
o all addenda and attachments as updated from
time to time by the Company
o the Portfolio of Criteria
o all applicable Company Policies and
Procedures.
AREA OF RESPONSIBILITY The territory in which the Dealer exercises
primary sales, service, Warranty, and customer
support responsibilities.
BUSINESS AND MARKETING PLAN The forecast of Dealer Sales and Marketing
Operations for a designated period. The Plan is
derived from the Dealer's most recent Portfolio
of Criteria and administered as an attachment to
this Agreement.
COMPONENTS New, unused components of Trucks that are sold
under one of the Company's Trademarks (as
defined in Article 4). These Components are
listed in the Product Addendum.
CONTROLLING INDIVIDUAL(S) The person or persons so designated by the
Company in the Dealer Statement of Ownership
Addendum.
DEALERSHIP The business operations of the Dealer through
which the Dealer sells Products and otherwise
discharges its obligations under this Agreement.
LOCATION Location of the Premises.
PARTS New, unused, spare, or replacement truck parts
purchased from the Company, including:
o rebuilt and remanufactured parts
o other all-makes parts
o proprietary parts
o all direct ship parts
o any other parts purchased from the Company.
These Parts are listed in the Product Addendum.
PORTFOLIO OF CRITERIA A compilation of various minimum standards of
criteria for Dealership operations pertaining to
the Dealer's Area of Responsibility, prepared by
the Company and updated from time to time.
PREMISES Dealer's facility for conducting Dealership
operations in the Area of Responsibility.
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DEALER SALES AND SERVICE AGREEMENT 3
PRODUCTS Products include:
o Trucks as listed in the Product Addendum
o Parts
o Volvo Components (including engines)
o other Components
o service products, including extended
warranty, contract maintenance, financial
offerings, customer support memberships, and
other services provided from time to time.
TRADEMARKS Trademarks, service marks, and trade names,
whether registered or unregistered, designated
by the Company as the primary trademark
identification for Products.
TRUCKS New, unused, heavy-duty trucks distributed by
the Company, sold under one of the Company's
Trademarks (as defined in Article 4), and listed
in the Product Addendum.
WARRANTY Warranty includes the following services, as
covered in the Warranty Administration
Procedures Manual:
o warranty
o extended coverage
o recalls
o service programs
o vendor-extended coverage.
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4 DEALER SALES AND SERVICE AGREEMENT
PREAMBLE
Volvo Trucks North America, Inc. (the "Company") is a
customer-service-oriented manufacturer of premium-quality trucks and
highway tractors. The Company also markets and distributes its Products,
including major Components and replacement Parts, for resale through its
select network of authorized dealers.
PURPOSE OF AGREEMENT
The Company's goal is to promote a mutually beneficial relationship
between itself and its dealers. Therefore, the purpose of this Agreement
is to:
o encourage and facilitate cooperation and mutual effort to
satisfy customers
o help the Company and the Dealer fully realize their
opportunities for business success.
COMPANY'S RESPONSIBILITIES
The dealers depend upon the Company to provide:
o a variety of competitive quality Products and services
o effective sales, Parts, and service support
o competent staff in support of the Dealer
o prompt and reliable service to the Dealer.
DEALER'S RESPONSIBILITIES
The Company depends upon its dealers, individually and as a network, to:
o manage a properly located, fully equipped Dealership in a
professional manner
o staff the Dealership with competent personnel
o sell sufficient quantities of Products into the appropriate
applications
o provide prompt and reliable service to customers
o project a caring attitude toward customers.
A MUTUALLY BENEFICIAL RELATIONSHIP
By fulfilling their respective responsibilities under this Agreement,
the Company and the Dealer will be able to establish and maintain a
mutually satisfactory relationship.
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DEALER SALES AND SERVICE AGREEMENT 5
THE COMPANY AND THE DEALER AGREE:
ARTICLE 1: SELLING PRIVILEGE
1.1 RELATIONSHIP BETWEEN COMPANY AND DEALER
The Dealer is an independent contractor, not an agent of the
Company. The Dealer therefore has no authority to bind the
Company to a third party.
The Dealer also is solely responsible for its own acts and
omissions.
The Company has no authority to bind the Dealer to any third
party except as provided by this Agreement and/or applicable
Company policies and procedures as announced from time to
time.
1.2 DEALER APPOINTMENT
1.2.1 DESCRIPTION OF APPOINTMENT
The Company appoints the Dealer in its Area of Responsibility
to:
o act as an independent authorized retail dealer for the
resale of Products
o provide Parts, used truck service, and technical
support to customers of Products.
DEFINITION:
PRODUCTS Products include:
o Trucks as listed in the Product Addendum
o Parts
o Volvo Components (including engines)
o other Components
o service products, including extended
warranty, contract maintenance, financial
offerings, customer support memberships,
and other services provided from time to
time.
This appointment is exclusive, meaning that so long as the
Dealer complies with its obligations under this Agreement, the
Company will not give any other dealer rights to locate a
facility in the Dealer's Area of Responsibility.
The Dealer agrees to:
o accept this appointment subject to the terms of this
Agreement, including
-- the Company's Portfolio of Criteria
-- policies and procedures set by the Company and
amended by the Company from time to time
o conduct its operations in accordance with these terms.
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6 DEALER SALES AND SERVICE AGREEMENT
1.2.2 ROLE OF CONTROLLING INDIVIDUAL
DEFINITION:
CONTROLLING The person or persons so designated by the Company
INDIVIDUAL in the Dealer Statement of Ownership Addendum.
Controlling Individual(s) approved by the Company and
identified in the Dealer Statement of Ownership Addendum must
own, control, and manage the Dealership on a daily basis.
The Company enters into this Agreement relying upon the
personal abilities and qualifications of the Controlling
Individual(s). The Dealer's rights and the Company's
obligations under this Agreement are contingent upon the
continuity of the approved Controlling Individual(s). The
Company and Dealer agree that the Controlling Individual(s)
and the percentage stated in the Dealer Statement of Ownership
Addendum will remain the same, unless changed according to
Article 9 of this Agreement.
1.3 TERM OF AGREEMENT
Unless otherwise stated in the Term Addendum, the term of this
Agreement shall be 5 years from the effective date.
1.4 AREA OF RESPONSIBILITY
1.4.1 DEFINITION OF AREA OF RESPONSIBILITY
DEFINITION:
AREA OF The territory in which the Dealer exercises
RESPONSIBILITY primary sales, service, and customer support
responsibilities.
The Company has determined that the Dealer can best market and
service Products, and provide the highest level of customer
support, in this geographic region. The boundaries of the Area
of Responsibility shall be set forth in the Area of
Responsibility Addendum provided by the Company.
1.4.2 CHANGING THE AREA OF RESPONSIBILITY
To improve service to customers and potential customers, the
Company reserves the sole right and discretion to redefine
from time to time the boundaries of any Area of
Responsibility. The Dealer recognizes that factors determining
the Area of Responsibility may change, leading to
modification.
Factors used in determining the Area of Responsibility will be
clearly defined in Company policies and procedures. Where the
Company determines that modification to the Area of
Responsibility is appropriate, it will, in all cases, provide
the Dealer with 60 days' notice of the proposed modification.
All disputes arising from changes in the Area of
Responsibility will be resolved using the alternative dispute
resolution process detailed in Article 7 of this Agreement.
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DEALER SALES AND SERVICE AGREEMENT 7
1.5 PORTFOLIO OF CRITERIA
DEFINITION:
PORTFOLIO OF A compilation of various minimum standards of
CRITERIA criteria for Dealership operations pertaining
to the Dealer's Area of Responsibility,
prepared by the Company and updated from time
to time.
The Portfolio of Criteria includes the minimum acceptable
criteria for business planning. The Dealer shall at all times
perform in accordance with and remain in compliance with the
terms of the Portfolio of Criteria. Its terms are subject to
review either:
o annually, in connection with the preparation of the
Business and Marketing Plan
o according to another interval determined by the
Company.
1.6 ADDENDA AND ATTACHMENTS
All addenda and other attachments to this Agreement are an
integral part of the Agreement. If an addendum or attachment
requires execution by the Dealer or the Company, this
Agreement shall be of no force or effect until the addendum or
attachment has been duly executed.
See the Table of Contents for a list of addenda to this
Agreement.
1.7 FULLY INCORPORATED POLICIES AND PROCEDURES
All applicable Company Policies and Procedures, which may be
modified from time to time, are fully incorporated in this
Agreement.
1.8 MODIFYING THE AGREEMENT
The provisions of this Agreement may be modified by the
Company as business conditions and other circumstances change.
1.9 CHANGING PRODUCT OFFERINGS
The Company may from time to time change its Product offerings
without prior notice to the Dealer. The Dealer will, in turn,
have every reasonable right to have the Product Addendum
updated to include new offerings that replace discontinued
offerings, but only if the Dealer meets minimum Company
standards as established from time to time.
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8 DEALER SALES AND SERVICE AGREEMENT
ARTICLE 2: DEALERSHIP SALES AND SERVICE
DEFINITION:
DEALERSHIP The business operations of the Dealer
through which the Dealer sells Products and
otherwise discharges its obligations under
this Agreement.
2.1 DEALER'S RESPONSIBILITIES
The Dealer has two primary functions in the Area of
Responsibility:
o to develop the business of selling and servicing
Products
o to support Product customers.
The Company relies upon the Dealer to:
o develop and deal directly with a strong customer base
in the Area of Responsibility
o conduct all business activities in a manner that
reflects favorably upon, and preserves the goodwill
and reputation of, the Dealer, the Company, and all
other Company dealers
o give adequate care and attention to all aspects of
Dealership business, including, among others:
-- Truck sales
-- Parts sales
-- Volvo Component sales
-- repair service
-- used truck sales
-- finance and insurance
-- administration
-- other support services and special customer
programs.
2.2 CUSTOMER RELATIONS
Success of the Company, the Dealer, and other Company dealers
depends upon establishing a reputation for exceptional
customer satisfaction and loyalty in all aspects of Dealership
operations. The Dealer and the Company recognize the
importance of prompt, courteous, and professional care in
promoting the image of a customer-service-oriented network.
The Dealer is responsible for maintaining this reputation and
will:
o conduct its business with the goal of furthering the
Company's and the network of dealers' customer service
objectives
o promote customer loyalty by prompt and courteous
attention to local and transient customers
o support the Company and its image with a positive
attitude to the customer and the public
o participate in Company-designated customer-
satisfaction-measurement systems to ensure consistent
levels of satisfaction with all Products.
The Company will support the Dealer in achieving its customer
service objectives.
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DEALER SALES AND SERVICE AGREEMENT 9
2.3 TRUCKS
DEFINITION:
TRUCKS New, unused, heavy-duty trucks distributed
by the Company, sold under one of the
Company's Trademarks (as defined in Article 4),
and listed in the Product Addendum.
2.3.1 TRUCK SALES
Within the Area of Responsibility, the Dealer shall:
o vigorously and aggressively promote the sale, lease,
and use of the full range of Truck models with
specifications appropriate for the customer's
intended use
o regularly and systematically solicit all current and
prospective owners and users of Trucks
o develop and maintain a Truck department staffed with
appropriately trained personnel, based on criteria
that the Company may establish from time to time.
If, for any reason, the Dealer believes it may be unable to
vigorously pursue any transaction, it shall immediately notify
the appropriate Company representative in writing with the
following information:
o the customer's name
o a description of the vehicle type in which the
customer is interested
o any special terms and conditions known to the Dealer.
2.3.2 TRUCK INVENTORY GUIDELINES
To help the Dealer develop its sales potential in the Area of
Responsibility, the Company may provide Truck inventory
guidelines for unsold Trucks.
2.3.3 EVALUATING TRUCK SALES PERFORMANCE
The Dealer's Truck sales performance shall be measured by:
o Dealer market performance
o Dealer retail earned market share.
2.4 VOLVO ENGINES AND COMPONENTS
2.4.1 ENGINE AND COMPONENT SALES
The Dealer shall actively promote the sale of Volvo engines
and Components, and meet the requirements of the Company for
sales penetration and aftermarket support.
2.4.2 ENGINE SALES PERFORMANCE OBJECTIVES AND EVALUATION
The Company will provide the Dealer with annual Volvo engine
and Component sales objectives and include them in the
Portfolio of Criteria. The Dealer's performance of its engine
and Component sales responsibilities shall be measured by such
reasonable criteria as the Company may develop from time to
time.
2.5 USED TRUCKS
The Company and the Dealer both recognize that used truck
sales are crucial to the development of market potential in
the Area of Responsibility. To fulfill this potential, the
Dealer will:
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10 DEALER SALES AND SERVICE AGREEMENT
o develop and maintain a used truck department
staffed with appropriately trained personnel
o provide customers with access to the purchase of
used trucks
o provide competitive trade-in values for new Truck
customers.
2.6 PARTS
DEFINITION:
PARTS New, unused, spare, or replacement truck parts
purchased from the Company, including:
o rebuilt and remanufactured parts
o other all-makes parts
o proprietary parts
o all direct ship parts
o any other parts purchased from the Company.
These Parts are listed in the Product Addendum.
2.6.1 PARTS SALES
Within the Area of Responsibility, the Dealer shall vigorously
and aggressively promote the sale of Parts to:
o retail and other customers, including transient
customers of Products
o authorized extended distribution outlets.
The Dealer shall also use its best efforts to develop its
potential for Parts sales and obtain an acceptable penetration
of the local market.
The Dealer understands that customers have the right to expect
any Part that the Dealer sells, installs, or uses in the
repair or servicing of Trucks to meet the Company's high
standards. The Dealer therefore agrees:
o not to sell, use, or install non-Volvo Parts that
in any way adversely affect the mechanical operation
of any Truck, or that are inferior in quality and
design to Volvo Parts
o not to represent used or remanufactured parts as new.
2.6.2 PARTS INVENTORY REQUIREMENTS
The Dealer will maintain Parts stocking requirements as
defined by the Company. The inventory of new, unused Parts
will be designed to promote customer service and satisfaction
and further the Dealer's Parts sales potential.
2.6.3 PARTS REPORTING
The Dealer will supply Parts reports as required by the
Company. Upon request, the Dealer will also:
o make available its complete Parts inventory data in
the manner required by the Company
o provide additional data, such as sales/demands, for
the purpose of improving Parts availability and
customer support.
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DEALER SALES AND SERVICE AGREEMENT 11
2.6.4 PARTS INFORMATION, CATALOGS, AND MANUALS
The Dealer will:
o strictly adhere to the Company's manuals,
bulletins, policies, procedures, and other
instructionals, in whatever form they are offered,
and as revised from time to time
o keep on the Premises, in operable condition, all
the equipment, catalogs, manuals, and bulletins
required to provide a high level of customer service.
These materials must be maintained in the medium
required by the Company.
The Dealer's continuing right to sell Parts is conditioned
upon fulfilling these obligations.
2.6.5 PARTS MERCHANDISING AND DISPLAY
The Dealer will provide an adequate area, according to Company
standards, for the merchandising and display of Products.
2.6.6 EVALUATING PARTS SALES PERFORMANCE
The Company will provide the Dealer, on a regular basis, with
specific Parts sales and purchase objectives. The Dealer's
performance of its Parts sales and purchase responsibilities
shall be measured by such reasonable criteria as the Company
may develop from time to time, which may include but are not
limited to:
o a comparison of the Dealer's actual Parts sales and
purchases to:
-- its Parts sales and purchase objectives as set
from time to time
-- its performance during the prior year
o a comparison of the Dealer's actual Parts sales and
purchases to those of other dealers in the same
region and district, and other dealers nationwide
o the Dealer's Parts sales penetration in the Area of
Responsibility
o the Dealer's achievement of objectives under the
Business and Marketing Plan.
2.7 SERVICE
2.7.1 CUSTOMER SERVICE
The Dealer will promote customer satisfaction by providing
courteous, convenient, prompt, efficient, quality service to
owners and users of Trucks, including transient customers.
These services will be provided whenever requested, regardless
of where or from whom the Trucks were purchased. The Dealer
will perform and administer all service in a professional
manner, in accordance with:
o all applicable laws and regulations
o the Company's customer satisfaction goals
o the Company's Service Policies and Procedures
Manual as amended from time to time.
Failure to provide a high level of service, as outlined in
this Agreement, could result in the loss of customer goodwill
and seriously damage the reputation of the Company, the
Dealer, other Company dealers, and Products.
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12 DEALER SALES AND SERVICE AGREEMENT
2.7.2 HOURS OF OPERATION
The Dealer agrees to:
o maintain hours of operation at the Premises
consistent with local competitive and/or trade
practices. At a minimum, hours should be equal to or
better than the average hours of the top 2 market
share leaders in the Area of Responsibility, not
including any resident dual brand at the Dealership.
The Dealer will work towards being open 7 days per
week, 24 hours per day.
o be open or on call 7 days per week, 24 hours per
day for the following services:
-- Parts and service
-- truck-down emergency road service
o conduct semiannual surveys within the Area of
Responsibility to monitor competitors' hours of
operation.
2.7.3 RECALL SERVICE PROCEDURE
During a recall campaign, the Dealer will:
o perform, in a timely fashion, all Product
inspections and repairs the Company requests,
regardless of where the Products were purchased
o perform recall service in accordance with the
Company's service manuals, bulletins, policies and
procedures, and other instructionals as amended from
time to time
o at the Company's request, provide all information
in the Dealer's possession regarding the location of
Products subject to a recall
o in all reasonable ways, notify customers of the
need and desirability of inspection and repairs.
The Company will compensate the Dealer for parts and labor
provided in connection with recall services according to the
then-current Company policy.
2.7.4 EVALUATING SERVICE PERFORMANCE
The Company and the Dealer will periodically evaluate the
Dealer's service performance to determine if the Dealer has
fulfilled the Company's service objectives, as included in but
not limited to:
o this Agreement
o the Portfolio of Criteria
o Company policies and procedures
o other reasonable criteria that the Company may adopt.
2.8 COMPLAINT RESOLUTION
2.8.1 CUSTOMER COMPLAINTS
Good customer relations are essential to the Dealer's and the
Company's mutual success. Accordingly, the Dealer will
promptly and diligently investigate and resolve all
complaints. The process of complaint resolution should secure
the goodwill of customers and the marketplace toward the
Dealer, the Products, the Company, and the Company's other
dealers.
Except as otherwise provided in this Agreement, the Dealer is
the primary resource for investigating and resolving customer
complaints. If the Dealer receives any
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 13
complaint that it is unable to resolve, the Dealer will
promptly notify the Company with:
o the nature of the complaint
o the Product involved
o the name and complete contact information of the
customer making the complaint.
2.8.2 SERVICE DISPUTES
Dissatisfied customers occasionally contact the Company
directly with complaints about the quality or cost of Dealer
service. The Company will forward these disputed issues to the
Dealer for response to the customer. In such cases it is the
Dealer's responsibility to resolve the dispute at its own
expense. The Dealer must keep records of the customer issue
and its resolution and provide this information to the Company
upon request.
2.9 SALES AND SERVICE PERSONNEL REQUIREMENTS
2.9.1 DEALERSHIP TRAINING REQUIREMENTS
The Dealer agrees to comply with the Company's training
requirements as outlined in the Training Policies and
Procedures Manual. The Dealer's continuing right to sell
Products is contingent upon fulfilling this obligation.
2.9.2 SALES
The Dealer shall at all times employ a sufficient number of
trained and qualified Parts and sales personnel, as specified
in the Parts and Sales Policies and Procedures Manuals, to
vigorously and aggressively promote the sale of Products in
accordance with the terms of this Agreement, the Portfolio of
Criteria, and the Business and Marketing Plan. Parts, new and
used truck, and Volvo Component sales personnel must also meet
the training requirements.
2.9.3 SERVICE
The Dealer shall also employ a sufficient number of trained
and qualified service personnel, as defined in the Service
Policies and Procedures Manual.
<PAGE>
14 DEALER SALES AND SERVICE AGREEMENT
ARTICLE 3: DEALERSHIP OPERATIONS
DEFINITION:
DEALERSHIP The business operations of the Dealer through
which the Dealer sells Products and otherwise
discharges its obligations under this Agreement.
3.1 FINANCIAL REQUIREMENTS
The Dealer shall at all times maintain and employ the total
investment, net worth, unencumbered net working capital
liquidity, and available wholesale credit it needs to properly
and completely fulfill its responsibilities under this
Agreement. The Dealer must demonstrate to the Company's
reasonable satisfaction that it is able to provide full and
prompt payment for purchased Products before the Company is
obligated to sell Products to the Dealer.
3.2 BUSINESS AND MARKETING PLAN AND SALES OBJECTIVES
DEFINITION:
BUSINESS AND The forecast of Dealer Sales and Marketing
MARKETING PLAN Operations for a designated period. The Plan
is derived from the Dealer's most recent
Portfolio of Criteria and administered as an
attachment to this Agreement.
On an annual basis or other period specified by the Company,
the Dealer shall submit, on Company-provided forms, a Business
and Marketing Plan that projects operating results for the
upcoming year or years. The Plan will cover new Truck, used
truck, Parts, and service sales. The Dealer will use this Plan
to increase market penetration in the Area of Responsibility.
The Business and Marketing Plan will incorporate the specific
sales objectives provided by the Company, which shall be based
on some or all of the following factors, among others:
o the Dealer's prior sales
o the Dealer's present market position
o the Company's national and District market positions
o the Company's long-range plans and objectives
o an analysis of current conditions and projected change
in the local market.
The Business and Marketing Plan shall contain a detailed
description of, among other things:
o analyses of the Dealer's present market position
o the Dealer's short- and long-term sales objectives
and strategies
o tactics and programs that the Dealer will implement
to achieve its objectives.
The Dealer shall use its best efforts to meet the objectives
set forth in the Business and Marketing Plan.
In support of this process, the Company shall provide the
Dealer with:
o an overview of then-current market conditions
o future Company marketing plans
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 15
o state of the Company
o any other plans that can reasonably be disclosed to
the Dealer without jeopardizing the Company's position
o any other reasonably necessary assistance in
formulating a Business and Marketing Plan.
3.3 RECORDS AND REPORTS
3.3.1 RECORDKEEPING AND REPORTING REQUIREMENTS
3.3.1.1 ACCOUNTING RECORDS
The Dealer will maintain uniform accounting records in the
manner prescribed by the Company. These records will at all
times accurately reflect the financial condition of its
business.
3.3.1.2 OPERATING REPORT
The Dealer will furnish to the Company a complete operating
report covering its operations on a calendar year-to-date
basis. This operating report:
o will be due by the 15th of each month
o must be submitted either on Company-provided forms
or over the Company-approved Dealer Communication
System, as the Company shall elect.
3.3.1.3 RETAIL AND OTHER REPORTS
The Dealer will provide a retail report and all other reports
at such times and on such forms as the Company may reasonably
request.
3.3.1.4 EMPLOYEE AND DEALERSHIP INFORMATION
The Dealer will keep current and provide, upon Company
request, employee and Dealership information.
o Employee information includes, but is not limited
to, Dealer personnel and their functions.
o Dealership information includes, but is not limited
to, hours of operation.
3.3.1.5 AUDITED FINANCIAL STATEMENT
The Dealer will submit a financial statement, compiled and
reviewed by a reputable certified public accounting firm, to
the Company at fiscal year-end closing. Should the Dealer
produce audited statements, these audited statements become
the requirement.
3.3.1.6 RETAINING RECORDS
The Dealer will retain all information, including Warranty,
inventory, and other sales and service records related to the
business covered by this Agreement, for a period of at least 5
years following the end of the calendar year in which the
record was generated. This information must be provided upon
request, on such forms and in such format as the Company
requires.
3.3.2 MAKING RECORDS AVAILABLE FOR EXAMINATION
The Dealer shall permit the Company and its designees to
examine the Dealer's accounting or other records upon
reasonable notice during business hours. This examination may
include, among other things, an audit of the Dealer's records
<PAGE>
16 DEALER SALES AND SERVICE AGREEMENT
supporting Warranty, service, or other claims made by the
Dealer against the Company.
3.3.3 FAILURE TO COMPLY
If the Dealer fails, after notice from the Company, to comply
with any of the provisions of this Section, the Company shall
have the right to:
o stop financing Parts or other purchases on open
account
o remove the Dealer from the list of dealers eligible
for Company participation in wholesale and retail
Truck financing.
3.3.4 CONFIDENTIALITY AND DISCLOSURE
The Company will keep all information provided under Section
3.3 confidential and will not disseminate it to any outside
party without the Dealer's consent, unless required to do so
by law. However, at its sole discretion, the Company may
disclose such information to its affiliated companies.
Dissemination within the Company of information provided under
this Section shall be on a need-to-know basis.
The Dealer hereby:
o authorizes the Company's affiliates to disclose to
the Company any information of the nature described
in this Section
o waives all claims of damage against any person or
entity for such disclosure.
"Affiliates" or "affiliated company" shall mean any parent or
subsidiary of the Company or any other company with common
ownership.
3.4 PREMISES AND LOCATION
DEFINITIONS:
PREMISES Dealer's facility for conducting Dealership
operations in the Area of Responsibility.
LOCATION Location of the Premises.
3.4.1 FACILITIES
3.4.1.1 MAINTENANCE REQUIREMENTS
The appearance and representation of the Premises affect both
customer and public perception of Product quality provided by
all dealers nationwide. Therefore, the Dealer will maintain
the Premises and the Location in accordance with:
o the terms of this Agreement
o the Company's most recent Portfolio of Criteria
o the Company's standards for size, cleanliness,
appearance, and presentation of Products, used
trucks, and repair services.
The Dealer further agrees that:
o interior and exterior retail environment and signs
will comply with any reasonable requirements the
Company may establish to promote and preserve its own
and the Dealer's image
o the Premises shall comply with all applicable
government ordinances, laws, and/or regulations in
effect from time to time
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 17
o in the Company's opinion, the Premises shall be
commercially satisfactory and in a good state of
repair.
The Company may, if circumstances warrant, require the Dealer,
upon reasonable prior notice, to make changes to the Premises
or Location.
3.4.1.2 ENVIRONMENTAL COMPLIANCE
The Dealer shall comply with all applicable federal, state,
and local environmental laws in the operation of the
Dealership.
3.4.1.3 HOURS OF OPERATION
See Section 2.7.2 for requirements concerning hours of
operation.
3.4.1.4 RESTRICTIONS ON OTHER LOCATIONS
The Dealer shall not:
o operate from any other location without the
Company's prior written consent
o establish a resident salesperson outside the Area
of Responsibility without the Company's approval.
3.4.2 RELOCATING FACILITIES
The Dealer must obtain the Company's advance written approval,
which will not be unreasonably withheld, to:
o relocate its facilities
o change the size of or substantially modify the use
of the Premises.
3.4.3 REPRESENTING NON-VOLVO PRODUCT LINES
In accepting the Company's Portfolio of Criteria, the Dealer
commits its Premises and other specified resources to meet its
obligations under this Agreement. The Dealer must seek
approval in writing from the Company before:
o representing other heavy-duty trucks
o distributing other substantial product offerings.
Such written notice must be sent 60 days in advance. The
Company, upon receipt of such notice, and without limiting any
rights it has under this Agreement, reserves the right to
modify the Portfolio of Criteria to insure that adequate
resources continue to be available for Products and customers
of Products. Adequate resources include, but are not limited
to, staffing, display space, and merchandising.
3.5 INSPECTIONS
The Company or its designees may at any time during normal
business hours, upon reasonable notice, inspect the Dealer's:
o Premises
o inventory of Products
o customer records relating to Product Warranty, sales,
and service.
3.6 SIGNS
The Dealer shall prominently display upon its Premises the
largest sign allowable by local ordinance. Signs must be:
<PAGE>
18 DEALER SALES AND SERVICE AGREEMENT
o consistent with Company policy and applicable
zoning ordinances
o adequate to identify the Premises as an authorized
sales and service establishment for all Products
o compatible with design standards established by the
Company
o subject to Company approval of Trademark display.
3.7 ELECTRONIC DEALER COMMUNICATIONS
Electronic transmission of data between the Dealer and the
Company is a necessary part of transacting business
successfully. To further this goal, the Company will continue
to make available to its dealers:
o cost-effective data communication capabilities that
use current technology
o guidelines and other assistance for using these
systems.
3.7.1 DEALER COMMUNICATION SYSTEM REQUIREMENTS
The Dealer will obtain and maintain on its premises a
Company-approved Dealer Business System capable of providing
Volvo DCS communications and electronically transmitting
information in a form compatible with the Company's minimum
standards, as published from time to time. This system and the
Dealer personnel must be capable of:
o transmitting to the company, among other information:
-- Truck orders
-- Parts orders
-- Warranty claims
-- Dealership Parts inventory
-- Truck repair-order history
-- financial data (FACTS)
-- other relevant business information
o receiving information from the Company.
It is the Dealer's responsibility to provide linkage, at its
own expense, with the Company's system.
The Dealer will also install and maintain computer equipment
that is capable of DCS communications in the following
departments:
o New Truck
o Used Truck
o Parts
o Service
o Administration.
This computer equipment must meet the minimum standards
published by the Company from time to time.
As the Company adds or changes systems or equipment, the
Dealer will modify its own systems and equipment to be
compatible within a reasonable time, as defined by the
Company. The Company will make every reasonable effort to
consider existing Dealer systems and equipment prior to adding
or changing requirements.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 19
3.7.2 SOFTWARE LICENSING REQUIREMENTS
Licensing agreements for some software supplied by the Company
may limit the number of clients/users that can access the
software. The Dealer agrees to notify the Company if the
number of clients/users using a system exceeds the licensing
agreement in force at the time, and purchase additional
licenses if necessary.
3.7.3 SYSTEMS ADMINISTRATOR REQUIREMENTS
The Dealer must appoint a systems administrator who will be
the primary contact for systems announcements, upgrades, and
the resolution of computer-related problems at the Dealership.
3.7.4 CONFIDENTIALITY
Systems supplied by the Company are considered confidential as
specified in Section 11.5 of this Agreement. These systems and
any intellectual property rights forming a part of these
systems:
o cannot be used in conjunction with any business
activities not directly related to the Company and
its benefit
o must be used as specified in Company licensing
agreements.
3.7.5 OBLIGATIONS UPON TERMINATING AGREEMENT
Any communications equipment, computers, software, or tools
supplied by the Company will remain its property and must be
returned upon termination of this Agreement. If requested by
the Company, the Dealer agrees to promptly execute any
financing statements or other documents for filing by the
Company evidencing its ownership of any equipment, computers,
software, or tools it has supplied.
3.8 DEALER COUNCIL
To promote goodwill and to maximize the mutual benefits of
this Agreement, the Company has established a Dealer Council
to serve as a mechanism for joint communication. The Dealer
Council will convey to the Company and the dealers each
others' concerns and opinions.
The Dealer Council is comprised of dealers elected by dealers
and develops its own bylaws. The number and qualifications of
elected representatives is determined by these bylaws.
The Company will meet with the Dealer Council periodically to
review matters presented as well as other mutual business
issues. The Company reserves the right to seek alternative
methods for receiving dealer input.
3.9 COMPANY MEETINGS AND PROGRAMS
The Company shall make available to the Dealer a variety of
meetings, seminars, and programs, including Product
announcement meetings, that are designed to:
o increase Dealer expertise in promoting Products
o develop sales and income for all aspects of
Dealership operations
o promote customer satisfaction.
<PAGE>
20 DEALER SALES AND SERVICE AGREEMENT
The Controlling Individual(s), or such Dealer personnel as the
Company shall reasonably prescribe, shall attend Company
meetings. The Dealer also agrees to support Company Product
programs in effect from time to time.
3.10 COMPANY SALES SUPPORT
The Company shall support the Dealer's sales of Products with
a national sales and marketing effort that will include, among
other things, regular national and/or regional advertising.
The Company may also provide:
o advertising materials to assist the Dealer in
promoting Product sales. These materials may include,
but are not limited to:
-- brochures
-- folders
-- catalogs
-- e-commerce applications
-- kiosks.
The Company may, in circumstances it deems
appropriate, charge the Dealer the reasonable cost of
such materials.
o cooperative advertising plans and special
promotions designed to stimulate sales.
3.11 DIRECT SALES
The Company intends to sell Products through its Dealers to
the fullest extent possible. However, if the Company
determines that it is appropriate in a particular case, it may
sell Products directly to any purchaser regardless of where
the purchaser is located or takes delivery. In all such cases
of direct sales, the Dealer shall have no right to any credit,
commission, or other compensation by virtue of any such sale.
If the Dealer's selling efforts have substantially contributed
to the Company's direct Product sale, the Company may, in
accordance with its policy in effect at the time, pay the
Dealer a commission based on the significance of the selling
effort.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 21
ARTICLE 4: TRADEMARKS
DEFINITION:
TRADEMARKS Trademarks, service marks, and trade
names, whether registered or unregistered,
designated by the Company as the primary
trademark identification for Products.
The Company is the owner or licensee of certain Trademarks.
The Dealer acknowledges that the Trademarks are valuable
assets of the Company and agrees to protect them, using them
only in accordance with the following terms and conditions.
4.1 DEALERSHIP TRADE NAME
Subject to Company approval, the Dealer is licensed to:
o non-exclusively use the Trademarks as part of the
Dealer trade name while conducting business under
this Agreement
o register this trade name where registration of
fictitious business names is required by law. The
Dealer shall notify the Company in writing of all
such registrations within 30 days.
The Dealer shall not:
o use any of the Trademarks in its actual corporate
name
o register or attempt to register any of the
Trademarks in any place or office, except as
permitted in this Section of the Agreement.
4.2 USING PRODUCT TRADEMARKS
The Dealer may use the Trademarks to fairly and truthfully
advertise and promote Product sales and enhance Product
goodwill. The Company may from time to time issue guidelines
for the use of the Trademarks; the Dealer shall comply with
such guidelines.
The Dealer shall not:
o use the Trademark on any product offered for sale
that was not purchased directly or indirectly from
the Company
o alter any Product or change or substitute any of
its equipment in any way that impeaches, infringes,
or lessens the validity of the Trademarks
o do anything else that will in any way impeach,
infringe, or lessen the validity of the Trademarks.
Dealer use of Trademarks shall be in accordance with Company
Policy. The Dealer will provide its best efforts to further
the goodwill and image associated with Trademarks.
4.3 TRADEMARK VALIDITY
The Dealer:
o acknowledges that the Trademarks are valid and
presently owned by or licensed to the Company
o agrees to use the Trademarks only as long as this
Agreement is valid
o has no right to authorize others to use the
Trademarks
<PAGE>
22 DEALER SALES AND SERVICE AGREEMENT
o will not use any of the Trademarks in any manner
that jeopardizes the Company's ownership or use
thereof.
4.4 EFFECTS OF AGREEMENT TERMINATION
Upon termination of this Agreement for any reason, all
licenses granted to the Dealer in this Article shall
immediately terminate. Additionally, the Dealer shall
immediately discontinue the use of Trademarks on:
o signs
o structures
o advertising, marketing, or other promotional activity.
As soon as possible after termination, the Dealer will change
its trade name so that it will no longer contain the Company
Trademark, or any other name deceptively similar to it.
4.5 NATURE OF TRADEMARK LICENSE
The Dealer's interest in this Trademark license is personal
and not assignable. The Dealer shall acquire only those rights
in connection with the Trademarks expressly granted in this
Article.
4.6 LIABILITY FOR FAILURE TO COMPLY
The Dealer will reimburse the Company for all legal fees and
other expenses incurred in connection with any legal or other
action to compel the Dealer to comply with the provisions of
this Article.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 23
ARTICLE 5: TERMS OF SALE FOR PRODUCTS
5.1 PRODUCT ORDERS
5.1.1 ORDER FULFILLMENT
The Company will sell Products to the Dealer, who must place
orders in the form the Company requires.
No order will be binding upon the Company or the Dealer until
accepted by the Company according to its policies as announced
from time to time. If the Dealer fails to fulfill any
condition of sale required of it, the Company may, even after
acceptance, delay production or cancel an order.
5.1.2 ORDER CANCELLATIONS
The Dealer may not cancel orders once they have been accepted
by the Company, except as specifically permitted by Company
policies as announced from time to time.
5.1.3 INSTALLING EQUIPMENT REQUIRED BY LAW
The Company may install and adjust the price for any equipment
or accessory required by law on any Products the Dealer
orders, whether or not such items are included in the Dealer's
order.
5.2 PRICES
When purchasing Products from the Company, the Dealer will pay
the prices shown in the Company's then-current price list or
other publications. All changes in price or other terms of
sale between the Company and the Dealer shall take place in
accordance with written Company policies issued from time to
time.
5.3 WHOLESALE CREDIT PROVISIONS
The Dealer shall establish and maintain exclusive credit lines
for the purchase of Trucks and, if applicable, used trucks.
The credit lines must be sufficient for the purchase of Trucks
in volumes stated in the Business and Marketing Plan.
5.4 GRANT OF PURCHASE MONEY SECURITY INTEREST
To secure its indebtedness to the Company ("Secured
Indebtedness"), the Dealer grants to the Company a purchase
money security interest in the Dealer's Parts inventory
("Collateral") and the proceeds, limited to the amount of the
Dealer's indebtedness to the Company. The Dealer shall, at the
Company's request, execute for public filing those documents
that the Company believes are necessary to perfect this
purchase money security interest. Upon Dealer default in the
payment of any of the Secured Indebtedness, the Company shall
have all the rights of a secured party under the Uniform
Commercial Code or other applicable laws.
The Dealer warrants and covenants that, so long as it has any
outstanding Secured Indebtedness, it will own and retain the
Collateral in its possession, except for final retail use or
sale in the ordinary course of business.
<PAGE>
24 DEALER SALES AND SERVICE AGREEMENT
This purchase money security interest shall survive the
termination of this Agreement if, at the time of such
termination, any Secured Indebtedness remains unpaid.
5.5 DELIVERY SCHEDULES AND TERMS
The Company will determine build schedules. It will not be
responsible for a failure or delay in accepting orders or
delivering Products due, in whole or in part, to:
o discontinuing the manufacture or sale of specific
Products
o labor difficulties
o shortages of labor, material, transportation, or
utilities
o government regulations
o any force majeure or other cause beyond the Company's
control.
Delivery terms shall be in accordance with Company policies as
announced from time to time.
5.6 PAYMENT AND OTHER TERMS OF SALE
Terms of payment, risk of loss, and other terms of sale of
Products, used trucks, and services shall be in accordance
with Company credit policies in effect at the time of the
order.
5.7 SALES AND USE TAXES
All of the Dealer's Product purchases are presumed to be for
resale.
The Dealer will provide the Company with any certificates or
other evidence necessary to establish or maintain exemptions
from state or local sales, use, or other taxes. If tax is
required on any sale from the Company to the Dealer, the
Dealer will either pay the tax directly or reimburse the
Company for payments made.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 25
ARTICLE 6: PRODUCT WARRANTY
DEFINITION:
WARRANTY Warranty includes the following services, as
covered in the Warranty Administration
Procedures Manual:
o warranty
o extended coverage
o recalls
o service programs
o vendor-extended coverage.
6.1 COMPANY WARRANTY
6.1.1 PRODUCT WARRANTY
The Company gives each customer who purchases Products from
the Dealer a limited Warranty in accordance with the Company's
customer Warranty policies. This policy may, in certain
situations, include extended Warranties issued according to
Company policies.
THE COMPANY MAKES NO OTHER WARRANTIES WHATSOEVER, WHETHER
WRITTEN OR ORAL, EXPRESS OR IMPLIED, TO THE DEALER OR THE
DEALER'S CUSTOMERS. THIS WRITTEN LIMITED WARRANTY IS GIVEN
INSTEAD OF ALL OTHER WARRANTIES, INCLUDING, WITHOUT
LIMITATION, ANY ORAL OR WRITTEN WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE.
6.1.2 PRODUCT WARRANTY DOCUMENTS
When selling or leasing Products, the Dealer shall execute,
and require the customer to execute, the Warranty documents
that the Company requires according to its policy in effect at
the time.
6.2 DEALER WARRANTY
6.2.1 PRODUCT WARRANTY
The Dealer will extend to each of its customers its written
warranty, which shall be the same as the Company's written
limited Warranty. If the Dealer extends a Product warranty
that differs from the Company's limited Warranty, the Dealer
must inform the customer and the Company, in writing, that:
o the warranty is provided solely by the Dealer
o neither the Company nor other Company Dealers have
any responsibility for such warranty.
6.2.2 SERVICE WARRANTY
All Dealer service facilities shall provide a written
workmanship guarantee to all customers. If the Company pays
for service work, it will be entitled to the same workmanship
guarantees as all other customers of the Service Department.
6.2.3 INDEMNIFICATION
The Dealer agrees to indemnify the Company against any
liability, costs, judgments, or expenses, including attorney's
fees, relating to any customer claim with respect to
<PAGE>
26 DEALER SALES AND SERVICE AGREEMENT
any Dealer warranty that differs from the Company's written
limited Warranty. The Dealer's obligation to indemnify the
Company will survive the termination of this Agreement.
6.3 WARRANTY AND SPECIAL POLICY SERVICE
6.3.1 PROVIDING WARRANTY SERVICE
The prompt and efficient administration of Warranty is vital
to the reputation of Products, the Company, and the Dealers.
It is therefore the Dealer's obligation to provide Warranty
service on all Products in a timely fashion, regardless of
where the Product was purchased. All service must be provided
in accordance with the Warranty policies and procedures
announced by the Company from time to time. The Dealer will
also perform, in a timely fashion, any other service to the
Products the Company requests.
6.3.2 NO CHARGE FOR WARRANTY SERVICE
Each Product owner is entitled to the full benefit of any
applicable Company Warranty. The Dealer shall not charge a
customer for any service covered by Warranty.
If the Dealer seeks Warranty coverage for a service that was
not performed in accordance with applicable Warranty repair
policies, including without limitation repair time charges
that exceed the Company's Standard Repair Time, then the
Dealer agrees not to charge the customer for any amount denied
by the Company.
6.3.3 PURCHASING WARRANTY REPAIR PARTS
The Dealer is required to purchase from the Company any Parts
used in a Warranty repair for which reimbursement is sought
from the Company.
6.3.4 WARRANTY CLAIMS
The Company will compensate the Dealer for labor and approved
materials following receipt of a properly submitted Warranty
claim and completion of all other conditions for payment.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 27
ARTICLE 7: ALTERNATIVE DISPUTE RESOLUTION
7.1 SOLE AND EXCLUSIVE DISPUTE RESOLUTION PROCEDURES
The parties shall promptly seek, in good faith and in a spirit
of cooperation, a rapid and equitable solution to any dispute,
controversy, or claim between them arising out of, relating
to, or concerning this Agreement. Accordingly, the parties
agree to engage in direct and meaningful negotiations to
arrive at such solution.
Except as provided herein, no civil, regulatory, or
administrative action with respect to any dispute, claim, or
controversy arising out of or relating to this Agreement may
be commenced until the procedures specified in this Article 7
have been followed. These procedures shall be the sole and
exclusive procedures for the resolution of any such dispute.
7.2 NEGOTIATION
7.2.1 NEGOTIATING PARTIES
The parties shall attempt in good faith promptly to resolve,
by negotiation, any dispute arising out of or relating to this
Agreement. The negotiating parties shall be the Dealer
Principal and the Company's Director of Dealer Development.
7.2.2 NEGOTIATION PROCEDURE
The negotiating parties will observe the following procedure:
1. Each party shall give the other party written notice of
any dispute not resolved in the normal course of business.
2. Within 15 days after delivery of the notice, the receiving
party shall submit to the other a written response. Both
notice and response shall include:
o a statement of each party's position
o a summary of arguments supporting that position
o the name and title of any other person who will
accompany the Dealer Principal or the Company's
Director of Dealer Development during negotiations.
3. Within 30 days after delivery of the disputing party's
notice, the Dealer Principal and the Company's
Director of Dealer Development shall meet at a
mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to attempt
to resolve the dispute.
4. Each party will honor any reasonable request for
information from the other party.
All negotiations and information exchanged pursuant to this
Section are confidential and shall be treated as compromise
and settlement negotiations for purposes of applicable rules
of evidence.
<PAGE>
28 DEALER SALES AND SERVICE AGREEMENT
7.3 MEDIATION
7.3.1 MEDIATION PROCEDURE
If the dispute has not been resolved by Negotiation as set
forth in Section 7.2 above within 45 days of the disputing
party's notice, and the parties have failed to meet within 20
days, the matter shall be submitted to the American
Arbitration Association ("AAA") or its successor, for
mediation under its Commercial Rules.
7.3.2 SELECTING AN AAA MEDIATOR
Either party may commence mediation by providing to AAA and
the other party a written request for mediation, setting forth
the subject of the dispute and the relief requested. The
parties will cooperate with AAA and with one another in
selecting a mediator from the AAA panel of mediators who has
qualifications in franchise law, and in scheduling the
mediation proceedings.
7.3.3 PLACE OF MEDIATION
The mediation shall be held in a mutually convenient location
to all parties, including the mediator.
7.3.4 MEDIATION COSTS
The parties covenant that they will participate in the
mediation in good faith and will share equally in its costs.
7.3.5 CONFIDENTIALITY AND INADMISSIBILITY
All offers, promises, conduct, and statements, whether oral or
written, made in the course of the mediation by any of the
parties, their agents, employees, experts, and attorneys, and
by the mediator and any AAA employees, are confidential,
privileged, and inadmissible for any purpose, including
impeachment, in any litigation or other proceeding involving
the parties. Evidence that is otherwise admissible or
discoverable shall not be rendered inadmissible or
nondiscoverable as a result of its use in the mediation.
7.3.6 CIVIL ACTIONS
Either party may seek equitable relief prior to the mediation
to preserve the status quo pending the completion of that
process. Except for such an action to obtain equitable relief,
neither party may commence a civil action with respect to the
matters submitted to mediation until after the completion of
the initial mediation session, or 90 days after the date of
filing the written request for mediation, whichever occurs
first.
Mediation may continue after the commencement of a civil
action if the parties so desire. The provisions of this
Section may be enforced by any Court of competent
jurisdiction, and the party seeking enforcement shall be
entitled to any award of all costs, fees, and expenses,
including attorney's fees, to be paid by the party against
whom enforcement is ordered.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 29
7.4 ARBITRATION
7.4.1 UPON FAILURE OF MEDIATION
If Negotiation followed by mediation as set forth in this
Article fails to reach an equitable solution to the dispute
within 90 days after commencement, then such dispute,
controversy, or claim may be settled by final and binding
arbitration administered by the AAA, in accordance with its
applicable rules, by one arbitrator, if so chosen by the
Dealer. Once initiated, all parties shall cooperate with AAA
and each other to reach the final decision.
7.4.2 GOVERNING LAW
This arbitration shall be governed by the Federal Arbitration
Act, 9 U.S.C. ss.ss. 1-16 to the exclusion of state laws
inconsistent therewith. Judgment upon the award rendered by
the arbitrator may be entered by any court having jurisdiction
thereof.
7.4.3 PLACE OF ARBITRATION
The place of arbitration shall be Greensboro, NC.
7.4.4 DAMAGE AWARDS
The arbitrator is not empowered to award damages in excess of
compensatory damages. Each party hereby irrevocably waives any
right to recover such damages with respect to any dispute
resolved by arbitration.
7.4.5 STATUTE OF LIMITATIONS
The statute of limitations applicable to the commencement of a
lawsuit in the state where the Dealership is located shall
apply to the commencement of an arbitration hereunder, except
that no defenses shall be available based upon the passage of
time during any Negotiation or Mediation called for in this
Article.
7.4.6 ARBITRATION COSTS
Each party shall bear its own costs, and any arbitrator's fees
shall be divided equally between the parties.
7.5 CONTINUING PERFORMANCE OF OBLIGATIONS
Each party is required to continue to perform its obligations
under this Agreement pending final resolution of any dispute
arising out of or relating to this Agreement, unless to do so
would be impossible or impracticable under the circumstances.
7.6 RIGHT OF TERMINATION
The requirements of this Article 7 shall not be deemed a
waiver of any right of termination under this Agreement.
<PAGE>
30 DEALER SALES AND SERVICE AGREEMENT
ARTICLE 8: TERMINATION OF AGREEMENT
8.1 EXPIRATION OF AGREEMENT
Unless otherwise stated in the Term Addendum, the term of this
Agreement shall be 5 years.
This Section is subject to the provisions in Section 8.4.
Neither the Dealer nor the Company waive any of their
respective rights under Section 8.4.
8.2 TERMINATION BY MUTUAL CONSENT
The Dealer and the Company may, by mutual consent, terminate
this Agreement at any time.
8.3 TERMINATION BY THE DEALER
The Dealer may terminate this Agreement at any time and
provide written notice of termination to the Company at least
60 days prior to the termination date. During the notice
period, the Dealer will continue to perform all of its
obligations under this Agreement.
8.4 TERMINATION BY THE COMPANY FOR CAUSE
8.4.1 REASONS FOR TERMINATION
The Company may terminate this Agreement on reasonable advance
notice for any of the following reasons:
1. NONPAYMENT TO COMPANY
Dealer's failure to pay any sum due to the Company within
30 days following receipt of the Company's notice of
nonpayment.
2. THIRD-PARTY LIABILITY
Dealer's failure to pay any sum due to any financing
source or any other third party within 30 days after
demand for payment. The Company may terminate this
Agreement if the Dealer's failure to pay any sum due to
any third party results in the Company incurring liability
or potential liability to a third party.
3. LOSS OF WHOLESALE CREDIT LINE
Loss of an adequate wholesale credit line without
implementing a satisfactory substitute within 30 days. The
wholesale credit line allows the Dealer to purchase stock
and sold orders.
4. CHANGE IN CONTROLLING INDIVIDUAL
Change in, resignation, or removal of a Controlling
Individual, except as expressly authorized in this
Agreement.
5. TRANSFER OF AGREEMENT
Any attempted or actual sale, assignment, or transfer of
this Agreement, or of any of the Dealer's rights or duties
under this Agreement, except as expressly authorized in
this Agreement.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 31
6. ACQUISITION BY COMPETITOR
The acquisition by a Company competitor of an ownership
stake of any kind in the Dealership or in any other
directly related business operated or controlled by the
Controlling Individual(s). Such acquisition may include,
but is not limited to, purchase of stock in a publicly
owned dealership.
7. FELONY CONVICTION
The conviction of the Dealer or any Controlling Individual
of any felony or crime that involves moral turpitude or
may adversely affect the business or reputation of the
Dealer, the Company, or its Products.
8. MISREPRESENTATION
Misrepresentation by the Dealer of a material fact in
connection with:
o any application for appointment as a dealer for the
Company
o any financial statement or other document the
Dealer submits under this Agreement
o any claim for compensation or credit for warranty,
recall, or similar services, or any other claim for
payment the Dealer submits to the Company.
9. LEGAL NONCOMPLIANCE
Dealer's failure to comply with all laws or regulations
applicable to the sale or service of Products, including
all federal, state and municipal licensing and permit
requirements. The Company may terminate this Agreement if
the Dealer's failure to comply adversely affects its
ability to do business as contemplated in this Agreement.
10. INTERNAL DISPUTE
Any dispute among Controlling Individuals which, in the
opinion of the Company, is likely to adversely affect the
business reputation of the Dealer, the Company, or its
Products.
11. INSOLVENCY
Insolvency includes:
o the filing by the Dealer of any petition for relief
as a debtor under the Bankruptcy Code or any state
insolvency law
o assignment by the Dealer for the benefit of its
creditors
o the appointment of any trustee, receiver, or
similar fiduciary for the Dealer, for all or a
substantial part of the Dealer's assets.
12. DECEPTIVE BUSINESS PRACTICE
An adjudication or determination by any government agency
that the Dealer or a Controlling Individual has committed
a deceptive or unfair business practice which, in the
Company's opinion, is likely to adversely affect the
reputation of the Dealer, the Company, or its Products.
<PAGE>
32 DEALER SALES AND SERVICE AGREEMENT
13. SALE OF ASSETS
An actual or attempted sale by the Dealer of any of its
principal operating assets that adversely affects the
Dealer's ability to do business as contemplated in this
Agreement.
14. OPERATIONAL FAILURE
Failure of the Dealer to conduct regular sales, service,
and parts operations during customary business hours for 5
or more consecutive days, unless caused by force majeure.
The Dealer must obtain the prior written consent of the
Company before suspending operations.
15. TRADEMARK VIOLATION
Unauthorized Dealer use of Company Trademarks.
16. PORTFOLIO OF CRITERIA VIOLATION
Dealer violation of any material provision or requirement
of the Portfolio of Criteria.
17. FAILURE TO PERFORM MATERIAL OBLIGATION
Dealer's failure to perform any material obligation under
this Agreement.
18. DAMAGING ACT OR OMISSION
A significant act or omission by the Dealer which is
damaging to the Company or the network of dealers.
19. NONCOMPLIANCE WITH INFORMATION REQUEST
Dealer's refusal to:
o furnish, on a timely basis, sales, service, or
financial information and related supporting data
o permit the Company to examine or audit the Dealer's
accounts and records as provided in this Agreement.
20. NONPAYMENT OF TAXES
Dealer's failure to pay any tax obligation to any
government authority that would result in an adverse
action against the Dealer that materially affects its
performance under this Agreement.
8.4.2 FAILURE TO PERFORM OBLIGATIONS
The parties understand and agree that the duties and
obligations this Agreement imposes upon the Dealer are
preconditions to the continuation of the Dealer-Company
relationship. The Dealer's performance under any prior form of
Dealer Sales and Service Agreement with the Company may be
considered in evaluating performance under this Agreement.
In the event the Dealer fails to perform any material duty or
obligation imposed upon it by this Agreement, the Company may
terminate this Agreement upon reasonable notice.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 33
If the Company determines that the Dealer is failing to meet
its performance obligations, the Company will:
o notify the Dealer in writing of such failure
o upon request, promptly review with the Dealer any
aspect of such failure
o provide the Dealer with a reasonable period to
remedy all failures.
If the Dealer cannot or refuses to remedy all failures within
this time period, the Company may terminate this Agreement.
8.5 RIGHTS AND OBLIGATIONS UPON TERMINATION
Upon termination of this Agreement for any reason, the
following actions will occur:
8.5.1 TERMINATION OF REPRESENTATION
The Dealer's right to represent the Company and buy, sell, or
service Products will immediately terminate, although the
Company may elect to complete unfilled orders. The Dealer
shall have the right to sell or otherwise dispose of Products
in its possession that the Company does not purchase at the
time of termination, as described in Section 8.5.4.
8.5.2 UNFILLED ORDERS
The Company will have the option to either cancel or fill any
unfilled Product orders placed by the Dealer. The Company may
require the Dealer to pay for Products on a cash-on-delivery
or other basis if they are delivered after the earlier of
these two dates:
o the effective date of termination
o the date of notice of termination.
8.5.3 SUMS DUE
Sums the Dealer owes the Company will be due and payable not
later than the effective termination date, notwithstanding any
other prior agreement or course of dealing.
8.5.4 PRODUCT AND TOOL REPURCHASE
8.5.4.1 REPURCHASING TRUCKS
The Company will repurchase any new and unused Trucks in the
Dealer's inventory, subject to inspection and free of all
liens and encumbrances, which were purchased from the Company
not more than one year prior to their tender for repurchase.
Such repurchase will be for an amount equal to the price paid
by the Dealer, including freight, and shall be:
o net of any taxes and fees
o less preparation charges and discounts.
The Company's obligation under this Article is conditioned
upon the understanding that the Trucks tendered for
repurchase:
o have not been altered, damaged, or materially
changed since their original acquisition from the
Company.
o do not have specifications that are so unique or
unusual that, in the Company's reasonable judgment,
they are unsalable.
<PAGE>
34 DEALER SALES AND SERVICE AGREEMENT
8.5.4.2 REPURCHASING PARTS
The Company shall repurchase from the Dealer any new, unused,
and salable Parts and tools in the Dealer's inventory
originally purchased from the Company. This repurchase is
subject to Section 8.5.4.4, the terms of the Parts Operations
Manual, and other Company policies current at the effective
date of termination.
8.5.4.3 REPURCHASING TOOLS
The Company shall also repurchase from the Dealer any tooling
in accordance with Company policies and procedures established
from time to time.
8.5.4.4 PRODUCT REPURCHASE POLICIES
Such repurchase of Products by the Company shall be in
accordance with Company policies as announced from time to
time. The current policy includes, among other provisions:
o Amounts payable to the Dealer under this Section
shall first be credited against any Dealer liability
to the Company.
o No payment shall be made to the Dealer for
repurchased Products until there has been a full
accounting of the Dealer's liability to the Company,
including all contingent liabilities.
o The Dealer shall, as a condition to any repurchase,
fully cooperate with the Company in complying with
all applicable bulk transfer laws. Without limiting
the generality of the foregoing, the Dealer shall
execute all documents necessary for compliance with
this Section.
o The Company shall have no obligation to repurchase
any Product from the Dealer unless the Dealer:
-- is able to deliver title free and clear of all
liens and encumbrances
-- has fully complied with Sections 4.4 and 8.5.5.
8.5.5 REMOVING SIGNS
As a precondition to the Company's obligation to make any
payments under this Section, the Dealer shall immediately
remove the following items displaying Company Trademarks:
o signs
o structures
o advertising, marketing, or other promotional activity.
8.5.6 RETURNING COMPANY-SUPPLIED EQUIPMENT
Any communications equipment, computers, software, or tools
that the Company supplies to the Dealer remain the property of
the Company and must be returned upon termination of this
Agreement.
8.5.7 SETTLING ACCOUNTS
The Company shall use its best efforts to settle all accounts
payable to or by the Dealer within 60 days of the termination
date.
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 35
ARTICLE 9: DEALERSHIP TRANSFER AND SUCCESSION RIGHTS
9.1 NOTICE OF DEALERSHIP TRANSFER
The Dealer shall provide the Company with at least 60 days'
prior written notice before the effective date of a Dealership
Transfer. "Dealership Transfer" is defined as:
o any proposed sale or other transfer of all or any
part of the stock of the Dealership or any
significant part of the assets of the Dealership
o any change in Controlling Individual(s).
9.2 APPROVAL RIGHTS
The Company shall have sole approval rights over any proposed
Dealership Transfer. This approval shall not be unreasonably
withheld provided the Dealer gives the Company 60 days' prior
written notice of the proposed transfer. Prior written notice
shall include:
o a fully executed copy of any agreement(s) with the
proposed transferee
o a complete dealer application from the proposed
transferee.
In making its decision, the Company will use its normal
criteria for evaluating dealer applicants and prospective
Controlling Individuals.
9.3 RIGHT OF FIRST REFUSAL
9.3.1 TERMS
Even when a proposed transferee meets the criteria to become a
dealer for the Company, the Company shall have a right of
first refusal for any bona fide Dealership Transfer offer (the
"Offer"). This right of first refusal shall:
o begin when the Dealership or any Controlling
Individual receives an Offer it has accepted, pending
Company approval
o continue for 60 days following the Company's
receipt of written notice of the proposed Offer. Such
notice, to be valid, shall include all of the Offer's
terms and conditions.
Any subsequent modification of an Offer shall be deemed a new
Offer for the purposes of this Section.
9.3.2 EXERCISING THE RIGHT OF FIRST REFUSAL
The Company may exercise its right of first refusal by
providing the Dealership with its written election in the
manner provided in this Section. Failure of the Company to
send such notice before the end of the above-prescribed 60-day
period shall extinguish the right of first refusal.
9.3.3 PURCHASING ASSETS
If the Company exercises its right of first refusal, it shall
purchase the assets or other interests specified in the Offer
on the terms and conditions of the Offer or on such other
terms and conditions as the parties shall agree. In the event
the proposed closing date occurs before the Company's approval
period expires, the closing date shall be extended to a
reasonable date after expiration of the 60 days, or to another
date agreed to by the parties.
<PAGE>
36 DEALER SALES AND SERVICE AGREEMENT
9.3.4 TRANSFERRING THE RIGHT OF FIRST REFUSAL
The Company shall have the right to assign its right of first
refusal to another party, providing it guarantees payment of
the purchase price by the transferee to the Dealer or
Controlling Individual(s), as appropriate. Upon receipt of the
notice triggering the right of first refusal, the Company is
authorized to discuss a possible assignment, including all
terms of the Offer, with any prospective assignee.
9.3.5 IN CASE OF DEALER VIOLATION
The following actions, among others, shall be considered a
breach of this Agreement:
o Dealer's failure to provide the notice of the Offer
as set forth above
o Dealer's signing an agreement not subject to the
Company's rights under this Article
o Dealer's completion of any other transaction in
violation of this Article.
Breach of a material term of this Agreement shall, among other
things, entitle the Company to:
o terminate this Agreement
o refuse to acknowledge the transferee as an
authorized dealer or Controlling Individual of the
Company
o obtain equitable relief in any court of competent
jurisdiction voiding the improper transaction.
9.4 SUCCESSION RIGHTS
9.4.1 DESIGNATED SUCCESSOR
Each Controlling Individual may propose a successor to his or
her interest by delivering to the Company a completed
Application for Designated Successor. To qualify, the proposed
successor must be a full-time employee of the Dealership and
otherwise meet the criteria the Company generally applies to
dealer applicants.
The procedure is as follows:
1. The Company will promptly review the Application for
Designated Successor and respond to the Controlling
Individual with either its decision or a request for
additional information.
2. If the Application is approved, the applicant will become
a Designated Successor. The Company will execute the
appropriate Successor Addendum to this Agreement.
3. Unless a material change occurs following the execution of
the Successor Addendum, the Designated Successor will,
with his or her consent, be appointed to replace the
Controlling Individual in case of death or incapacitation.
9.4.2 ABSENCE OF A SUCCESSOR ADDENDUM
In the event of death or incapacity of a Controlling
Individual when there is no executed Successor Addendum or
qualified Designated Successor, the Company may terminate this
Agreement subject to the following condition:
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 37
The remaining Controlling Individuals, if any, and the
deceased or incapacitated Controlling Individual's heirs or
assignees shall have up to 6 months following the death or
incapacity to qualify as a replacement Controlling Individual
in accordance with this Article.
<PAGE>
38 DEALER SALES AND SERVICE AGREEMENT
ARTICLE 10: INDEMNIFICATION AND LIMITATION
10.1 INDEMNIFICATION
10.1.1 INDEMNIFICATION BY THE COMPANY
10.1.1.1 PRODUCT INDEMNIFICATION
Subject to Sections 10.1.1.2 and 10.1.1.3, in any lawsuit
naming the Dealer as a defendant and relating to any Product
sold by the Dealer, the Company shall:
o assume the defense of the Dealer
o hold harmless and indemnify the Dealer against any
-- costs
-- expenses, including attorney's fees
-- judgments for monetary damages, less any offset
recovered by the Dealer.
10.1.1.2 CONDITIONS FOR INDEMNIFICATION
The Company will indemnify the Dealer only if the lawsuit is
based upon:
o an alleged breach of the Company's written Product
Warranty
o bodily injury or property damage claimed to have
been caused solely by a defect in the design,
manufacture, or assembly of the Product. The defect
must have occurred before the Product left the
Company's control. This provision does not apply to a
defect that the Dealer should reasonably have
detected in a predelivery Product inspection.
10.1.1.3 COMPANY'S OBLIGATIONS
The Company's obligations under this Section shall be
conditioned upon the Dealer's:
o promptly notifying the Company, in writing, upon
learning of any actual or threatened Product
liability action
o cooperating fully in the defense of the action.
The Company will determine its obligation under this Section
of the Agreement by examining the relevant pleadings and
subsequently discovered information. If the subsequently
discovered information reveals that the Company is not
obligated, then the Company may terminate its defense efforts
and tender the case back to the Dealer.
The Company shall not be obligated if the alleged damage or
injury is, or is claimed to have been, caused by the Dealer's:
o alteration or modification of the Product
o misapplication or misspecification of the Product
o misrepresentation about the Product
o use of nonapproved Parts or Components.
10.1.2 INDEMNIFICATION BY THE DEALER
10.1.2.1 TYPE OF INDEMNIFICATION
Under the conditions listed below, the Dealer shall hold
harmless and indemnify the Company against any:
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 39
o costs
o expenses, including attorney's fees
o judgments
o other liabilities, of any nature or kind whatsoever,
whether actual or contingent.
10.1.2.2 CONDITIONS FOR INDEMNIFICATION
The Dealer will indemnify the Company under any of the
following conditions:
o failure to comply with any provision of this
Agreement
o negligence or malfeasance in the sale or servicing
of any Product
o breach of any contract with a third party
o fraud or misrepresentation of any material fact to
the Company or to any other party
o use of nonapproved Parts or Components.
The Company reserves the right to select counsel and control
any litigation arising out of these conditions.
10.2 LIMITATION OF REMEDIES AND DAMAGES
A limitation of remedies and damages will apply to any action,
suit, other proceeding, or dispute between the Company and the
Dealer arising out of or relating to:
o the performance of this Agreement
o the manufacturer-dealer relationship
o any warranty the Company or the Dealer gives to a
Product purchaser or lessee.
The limitation is as follows:
NEITHER THE COMPANY NOR THE DEALER MAY RECOVER CONSEQUENTIAL
DAMAGES, INCIDENTAL DAMAGES, OR OTHER INDIRECT OR SPECIAL
DAMAGES OR LOSSES SUCH AS, BUT NOT LIMITED TO, LOSS OF:
o PROFITS
o GOODWILL
o BUSINESS OPPORTUNITY
o USE OF PLANT OR EQUIPMENT
o EXECUTIVE OR EMPLOYEE TIME.
<PAGE>
40 DEALER SALES AND SERVICE AGREEMENT
ARTICLE 11: GENERAL PROVISIONS
11.1 MODIFYING THE AGREEMENT
This document and attachments, addenda, and the Portfolio of
Criteria represent the entire Agreement between the Company
and the Dealer, superseding all prior oral or written
agreements or other communications. Except to the extent that
this Agreement authorizes the Company to unilaterally effect
amendments, either directly or by announcing a new Company
policy, this Agreement may only be modified by a written
document signed by both the Dealer and the Company.
11.2 PROHIBITION ON ASSIGNMENTS
The Dealer may not assign, sell, delegate, transfer, or
encumber its rights or obligations under this Agreement
without the prior written consent of the Company.
11.3 OFFSETS
The Company may credit any sums it owes to the Dealer against
any sums due from the Dealer. In accordance with its policies,
the Company may charge interest at a rate permitted by law on
any overdue amounts the Dealer owes.
11.4 NO WAIVERS POLICY
If the Company or the Dealer fail, in a specific instance, to
insist on performance of an obligation by the other party,
such failure does not constitute a waiver of the right to
insist upon performance of that or any other obligation in the
future.
11.5 CONFIDENTIALITY
The Dealer shall keep secret and confidential all proprietary
information of the Company and shall not disclose such
information to anyone without the Company's express written
approval. Use of such proprietary information by the Dealer
for purposes other than the fulfillment of obligations imposed
by this Agreement is prohibited. Proprietary information is
defined as information that is either:
o not generally known outside the Company and its
dealers
o designated in writing as "Confidential" by the
Company.
11.6 ATTORNEY'S FEES
If either party institutes or maintains an action, suit,
claim, or other judicial or administrative proceeding to
enforce or defend any of the rights or obligations arising out
of or in any way related to this Agreement or its termination,
neither party shall be entitled to recover from the other
party its attorney's fees or other costs and expenses incurred
in such action, suit, proceeding, or any appeal.
11.7 GOVERNING LAW
This Agreement will be governed by and construed under the
laws of the state where the Dealer's principal place of
business is located.
11.8 COMPLIANCE WITH LOCAL LAW
If the law of any jurisdiction is applicable to the
performance of any obligation or the exercise of any right
under this Agreement, the obligation shall be performed and
the
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 41
right shall be exercised to the extent required by such law.
All of the provisions of this Agreement shall be construed in
light of this Section.
11.9 SEVERABILITY
Any provision that contravenes any law or regulation of any
relevant jurisdiction shall be deemed to be modified to
conform to such law or regulation and shall not cancel or
invalidate the remainder of such provision, and all other
terms and provisions of this Agreement shall remain in full
force and effect. Such modification shall only be effective as
long as it is required under applicable law.
11.10 NOTICE
11.10.1 METHODS OF COMMUNICATION
Any written notice or other communication required or
permitted by this Agreement shall be deemed given when:
o personally delivered
o sent by facsimile transmission (fax), as confirmed by
a printed transmission report
o sent by Federal Express or another nationally
recognized, expedited delivery service, and received
by the recipient.
11.10.2 ADDRESSES
Notices to the Dealer shall be sent to the address shown on
Page 1 of this Agreement.
Notices to the Company shall be sent to:
P.O. BOX OR STREET ADDRESS
P.O. Box 26115 7900 National Service Road
Greensboro, NC 27402-6115 Greensboro, NC 27409
Attention: Dealer Operations
FAX # 336-393-2392
Alternatively, notices may be sent to such other address as
the party receiving the communication may have specified in
writing.
<PAGE>
42 DEALER SALES AND SERVICE AGREEMENT
IN WITNESS WHEREOF, the Company and the Dealer have executed this Agreement
effective on the date shown on Page 1.
_______________________________________ VOLVO TRUCKS NORTH AMERICA, INC.
DEALER FIRM NAME
By: ________________________________ By: ________________________________
Title: ________________________________ Title:________________________________
If Dealer is a corporation, show State in which incorporated: __________________
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 43
ADDENDUM 1: PRODUCT ADDENDUM
TO
VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
The following Trucks are distributed by Volvo Trucks North
America, Inc. The Dealer may sell these Products only in
accordance with the provisions of this Agreement:
VN SERIES
XPEDITOR SERIES
AUTOCAR SERIES
AUTOHAULER SERIES
WG SERIES
<PAGE>
44 DEALER SALES AND SERVICE AGREEMENT
ADDENDUM 2: TERM ADDENDUM
TO
VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
In accordance with Section 8.1 of this Agreement, the term of
this Agreement between Volvo Trucks North America, Inc. (the
"Company") and
Dealer: ____________________________________
Street Address: ____________________________________
City, State, Zip: ____________________________________
is as follows:
Effective Date: ____________________________________
Expiration Date: ____________________________________
VOLVO TRUCKS NORTH AMERICA, INC.
By: _________________________
Title: _________________________
<PAGE>
DEALER SALES AND SERVICE AGREEMENT 45
ADDENDUM 3: AREA OF RESPONSIBILITY ADDENDUM
TO
VOLVO TRUCKS NORTH AMERICA, INC.
DEALER SALES AND SERVICE AGREEMENT
Dealer Code: ________________________________________
Dealer Name: ________________________________________
Street Address: ________________________________________
City, State, Zip: ________________________________________
Effective Date: ________________________________________
The Dealer shall have the following Area of Responsibility:
The State of: _________________ The State of: _____________
The County of: _________________ The County of: _____________
This Area of Responsibility Addendum shall remain in effect
until superseded by a new Area of Responsibility Addendum
delivered to the Dealer by the Company. This Area of
Responsibility Addendum cancels and supersedes any previous
Area of Responsibility Addendum.
VOLVO TRUCKS NORTH AMERICA, INC.
By: ______________________________
Title: ______________________________
