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Exhibit 10.2
DETROIT DIESEL
DISTRIBUTOR AGREEMENT
Additional Provisions Applicable To Distributor Agreement
Table of Contents
Article 1. Glossary of Terms
Affiliated Company
Any company in which Detroit Diesel Corporation has a direct or indirect ownership interest, as well as Freightliner LLC and its subsidiaries, or such other DaimlerChrysler company responsible for manufacturing or selling the 2007 engines referred to in Article 2.2 Agreement
The Distributor Agreement that is executed by Distributor and Company, the Additional Provisions, and all related Addenda.
Area of Responsibility
The area described in the Area of Responsibility Addendum to this Agreement as established by Company from time to time.
Authorized Dealer
A business entity with whom Distributor has executed a form of dealer agreement provided or approved by Company, pursuant to Article 5 of this Agreement.
Detroit Diesel DistributorA business entity which is a party to a Distributor Agreement with Company or an Affiliated Company for any or all of the Products described in the Products Addendum.
Detroit Diesel Remanufacturing Corporation (“DDR”)
A company or facility which has been authorized by Company to remanufacture and market reliabilt Parts.
Direct Dealer
A business entity with whom Company or Affiliated Company has directly executed a dealer agreement for any or all of the Products and/or Parts.
Distributorship Location(s)
The location(s) approved by Company for the conduct of Distributorship Operations as identified on the Distributorship Locations and Premises Addendum.
Distributorship Operations
The functions, responsibilities, operations, and activities that are contemplated by this Agreement, including any optional activities undertaken by Distributor in connection with Products and Parts.
Distributorship Premises
The facilities approved by Company at the Distributorship Location(s) for the conduct of the Distributorship Operations as identified on the Distributorship Locations and Premises Addendum.
MarksThe various trademarks, service marks, names and designs owned by or licensed to Company, or an Affiliated Company, and used in connection with Products and Parts.
Parts
New parts or reliabilt remanufactured parts which are marketed by or for Company for use in connection with Products and which are listed in current parts catalogs, price schedules and supplements thereto furnished by Company and DDR.
Products
The new engines that are described in the Products Addendum, plus reliabilt Products and all past products marketed under the same trade name.
Principal Manager(s)
The individual manager(s) of Distributor identified in the Management and Ownership Addendum approved by Company upon whose personal service Company relies in entering into this Agreement.
Principal Owner(s)
Owner(s) of Distributor upon whose stated record and beneficial ownership interests in Distributor, as set forth in the Management and Ownership Addendum, Company relies in entering into this Agreement.
reliabilt Products and reliabilt Parts
Used Products and Parts which have been remanufactured under license agreements executed by Company and which are marketed by Company, DDR or Detroit Diesel Distributors under the “ reliabilt ” trademark.
Service Policy ManualThe manual of that name furnished by Company to Distributor, as modified by change notices, letters or revision sheets.
Terms of Sale Bulletins
Bulletins furnished by Company to Distributor setting forth the terms of sale and other provisions that apply to sales of Products and Parts by Company to Distributors as issued from time to time or as modified by any change notices, letters or revision sheets.
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Article 2. Company Rights and Responsibilities
2.1 General
Company is responsible for determining which products it will market and the methods it will use to sell those products to Detroit Diesel Distributors or other customers.
Company will furnish Distributor with a Products Addendum identifying Products and Parts available for purchase by Distributor. During the term of this Agreement, the applicable Products Addendum, whether original or a superceding version, will include all current medium and heavy-duty Detroit Diesel or MBE engines for on-highway applications which are manufactured by or for Company and offered for sale in North America by Company or Affiliated Company and will include Parts for such engines, as well as engines previously manufactured by or for Company for which Parts are currently offered for sale. In addition, the Products Addendum shall be amended to add the engines currently in development to meet the 2007 on-highway USEPA emissions standards in models of 9-litre, 12-litre and 14.8-litre displacements (or production derivatives of similar displacement) when such engines are offered for sale by Company or Affiliated Company either as loose engines or installed in on-highway vehicles sold in North America.
Company may determine additional Products and/or Parts it will sell to Distributor and will identify those additional Products and/or Parts in the Products Addendum. Any such additional Products and/or Parts may be added to or deleted from the Products Addendum by Company by furnishing Distributor with a new Products Addendum.
2.3 Distributors, Branches and Authorized De alers
2.3.1 Number and Location
Company is responsible for determining the number and location of Detroit Diesel Distributors, branches and Authorized Dealers. Distributor will not establish a branch or other location for the conduct of Distributorship Operations or appoint an Authorized Dealer without the prior written approval of Company.
2.3.2 Character of Changes
Company reserves the right to (a) reassign a portion of the Area of Responsibility to another Detroit Diesel Distributor; and/or (b) establish an additional Detroit Diesel Distributor in the Area of Responsibility.
If Company believes any such changes are appropriate, Company and Distributor shall endeavor to reach agreement reflecting the changes to be effected, the manner in which they will be accomplished, and the time period for completing such changes.
If Company determines in its sole discretion that agreement satisfactory to Company cannot be reached with Distributor, Company shall notify Distributor in writing of the changes that it will put into effect and the timing of such changes.
As a result of any such changes effected by Company, Company shall furnish to Distributor a new Area of Responsibility Addendum, as required.
If the portion of the Area of Responsibility deleted from Distributors previous Area of Responsibility contains any approved Distributor Location(s) then Company will repurchase Products and Parts and signs in accordance with Article 8.2 and will provide premises assistance in accordance with Article 8.3 of this Agreement.
2.4.1 Orders
Distributor shall submit orders for Products and Parts in accordance with ordering procedures furnished Distributor by Company. Distributor’s orders are not binding until accepted by Company and may be canceled by Distributor until that time. After Company’s acceptance of an order, Distributor may not modify or cancel such order without the written consent of Company, except in the case of a price increase as provided in this Article 2.4. Company may establish a reasonable cancellation charge to be paid by Distributor.
If the productive capacity of Company’s manufacturing sources are insufficient at any time to meet the demand for Products or Parts, Company will endeavor to distribute Products and Parts in a fair and equitable manner.
Company will not be liable for any delay or failure to deliver Products and Parts where caused, in whole or in part, by:
(a) any strike or labor trouble affecting operations of Company, Affiliated Companies or their suppliers;
(b) any shortage or curtailment of utilities, materials, transportation or labor or any shortage or damage to the facilities of Company, Affiliated Companies or their suppliers;
(c) any act of government, including the enactment of laws or regulations or issuance of judicial or administrative injunctions or orders;
(d) any curtailment or discontinuance of production by Company, Affiliated Companies or their suppliers;
(e) any cause beyond the control of Company, Affiliated Companies or their suppliers.
2.4.2 Prices and Terms of Sale
Prices, charges, discounts, allowances and other terms of sale applicable to purchases of Products and Parts will be those established by Company in pricing publications and the Terms of Sale Bulletins in effect at the time of shipment to Distributor. Company has the right to change
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the prices, charges, discounts, allowances and other terms of sale for Products and Parts at any time.
Company will give written notice to Distributor of any price increase before shipping any Products to which such increase applies. Distributor may cancel or modify the affected orders for Products by delivering a written notice of cancellation to Company within 20 days of receipt of Company’s announcement of such price increase.
Company agrees that it will sell Products and/or Parts to Distributor at prices or terms of sale no less favorable than those offered to any Authorized Dealer or Direct Dealer within Distributor’s Area of Responsibility without the express prior approval of Distributor.
2.4.3 Shipments
Unless otherwise agreed, Company shall arrange for shipment services on Distributor’s behalf and account. Products and Parts will be shipped to Distributorship Locations or other locations authorized by Company. Company shall not be liable for any delays, losses or damages in shipment.
If any Products or Parts ordered by Distributor are diverted or returned because of Distributor’s delay or failure to accept delivery, Distributor will pay any additional costs incurred by Company as a result of such diversion or return.
2.4.4 Warranties on Products or Parts
Company warrants new Products and Parts as set forth in documents containing those warranties that Company provides with such Products and as set forth in the Service Policy Manual.
EXCEPT AS OTHERWISE PROVIDED BY LAW, THE WRITTEN SELLER’S WARRANTIES ARE THE ONLY WARRANTIES APPLICABLE TO NEW PRODUCTS AND PARTS. WITH RESPECT TO DISTRIBUTOR, SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES OR LIABILITIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY LIABILITY FOR COMMERCIAL LOSSES BASED UPON NEGLIGENCE OR MANUFACTURER’S STRICT LIABILITY. EXCEPT AS MAY BE PROVIDED UNDER AN ESTABLISHED SELLER’S PROGRAM OR PROCEDURE, COMPANY NEITHER ASSUMES NOR AUTHORIZES ANYONE TO ASSUME FOR IT ANY OTHER OBLIGATION OR LIABILITY IN CONNECTION WITH PRODUCTS AND PARTS, AND COMPANY’S MAXIMUM LIABILITY IS TO REPAIR OR REPLACE THE PRODUCT OR PART.
2.4.5 Change in or Discontinuance of Products or Parts
Company may discontinue any Products or Parts or lines of Products or Parts or change the design or specifications of any Products or Parts at any time without notice and without incurring any obligation to Distributor.
Company may install any equipment or accessories or incorporate any design features required by law on any Products or Parts ordered by Distributor, whether or not such items or features are included in Distributor’s order.
2.5 Assistance to Distributors
2.5.1 Counseling
Company shall counsel Distributor on sales, service and other related matters.
2.5.2 Manuals, Bulletins and Materials
Company shall provide Distributor with manuals, bulletins and other materials considered appropriate by Company and will inform Distributor of any applicable charges.
2.5.3 Advertising and Sales Promotion
Company shall make advertising and sales promotion programs and materials available to Distributor as considered appropriate by Company and will inform Distributor of any applicable charges.
2.5.4 Training
Company shall provide training programs and materials considered appropriate by Company to assist Distributor in fulfilling its responsibilities to train personnel of Distributor, Authorized Dealer(s) and Product users. Company shall inform Distributor of any applicable charges. Company shall not be responsible for any compensation payable to personnel of Distributor, Authorized Dealer(s) or Product users while attending such courses or for related travel and living expenses.
2.5.5 Engineering
Company may provide Product application guidelines and/or consulting engineering service to Distributor. Distributor’s responsibility for proper installation and application shall remain the same as provided in Article 3.3.
Company acknowledges that some third parties who acquire Products or Parts from Distributor may install or apply such Products or Parts independent of Distributor and that, in such instances, Distributor shall have no application or installation responsibility to such third parties or the owner/user of such Products and Parts.
2.6 Payment and Compensation for Performance of Specified Responsibilities
2.6.1 Payment for Performance of Service Responsibilities
Company will pay Distributor for the replacement of Parts or will provide Distributor with the Parts required and pay for labor in accordance with the applicable provisions of
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the Service Policy Manual for all warranty repairs, special policy adjustments and campaign inspections or corrections performed directly by Distributor in its conduct of service operations.
Company will pay Distributor in accordance with the Service Policy Manual for approved claims submitted by Distributor on behalf of Authorized Dealers in connection with their performance of warranty repairs, special policy adjustments and campaign inspections and corrections for Products and Parts for which such Authorized Dealers have service responsibilities.
2.6.2 Compensation for Performance of Specified Responsibilities
Company will compensate Distributor, as provided in appropriate manuals, bulletins and letters furnished Distributor by Company, for the performance of specified services that may include indirect sales activities, sales promotion, dealer development, dealer technical support, dealer parts support and distribution functions.
Company and Distributor acknowledge that Company has used such payments as a mechanism for compensating Distributor for specified services performed to support Authorized Dealers and direct Dealers. Distributor acknowledges that Company reserves the right to change the method and amount of compensation. Company agrees to advise Distributor of the details of any such change at least ninety (90) days in advance of implementation of any such change.
Article 3. Distributor Sales Responsibilities
3.1 Retail Sales, Wholesale Sales and Sales Promotion Activities
Distributor shall aggressively and effectively perform the following sales activities in the Area of Responsibility:
(a) retail sales of Products and Parts to users and prospective users.
(b) wholesale sales of Products and Parts to original equipment manufacturers (OEM), and Authorized Dealers.
(c) promote purchases by dealers, users and potential users of OEM products equipped with Products.
Distributor acknowledges that Company has reserved the right to sell Products and Parts directly to any customers, including but not limited to, OEM’s. However, nothing in this Agreement shall be construed to restrict the right of Distributor to sell any Product or Parts to any customers within the Area of Responsibility, including OEM’s.
3.2 Sales Efforts
In furtherance of its responsibilities, Distributor shall:
(a) employ a force of trained management and sales personnel considered adequate by Company;
(b) build and maintain customer confidence and satisfaction;
(c) establish and maintain regular contacts with prospective purchasers of Products and Parts and equipment using Products and with others who influence purchases;
(d) employ effective ethical sales, advertising and promotion programs and activities; and
(e) actively participate in industry and trade associations and support programs for exhibiting and demonstrating Products.
3.3 Application and Installation
Distributor shall be responsible for proper application and installation, and for supervision of proper application and installation by a third party where appropriate, of all Products sold by Distributor.
Company acknowledges that some third parties who acquire Products or Parts from Distributor may install or apply such Products or Parts independent of Distributor and that, in such instances, Distributor shall have no application or installation responsibility to such third parties or the owner/user of such Products and Parts.
However, Company assumes no responsibility for the proper application or installation of any Products or Parts sold by Distributor.
Distributor shall provide Company all information including End Product Questionnaires (EPQ) requested concerning applications, modifications and installations of Products. Failures resulting from improper application, modification or installation are not the responsibility of Company. Distributor will reimburse Company for any expenses or other liabilities incurred by Company as a result of Distributor’s improper application, modification or installation of Products.
3.4 Sales Performance Evaluation
Distributor’s sales performance will be evaluated by Company based upon Distributor’s sales achievement as compared to sales objectives established by Company for Distributor and to the sales achievement of other Detroit Diesel Distributors.
In addition, Company will consider other relevant factors including, but not limited to:
(a) the trend of Distributor’s sales performance;
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(b) the manner in which Distributor has conducted sales operations, including advertising, sales promotion and treatment of customers;
(c) sales resulting from Distributor’s efforts to support Company sales to OEM’s;
(d) the manner in which Distributor has submitted orders for Products;
(e) availability of Products to Distributor; and
(f) significant local conditions that may have affected Distributor’s performance.
3.5 Distribution and Sale of Products and Pa rts
In the distribution or sale of new, rebuilt or remanufactured engines, or new, rebuilt or remanufactured components or new service parts for engines or in the servicing of engines, Distributor shall exclusively promote, sell, use and service Products and Parts in Distributorship Premises, unless otherwise agreed by Company.
Distributor may sell or promote at Distributor Locations products and parts which do not compete with Products and/or Parts marketed by Company if Distributor provides notice to Company of its intention to do so reasonably in advance of the commencement of such activity and if Distributor is otherwise in compliance with its responsibilities under this Agreement. This provision does not restrict Distributor from conducting any business at any facility other than Distributor Locations.
After January 1, 2006, Distributor may request that Company waive the limitations of Article 3.5 and sell or promote competitive products and parts. Company will decide in its sole discretion whether to consent to the waiver. If Company does consent and Article 3.5 is waived, Distributor will no longer be entitled to the assistance on distributorship premises set forth in Article 8.3, which provisions will be ineffective.
In the event Distributor is authorized by any Affiliated Company to supply parts and service support for products sold by Affiliated Company, Company will not unreasonably withhold its approval of Distributor activities relating to the products and components of Affiliated Company.
3.6 Sales Outside Area of Responsibility
3.6.1 Service Commission for Sales Outside Area of Responsibility
Distributor agrees that on sales of any Products by Distributor, directly to customers outside the Area of Responsibility, or directly or indirectly to customers whose initial substantial use of the Products will be outside the Area of Responsibility including, but not limited to, sales outside the United States of America, it will pay or cause to be paid to the Detroit Diesel Distributor in whose area of responsibility the Products are sold, or where their initial substantial use occurs, a service com-mission as defined by and in accordance with applicable provisions of the Service Policy Manual.
Distributor agrees to accept charges against its accounts with Company and other Detroit Diesel Distributors in implementing this Article 3.6. Distributor acknowledges that in actions taken by Company in implementing this Article 3.6 and remitting a service commission to the Detroit Diesel Distributor in whose area of responsibility a sale of a Product by a Detroit Diesel Distributor has taken place, or where the initial substantial use of the Product sold by Detroit Diesel Distributor occurs, Company shall act in sole capacity of an accommodation transferor, but without liability to either party, except for its gross negligence, or assurance that such service commission, disputed or undisputed, shall be paid.
Company shall effect such payment on behalf of Distributor by charging Distributor’s account with Company with the amount of the service commission and crediting the other Detroit Diesel Distributor’s account with Company with the amount so charged.
3.6.2 Excluded Sales
In view of the active and effective efforts required of a Detroit Diesel Distributor to continuously promote and sell Products, and such sale, or the initial substantial use, of a Product may occur outside the selling Detroit Diesel Distributor’s area of responsibility, a service commission on the sale of the Product shall not be paid if (i) the purchaser has a bona fide purchasing office, as solely determined by Company, in the selling Detroit Diesel Distributor’s area of responsibility or (ii) if the Product is installed in a vehicle or end-product owned or operated by the customer and located in the selling Detroit Diesel Distributor’s area of responsibility at time of installation, or (iii) the Product is a qualified product as listed on the selling Detroit Diesel Distributor’s Qualified Products and OEM’s Addendum, or (iv) the customer is a qualified OEM as listed on the selling Detroit Diesel Distributor’s Qualified Products and OEM’s Addendum or Company has specifically exempted a sales transaction from this provision prior to the execution of the sale.
In addition, a service commission shall not be paid (i) on sales of Products to the governments or certain agencies of the United States of America or the Dominion of Canada or to certain governmental units thereof, as Company, from time to time, will delineate, for use by such government or agencies, or (ii) if the sale is to a customer who is an authorized Detroit Diesel Distributor and the selling Detroit Diesel Distributor is not in default under the distributor agreement.
3.6.3 Resolution of Disputes
Distributor agrees to accept and abide by Company’s decision in disputes arising with respect to service commissions payable pursuant to the section.
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Article 4. Distributor Service Responsibilities
Distributor agrees to perform directly and through Authorized Dealers, the service obligations of Company, Distributor and Authorized Dealers on all Products in the Area of Responsibility, regardless of origin of purchase. This work will be performed promptly, in a good and workmanlike manner and in accordance with the Service Policy Manual and other publications provided by Company.
Except as authorized by Company, neither Distributor nor any Authorized Dealer shall charge a customer for parts or service for which Distributor or Authorized Dealer will be paid by Company or another Detroit Diesel Distributor.
In furtherance of its service responsibilities, Distributor shall, at each Distributorship Location:
(a) employ a force of trained management and service technicians who are accredited and trained on all current Products for which Distributor is authorized by this Agreement to service;
(b) establish and maintain service facilities satisfactory in appearance and size for the conduct of service operations;
(c) maintain current applicable service information;
(d) provide and maintain tools and equipment considered necessary by Company, including at least those listed in the Special Service Tool and Equipment Lists, Distributor Training Standards Manual and other applicable bulletins for all Products for which Distributor is authorized by this Agreement to service; and
(e) provide and maintain properly equipped service vehicles or other means of providing satisfactory customer service.
4.2 Warranties
Distributor shall deliver, and shall require Authorized Dealers to deliver, a copy of the warranty applicable to Products or Parts to each customer purchasing a Product or Part and shall explain the provisions to any customer requesting such explanation. Such warranty shall be delivered at the time of sale, but not later than the time of delivery, of the Product or Part to the customer.
Distributor shall explain and cause its Authorized Dealers to explain to customers the proper operation instructions and requirements for Products.
4.3 Warranty, Special Policy and Campaign Re pairs
Distributor shall perform and shall cause its Authorized Dealers to perform, in accordance with the Service Policy Manual, (a) warranty repairs on all Products and Parts qualifying for such repairs; (b) special policy adjustments approved by Company; and (c) campaign inspections and corrections that are directed by Company on Products and Parts.
In performing the above work, Distributor will, unless otherwise authorized in writing by Company, use only Parts. Distributor shall provide and shall cause its Authorized Dealers to provide to each customer a copy of the repair order for the above work.
4.4 Representations as to Parts
Distributor shall not, and shall assure that Authorized Dealers shall not, represent parts not marketed by Company as Parts marketed by Company.
4.5 Service Performance Evaluation
Distributor’s service performance will be evaluated by Company based upon, but not limited to, the following factors:
(a) customer confidence and satisfaction;
(b) the manner and efficiency in which Distributor conducts service operations;
(c) the adequacy of facilities, tools and equipment, and personnel;
(d) the effectiveness of its Authorized Dealers;
(e) accuracy of claims and processing of Applications for Adjustment (“AFA”) or other payments to dealers and customers; and
(f) availability of Parts for service operations.
Article 5. Authorized Dealers
5.1 Appointments
Distributor and Company recognize that for Distributor to properly fulfill its service, sales and promotional responsibilities relating to Products and Parts, it may be necessary for Distributor to appoint qualified dealers at locations selected by Company or proposed by Distributor in the Area of Responsibility. Each such dealer may be required to be owned and operated independently of Distributor and its employees and owners and each appointment is subject to approval by Company.
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When each such dealer has executed with Distributor a form of dealer agreement provided or approved by Company, Company will confirm its approval in writing to Distributor.
If Distributor fails to appoint a qualified dealer approved by Company or at a location requested by Company within ninety (90) days after receipt of such written request, Company or Affiliated Company may appoint a dealer directly as a Direct Dealer. Unless otherwise agreed to by Distributor, Distributor will not be responsible for the training, support and development of any Direct Dealer appointed in Distributor’s Area of Responsibility.
5.3 Administration of Authorized Dealers
Distributor shall provide an adequate number of capable employees to administer and advise Authorized Dealers in all phases of their operations.
Distributor shall assure that the qualifications of each Authorized Dealer are maintained to adequately support customer needs for Products designated in the dealer agreement and for Parts.
Distributor is responsible for training Authorized Dealer personnel in procedures and techniques applicable to the sales and service of such designated Products and Parts.
Company personnel have the right to contact Authorized Dealers directly to determine the manner in which they perform their responsibilities and to provide assistance as appropriate.
Requirements
6.1 Distributorship Locations and Premises
6.1.1 Establishment of Distributorship Locations and Premises
Distributor will establish and maintain Distributorship Premises at the Distributorship Location(s) approved by Company. Such Distributor Premises shall be acceptable to Company in appearance, functionality, trademarks, cleanliness, and neatness, and adequate in size and properly equipped for the conduct of Distributorship Operations.
Further, Distributor shall not, without prior written approval of Company, conduct, or allow any other person or entity to conduct, any activities in conflict with Distributor Operations at any Distributorship Location or within any building located on the property leased or owned by Distributor.
6.1.2 Establishment of Distributor Branches
Distributor will, upon written request by Company, establish Distributorship Premises at a branch location(s) selected by Company for the conduct of Distributorship Operations. Each such branch shall be operated by Distributor. The appointment by Distributor of an Authorized Dealer will not fulfill Distributor’s responsibility to establish a branch location requested by Company.
If Distributor fails to establish a branch within six (6) months after receipt of a written request from Company, Company may change the Area of Responsibility, establish an additional Detroit Diesel Distributor or directly appoint a dealer at such location.
6.1.3 Execution of Distributorship Locations and Premises Addendum
The Distributorship Locations and Distributorship Premises, including branch locations established by Distributor at the request of Company, and the purposes for which such Premises will be used, will be reflected in a Distributorship Locations and Premises Addendum executed by Distributor and Company. Distributor, or any of its owners, will not conduct any of the Distributorship Operations at any location that is not reflected in such Addendum.
6.1.4 Changes Proposed
If Distributor desires to establish, change or eliminate any Distributorship Premises or change the use of any Distributorship Premises, it shall advise Company in writing and obtain prior written approval of any such change. Any such change approved by Company shall be reflected, when implemented, in a new and superseding Distributorship Locations and Premises Addendum.
Company and Distributor acknowledge that Company and Affiliated Companies are contemplating making changes in the manner in which Parts are distributed an in the appointment and support of dealers. Changes which may occur that could affect Distributor operations include pricing changes, functional compensation and specified service or support functions. If a Distributor in the exercise of reasonable business judgment determines that such a change causes a financial deterioration of a Distributor Location and Distributor requests permission of Company to close or downsize the affected Distributor Location, Company will not unreasonably withhold such approval.
If Distributor does not obtain such prior written approval, Company may terminate this Agreement. In any event, Company may exercise its right under Article 2.3.2 to modify the Area of Responsibility or appoint an additional Distributor.
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6.1.5 Business Hours
Distributor shall maintain its Distributorship Premises open to serve customers during all days and hours which are customary in the trade and lawful and necessary to properly serve customers in the Area of Responsibility. Distributor shall provide emergency service in the Area of Responsibility on a seven (7) day per week, twenty four (24) hour per day basis.
6.1.6 Signs
Distributor shall install and maintain, at its own expense, only signs approved by Company at the Distributorship Premises and assure that the Authorized Dealers utilize signs approved by Company.
6.1.7 Distributor Name
Distributor’s business name must be approved in writing by Company.
6.2 Capital
Distributor shall provide working and equity capital as mutually agreed upon by Company and Distributor to adequately fulfill Distributor’s responsibilities under this Agreement.
6.3 Personnel
Distributor shall provide competent management and a sufficient staff of personnel who are adequately trained to perform the Distributor’s responsibilities under this Agreement.
6.4 Inventory
Distributor shall maintain an inventory of Products and Parts adequate to meet the needs of Authorized Dealers and other customers located in the Area of Responsibility.
Distributor will assure that Authorized Dealers maintain an inventory of Parts considered adequate by Distributor to meet the needs of Dealers’ customers.
Distributor and Company will provide each other with such information and assistance as reasonably requested to facilitate compliance with government laws, regulations and orders relating to Products and Parts. Distributor shall be responsible for complying with applicable laws, regulations and orders.
Company and its suppliers shall not be required to change their materials, designs, or production processes in any way to meet such regulations, but shall endeavor to achieve Product and Part conformance where, in their sole judgment, such conformance is practical and is economically justified.
6.6 Training
In order to maintain and develop qualified personnel, Distributor shall send appropriate personnel, at its own expense, to conferences and training programs provided by Company.
Distributor shall establish and maintain training programs recommended by Company devoted to training personnel of Distributor, Authorized Dealer(s) and Product users.
6.7 Accounting System, Records, Reports and Audits
Distributor agrees to maintain accounting systems in a manner approved by Company. Distributor further agrees to furnish to Company complete and accurate financial statements on a periodic basis as required by Company in a form satisfactory to Company, including upon request, an annual audited financial statement for Distributorship, and if applicable, subsidiary or parent companies.
Distributor shall maintain complete and accurate sales, service, parts, training and other appropriate records designated by Company in a form satisfactory to Company and shall cause its Authorized Dealers to maintain similar records. Distributor agrees to maintain such records and to cause its Authorized Dealers to maintain similar records for a minimum period of two (2) years in a form satisfactory to Company.
Distributor authorizes, and will cause each Authorized Dealer to permit, any designated representative of Company to examine, audit, reproduce and take copies of any Distributor or Authorized Dealer accounts and records required under this Agreement or under the authorized dealer agreement provided or approved by Company.
Company will not furnish any data submitted by Distributor to any third party unless authorized by Distributor or required by law, or pertinent to judicial or government administrative proceedings. Further, Company will not furnish to any Affiliated Company, without the express prior approval of Distributor, data submitted by Distributor other than data related specifically to Products and Parts.
Distributor agrees to furnish, upon reasonable notice during regular business hours, when requested by Company, accurate information covering Distributor’s sales of Products and Parts and reliable forecasts of Distributor’s requirements for Products and Parts.
6.8 Distributor Business Plans
Using the outline furnished by Company, Distributor shall submit to Company a distributor business plan covering the items specified in such outline. A distributor business plan shall be prepared and submitted for each calendar year or for such other period as may be specified by
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Company. Company will advise Distributor in writing of any recommended changes in such plan.
Distributor’s performance will be evaluated by Company on the basis of how effectively it has met the goals and objectives set forth in the distributor business plan, including any recommendations made thereon in writing by Company. Additionally, consideration will be given to the manner in which Distributor has fulfilled its sales, service and premises responsibilities. Such evaluation will also consider performance of Authorized Dealers.
6.9 Trademarks and Service Marks
6.9.1 Ownership
Distributor acknowledges and will cause each Authorized Dealer to acknowledge that Company, or an Affiliated Company is the exclusive owner or the authorized licensee of the various trademarks, service marks, names and designs used in connection with Products and Parts (herein called Marks).
6.9.2 Display and Use of Marks
Distributor is granted and Distributor will grant each Authorized Dealer the non-exclusive right to display such Marks in the conduct of Distributorship Operations by Distributor and sales and service operations relating to Products and Parts by Authorized Dealers. Distributor will discontinue and will cause an Authorized Dealer to discontinue the display or use of any such mark or change the manner in which any such Mark is displayed or used when requested to do so by Company. Distributor will not use or permit Authorized Dealers to use any Mark as part of the name under which the business of Distributor or an Authorized Dealer, or any company affiliated with Distributor or an Authorized Dealer, is conducted without the prior written approval of Company. Any such approval by Company shall be automatically rescinded upon the expiration or termination of this Agreement.
During the term of this Agreement, Distributor will not use and will not permit an Authorized Dealer to use any mark or name so resembling such Marks as to be likely to confuse or deceive.
Distributor shall not remove or alter Marks or other identifications used on or in connection with any Product or add any Marks or other identification without Company’s prior approval.
6.9.3 Discontinuance of Use Upon Termination
Upon the expiration or termination of this Agreement, Distributor will immediately discontin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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