Document:

Exhibit 4.2.2

EXHIBIT 4.2.2

AMENDED AND RESTATED SUPPLEMENTAL INDENTURE

AMENDED AND RESTATED SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of February
19, 2010, among PAG NORTHERN CALIFORNIA MANAGEMENT, INC., PAG SANTA ANA AVW, INC., PAG WEST
ACQUISITION 1, INC. and PAG ACQUISITION 2, INC. (each a “Guaranteeing Subsidiary”), subsidiaries
of Penske Automotive Group, Inc. (or its permitted successor), a Delaware corporation (the
“Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and
Bank of New York Trust Company, N.A., successor to J.P. Morgan Trust Company, National Association,
as trustee under the Indenture referred to below (the “Trustee”).

WITNESSETH

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of December 7, 2006 providing for the issuance of 7.750% Senior Subordinated
Notes due 2016 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall
execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing
Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the
Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide a Guarantee on the
terms and subject to the conditions set forth in the Guarantee and in the Indenture including but
not limited to Article 13 thereof, including the subordination provisions thereof.

4. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guaranteeing Subsidiary(ies), as such, shall have any
liability for any obligations of the Company or any Guaranteeing Subsidiary(ies) under the Notes,
any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the Notes or any Guarantee
by accepting a Note waives
and releases all such liability. The waiver and release are part of the consideration for issuance
of the Notes and this Guarantee.

 

 

 

5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same agreement.

7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect
the construction hereof.

8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed
and attested, all as of the date first above written.

Dated as of February 19, 2010

SIGNATURES

	 	 	 	 	 
	 	PENSKE AUTOMOTIVE GROUP, INC.

 	 
	 	By:  	/s/ Robert O’Shaughnessy
 	 
	 	 	Name:  	Robert O’Shaughnessy 	 
	 	 	Title:  	Executive Vice President — Finance and
CFO 	 
	 
	 	GUARANTORS:

UAG MINNEAPOLIS B1, LLC

JS IMPORTS, LLC

PALM AUTO PLAZA, LLC

WEST PALM NISSAN, LLC

UAG BOSTON FMM, LLC

UAG BOSTON FMB, LLC

UAG BOSTON FML, LLC

UAG BOSTON FMR, LLC

UAG BOSTON BENTLEY, LLC

WEST PALM S1, LLC

 	 
	 	By:  	/s/ Robert O’Shaughnessy
 	 
	 	 	Name:  	Robert O’Shaughnessy 	 
	 	 	Title:  	Assistant Treasurer 	 

 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SCOTTSDALE 101 MANAGEMENT, LLC

SCOTTSDALE PAINT & BODY, LLC

UAG ACQUISITION 1, LLC

UAG ACQUISITION 2, LLC

UAG ACQUISITION 3, LLC

UAG ACQUISITION 4, LLC

UAG ACQUISITION 5, LLC

TAMBURRO ENTERPRISES, INC.

CLASSIC SPECIAL ADVERSTISING, INC.

CLASSIC SPECIAL, LLC

CLASSIC SPECIAL AUTOMOTIVE GP, LLC

 	 
	 	By:  	/s/ Robert O’Shaughnessy
 	 
	 	 	Name:  	Robert O’Shaughnessy 	 
	 	 	Title:  	Assistant Treasurer 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	CLASSIC OLDSMOBILE-PONTIAC-GMC, LTD.	 	 
	 	 	CLASSIC SPECIAL HYUNDAI, LTD.	 	 
	 	 	HILL COUNTRY IMPORTS, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: CLASSIC SPECIAL, LLC	 	 
	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	 	 	 	 	Title:    Assistant Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CLASSIC SPECIAL AUTOMOTIVE, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: CLASSIC SPECIAL AUTOMOTIVE GP, LLC	 	 
	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	 	 	 	 	Title:    Assistant Treasurer	 	 

 

 

 

	 	 	 	 	 
	 	ADDITIONAL GUARANTORS

PAG LONG ISLAND M1, LLC

PAG LONG ISLAND A1, LLC

PAG LONG ISLAND B1, LLC

PAG LONG ISLAND L1, LLC

TURNERSVILLE AUTO OUTLET, LLC

SMART USA DISTRIBUTOR LLC

PAG NORTH SCOTTSDALE BE, LLC

PENSKE DIRECT, LLC

CYCLE HOLDINGS, LLC

PAG TURNERSVILLE AU, LLC

PAG ACQUISITION 15, LLC

PAG MICHIGAN S1, LLC

PAG AUSTIN S1, LLC

PAG CLOVIS T1, INC.

PAG ORLANDO LIMITED, INC.

PAG ORLANDO GENERAL, INC.

 	 
	 	By:  	/s/ Robert O’Shaughnessy
 	 
	 	 	Name:  	Robert O’Shaughnessy 	 
	 	 	Title:  	Assistant Treasurer 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	PAG ORLANDO PARTNERSHIP, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: PAG ORLANDO GENERAL, INC.	 	 
	 	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	 	 	 	 	Title:    Assistant Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HBL, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: Penske Automotive Group, Inc.	 	 
	 	 	 	 	Its: Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	 	 	 	 	Title:    Executive Vice President-Finance	 	 

	 	 	 	 	 	 	 
	 	 	PETER PAN MOTORS, INC.	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Assistant Treasurer	 	 
	 
	 
	 	 	UAG MENTOR ACQUISITION, LLC	 	 

	 	 	 	 	 	 	 
	 	By: Penske Automotive Group, Inc.	 	 
	 	Its: Sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Executive Vice President-Finance	 	 

 

 

 

	 	 	 	 	 	 	 
	 	 	PAG SAN JOSE S1, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Assistant Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	AUTOMOTIVE MEDIA HOLDINGS, LLC	 	 
	 	 	PAG ACQUISITION 20, LLC	 	 
	 	 	PAG ACQUISITION 21, LLC	 	 
	 	 	PAG ACQUISITION 22, LLC	 	 
	 	 	PAG ACQUISITION 23, LLC	 	 
	 	 	PAG ACQUISITION 24, LLC	 	 
	 	 	PAG ACQUISITION 25, LLC	 	 
	 	 	PAG ACQUISITION 26, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	By: PENSKE AUTOMOTIVE GROUP, INC.	 	 
	 	 	Its: Sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Executive Vice President — Finance and
CFO	 	 
	 
	 	 	 	 	 	 
	 	 	PAG NORTHERN CALIFORNIA MANAGEMENT, INC.	 	 
	 	 	PAG SANTA ANA AVW, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Assistant Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	PAG WEST ACQUISITION 1, LLC	 	 
	 	 	PAG WEST ACQUISITION 2, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert O’Shaughnessy
 

Name: Robert O’Shaughnessy
	 	 
	 

	 	 	 	Title:    Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, AS TRUSTEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ D.G. Donovan
 

Name: D.G. Donovan
	 	 
	 

	 	 	 	Title:    Vice PresidentExhibit 10.10

EXHIBIT 10.10

DEALER AGREEMENT

FOR

MINI PASSENGER CARS

 

 

 

BMW OF NORTH AMERICA, LLC

DEALER AGREEMENT FOR MINI PASSENGER CARS

STANDARD PROVISIONS

Table of Contents

	 	 	 	 	 
	PARAGRAPH 1 — DEFINITIONS
	 	 	3	 
	BMW Group
	 	 	3	 
	BMW NA
	 	 	3	 
	Dealer
	 	 	3	 
	Dealer Facility
	 	 	3	 
	Dealer Operating Requirements Addendum
	 	 	3	 
	Dealer Operator
	 	 	4	 
	Dealer’s Officers
	 	 	4	 
	Dealer’s Owners
	 	 	4	 
	General Manager
	 	 	4	 
	Improvement Addendum
	 	 	4	 
	MINI Car Dealers
	 	 	4	 
	MINI Car Dealer Agreement
	 	 	4	 
	MINI Dealer Car Operations
	 	 	5	 
	MINI Division
	 	 	5	 
	MINI Products
	 	 	5	 
	MINI Vehicle(s)
	 	 	5	 
	Net Purchase Price
	 	 	5	 
	Original MINI Parts
	 	 	6	 
	Primary Market Area
	 	 	6	 
	United States
	 	 	6	 
	PARAGRAPH 2 — APPOINTMENT OF CAR DEALER
	 	 	7	 
	Dealer Appointment
	 	 	7	 
	PARAGRAPH 3 — DEALER AGREEMENT AND OPERATING STANDARDS
	 	 	8	 
	Dealer Agreement
	 	 	8	 
	Operating Standards
	 	 	8	 
	PARAGRAPH 4 — TERM
	 	 	9	 
	Term
	 	 	9	 
	PARAGRAPH 5 — CAR DEALER OWNERSHIP AND MANAGEMENT
	 	 	10	 
	Ownership and Management
	 	 	10	 
	PARAGRAPH 6 — OWNERSHIP CHANGES AND TRANSFERS OF AGREEMENT
	 	 	14	 
	Transfer, Sale, or Assignment by Dealer
	 	 	14	 
	Ownership, Policies and Procedures
	 	 	14	 
	Ownership Limitations
	 	 	14	 
	PARAGRAPH 7 — RIGHT OF FIRST REFUSAL
	 	 	15	 
	Right of First Refusal
	 	 	15	 
	PARAGRAPH 8 — DEALER FACILITIES
	 	 	17	 
	Dealer Facilities
	 	 	17	 
	Facility and Satellite Authorization
	 	 	18	 
	Dedication to the MINI Brand
	 	 	18	 
	Facilities Compliance
	 	 	19	 
	Pre-Owned Vehicle Facilities
	 	 	19	 
	PARAGRAPH 9 — BASIC OBLIGATIONS OF MINI DIVISION
	 	 	20	 
	Assistance to Dealer
	 	 	20	 
	Allocation of Vehicles
	 	 	20	 
	Supply of MINI Products to Dealer
	 	 	21	 

 

i

 

	 	 	 	 	 
	PARAGRAPH 10 — BASIC OBLIGATIONS OF DEALER
	 	 	22	 
	MINI Sales, Service, and Parts Supply
	 	 	22	 
	Conduct of Business
	 	 	22	 
	Compliance with Dealer Operating Requirements and Standards for MINI Dealers
	 	 	22	 
	Issuance of Improvement Addendum
	 	 	23	 
	PARAGRAPH 11  —  CUSTOMER SATISFACTION
	 	 	24	 
	Customer Satisfaction
	 	 	24	 
	PARAGRAPH 12 — GENERAL REQUIREMENTS FOR DEALER’S CAR OPERATIONS
	 	 	25	 
	Business Hours
	 	 	25	 
	Signs, Pylons, and Displays
	 	 	25	 
	Dealer’s Corporate and Trade Name
	 	 	25	 
	Exclusive Ownership of MINI Trademarks and Non-Exclusive Trademark License
	 	 	25	 
	Use of MINI Trademarks by Dealer
	 	 	26	 
	Dealer Web Sites and Internet Use
	 	 	27	 
	Sales of Certified Pre-Owned and Other Pre-Owned MINI Vehicles
	 	 	28	 
	Insurance
	 	 	28	 
	Training
	 	 	28	 
	Advertising and Marketing
	 	 	28	 
	Dealer Submissions to MINI Division
	 	 	29	 
	Compliance with Laws
	 	 	29	 
	Compliance with this Agreement and MINI Division Policies, Procedures, Programs, and Guidelines
	 	 	29	 
	PARAGRAPH 13 — DEALER’S SALES OF MINI VEHICLES
	 	 	30	 
	Sales Promotion
	 	 	30	 
	Sales Performance
	 	 	30	 
	Sales Leads
	 	 	30	 
	Demonstrators
	 	 	30	 
	Strategic Business Plan
	 	 	30	 
	Primary Market Area
	 	 	31	 
	Performance Evaluation
	 	 	31	 
	Down Payments and Trade-Ins
	 	 	32	 
	Consumer Disclosures
	 	 	32	 
	PARAGRAPH 14 — CUSTOMER SERVICE
	 	 	33	 
	Scope and Quality
	 	 	33	 
	Disclosure and Use of Original MINI Parts
	 	 	33	 
	Pre-Delivery Inspection
	 	 	33	 
	MINI Service and Warranty Information Booklet and MINI Owner’s Manual
	 	 	34	 
	Compliance with Consumer Protection Statutes, Policies, Procedures, and Guidelines
	 	 	34	 
	PARAGRAPH 15 — DEALER’S RECORDS AND REPORTS AND ACCESS TO DEALER’S PREMISES
	 	 	35	 
	Financial Records
	 	 	35	 
	Management Information Systems Requirements
	 	 	35	 
	Financial Statements
	 	 	35	 
	Additional Reports
	 	 	35	 
	Access to Dealer’s Premises and Records
	 	 	36	 
	Confidentiality
	 	 	36	 
	PARAGRAPH 16 — DEALER’S PURCHASES OF MINI VEHICLES
	 	 	37	 
	Dealer’s Purchase Price
	 	 	37	 
	Payment
	 	 	37	 
	Line of Wholesale Credit
	 	 	37	 
	Shipment to Dealer
	 	 	37	 
	Claims Processing
	 	 	37	 
	Passing of Risk
	 	 	38	 
	Repair and Sale of Damaged MINI Vehicles
	 	 	38	 
	Option to Repurchase Damaged Vehicles
	 	 	38	 

 

ii

 

	 	 	 	 	 
	PARAGRAPH 17 — DEALER’S INVENTORY AND PURCHASE OF ORIGINAL MINI PARTS
	 	 	39	 
	Minimum Inventory of Original MINI Parts
	 	 	39	 
	Dealer’s Purchase Price
	 	 	39	 
	Payment
	 	 	39	 
	Delivery
	 	 	39	 
	Claims for Incomplete Delivery
	 	 	39	 
	Return of Defective Original MINI Parts
	 	 	40	 
	Right to Return Original MINI Parts
	 	 	40	 
	Non-Returnable Materials, Parts, and Assemblies
	 	 	40	 
	PARAGRAPH 18  —  ADDITIONAL PROVISIONS GOVERNING DEALER’S PURCHASE OF MINI PRODUCTS AND DEALER’S
INVENTORIES
	 	 	41	 
	Taxes
	 	 	41	 
	Purchase Money Security Interest
	 	 	42	 
	Return or Diversion of MINI Vehicles on Dealer’s Failure to Accept
	 	 	43	 
	Failure of or Delay in Delivery
	 	 	43	 
	Changes in Specifications
	 	 	43	 
	Changes by Dealer on MINI Products and Compliance with Safety, Air Pollution, Noise Control,
and Consumer Warranty Requirements
	 	 	44	 
	Inventories
	 	 	44	 
	PARAGRAPH 19 — WARRANTY TO CUSTOMERS
	 	 	45	 
	MINI Warranties
	 	 	45	 
	Incorporation of MINI Warranties in Dealer’s Sales
	 	 	45	 
	Exclusion of Warranties
	 	 	45	 
	Warranty Policies and Procedures
	 	 	45	 
	PARAGRAPH 20 — TERMINATION PRIOR TO EXPIRATION DATE AND SUCCESSION
	 	 	47	 
	Termination by Dealer
	 	 	47	 
	Immediate Termination by the MINI Division for Cause
	 	 	47	 
	Termination by the MINI Division on Sixty (60) Days Notice
	 	 	49	 
	Termination upon Offering to Enter into a New or Amended MINI Car Dealer Agreement
	 	 	50	 
	Termination for Failure of BMW NA to be Licensed
	 	 	50	 
	No Waiver by Failure to Terminate
	 	 	50	 
	Termination upon Death or Permanent Disability
	 	 	51	 
	Successor in Event of Death or Permanent Disability
	 	 	51	 
	Successor Nominee
	 	 	52	 
	PARAGRAPH 21 — CONTINUATION OF BUSINESS RELATIONS
	 	 	53	 
	Continuation of Business Relations After Expiration or Prior Termination
	 	 	53	 
	PARAGRAPH 22 — RIGHTS AND LIABILITIES UPON EXPIRATION OR PRIOR TERMINATION
	 	 	54	 
	Cancellation of Pending Orders and Post Expiration and Termination Obligations
	 	 	54	 
	Purchase of Dealer’s Inventory of MINI Products by the MINI Division
	 	 	55	 
	PARAGRAPH 23 — INDEMNIFICATION
	 	 	57	 
	Indemnification by the MINI Division
	 	 	57	 
	Indemnification by Dealer
	 	 	58	 
	Notification
	 	 	59	 
	Allegations Involving Both the MINI Division and Dealer
	 	 	60	 
	PARAGRAPH 24 — ALTERNATE DISPUTE RESOLUTION
	 	 	61	 
	PARAGRAPH 25 — MISCELLANEOUS PROVISIONS
	 	 	62	 
	Approval or Consent by the MINI Division
	 	 	62	 
	Divisibility
	 	 	62	 
	Termination of Prior Agreements
	 	 	62	 
	Notices
	 	 	62	 
	No Implied Waivers
	 	 	62	 
	Dealer Not an Agent and Disclaimer of Further Liability by the MINI Division and the BMW Group
	 	 	63	 
	Accounts Payable
	 	 	63	 
	Continuing Security Interests
	 	 	63	 
	Assignment of Security Interests
	 	 	63	 
	Assignment of Dealer Agreement by the MINI Division of BMW NA
	 	 	63	 
	Limitations Re Dealer Stock and Assets
	 	 	64	 
	MINI Division’s Right to Specific Performance
	 	 	64	 
	Reservation of Rights
	 	 	64	 
	Headings
	 	 	64	 
	Entire Agreement and Representations
	 	 	64	 
	Execution of Agreement
	 	 	65	 
	Modification of Agreement
	 	 	65	 
	New Jersey Law
	 	 	65	 

 

iii

 

This DEALER AGREEMENT is effective as of the _____ day of _____, _____, by and between the MINI Division
of BMW of North America, LLC, a Delaware limited liability company, having its principal place of
business at 300 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677, and

	 	 	 	 	 
	Dealer Name:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Dealer Location:

	 	 

	, a	
	 
	 	 	 	 
	Business Type:
	 	 	 	 
	 

	 	 

	 	 

(if a corporation, limited liability company, or partnership) organized or incorporated under the
laws of the

	 	 	 	 	 
	State of:

	 	 	 and	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Doing Business As:
	 	 	 	 
	 

	 	 

	 	 

having its principal place of business at

	 	 	 	 	 
	Address:

	 	 

	, in 	 
	 
	 	 	 	 
	City/Town:

	 	 

	, in the 	 
	 
	 	 	 	 
	County of:

	 	 

	, in the 	 
	 
	 	 	 	 
	State of:

	 	 

	, (as “Dealer”) 	 

 

1

 

PURPOSE OF AGREEMENT

The purpose of this Agreement is to authorize Dealer to operate an approved MINI Car dealership
and to set forth the rights and responsibilities of both the MINI Division and Dealer in providing
MINI Products and services to the consuming public. The relationship between the MINI Division and
Dealer is based on the respect of the individual roles each party must play and recognition that
each party must perform in a competent, cooperative, and ethical manner to help achieve mutual
success and the overall success of the MINI brand.

The reintroduction of the MINI brand and MINI passenger cars to the American market offers a
unique business opportunity for both the MINI passenger car dealer organization and MINI Division.
Dedication to a pure and consistent presentation of MINI brand values will entice consumers to the
brand, leverage our collective investments, increase our voice, and help provide a higher return
on investment. The MINI personality must be consistent in visual branding, marketing
communications, and promotions on the Internet and through the retail, product, and ownership
experiences.

 

2

 

PARAGRAPH 1 — DEFINITIONS

IN CONSIDERATION OF the foregoing and the mutual covenants herein contained, the parties hereto
agree as follows:

The following definitions shall be used in this Dealer Agreement and have the following meanings:

BMW Group

(a) “BMW Group” is the umbrella term for collectively identifying the operations,
businesses, and/or activities of Bayerische Motoren Werke AG, its subsidiaries, their
affiliates, and related entities throughout the world, both within and outside the
automotive industry. The BMW Group produces products under various brand names; the most
significant at the time of introducing this Agreement are MINI (the only brand addressed by
this Agreement) and BMW (which is not covered). The BMW Group is represented by many
different legal entities, including, but not limited to, BMW of North America, LLC and its
affiliates.

BMW NA

(b) “BMW NA” shall mean BMW of North America, LLC, an, entity organized under the laws of
the State of Delaware. The MINI Division of BMW NA or an affiliated entity (“Affiliated
Entity”) shall be the exclusive importer and distributor of MINI Products in the United
States.

Dealer

(c) “Dealer”, “MINI Dealer”, “Center”, “MINI Center”, “Dealership”, or “MINI Dealership”
shall mean a dealer authorized to sell and service MINI Products as appointed by the MINI
Division of BMW of North America, LLC or an Affiliated Entity pursuant to this Agreement.

Dealer Facility

(d) “Dealer Facility”, including its plural and possessive forms, shall mean the land and
building(s) that constitute the authorized location(s) established in accordance with the
provisions of Paragraph 8 of this Dealer Agreement for the conduct of MINI Dealer Car
Operations.

Dealer Operating Requirements Addendum

(e) “Dealer Operating Requirements Addendum”, “Center Operating Requirements Addendum”, and
“Operating Requirements Addendum” shall mean the Addendum to this Agreement containing the
“Dealer Operating Requirements”, which are the MINI Product, Dealer Facility, Corporate
Identity, Personnel, Training, Financial, Equipment, Special Tool, Certified Pre-Owned
Vehicle, Parts, and Demonstrator Requirements for a MINI Dealer’s Car Operations and other
such requirements applicable to Dealer, as issued, amended, canceled, or superseded from
time to time by the MINI Division of BMW of North America, LLC or an Affiliated Entity
following review with Dealer.

 

3

 

Dealer Operator

(f) “Dealer Operator” shall mean the person named in Paragraph 5 of the Dealer Agreement as
the person in charge of MINI Dealer Operations with authority to make all operating
decisions on behalf of the Dealer with respect to the MINI Dealer Operations and is the
person upon whom the MINI Division of BMW of North America, LLC or an Affiliated Entity is
relying to represent MINI Products and to act on the Dealer’s behalf, as well as any person
who succeeds to such position in accordance with this Agreement.

Dealer’s Officers

(g) “Dealer’s Officers” or “Dealer Officers” shall mean all the persons named in Paragraph
5 of the Dealer Agreement as officers of Dealer, as well as any other person who succeeds
to any such executive and/or managerial position in the Dealer in accordance with the
Agreement.

Dealer’s Owners

(h) “Dealer’s Owners” or “Dealer Owners” shall mean all the persons named in Paragraph 5 of
the Dealer Agreement as the beneficial and record owners of the Dealer, as well as any
other person who acquires or succeeds to any beneficial interest or record ownership of the
Dealer in accordance with the Agreement.

General Manager

(i) “General Manager” shall mean the person named in Paragraph 5 of the Dealer Agreement as
the person in charge of its MINI Car Operations in the absence of the Dealer Operator, as
well as any person who succeeds to such position in accordance with this Agreement.

Improvement Addendum

(j) “Improvement Addendum” shall mean the Addendum to this Dealer Agreement that lists the
outstanding obligations of the Dealer that must be met to ensure the continuation of this
Agreement under Paragraph 4 of this Agreement.

MINI Car Dealers

(k) “MINI Car Dealers”, “MINI Dealers”, “Car Dealers”, or “Dealers” shall mean all of the
authorized MINI dealers that are signatories to a Dealer Agreement for MINI passenger cars
with the MINI Division of BMW NA or an Affiliated Entity.

MINI Car Dealer Agreement

(I) “MINI Car Dealer Agreement”, “MINI Passenger Car Dealer Agreement”, “Car Dealer
Agreement”, “Passenger Car Dealer Agreement”, “Dealer Agreement”, “Dealer Agreement for
Cars”, Dealer Agreement for Passenger Cars, “Dealer Agreement for MINI Passenger Cars”, or
“Agreement” shall mean this Dealer Agreement.

 

4

 

MINI Dealer Car Operations

(m) “MINI Dealer Car Operations”, “MINI Dealer Operations”, “MINI Car Operations”, or “Car
Operations” shall mean all activities of the Dealer relating to the promotion and sale of
MINI Products, the Supply of Original MINI Parts, customer service for MINI Products,
and/or all other operations of Dealer governed by this Agreement, such as sales of
certified pre-owned MINI Vehicles.

MINI Division

(n) “MINI Division” shall mean the MINI Division of BMW of North America, LLC or an
Affiliated Entity that is responsible for all aspects of the distribution and marketing of
MINI passenger cars in the United States.

MINI Products

(o) “MINI Products” shall mean MINI Vehicles and Original MINI Parts.

MINI Vehicle(s)

(p) “MINI Vehicle(s)” shall mean new passenger cars bearing the trademarks of the
heritage-rich MINI brand and MINI make, which were purchased from the Rover Group in 1994,
that are now manufactured by the BMW Group and sold by the MINI Division of BMW of North
America, LLC or an Affiliated Entity. The MINI make and the MINI brand do not include: 1)
the BMW or ROLLS-ROYCE makes or brands of the BMW Group or vehicles badged with BMW or
ROLLS-ROYCE trademarks; or 2) any other make or brand of the BMW Group. The only new
vehicles and the only Line-Make authorized to be sold or serviced under this Agreement are
MINI passenger cars, which are badged with MINI trademarks. Other than passenger cars, no
other line of vehicles is authorized to be sold or serviced under this Agreement, e.g.,
light trucks (including sport utility vehicles, pick-up trucks, and minivans), medium
trucks, heavy trucks, and motorcycles are lines of vehicles not covered by this Agreement.

Net Purchase Price

(q) “Net Purchase Price” shall mean the actual price at which Dealer purchased the certain
MINI Product from the MINI Division of BMW of North America, LLC or an Affiliated Entity,
which price shall include the addition or deduction of any and all rebates, refunds, credit
allowances, discounts, and other payments or adjustments made by the MINI Division of BMW
of North America, LLC or an Affiliated Entity relative to such MINI Product. “Net Purchase
Price” shall not include payments or adjustments in connection with Dealer advertising
association activities (if applicable).

 

5

 

Original MINI Parts

(r) “Original MINI Parts” shall mean: (i) any genuine parts, accessories, and equipment for
MINI
Vehicles manufactured by or on behalf of and/or sold by the BMW Group and/or the MINI
Division of BMW of North America, LLC or an Affiliated Entity and/or bearing the authorized
trademarks of the MINI brand, which parts, accessories, and equipment usually are described
as “Original” in packaging; and (ii) any equipment designed for use in MINI Dealer
Operations (including special MINI tools) and any non-automotive accessories and other
equipment, including aftersales, MotoringGear, lifestyle, and gift items bearing the
trademarks of the MINI brand, which are supplied to Dealer by or on behalf of the MINI
Division of BMW of North America, LLC or an Affiliated Entity.

Primary Market Area

(s) “Primary Market Area” shall mean the area designated by the MINI Division of BMW of
North America, LLC or an Affiliated Entity in which the Dealer is expected to focus its
activities under this Dealer Agreement. Evaluation of the Dealer’s performance shall be
primarily based upon the Dealer’s activities in its Primary Market Area.

United States

(t) “United States” shall mean the 50 United States, the District of Columbia, and the
Commonwealth of Puerto Rico.

 

6

 

PARAGRAPH 2 — APPOINTMENT OF CAR DEALER

Dealer Appointment

(a) Subject to the terms of this Agreement, the MINI Division appoints Dealer as a dealer
of MINI Products and grants Dealer the non-exclusive right to buy and/or sell and/or
service MINI Products. Dealer accepts such appointment and agrees to be bound by this
Agreement.

While Dealer recognizes that its performance will be primarily measured based upon its
activities in its Primary Market Area, Dealer agrees that this appointment does not confer
upon it the exclusive right to deal in MINI Products in any specific geographic area within
the United States, nor does it limit the persons within the United States to whom Dealer
may sell MINI Products for use therein.

Dealer agrees that it will not sell MINI Products for resale in the United States or for
resale or use outside the United States. In addition, Dealer agrees to abide by the MINI
Division’s Export Policy and all amendments and modifications thereto.

Dealer acknowledges that the MINI Division reserves the right to appoint additional MINI
Car Dealers, whether located near Dealer’s location or elsewhere, as the MINI Division in
its sole discretion deems necessary or appropriate. The MINI Division agrees that it will
not appoint additional representation without first conferring individually with the MINI
Car Dealer(s) in the Dealer’s state of operation whose Primary Market Area would be subject
to adjustment if representation is added to the proposed location so that the MINI Division
can determine whether other alternatives to additional representation are satisfactory to
the MINI Division. If a decision is made to proceed with establishment of additional
representation, the MINI Division will provide such MINI Car Dealer(s) no less than thirty
(30) days written notice of such decision.

 

7

 

PARAGRAPH 3 — DEALER AGREEMENT AND OPERATING STANDARDS

Dealer Agreement

(a) All currently effective Addenda to the Dealer Agreement for MINI passenger cars and all
Addenda to be issued to Dealer by the MINI Division, all of which may be amended, canceled,
or superseded from time to time, are hereby fully incorporated into this Dealer Agreement
(“Incorporated Documents”). Unless the context otherwise indicates, the term “Agreement”
shall mean this document, the Incorporated Documents, and the documents referred to
therein, including, but not limited to, policies, procedures, programs, and guidelines
issued from time to time by the MINI Division. The terms used in this Agreement are defined
in Paragraph 1 of this Agreement. Dealer hereby acknowledges receipt of this Agreement and
agrees to become familiar with its terms.

Operating Standards

(b) Dealer is required to comply with the operating guidelines that the MINI Division
establishes and agrees to conform its operations to those operating guidelines.

 

8

 

PARAGRAPH 4 — TERM

Term

(a) This Agreement shall continue in full force and effect and shall govern all relations
and transactions between the parties commencing on the effective date hereof and continuing
as follows:

(1) If Dealer has fulfilled all of its obligations hereunder and no Improvement
Addendum is currently in force: 1) this Agreement shall expire five (5) years from the
effective date hereof and the MINI Division will renew the Agreement unless it is
terminated earlier in accordance with the applicable provisions of this Agreement; or
2) when the MINI Division develops a superseding Agreement, the MINI Division will form
a project group consisting of two MINI passenger car dealers per region, one selected
by the MINI Division and the other selected by MINI passenger. car dealers. The project
group will review the superseding Agreement and advise the MINI Division on it. In the
event that the project group reviews a superseding Agreement, and the MINI Division
offers Dealer an opportunity to enter into that Agreement, Dealer shall enter into the
superseding Agreement.

(2) If Dealer has outstanding obligations as of the effective date of this Agreement
and/or an Improvement Addendum is in force, this Agreement shall expire on the earlier
of three years from the effective date hereof or sixty (60) days following the earliest
“Compliance Date” specified in said Addendum, unless otherwise terminated in accordance
with the applicable provisions of this Agreement.

 

9

 

PARAGRAPH 5 — CAR DEALER OWNERSHIP AND MANAGEMENT

Ownership and Management

(a) This is a PERSONAL SERVICES AGREEMENT. The MINI Division is entering into this
Agreement in reliance upon the qualifications, abilities, and integrity of the Dealer
Operator and upon the representation of the Dealer’s Owners that the Dealer Operator will
have full managerial authority for the operations and activities of Dealer. In order to
induce the MINI Division to enter into this Agreement, Dealer states that:

Dealer’s Owners

(1) The beneficial owners, record owners, members, and partners, if any, of Dealer are
(include record owners if different from beneficial):

	 	 	 
	NAME

	 	% RECORD OR BENEFICIAL

Additional Names Attached

 

10

 

Dealer’s Officers

(2) The following persons are Dealer’s Officers (if Dealer is an LLC, include the names of
the members and the officers of the member):

	 	 	 
	NAME

	 	TITLE

Dealer’s Corporate Directors

(3) If Dealer is a corporation or company, the following are its Directors (if Dealer is an
LLC, include the directors of the member):

	 	 	 
	NAME

	 	TITLE

Dealer Operator 

(4) The following person shall be in complete charge of Dealer’s MINI Car Operations with
authority to make all operating decisions on behalf of Dealer with respect to Dealer’s MINI
Car Operations and is the person upon whom the MINI Division can rely to act on Dealer’s
behalf:

	 	 	 
	NAME

	 	TITLE

General Manager

(5) The following is Dealer’s General Manager (if none, enter “NONE”):

	 	 	 
	NAME

	 	TITLE

Successor(s)

(6) The Dealer’s Owners have nominated the following individual(s) as proposed Dealer
Owners of a Successor Dealer to be established if this Agreement is terminated because
of
the death or permanent disability of any of the Dealer’s Owners (if none, enter “NONE”):

	 	 	 
	NAME

	 	TITLE

 

11

 

Because of the importance that the MINI Division places on the statements and representations of
the Dealer’s Owners and the qualifications of the Dealer Operator, Dealer agrees that there will
be no change in the: (a) identity of the Dealer’s Owners ((1) above); (b) the Dealer Operator ((4)
above); (c) the Successor(s) ((6) above); or (d) Dealer’s name, identity, business organization or
structure, without the prior written consent of the MINI Division.

To enable the MINI Division to maintain effectively the MINI Dealer network, Dealer further agrees
to provide the MINI Division with forty-five (45) days prior written notice of any proposed change
in the ownership of Dealer, which would change the interests in, or control of, Dealer, or of any
proposed disposition of Dealer’s MINI assets. Any such change in ownership or disposition of
Dealer’s MINI assets shall not be effective without the prior written consent of the MINI
Division, which consent will not be unreasonably withheld. Dealer acknowledges and agrees that all
proposed owners of all or a portion of the Dealer shall be required to meet the MINI Division’s
appointment criteria and comply with the MINI Division’s ownership policies, procedures, and
limitations. The MINI Division shall respond to Dealer’s notification within forty-five (45) days
after Dealer has furnished to the MINI Division all completed applications and information
reasonably requested to evaluate the proposal.

Without limiting other considerations in determining whether the MINI Division will provide
consent, this Agreement may not be transferred, assigned, or assumed until all indebtedness of
Dealer to the MINI Division of BMW NA, its subsidiaries, or affiliates has been fully satisfied
and unless the transferee, assignee, or party assuming this Agreement agrees and commits to
fulfill and complete all of the obligations under this Agreement and the Improvement Addendum (if
applicable) and fully comply with all MINI Division policies, procedures, programs, and
guidelines.

 

12

 

Dealer recognizes that the MINI Division has a vital interest in ensuring that MINI Dealers employ
qualified personnel. Therefore, Dealer agrees to employ personnel who meet the qualifications for
each position within the Dealer. The MINI Division agrees that Dealer has the right to decide and
is responsible for all
matters concerning management and personnel.

Dealer has designated herein certain individuals as officers, directors, managers and/or
individuals with responsibility for Dealer’s MINI Car Operations. Dealer agrees to notify the MINI
Division in writing of any change in the designated individuals (2, 3, and 5 above) and recognizes
that such designation shall not relieve Dealer of its responsibility for performance under this
Agreement.

Dealer agrees that the MINI Division may rely upon the Dealer Operator and General Manager (if
applicable) to act on Dealer’s behalf on any and all matters and that such reliance shall not
alter Dealer’s responsibilities under this Agreement.

 

13

 

PARAGRAPH 6 — OWNERSHIP CHANGES AND TRANSFERS OF AGREEMENT

Transfer, Sale, or Assignment by Dealer

(a) (1) In view of the nature, purposes, and objectives of the MINI Division and this
Agreement, and the differences in operating requirements among dealerships of differing
sizes and types of markets, the MINI Division expressly reserves the right to select the
dealers with whom it will enter into such agreements so as to maintain a high quality
network of dealers. Furthermore, Dealer agrees that the MINI Division has the right to
approve or decline to approve any prospective purchaser based on his, her, or its
character, reputation, automotive experience, performance (including, but not limited to,
customer satisfaction, market penetration, and profitability), potential impact on the MINI
brand, management, compliance with the MINI Division’s ownership policies, procedures, and
limitations, compliance with the law and agreements, capital, financial qualifications, or
other qualifications for appointment as an owner of a dealer.

(2) Dealer shall not transfer, sell, or assign, or attempt to transfer, sell, or assign,
the Dealer’s assets, any ownership interest in the Dealer, or this Agreement, or sell or
transfer any right or delegate any duty, obligation, or responsibility of Dealer under this
Agreement, without the prior written consent and approval of the MINI Division. If a
transfer, sale, or assignment of a Dealer’s stock or assets is approved by the MINI
Division, then the MINI Division shall offer the transferee or assignee of Dealer the right
to enter into a new Agreement in substantially the same form as the Agreement then
currently offered by the MINI Division to its Dealers.

Ownership, Policies and Procedures

(b) The MINI Division fully incorporates by reference its ownership policies and procedures
into this Agreement.

Ownership Limitations

(c) (1) The combined SPG of all the MINI dealers owned directly or indirectly by any
individual, partnership, trust, corporation, or other entity cannot exceed 10% of the SPG
of all MINI dealers in the United States at any time. The MINI Division can withhold its
consent to any change of ownership that would take any individual’s, partnership’s,
trust’s, corporation’s, or other entity’s direct or indirect ownership interest above 10%.
Dealer acknowledges and agrees that the MINI Division’s 10% ownership limit is fair and
reasonable.

(2) In any metropolitan area defined by the MINI Division as a multiple point market no
individual, partnership, trust, corporation, or any other entity can directly or indirectly
own an interest in more than 50% of the MINI dealers in the market. The MINI Division can
withhold its consent to any change of ownership that would violate this Paragraph. Dealer
acknowledges and agrees that the ownership limit described in this Paragraph is fair and
reasonable.

 

14

 

PARAGRAPH 7 — RIGHT OF FIRST REFUSAL

Right of First Refusal

(a) The MINI Division recognizes the investment that Dealer has committed to operate a MINI
dealership. Dealer recognizes the importance to the MINI Division of continuing dealership
operations from approved locations to provide for the effective sales and service of MINI
Products. Accordingly, whenever Dealer intends to dispose of Dealer’s MINI assets, change
control of the Dealer, or change majority ownership from that listed in Paragraph 5(a)(1),
the MINI Division shall have the first right to purchase Dealer’s MINI assets or ownership
interests pursuant to this Paragraph. Dealer agrees to disclose to the prospective buyer
that any sale or disposition shall be subject to the terms of this Agreement and any other
information provided to Dealer which impacts the MINI Dealer Operations or the market in
which the Dealer operates.

The MINI Division will advise Dealer if it will exercise the right of first refusal within
forty-five (45) days after Dealer has furnished to the MINI Division all completed
applications and information in accordance with Paragraph 5. If the MINI Division exercises
the right, the MINI Division will assume the proposed buyer’s rights and obligations under
the written agreement the proposed buyer negotiated with Dealer (the “Buy/Sell Agreement”).
The purchase price shall be that set forth in the Buy/Sell Agreement.

The MINI Division shall have the right to perform due diligence in connection with
Paragraph 7 while the MINI Division decides whether to exercise its right of first refusal.
If the MINI Division exercises its right, the MINI Division’s right to conduct due
diligence shall continue. Dealer agrees to fully cooperate with the MINI Division in
connection with its due diligence.

In the event the MINI Division exercises its right of first refusal, the MINI Division may
assign the Buy/Sell Agreement to any party. The MINI Division shall remain responsible to
guarantee the purchase price to be paid by the assignee.

Dealer shall transfer the assets and any applicable real estate free and clear of all liens
and encumbrances. Any property shall be transferred by Warranty Deed, where possible,
conveying marketable title. Deeds will be in the proper form for recording. Possession will
be deemed transferred when the deed is delivered. Dealer shall furnish copies of, and will
assign where required, all agreements, licenses, easements, permits, or other documents
necessary for the conduct of Dealer’s MINI Car Operations.

 

15

 

Subject to the limitation set forth below, if the MINI Division exercises its right under
this Paragraph, the MINI Division will reimburse Dealer for all reasonable and acceptable
expenses, excluding brokerage commissions, incurred by Dealer in connection with the
development of the Buy/Sell Agreement prior to the MINI Division’s exercise of its right.
Dealer shall supply the MINI Division with reasonable documentation to support all those
expenses and all copies of materials
generated during the negotiation and development of the Buy/Sell Agreement in anticipation
of the sale (including environmental reports, accounting reviews, among others). Dealer
agrees that the expenses the MINI Division will pay to Dealer pursuant to Paragraph 7 shall
not exceed the lesser of actual expenses or an aggregate of Fifty Thousand Dollars
($50,000.00). Any dispute regarding reimbursement shall be presented for review under
Paragraph 24.

This Paragraph shall not apply in the event that Dealer proposes to change majority
ownership, dispose of its assets, or otherwise enter into a proposed Buy/Sell Agreement
with: 1) an immediate family member (spouse, child, brother, sister, parent, grandchild, or
spouse of child) of a Dealer Owner; 2) an individual who is listed on the Successor
Addendum; 3) an individual who is currently employed by Dealer and has been actively
employed by Dealer for at least three consecutive years in the Dealer’s MINI Car Operations
and is otherwise qualified as a Dealer Operator; or 4) an individual who is currently
listed as a Dealer’s Owner in Paragraph 5 and has been so listed for the past three
consecutive years and is otherwise qualified as a Dealer Operator.

 

16

 

PARAGRAPH 8 — DEALER FACILITIES

Dealer Facilities

(a) Dealer agrees that Dealer Facilities shall satisfy all applicable provisions
of this Agreement, including reasonable space, facility, and MINI Corporate
Identification requirements in the Dealer Operating Requirements Addendum and/or
Dealer Facilities Guidelines. The MINI Division recognizes the investment Dealer has
in its facilities and hereby approves the location of the following Dealer Facilities
for the exclusive purpose of:

(1) A showroom and sales facility for MINI Vehicles at:

Address:

(2) Service and parts facilities for MINI Vehicles at:

Address:

(3) Facilities for the display and sale of certified pre-owned MINI Vehicles at:

Address:

(4) Facilities for the display and sale of pre-owned MINI Vehicles at:

Address:

(5) Satellite(s) authorized pursuant to Paragraph 8(b) of the Agreement at:

(6) Other facilities (indicate the nature of the facility, e.g., storage facility):

 

17

 

Facility and Satellite Authorization

(b) Dealer shall operate its MINI Car Operations only at the authorized locations listed in
Paragraph 8(a) of the Agreement. Any proposed change in the Dealer’s authorized locations,
including the establishment or relocation of satellite locations, requires the MINI
Division’s prior written consent. To the extent that a proposed change is approved and
involves the establishment or relocation of a satellite of the Dealer authorized to operate
under this Agreement, the location of the satellite shall be listed in Paragraph 8(a) of
the Agreement and shall be identified as a satellite. Accordingly, such a listing and
identification constitutes authorization to operate a satellite under this Agreement and a
new Dealer Agreement shall not be issued. Dealer agrees that satellite locations are not
necessarily permanent and that Dealer shall discontinue operations at a satellite upon
receipt of one hundred twenty (120) days written notice from the MINI Division. Dealer
further agrees that the termination or withdrawal of approval of a satellite does not
constitute the termination or failure to renew this Agreement.

Unless otherwise provided herein, Dealer shall conduct Dealer’s MINI Car Operations and
keep MINI Products exclusively at the authorized Dealer Facilities designated above.

In the event that Dealer desires to: (1) change its principal place of business from that
first set forth in this Agreement; (2) change any location of the Dealer Facilities; (3)
establish any additional locations for either operating its business or storage of MINI
Products; (4) make any major structural or design change in the Dealer Facilities; or (5)
change the usage or function of any locations or facility approved herein or otherwise
utilize such locations or facilities for any functions other than the approved functions,
Dealer must obtain the prior written approval of the MINI Division for any such change or
establishment.

Dedication to the MINI Brand 

(c) The MINI passenger car showroom shall be totally dedicated to the MINI brand, shall be
compliant with all MINI Corporate Identity requirements and standards, and shall be, at a
minimum, architecturally separated from the showrooms of line-makes other than MINI
passenger cars. Furthermore, the showroom shall have a sales staff fully dedicated to the
MINI brand. All authorized facilities under this Agreement other than the MINI passenger
car showroom, including, but not limited to, all customer-facing areas such as the areas
for the sale of Original MINI Parts, MINI service, and MINI customer relations, shall be
compliant with all MINI Corporate Identity requirements and standards and shall have staff
dedicated to the MINI brand.

 

18

 

Facilities Compliance

(d) Recognizing that Dealer’s Facilities affect Dealer’s ability to discharge properly its
responsibilities under this Agreement and the Dealer Operating Requirements Addendum,
Dealer will ensure that Dealer’s Facilities comply with the applicable provisions of this
Agreement, including such reasonable requirements and standards as the MINI Division may
prescribe from time to time.

Pre-Owned Vehicle Facilities

(e) Dealer must obtain the MINI Division’s prior written approval for all MINI branded
locations and facilities from which pre-owned MINIS are sold, including certified pre-owned
MINIS. The MINI Division’s approval of such locations will not be unreasonably withheld.

 

19

 

PARAGRAPH 9 — BASIC OBLIGATIONS OF MINI DIVISION

Assistance to Dealer

(a) The MINI Division will assist Dealer in Dealer’s MINI Car Operations through such means
and upon such terms and conditions as the MINI Division considers necessary and
appropriate, including, among other things:

(1) Sales, technical, and process training, delivered in person or electronically,
prior to introduction of new MINI Vehicles or on an ongoing basis;

(2) Sales, service, and parts literature and other printed materials relating to MINI
Products;

(3) National advertising campaigns for MINI Vehicles;

(4) Periodic suggestions and evaluations to assist Dealer in the conduct of its MINI
Car Operations; and

(5) Technical Assistance Hotline and Parts Telephone Support.

Allocation of Vehicles

(b) The MINI Division agrees to sell and deliver MINI Products to Dealer in accordance with
the provisions of this Agreement:

(1) In making such sales and deliveries, the MINI Division will consider Dealer’s
preferences, as well as its compliance with the resale and use restrictions of the
Dealer Agreement, and will endeavor to make a fair and equitable allocation and
distribution of the MINI Products available to it among its MINI Dealers. The MINI
Division reserves the right to reduce allocation of MINI Vehicles to Dealers which do
not comply with the terms and conditions of the Dealer Agreement or the Dealer
Operating Requirements Addendum;

(2) Dealer recognizes the possibility that from time to time MINI Products may not be
available in sufficient quantities. In such event, Dealer agrees that the MINI
Division, in the exercise of its business judgment, may determine the method and manner
of the allocation of MINI Products between Dealer and the MINI Division’s other
Dealers. Upon Dealer’s written request, the MINI Division agrees to provide Dealer with
an explanation of the method used to distribute such MINI Products; and

(3) Dealer recognizes that when introducing new MINI Products, the MINI Division may
require certain prerequisites be in place at the MINI Dealer, i.e., training,
equipment, tools, parts, displays, and customer information, prior to the MINI Division
distributing such MINI Products to the Dealer. Such prerequisites shall help ensure
customer satisfaction, consistent communication of MINI brand values, and product
acceptance in the market. Dealer agrees that its failure to meet the prerequisites will
delay the distribution of new MINI Products to
Dealer until the prerequisites are met.

 

20

 

Supply of MINI Products to Dealer

(c) The MINI Division agrees to sell and deliver MINI Products to Dealer in accordance with
this Agreement and the ability of the Dealer to store, display, sell, and service MINI
Products, as reflected in its Dealer Operating Requirements Addendum. The MINI Division
shall have no obligation to supply and Dealer shall not be entitled to receive MINI
Products which exceed the Dealer’s ability to store, display, sell, or service MINI
Products as evidenced by its Dealer Operating Requirements Addendum.

 

21

 

PARAGRAPH 10 — BASIC OBLIGATIONS OF DEALER

MINI Sales, Service, and Parts Supply

(a) Dealer assumes the responsibility for the promotion and sale of MINI Products, the
supply of Original MINI Parts, and customer service for MINI Products.

Conduct of Business

(b) In the conduct of its business, Dealer will:

(1) Safeguard and promote the reputation of MINI Products, the trademarks of MINI, and
the MINI brand;

(2) Help reintroduce the heritage-rich MINI brand in the United States after being
absent from the country for more than thirty years;

(3) Refrain from negligent or willful conduct which may be harmful to the reputation or
to the marketing of MINI Products or inconsistent with the public interest;

(4) Refrain from all deceptive, misleading, or unethical practices; and

(5) Comply with all applicable local, state, and federal laws.

Compliance with Dealer Operating Requirements and Standards for MINI Dealers

(c) Dealer, recognizing that its responsibilities under this Agreement demand the most
effective use of its available facilities, capital, and personnel, agrees to comply with
its Dealer Operating Requirements Addendum. Dealer shall review said Addendum with MINI
Division representatives at the Retail Business Plan Review, satisfy outstanding
obligations under its Improvement Addendum, if applicable, and comply with all reasonable
standards established by the MINI Division from time to time relating to Dealer’s MINI Car
Operations.

 

22

 

Issuance of Improvement Addendum

(d) The MINI Division will notify Dealer in writing if Dealer fails to comply with any
obligation, responsibility, or requirement under the Dealer Agreement or the Dealer
Operating Requirements Addendum (“Deficiency”).

(1) If Dealer fails to remedy the Deficiency following notice, the MINI Division will
issue to Dealer an Improvement Addendum or amend an existing Improvement Addendum,
listing the Deficiency(s) and providing Dealer a reasonable date by which the Dealer
must satisfy the Deficiency(s).

(2) Should Dealer reasonably request an extension of time in writing to comply with an
Improvement Addendum, a justified request for extension will not be unreasonably
withheld; however, under no circumstances is the MINI Division obligated to grant more
than two extensions.

(3) Dealer’s failure to satisfy the Deficiency(s) will jeopardize the Dealer’s ability
to renew the Dealer Agreement and could subject Dealer to early termination of this
Agreement.

(4) An Improvement Addendum will be canceled once Dealer remedies the Deficiency(s).

(5) An Improvement Addendum may be superseded by the MINI Division at any time to
reflect a Dealer’s progress toward satisfaction of a Dealer’s Deficiency(s).

 

23

 

PARAGRAPH 11 — CUSTOMER SATISFACTION

Customer Satisfaction

(a) The MINI Division and Dealer agree to conduct their respective businesses in a manner
that promotes and supports the image and reputation of MINI, MINI Products, the MINI
Division, MINI Dealers, and the BMW Group. The MINI branding strategy, the price-value
relationship of MINI Products, and excellent customer care are essential elements of image
and reputation in all dealings and transactions with customers.

Dealer, as the direct link to the MINI customer, is responsible for satisfying customers in
all matters, except those directly related to product design and manufacturing. Dealer will
take all reasonable steps to ensure that each customer is satisfied with MINI Products and
with the services and the practices of Dealer. Dealer will recommend to the MINI Division
methods of reasonably satisfying customers. The MINI Division will support Dealer’s
customer satisfaction efforts through counseling, training opportunities, and providing
survey results.

When requested by the MINI Division, Dealer shall submit a plan detailing its customer
satisfaction programs. That plan shall include continuous reinforcement to all Dealer
personnel of the importance of customer satisfaction, necessary training for Dealer
personnel, and methods of conveying to customers that the Dealer is committed to their
satisfaction.

Following consultation with and notice from the MINI Division or its authorized
representative, Dealer shall remedy, to the satisfaction of the MINI Division, any practice
or method of operation which would have a detrimental effect upon customer satisfaction or
would impair the reputation or image of MINI, MINI Products, the MINI Division, MINI
Dealers, or the BMW Group.

 

24

 

PARAGRAPH 12 — GENERAL REQUIREMENTS FOR DEALER’S CAR OPERATIONS

Business Hours

(a) Throughout the term of this Agreement, the Dealer Facility shall be operated during,
and for not less than, the customary business hours of the trade in the community or
locality in which Dealer is located. When necessary to accommodate customers’ needs,
however, Dealer shall extend its regular business hours.

Signs, Pylons, and Displays

(b) Subject to local requirements, Dealer agrees to display conspicuously at and around the
Dealer Facility such MINI approved signs, pylons, and displays as the MINI Division shall
reasonably require.

Dealer’s Corporate and Trade Name

(c) Dealer agrees that its corporate name and its trade name (also known as the Dealer’s
dba) for its MINI Dealer Car Operations shall comply with all applicable MINI Division
policies, procedures, programs, and guidelines related thereto.

Exclusive Ownership of MINI Trademarks and Non-Exclusive Trademark License

(d) Dealer acknowledges that the exclusive ownership, and the validity, of the MINI
trademarks (including, without limitation, the MINI logo), both registered and at common
law, resides within the BMW Group, and Dealer shall not contest the same during the term of
the Agreement or at any time thereafter. Dealer further acknowledges that it is only
pursuant to the nonexclusive trademark license granted herein that Dealer can use MINI
trademarks or MINI trade names in connection with the sale of MINI Products and that Dealer
has no other such license. Dealer further acknowledges that the MINI trademarks are famous
and highly distinctive throughout the world, and that the MINI trademarks have achieved the
highest degree of recognition within the automotive industry and other related industries
throughout the world. Dealer and the MINI Division agree to cooperate with each other in
preventing any acts of trademark infringement, dilution, or unfair competition with respect
to any MINI trademark, but the BMW Group (or the MINI Division, as the BMW Group’s agent
with respect to trademark matters) shall have sole control over all actions and legal
proceedings to suppress infringement, dilution, or any act of unfair competition with
respect to any MINI trademark. Dealer acknowledges, and shall not contest, the BMW Group’s
right and authority to bring any action for infringement, dilution, or unfair competition
with respect to any MINI trademark.

 

25

 

Use of MINI Trademarks by Dealer

(e) The MINI Division grants Dealer a non-exclusive license to use the MINI trademarks
subject to the terms and conditions of this Agreement, including, but not limited to, the
BMW Group and the MINI Division trademark policies and guidelines. Dealer agrees that it
will use the trademarks solely in connection with the promotion and sale of MINI Products
and consumer service for MINI Products only in such manner, at such location, to such
extent, and for such purposes as the MINI Division may specify from time to time. No MINI
trademark may be used except in the color, size, form, and style approved by the MINI
Division. Moreover, without the express prior written consent of the MINI Division, Dealer
shall not use any MINI trademark (including the letters “MINI”) as part of its corporate
business name. Dealer shall promptly change or discontinue its use of any MINI trademark
upon the MINI Division’s request. Dealer agrees that the sole source and origin of MINI
Products is the MINI Division and the BMW Group. Dealer shall not use the MINI trademarks
in any manner which may tend to cause a likelihood of confusion concerning the source or
origin of MINI Products. Dealer shall not use the MINI trademarks in any manner which is
likely to cause confusion among the public, deceive or mislead the public, or impair the
goodwill of the MINI Division or MINI Products. Without the MINI Division’s prior written
consent, Dealer shall not use MINI trademarks in connection with, or associated with, any
other trademark or brand. In the event Dealer desires to utilize the MINI trademarks in any
material, including signage or advertisements, which also contains reference to another
line or automotive make, Dealer agrees to provide the MINI Division with thirty (30) days
prior written notice of such use. The MINI Division shall have the sole discretion to grant
or deny approval for such use of the MINI trademarks. Dealer acknowledges that the MINI
Division shall be irreparably harmed by any breach by Dealer of any provision of this
Agreement concerning the use of the MINI trademarks. Dealer acknowledges that the BMW Group
or the MINI Division may, at their discretion, terminate this license or the MINI Division
may terminate this Agreement for any violation of the BMW Group or the MINI Division
trademark policies or guidelines or the breach of this provision or other related
provisions in this Agreement. Dealer agrees to pay all costs, fees, and expenses, including
attorneys fees, of the MINI Division associated with or arising from any legal claim or
proceeding for the enforcement of any provision of this Agreement concerning the use of the
MINI trademarks or the MINI brand.

The MINI Division agrees to provide Dealer with written notice and an opportunity to cure
violations of trademark policies and guidelines, the infringement of MINI trademarks or
trade names, and attempts to dilute MINI trademarks or the MINI brand. The length of the
cure period will be based on the circumstances presented, but in no event will the cure
period exceed thirty (30) days.

 

26

 

Dealer Web Sites and Internet Use

(f) Dealer and MINI Division both recognize the importance of e-commerce to the mutual
benefit of MINI passenger car dealers, MINI passenger car customers, and the MINI Division.
E-commerce shall be a core element of the MINI passenger car business model. Dealer shall
maintain a world wide web site or otherwise maintain a presence and advertise on the
Internet (and any other public computer networks that are developed and are acceptable to
the MINI Division) in connection with the Dealer’s business. All such activities shall be
in compliance with the law and any applicable MINI Division e-commerce standards or
Internet or web site policies, including functionality policies, that exist or are
subsequently developed. Among other purposes, the MINI Division will use its Internet web
site(s) to provide sales leads to Dealers, to facilitate sales, and to facilitate the flow
of MINI Product and sales information among the MINI Division, MINI Dealers, and consumers.
Dealer shall be required to use a MINI Corporate Identity web-site template and future
generations of the template that will be provided to it by the MINI Division. Dealer agrees
to use the template to provide for the handling of sales leads and on-line sales by MINI
passenger car dealers to retail customers. Dealer also agrees to include on its web sites
information that the MINI Division requires in the manner and form selected by the MINI
Division. Dealer further agrees to list a link on its web sites to
http://www.MINIUSA.com. If Dealer is requested to provide a link to additional web
sites by the MINI Division in writing, Dealer shall add such links to its web sites. Dealer
also shall not add links to its MINI passenger car web sites for line-makes other than MINI
passenger cars without the prior written consent of the MINI Division. Dealer agrees that
it shall provide input to the MINI Division and any ecommerce work groups of MINI passenger
car dealers on e-commerce initiatives that Dealer, a work group or groups, and/or the MINI
Division believe should be considered for inclusion in the MINI business model.

Dealer shall not use any MINI trademarks on its web sites in a manner inconsistent with the
terms of this Agreement, without the MINI Division’s prior written authorization, or in a
manner that is not acceptable to the MINI Division. Furthermore, Dealer may not post MINI
Division or BMW Group proprietary, confidential, or copyrighted material or information on
its web sites without the prior written approval of the MINI Division or the BMW Group. In
addition, Dealer agrees to obtain the MINI Division’s prior written approval for any
Internet domain name Dealer may use or intend to use and/or home page address. Dealer also
agrees that it shall not cybersquat on any unauthorized domain names including MINI
trademarks or trade names. Finally, Dealer agrees that it shall be responsible for the
activities and actions it undertakes on the Internet and at its web sites.

 

27

 

Sales of Certified Pre-Owned and Other Pre-Owned MINI Vehicles

(g) Dealer shall not use any MINI trademark in connection with the sale of certified or
non-certified pre-owned MINIS unless the Dealer fully complies with all requirements of the
MINI Division as to
the standards, practices, and facilities for the sale of pre-owned MINIS under the MINI
trademarks. Dealer agrees to adhere to the terms and conditions associated with the sales
and service activities for certified pre-owned MINIS and to all policies, procedures,
programs, and guidelines established and updated from time to time by the MINI Division for
certified pre-owned MINIs. Furthermore, Dealer shall not certify any MINIS which do not
meet the requirements for certification and shall not submit claims, information, or
reports to the MINI Division identifying as certified, vehicles that do not meet
certification requirements or vehicles that have not been certified.

Insurance

(h) Dealer shall maintain comprehensive and excess liability insurance policies in an
amount sufficient to meet all reasonably anticipated contingencies, including legal
judgments entered against Dealer. In no event shall the aggregate value of the policies be
less than Five Million Dollars ($5,000,000.00). The policies must be issued by an insurance
company with an “A-” or better rating by A.M. Best or a similar rating agency acceptable to
the MINI Division. Dealer must provide the MINI Division with copies of such policies upon
request and a certificate of insurance each time the policies are renewed.

Training

(i) Dealer agrees that its personnel will be trained in such special training courses as
may be offered from time to time by the MINI Division. Dealer shall require its personnel
to meet with the MINI Division personnel in the dealership or at other appropriate
locations for the purposes of training and to use training materials as may be suggested
from time to time by the MINI Division.

Advertising and Marketing

(j) Dealer agrees to advertise MINI Products and customer service for MINI Products in
accordance with the standards set forth in Paragraph 10(b) and such other reasonable
policies, standards, and guidelines as the MINI Division may establish from time to time.
Such advertising shall include, among other things, listings in approved web sites and
local classified telephone directories identifying Dealer as an authorized dealer in MINI
Products.

Both the MINI Division and Dealer recognize the need of maintaining uniformly high
standards of ethical advertising of a quality and dignity consistent with the reputation of
MINI Products in order to maintain public confidence and respect in Dealer, the MINI
Division, and MINI Products. Accordingly, Dealer agrees not to publish or cause to be
published any advertising in any media whatsoever relating to MINI Products and customer
service for MINI Products which is likely to deceive and/or mislead the public or to impair
the goodwill or image of the MINI Division or MINI Products. The MINI Division reserves the
right to require Dealer to cease any advertising inconsistent with this provision including
the right to prohibit Dealer from using MINI trademarks in advertising.

 

28

 

MINI passenger car marketing and advertising shall be consistent with MINI brand values and
the image that the MINI brand projects into the marketplace. Dealer agrees, warrants, and
represents that any and all of its marketing, advertising, and solicitation messages and
materials, in any and all media, shall be consistent with, conform with, and shall not
compromise, the MINI brand image. In order to properly develop the MINI brand image and to
create efficiencies for MINI passenger car dealers, MINI Division will provide certain
marketing and advertising materials for Dealer use. Marketing, advertising, and
solicitation materials that Dealer desires to disseminate that have not been provided by
MINI Division shall be submitted to MINI Division for its approval prior to use.

Dealer Submissions to MINI Division

(k) The submission of false or fraudulent claims, reports, statements, or information by
Dealer to MINI Division, BMW NA, or an Affiliated Entity is strictly prohibited and may
result in the termination of this Agreement.

Compliance with Laws

(I) Dealer shall comply with all applicable local, state, and federal laws and regulations,
including, but not limited to, laws and regulations requiring licensing and/or
registration. Dealer agrees to disclose information as the MINI Division may reasonably
request with respect to the foregoing.

Compliance with this Agreement and MINI Division Policies, Procedures, Programs, and Guidelines

(m) Dealer shall comply with the terms and conditions of this Agreement and all existing
and subsequently developed or amended MINI policies, procedures, programs, and guidelines.

 

29

 

PARAGRAPH 13 — DEALER’S SALES OF MINI VEHICLES

Sales Promotion

(a) Dealer shall actively and effectively promote the sale of the full line of authorized
MINI Vehicles and shall promote and sell such MINI Vehicles primarily in its Primary Market
Area in accordance with the terms and conditions of this Agreement and through such means
as reasonably may be required by the MINI Division from time to time.

Sales Performance

(b) Within the limitations, if any, resulting from the quantity of MINI Vehicles made
available to Dealer by the MINI Division, Dealer shall achieve the best possible sales
performance obtainable for MINI Vehicles. Such sales performance shall be evaluated on the
basis of such reasonable and equitable criteria as may be determined from time to time by
the MINI Division.

Sales Leads

(c) Dealer shall follow up all sales leads provided to Dealer by the MINI Division (or any
of its subsidiaries, affiliated companies, or vendors), whether obtained through the MINI
Division’s web site or otherwise, promptly and courteously within the time periods set
forth by the MINI Division in writing to Dealers or in the Dealer’s Operating Requirements
Addendum. Dealer acknowledges that the MINI Division may divert any sales leads not
followed up on by a Dealer within the time periods set forth by the MINI Division, in
writing to Dealers or in the Dealer’s Operating Requirements Addendum, to other Dealers.

Demonstrators

(d) For purposes of demonstration, Dealer shall have available at all times such number of
the most current model MINI Vehicles as required pursuant to the Dealer’s Operating
Requirements Addendum.

Strategic Business Plan

(e) Each Dealer shall develop a strategic business plan with objectives for the following
year. The annual strategic business plan will be discussed with and presented to MINI
Division representatives at an annual strategic business plan review. The final strategic
business plan, as accepted by the MINI Division, shall represent the goals and objectives
of Dealer and contain the action plans developed by Dealer to achieve those goals and
objectives and, in the case of an Improvement Addendum, address the means of complying with
the terms and conditions of this Agreement.

 

30

 

Primary Market Area

(f) The MINI Division will assign to Dealer in writing a geographic area consisting of a
collection of zip code areas or census tracts, which shall be the Dealer’s Primary Market
Area. The Dealer’s Primary Market Area is the area in which a Dealer will primarily promote
and sell MINI Vehicles. The Dealer’s Primary Market Area will be used to evaluate the
Dealer’s performance obligations and objectives under this Agreement. The MINI Division may
adjust a Dealer’s Primary Market Area at any time and will provide written notice to the
Dealer of any adjustment. Dealer agrees that it has no right or interest in any Primary
Market Area. In assigning or changing the Dealer’s Primary Market Area, the MINI Division
will exercise its best business judgment based on the facts and circumstances at the time
that any assignment or change is made.

Performance Evaluation

(g) Dealer and the MINI Division agree that their primary purpose is to satisfy customers
by properly servicing and promoting the sale of MINI Products within Dealer’s Primary
Market Area, consistent with MINI brand values. Dealer and the MINI Division will work
together to achieve this purpose.

(1) Dealer’s compliance with the retail business plan and Dealer’s sales, service, and
customer satisfaction performance will be regularly reviewed and evaluated. The MINI
Division will provide to Dealer, in writing, its evaluation of Dealer’s performance.
Any written comments submitted by Dealer to the MINI Division shall become part of a
performance evaluation report.

(2) The MINI Division shall evaluate Dealer’s performance based on, but not limited to:

	 	(i)	 	Dealer’s sales of MINI Products in Dealer’s Primary Market
Area;

	 	(ii)	 	Registrations attributable to Dealer in its Primary Market
Area;

	 	(iii)	 	The sales and registrations of competitive passenger cars in
Dealer’s Primary Market Area;

	 	(iv)	 	Feedback from Dealer’s customers measured by the results of
the customer satisfaction surveys provided to Dealer by the MINI Division;

	 	(v)	 	The trend of Dealer’s performance over a reasonable period of
time;

	 	(vi)	 	Significant local conditions that may have affected Dealer’s
performance;

	 	(vii)	 	The general vehicle purchasing trends of the public; and

	 	(viii)	 	Dealer’s compliance with its Dealer Operating Requirements Addendum, its
retail business plan objectives, and Best Practices.

 

31

 

Down Payments and Trade-Ins

(h) Payments received from customers, whether in money or in kind, which are to be applied
towards the subsequent purchase of a new MINI Vehicle, shall be held for such customers in
accordance with applicable law until such time as the transaction with respect to which
such payments were received is consummated or terminated.

Consumer Disclosures

(i) Dealer shall deliver to purchasers of MINI Vehicles an itemized invoice and disclose
any other information or give any notice provided by the MINI Division intended for
consumers or required by law.

 

32

 

PARAGRAPH 14 — CUSTOMER SERVICE

Scope and Quality

(a) Dealer shall provide the best possible customer service for all owners of MINI Vehicles
whether or not the MINI Vehicle was sold by Dealer and shall promote its customer service
and the sale of Original MINI Parts. Dealer shall not engage in any service practice with
respect to any MINI Products if the MINI Division has reasonably objected to the nature or
quality of such practice or the practice is detrimental to customers or inconsistent with
the purposes of this Agreement.

Disclosure and Use of Original MINI Parts

(b)(1) Dealer shall not use any parts other than Original MINI Parts or parts expressly
approved (e.g., authorized remanufactured parts) by the MINI Division in the performance of
warranty service in connection with the MINI New Passenger Car Limited Warranty, parts
warranties, and/or other MINI warranties.

(2) Dealer recognizes that its customers have a right to expect that any product that they
purchase from Dealer meets the high quality standards associated with MINI Products. In
order to avoid confusion and minimize potential customer dissatisfaction, in any case where
Dealer sells for use in the repair of any MINI Product any parts which are not Original
MINI Parts or parts approved by the BMW Group or the MINI Division of BMW NA, Dealer shall
disclose to the customer that such parts are not Original MINI Parts or parts approved by
the BMW Group or the MINI Division of BMW NA, and consequently, that such parts are not
warranted by the MINI Division. Such disclosure shall be in writing, conspicuous, and set
forth on the parts invoice, service, or repair order. Dealer will also, by appropriate
written notice, advise the customer of the source of such parts and the extent of any
warranty given by the supplier or manufacturer of such parts.

(3) Dealer shall not represent in any manner, sell or offer for sale as new, Original MINI
Parts or parts approved (e.g., authorized remanufactured parts) by the BMW Group or the
MINI Division of BMW NA, any parts which are not in fact new, Original MINI Parts or parts
approved by the BMW Group or the MINI Division of BMW NA.

Pre-Delivery Inspection

(c) Before delivery to the customer, Dealer shall inspect, prepare, and condition each new
MINI Vehicle in accordance with quality certification and other pre-delivery inspection
procedures furnished from time to time by the MINI Division to Dealer. Evidence of
satisfactory completion will be determined at the discretion of the MINI Division, through
customer responses to surveys or inspection documents maintained in the Dealer’s vehicle
history file.

 

33

 

MINI Service and Warranty Information Booklet and MINI Owner’s Manual

(d) Upon delivery to a customer of a new MINI Vehicle, Dealer will also deliver to the
customer the MINI Service and Warranty Information booklet supplied by the MINI Division
for such MINI Vehicle, properly completed and stamped with Dealer’s corporate or business
name, the customer warranty information, including notification of any laws, rules, or
regulations addressed in subparagraph (e) below when required by applicable state law, and
the appropriate MINI Owner’s Manual. In addition, Dealer shall have copies of applicable
warranty information on display and ready for customer use.

Compliance with Consumer Protection Statutes, Policies, Procedures, and Guidelines

(e) Dealer acknowledges the existence and applicability of various “repair or replace”
laws, damage disclosure laws, other consumer protection laws, rules, and regulations, and
the MINI Division disclosure policies, procedures, and guidelines. Dealer agrees to comply
fully with the requirements of such laws, rules, regulations, policies, procedures, and
guidelines, including, but not limited to, delivering all required disclosures, booklets,
and manuals to consumers, and Dealer shall take no action which adversely affects the MINI
Division’s rights and duties under these laws, rules, and regulations.

Moreover, Dealer agrees to use its best efforts to notify the MINI Division promptly in
writing of all situations in which “repair or replace” laws are or may be applicable.
Dealer further agrees to take such other action as the MINI Division may reasonably
require.

 

34

 

PARAGRAPH 15 — DEALER’S RECORDS AND REPORTS AND ACCESS TO DEALER’S PREMISES

Financial Records

(a) Dealer shall keep accurate and current books of account in accordance with accounting
practices reasonably satisfactory to the MINI Division so as to enable the MINI Division to
develop comparative data in order, among other things, to furnish to Dealer, for Dealer’s
benefit, business management assistance.

Management Information Systems Requirements

(b) To facilitate the efficient operation of the MINI passenger car dealer network and the
accurate and prompt disclosure to the MINI Division of dealership operations and financial
information, Dealer agrees to install and maintain management information system facilities
which are compatible with the computer systems, hardware, and software used by the MINI
Division and comply with MINI information management requirements and standards.

Financial Statements

(c) Dealer shall deliver or mail to the MINI Division the following:

(1) On or before the tenth (10th) day of each calendar month, on such forms as the MINI
Division reasonably may require, a financial and operating statement reflecting
Dealer’s MINI Car Operations for the preceding month and Dealer’s total MINI Car
Operations from the beginning of the calendar year to the end of the preceding month
(the statements referenced in this Paragraph shall also reflect the financial and
operating results for any other line-makes of the BMW Group for which Dealer is an
authorized dealer); and

(2) Within three and one-half (3-1/2) months after the end of the calendar year, a
financial and operating statement for such year. In the event the MINI Division so
requests in writing, such statement shall be reviewed by a certified public accountant.

Additional Reports

(d) Dealer will furnish to the MINI Division, on such forms and at such times as the MINI
Division reasonably may require, complete and accurate reports of Dealer’s sales and
inventories of new MINI Vehicles, of certified pre-owned MINI Vehicles, of other pre-owned
vehicles, and of Original MINI Parts. Dealer will also furnish to the MINI Division such
other reports as the MINI Division reasonably may require from time to time. Dealer shall
maintain such records for at least five (5) years.

 

35

 

Access to Dealer’s Premises and Records

(e) Until the expiration or prior termination of this Agreement and thereafter until
consummation of all the transactions referred to in Paragraph 22 hereof, the MINI Division,
through its representatives, employees, and other designees, shall have the right, at all
reasonable times during regular business hours, to inspect Dealer’s MINI Car Operations,
including the Dealer’s Facility and records and accounts of Dealer relating to Dealer’s
MINI Car Operations. Dealer shall cooperate fully with, and take all actions necessary to
facilitate, such inspections.

Confidentiality

(f) The MINI Division of BMW NA will not furnish any financial data submitted to it by
Dealer to any third party unless: 1) authorized by Dealer; 2) required by law, regulation,
order, or judicial, alternate dispute resolution, or administrative process; 3) pertinent
to judicial, alternate dispute resolution, or administrative proceedings; or 4) required to
generate composite or comparative data for analytical purposes. Dealer agrees to keep
confidential and not disclose, directly or indirectly, information that BMW NA designates
as confidential and provides to Dealer.

 

36

 

PARAGRAPH 16 — DEALER’S PURCHASES OF MINI VEHICLES

Dealer’s Purchase Price

(a) The MINI Division will sell MINI Vehicles to Dealer at such prices and upon terms as
may be established from time to time by the MINI Division. Dealer shall be responsible for
payment of any and all sales taxes, use taxes, excise taxes, and other governmental or
municipal charges imposed or levied or based upon the sale of MINI Vehicles by the MINI
Division to or through Dealer.

Payment

(b) Payment for each MINI Vehicle purchased by Dealer shall be made in cash at the time of
delivery unless the invoice provides otherwise, in which event the terms of the invoice
shall govern. Receipt of any check, draft, or other commercial paper shall not constitute
payment until the MINI Division has received cash in the full amount thereof. In the event
of non-payment, Dealer shall pay all of the MINI Division’s collection charges, including
attorneys fees and costs.

Line of Wholesale Credit 

(c) During the term of this Agreement, Dealer shall maintain exclusively for MINI Vehicles
an unrestricted line or lines of wholesale credit with a financing institution or
institutions satisfactory to the MINI Division in amounts as specified in the Dealer
Operating Requirements Addendum.

Shipment to Dealer 

(d) The MINI Division will endeavor, whenever practicable, to follow Dealer’s requests with
regard to route and method of shipment of MINI Vehicles, but the MINI Division reserves the
right to ship MINI Vehicles purchased by Dealer hereunder by whatever mode of
transportation, by whatever route, and from whatever point the MINI Division may select.
All shipping charges for MINI Vehicles will be borne by Dealer.

Claims Processing

(e) In order to facilitate the processing of claims for damage against the carrier or
carrier’s insurer, Dealer hereby authorizes the MINI Division to process, and the MINI
Division agrees that it will so process at its own cost and expense, all such claims in the
MINI Division’s name, but for Dealer’s account, in such manner and on such basis as the
MINI Division may reasonably determine. The MINI Division shall not, however, be obliged to
retain counsel or commence legal proceedings against carrier or carrier’s insurer with
respect to any such claims. Dealer also authorizes the MINI Division to settle or
compromise any such claims for less than the full amount thereof as the MINI Division may
in its sole judgment determine without the prior approval of Dealer.

 

37

 

Immediately upon delivery of any MINI Products to Dealer, Dealer shall make a careful
inspection of such products and shall note any damage in the MINI Products so delivered on
the appropriate
carrier delivery forms, which shall be signed by both the representatives of the carrier
and the representatives of the Dealer. Dealer shall also follow any other pertinent
procedures that may be established from time to time by the MINI Division and will
cooperate with the MINI Division in processing any claims. Failure by Dealer to note any
deficiency or damage upon delivery to Dealer and failure to follow any other pertinent
procedures established by the MINI Division shall constitute a waiver by Dealer of the MINI
Division’s obligation to process any claim and Dealer shall be solely responsible for
asserting and processing any such claims against the carrier.

Passing of Risk

(f) All MINI Vehicles sold to Dealer shall be at Dealer’s risk and peril from the time of
delivery at the MINI Division’s established place of delivery whether to Dealer, Dealer’s
agent, or a common carrier, and during all subsequent transportation. It shall be the
obligation of Dealer to insure against such risks for its benefit and at its expense.

Repair and Sale of Damaged MINI Vehicles

(g) In the event that any MINI Vehicle sold by the MINI Division to Dealer should become
damaged prior to its delivery by Dealer to a customer, Dealer shall, applying BMW Group or
MINI Division approved repair practices and procedures, repair fully such damage so that
such MINI Vehicle shall be placed in first-class salable condition prior to delivery.
Dealer shall not market any MINI Vehicle if the quality or condition thereof has been
reasonably objected to by the MINI Division. Dealer shall comply with all state laws
applicable to such sales and shall disclose to the customer all damage and repairs in
accordance with applicable state law. Dealer will also disclose all damage when processing
wholesale or retail trades of MINI Vehicles.

Option to Repurchase Damaged Vehicles

(h) In order to protect the integrity of MINI Vehicles and Dealer’s and the MINI Division’s
reputation in the marketplace, Dealer agrees to notify the MINI Division whenever any of
Dealer’s new and unused MINI Vehicles are substantially damaged. For the period of ten (10)
business days from the MINI Division’s receipt of notice from a Dealer, the MINI Division
shall have the first option to repurchase from Dealer such damaged MINI Vehicles at a price
equal to the Net Purchase Price originally paid by Dealer to the MINI Division less any
monies or other consideration received by Dealer in connection with or relating to such
damaged MINI Vehicles. Dealer agrees to assign its rights under any insurance contract with
respect to such MINI Vehicles to the MINI Division. In the event the MINI Division
exercises its option to repurchase as granted above, the MINI Division reserves the right
to make any payment hereunder directly to any party having a security interest in the MINI
Vehicle being repurchased. The MINI Division shall not be liable for any interest expense
under this Paragraph 16 on returned vehicles, unless repurchased under this subparagraph
(h).

 

38

 

PARAGRAPH 17 — DEALER’S INVENTORY AND PURCHASE OF ORIGINAL MINI PARTS

Minimum Inventory of Original MINI Parts

(a) Dealer shall acquire and at all times maintain at least a minimum inventory of
available Original MINI Parts necessary to satisfy adequately the needs of the market.

Dealer’s Purchase Price

(b) The MINI Division shall sell Original MINI Parts to Dealer at such prices and upon such
terms as may be established from time to time by the MINI Division. Dealer is responsible
for any and all sales taxes, excise taxes, use taxes, and other governmental or municipal
charges imposed or levied or based upon the sale of Original MINI Parts by the MINI
Division to Dealer, except federal excise taxes which may be included in the purchase price
of the MINI Division of BMW NA to Dealer. In the event of any increase in the prices
established by the MINI Division for Original MINI Parts, Dealer will have the right to
cancel all orders for Original MINI Parts affected by the increase which are pending and
unfilled at the time Dealer obtains notice of the increase, provided that the MINI Division
is notified in writing of such cancellation within ten (10) days from the time Dealer
obtains notice of the increase.

Payment

(c) Dealer’s orders for Original MINI Parts will be filled on the basis of payment terms
established from time to time by the MINI Division for Dealer’s account. Such terms may
provide for open account, limited open account, C.O.D., or cash. Dealer will be invoiced at
the time of shipment through the electronic Dealer Communications System. Dealer shall
receive a month-end statement. Dealer shall render payment for the total amount of the
monthly statement in accordance with the terms stated therein. Unless otherwise indicated
in writing, full payment is due upon receipt of said statement. In the event of
non-payment, Dealer shall pay all of the MINI Division’s collection charges, including
attorneys fees and costs.

Delivery

(d) Delivery of Original MINI Parts ordered by Dealer shall be made by common carrier, U.S.
mail, or express mail, and if practical, in accordance with Dealer’s specific request. If
freight charges are to be paid by the MINI Division, the most economical transportation
will be selected.

Claims for Incomplete Delivery

(e) All claims for incomplete delivery of Original MINI Parts must be made by Dealer in
writing immediately upon Dealer’s receipt of shipment.

 

39

 

Return of Defective Original MINI Parts

(f) Dealer shall not sell, offer for sale, or install any Original MINI Parts if the nature
or quality thereof has been reasonably objected to by the MINI Division. Dealer may, after
receipt of written authorization from the MINI Division, return defective Original MINI
Parts to the MINI Division for credit, together with the original invoice indicating
Dealer’s purchase price of such Original MINI Parts. Such Original MINI Parts shall be
shipped, shipping charges prepaid, to the destination specified by the MINI Division.
Dealer will be reimbursed for shipping charges prepaid by it on authorized returns of
defective Original MINI Parts based on the lowest applicable rate of transportation by
common carrier.

Right to Return Original MINI Parts

(g) Dealer will notify the MINI Division of any Original MINI Parts ordered by Dealer in
error within sixty (60) days after receipt of shipment. Dealer may return such Original
MINI Parts, no later than sixty (60) days after Dealer’s receipt of specific authorization
from the MINI Division, for credit, which credit shall be applied to Dealer’s account based
on the invoiced price of the returned Original MINI Parts. Such Original MINI Parts shall
be returned, shipping charges prepaid, to the destination specified by the MINI Division.

Dealer may also return, after receipt of written authorization from the MINI Division,
Original MINI Parts shipped to Dealer due to the MINI Division’s shipping error. Such
Original MINI Parts shall be shipped, shipping charges prepaid, to the destination
specified by the MINI Division and Dealer shall be credited for such prepaid shipping
charges as well as for the invoiced prices of the returned Original MINI Parts.

Non-Returnable Materials, Parts, and Assemblies

(h) Dealer will not be entitled to return: (1) any materials which have been acquired or
specially fabricated by the MINI Division upon Dealer’s order; (2) unlisted Original MINI
Parts or assemblies; or (3) any Original MINI Parts or assemblies not purchased by Dealer
from the MINI Division.

 

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PARAGRAPH 18 — ADDITIONAL PROVISIONS GOVERNING DEALER’S PURCHASE OF MINI PRODUCTS AND DEALER’S
INVENTORIES

Taxes

(a) Dealer shall provide the MINI Division with all of its tax identification numbers. With
regard to each purchase of MINI Products, Dealer represents and warrants that:

(1) Such MINI Products are being purchased from the MINI Division by Dealer for resale
in the ordinary course of Dealer’s business;

(2) Dealer has complied with all of the applicable provisions of local and state laws
required for the collection and payment by Dealer of all sales, use, and excise taxes
and other governmental or municipal charges applicable to all such resale transactions;
and

(3) Dealer has furnished to the MINI Division all resale certificates or similar
documents required to perfect an exemption from any applicable sales and use taxes.

Dealer shall be responsible for payment of any and all taxes and other governmental or
municipal charges imposed or levied in connection with the sale to Dealer by the MINI
Division of MINI Products or equipment supplied to Dealer by the MINI Division.

In the event that any MINI Products are put to a taxable use by Dealer or are in fact
purchased by Dealer for purposes other than resale in the ordinary course of Dealer’s
business, Dealer shall make timely return and payment to the appropriate taxing
authorities, as required by Paragraph 16(a), with respect to MINI Vehicles, and Paragraph
17(b), with respect to Original MINI Parts, of all applicable sales, use, and excise taxes,
and other governmental or municipal charges imposed or levied or based upon the sale of
such MINI Products by the MINI Division to Dealer, and Dealer shall hold the MINI Division
harmless from any and all claims and demands which may be made by such taxing authorities
against the MINI Division with respect thereto.

 

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Purchase Money Security Interest

(b) In order to assure its prompt and unconditional payment to the MINI Division of BMW NA
upon the terms and as when due of any and all indebtedness, obligations, or liabilities of
Dealer to the MINI Division for the purchase of MINI Products (“Obligations”), Dealer
hereby grants, assigns, and transfers to the MINI Division of BMW NA a continuing first and
senior lien on and security interest in all such MINI Products sold on credit, open
account, or limited open account to Dealer by the MINI Division, all accessions and
additions thereto, and all proceeds and products of such MINI Products, whether now owned
or hereafter acquired as well as a security interest in cash incentives, holdbacks,
bonuses, or other MINI Division payables (the “Collateral”). In furtherance thereof and in
recognition of the MINI Division of BMW NA’s status as a secured party having all the
rights and remedies of a secured party under Article 9 of the Uniform Commercial Code:

(1) In the event Dealer is in default of any Obligations or any of the events described
in Paragraph 20(b) and (c) of this Agreement shall occur, and at any time thereafter,
the MINI Division may declare Dealer in default and may exercise the following rights
and remedies, in addition to all other rights and remedies it has as a secured party
under the Uniform Commercial Code:

(i) To declare all Obligations of Dealer to the MINI Division immediately due
and payable; and

(ii) To require Dealer to assemble the Collateral and make it available to
the MINI Division for possession at a place designated by the MINI Division
which is reasonably convenient to both parties.

(2) With respect to all proceeds of the Collateral, including, without limitation,
payments received by Dealer from a customer upon delivery of any MINI Product
constituting Collateral and cash deposits received from a customer in anticipation of a
future delivery of a MINI Product constituting Collateral to such customer, Dealer
grants to the MINI Division an irrevocable power of attorney to endorse all cash and
non-cash proceeds of the Collateral to effect collection thereof, it being understood
and intended by Dealer that such power of attorney is coupled with an interest; and
Dealer shall:

(i) Upon demand by the MINI Division, whether or not Dealer is in default of
any Obligations, deposit not later than the business day following receipt,
all proceeds of the Collateral or any portion thereof, in a separate bank
account designated for that purpose and under the sole control of the MINI
Division;

(ii) Not commingle any proceeds of the Collateral to which the MINI Division
is entitled with other funds or property of Dealer until delivery of such
proceeds to the MINI Division has been completed, it being agreed and
understood that the proceeds to which the MINI Division is entitled shall be
that portion of the proceeds upon sale of a MINI Product constituting
Collateral which equals the Obligations with respect to such MINI Product;
and

(iii) Hold any proceeds of the Collateral to which the MINI Division is
entitled under Paragraph 18(b)(2) hereof separate and apart and upon express
trust for the MINI Division until such delivery or deposit.

(3) Dealer shall hold in trust each deposit of cash received from a customer in
anticipation of a future delivery of a MINI Product constituting Collateral to such
customer until such delivery is consummated.

(4) Dealer shall not sell, pledge, assign, transfer, lease, resell, or otherwise
dispose of any type of Collateral herein described or any interest in Collateral except
in the ordinary course of Dealer’s business or as may be authorized in writing by the MINI Division.

 

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(5) Dealer shall execute and deliver promptly to the MINI Division one or more
financing statements pursuant to the Uniform Commercial Code in the form suitable for
filing to perfect a purchase money security interest in the Collateral and which are
otherwise satisfactory to the MINI Division. Dealer irrevocably appoints the MINI
Division as its attorney in fact, to sign and file, in Dealer’s name, financing
statements at any time with respect to the Collateral and the proceeds thereof, it
being understood and intended by Dealer that such power of attorney is coupled with an
interest.

(6) The remedies provided in this Paragraph 18(b) shall be in addition to any other
rights and remedies provided for in this Agreement or under applicable law.

Return or Diversion of MINI Vehicles on Dealer’s Failure to Accept

(c) In the event Dealer should fail or refuse for any reason (other than an error by the
MINI Division) to accept any MINI Vehicle delivered to Dealer’s Facility, Dealer will
reimburse the MINI Division for all expenses incurred by the MINI Division in returning
such MINI Vehicle to the original point or in diverting it to another destination, as the
case may be; but in no event shall Dealer be required to pay the MINI Division an amount in
excess of the expense of returning such MINI Vehicle to its original point of delivery to
Dealer. Dealer forfeits any further rights it may have with respect to such rejected MINI
Vehicle(s).

Failure of or Delay in Delivery

(d) The MINI Division will not be under any liability to Dealer for failure to deliver or
for delay in making delivery if such failure or delay results from any event brought by
causes other than willful or grossly negligent conduct of the MINI Division, such as, for
example, any event in the nature of force majeure, acts of God, acts of any government,
foreign or civil wars, riots, interruptions of navigation, shipwrecks, strikes, lockouts,
other labor troubles, embargoes, blockades, fires, explosions, sabotage, failures of the
BMW Group or of any other supplier of the MINI Division to deliver, or delay of the BMW
Group or of any other supplier of the MINI Division in making delivery.

Changes in Specifications

(e) MINI Products will be delivered by the MINI Division to Dealer in accordance with
standards applicable at the time of their manufacture. The MINI Division and Dealer
recognize and agree that the BMW Group and/or the MINI Division shall have the right,
without limitation, at any time and from time to time, to make changes or modifications in
the design specifications of MINI Products without notice. The MINI Division shall have no
obligation to Dealer to make such change or modification with respect to MINI Products
previously delivered to or ordered by Dealer or to make any refund or other adjustment for
any MINI Products previously purchased by Dealer
or being imported, manufactured, or sold, whether or not the price of such MINI Products is
affected thereby. No change shall be considered a model year change unless so specified by
the BMW Group.

 

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Changes by Dealer on MINI Products and Compliance with Safety, Air Pollution, Noise Control,
and Consumer Warranty Requirements

(f) Dealer agrees not to make any modifications or alterations to MINI Vehicles which
alters the original engineering and/or operating specifications of the vehicle. The MINI
Division may request Dealer to make such changes or refrain from making such changes on
MINI Products as may be prescribed from time to time by the BMW Group, and Dealer agrees to
comply promptly with such requests. Dealer also agrees to take such steps and render such
reports in connection with the National Traffic and Motor Vehicle Safety Act of 1966, the
Consumer Product Safety Ad, the Magnuson-Moss Warranty Act, or any other legislation or
regulation pertaining to safety, air pollution, noise control, or warranties to consumers,
as may be required of motor vehicle dealers, distributors, or manufacturers or as the BMW
Group or the MINI Division may request from time to time, and to comply with all such
legislation and regulations in conducting Dealer’s MINI Car Operations. The MINI Division
will reimburse Dealer for the reasonable cost of any Original MINI Parts, and labor in
accordance with current warranty rates and procedures, which may be used by Dealer in
making changes on MINI Products requested by the MINI Division and/or the BMW Group. Dealer
agrees to indemnify and hold harmless the BMW Group and the MINI Division from and against
any and all claims and liabilities arising from Dealer’s failure or alleged failure to
comply, in whole or in part, with any obligation assumed by Dealer pursuant to this
Paragraph. Dealer will communicate to the MINI Division all suggestions with respect to
improvements in MINI Products it may have or develop as a result of its experience.

Inventories

(g) Dealer agrees that, in addition to maintaining at least the minimum inventory of
Original MINI Parts required under Paragraph 17(a), Dealer will acquire, and at all times
maintain, such inventory of available MINI Products as is necessary in accordance with the
current and reasonably foreseeable volume of Dealer’s business and to further Dealer’s
sales activities and to assure satisfactory customer service and supply of Original MINI
Parts.

 

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PARAGRAPH 19 — WARRANTY TO CUSTOMERS

MINI Warranties

(a) Each MINI Vehicle supplied by the MINI Division will be warranted to the customer by
the MINI Division in accordance with the MINI New Passenger Car Limited Warranty, the
Limited Emissions Warranties, and the Limited Warranty against Rust Perforation. Each
Original MINI Part supplied by the MINI Division will be warranted to the customer by the
MINI Division in accordance with the Limited Warranty on Original MINI Parts.

Incorporation of MINI Warranties in Dealer’s Sales

(b) Dealer agrees to make all sales of MINI Vehicles and Original MINI Parts in such a way
that its customers acquire all rights in accordance with the MINI New Passenger Car Limited
Warranty, the Limited Emissions Warranties, the Limited Warranty against Rust Perforation,
or the Limited Warranty on Original MINI Parts, as the case may be. Dealer will supply
consumers with a copy of such warranties in such fashion as may from time to time be
required by the MINI Division or by applicable law.

Exclusion of Warranties

(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EXCEPT AS SPECIFICALLY PROVIDED FOR IN THE
MINI NEW PASSENGER CAR LIMITED WARRANTY, THE LIMITED EMISSIONS WARRANTIES, THE LIMITED
WARRANTY AGAINST RUST PERFORATION, AND THE LIMITED WARRANTY ON ORIGINAL MINI PARTS, ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED AND THE MINI DIVISION
MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, TO CONSUMERS. THE EXCLUSION ALSO APPLIES TO
INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR INDIRECT DAMAGES FOR ANY BREACH OF EXPRESS OR
IMPLIED WARRANTY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND/OR FITNESS, IF
ANY, APPLICABLE TO MINI PRODUCTS.

Warranty Policies and Procedures

(d) Dealer agrees to comply with the provisions of the Warranty Policies and Procedures
Manual supplied by the MINI Division to Dealer and any future versions of the Warranty
Policies and Procedures Manual applicable to a warranty claim. All such manuals and
documents referred to therein are fully incorporated into this Agreement. Dealer further
agrees to follow the procedures established from time to time by the MINI Division for the
processing and disposition of warranty claims and the return and disposition of Original
MINI Parts claimed to be defective. Dealer will also comply with all requests of the MINI
Division for the performance of service in

 

45

 

 response to warranty claims and will maintain detailed records of time and parts consumption as
prescribed by the MINI Division. Upon complying with such procedures and requests and
maintaining such records, Dealer will be entitled to reimbursement for warranty claims in
the amounts for reimbursement specified in the applicable Warranty Policies and Procedures
Manual for warranty claims provided that Dealer has the necessary equipment and qualified
service personnel, as specified by the MINI Division, to effect necessary warranty repairs.
Dealer must also have documentation in support of its claims and Dealer acknowledges and
agrees that the MINI Division may request Dealer to provide documentation to the MINI
Division at any time in connection with such claims.

Strict adherence to the procedures established for processing warranty claims is necessary
in order for the MINI Division to process such claims fairly and expeditiously. The MINI
Division will be under no obligation with respect to warranty claims not made strictly in
accordance with such procedures and in a timely manner. Dealer’s obligation hereunder
extends to all MINI Vehicles and MINI Products under warranty presented to Dealer by a
customer, regardless of whether Dealer sold the MINI Vehicle or MINI Product to such
customer.

Dealer is not authorized to assume or incur any other or additional warranty obligations or
liabilities on behalf of either the BMW Group or the MINI Division. Any such other or
additional obligations assumed or incurred by Dealer shall be solely the responsibility of
Dealer, including the disclosure of the identity of the supplier or warrantor, the
existence of a warranty, and the specific terms and conditions of such warranty to the
consumer.

 

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PARAGRAPH 20 — TERMINATION PRIOR TO EXPIRATION DATE AND SUCCESSION

Termination by Dealer

(a) Dealer shall have the right to terminate this Agreement at any time by sending notice
of such termination to the MINI Division, by certified mail, return receipt requested,
telegram, or overnight mail service at least sixty (60) days in advance of the effective
date thereof.

Immediate Termination by the MINI Division for Cause

(b) Except to the extent a greater notice period is required by any applicable statute, in
which case the minimum notice period shall be deemed to be the minimum period required by
such law, the MINI Division shall have the right to terminate this Agreement for cause,
with immediate effect, by sending notice of such termination to Dealer by certified mail
return receipt requested, telegram, or overnight mail service, if any of the following
events should occur:

(1) Any material misrepresentation by any of the persons listed in Paragraph 5 of the
Dealer Agreement as to any fact relied upon by the MINI Division in entering into this
Agreement or approving such persons;

(2) Conviction of Dealer or of any of the persons listed in Paragraph 5 of the Dealer
Agreement, or pleading guilty or pleading nolo contendre by any of the foregoing, of
any felony or for any material violation of law if the MINI Division has reason to
believe that such conviction or plea may adversely affect the conduct of Dealer’s MINI
Car Operations or would tend to be harmful to the BMW Group, the MINI Division, the
reputation of MINI Products, or the marketing of MINI Products;

(3) Submission by Dealer to the MINI Division of false or fraudulent reports,
statements, or information, or false or fraudulent claims for reimbursement, refunds,
or credits, such as, for example, false or fraudulent warranty claims;

(4) Grossly negligent or willful conduct on the part of Dealer or of any of the persons
listed in Paragraph 5 of the Dealer Agreement that the MINI Division determines, in the
reasonable exercise of its discretion, to be harmful to the goodwill of the BMW Group
or the MINI Division, the reputation of MINI Products, or the marketing of MINI
Products;

(5) Closure or cessation of Dealer’s MINI Car Operations for a period of six (6)
consecutive business days, unless such closure or cessation of operation is caused by
some event beyond the control of the Dealer, such as strikes, civil war, riots, fires,
floods, earthquakes, or other acts of God, and Dealer does not immediately resume its
customary operations after the cause of the closure or cessation of operations is
removed;

(6) Dissolution or liquidation of Dealer, if a partnership, corporation, or a limited
liability company;

 

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(7) Insolvency or business failure of Dealer, Dealer’s inability to pay its debts as
such debts become due, appointment of a receiver or custodian for all or any part of
the property of Dealer, assignment for the benefit of creditors by Dealer, the
commencement of a case or proceeding under any bankruptcy or insolvency laws by or
against Dealer or any person or entity owning or holding, beneficially or otherwise, a
majority or controlling interest in Dealer, or the subjection of all or any MINI
Products to execution or other judicial process;

(8) Termination of BMW NA’s authorization as a MINI importer;

(9) The conduct, directly or indirectly, of any dealership operation at any location,
other than that specifically approved herein for such operation, without the prior
written approval of the MINI Division;

(10) Any attempted or actual sale, transfer, or assignment by Dealer of the Dealer’s
assets, any ownership interest in the Dealer, this Agreement, or any of the rights
granted to Dealer hereunder, or any attempted or actual transfer, assignment, or
delegation by Dealer of any of the responsibilities assumed by it under this Agreement,
without the prior written consent and approval of the MINI Division, including, but not
limited to, any attempted or actual sale, transfer, or assignment of Dealer’s assets or
any ownership interest in the Dealer relating to the conduct of MINI Car Operations
hereunder to a person or entity that does not meet the MINI Division’s appointment
criteria for a Dealer Agreement For MINI Passenger Cars.

(11) Any attempted or actual sale, transfer, or assignment of Dealer assets or stock
that does not comply with the ownership limitations set forth in this Agreement or the
MINI Division’s ownership policies or procedures;

(12) Any change of a Dealer’s executive management (the Dealer Operator and/or any of
the Dealer’s Owners and/or Officers that are identified in Paragraph 5 of this
Agreement) without the MINI Division’s prior written consent and approval;

(13) Any attempted or actual pledging of Dealer stock or this Agreement as security for
an obligation;

(14) The termination of, or any conduct that warrants the termination of, a dealer
agreement for any of the other line-makes of the BMW Group under which Dealer is an
authorized dealer;

(15) The loss of licenses, permits, or authorization necessary for Dealer to perform
its obligations under this Agreement; and

(16) Any dilution or attempt to dilute the MINI brand or trademarks, the infringement
of MINI trademarks, or the violation of the trademark provisions in this Agreement or
the BMW Group or the MINI Division trademark policies or guidelines.

 

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Termination by the MINI Division on Sixty (60) Days Notice

(c) Except to the extent a greater notice period is required by any applicable statute, in
which case the notice period shall be deemed to be the period required by such statute, the
MINI Division shall have the right to terminate this Agreement, on sixty (60) days notice,
if any of the following situations exist and the MINI Division has previously sent a
written notice to Dealer with respect thereto:

(1) Any disagreement or personal difficulties between or among any of the persons
listed in Paragraph 5 of the Dealer Agreement which the MINI Division has a reasonable
basis to believe would have a materially adverse effect on the conduct of Dealer’s MINI
Car Operations or the presence in the management of Dealer of any person who the MINI
Division has a reasonable basis to believe does not have the requisite qualifications
for the position;

(2) Impairment of the reputation or financial standing of Dealer or any of the persons
listed in Paragraph 5 of the Dealer Agreement or ascertainment by the MINI Division of
any facts existing at or prior to the time of execution of this Agreement which tend to
impair such reputation or financial standing;

(3) Any reduction in value of Dealer’s MINI Products or any act on the part of the
Dealer, including without limitation, the existence of any liens or encumbrances upon
MINI Products, which to any degree imperils the prospect of full performance or
satisfaction of the Obligations of Dealer to the MINI Division; or any change in the
financial or other condition of Dealer which the MINI Division has reason to believe
unreasonably impairs the MINI Division’s security or increases its risk hereunder. By
way of example, such impairments might include failure to pay for MINI Products in
accordance with the terms and conditions of sales and failure to establish and/or
maintain for the duration of the Agreement, net working capital and/or adequate
exclusive unrestricted wholesale lines of credit;

(4) The importation, exportation, distribution, or sale of: (a) MINI vehicles which are
not originally manufactured or designed for use in the United States; or (b) MINI
Products: (i) for resale in the United States; (ii) for resale or use outside the
United States; or (iii) in violation of the MINI Division’s Export Policy.

(5) Refusal to permit the MINI Division to examine or audit Dealer’s accounts and
records as provided herein upon receipt by Dealer from the MINI Division of written
notice requesting such permission or information;

(6) Failure of Dealer to furnish accurate sales or financial information and failure to
submit the information and related supporting data in a timely fashion;

 

49

 

(7) Subject to provisions contained herein with regard to any change in ownership
occurring by reason of the death or permanent disability of Dealer’s Owner(s), any
change in Dealer’s
Owner(s) holding a majority or controlling ownership interest in Dealer, or any change,
whether voluntary or by operation of law, in the ownership of beneficial interests in
Dealer, or any appointment of Dealer Operator, without the prior written consent of the
MINI Division;

(8) Dealer’s failure to take any actions pursuant to the National Highway Traffic
Safety Administration and Motor Vehicle Safety Act of 1966, the Consumer Product Safety
Act, the Magnuson-Moss Warranty Act, damage disclosure statutes, or any other law,
statute, or regulation pertaining to safety, air pollution, noise control, or
warranties to consumers which may be required of motor vehicle dealers or which the
MINI Division may request in implementing any action undertaken by the MINI Division or
the BMW Group; or

(9) Any breach or violation of any material obligation contained in this Agreement or
in connection with any transaction between the MINI Division and Dealer, or the failure
of Dealer to satisfy any Deficiency(s) contained in the Improvement Addendum, or any
material failure by Dealer to comply with a requirement established by the MINI
Division and communicated to Dealer in accordance with this Agreement.

During the period such a situation as defined in this Paragraph 20 continues to exist, the
MINI Division may modify its terms of payment with respect to Dealer to such extent as the
MINI Division may consider appropriate, irrespective of Dealer’s credit standing or payment
record.

Termination upon Offering to Enter into a New or Amended MINI Car Dealer Agreement

(d) The MINI Division may terminate this Agreement at any time by providing Dealer with
ninety (90) days prior notice thereof and offering to enter into a new or amended form of
MINI Car Dealer Agreement with Dealer in a form being generally offered to eligible or
qualified MINI Car Dealers in accordance with Paragraph 4.

Termination for Failure of BMW NA to be Licensed

(e) If BMW NA or an Affiliated Entity fails to obtain or maintain any license, permit, or
authorization necessary for the MINI Division or an Affiliated Entity to perform its
obligations under this Agreement or if any such license, permit, or authorization is
suspended or revoked, and such suspension or revocation continues for a period of six (6)
consecutive business days, either party may terminate this Agreement by providing written
notice to the other party.

No Waiver by Failure to Terminate

(f) In the event the MINI Division shall be entitled to terminate this Agreement pursuant
to the provisions of Paragraph 20(b) or (c), but shall fail to do so, such failure shall
not be considered a waiver of the rights of the MINI Division to so terminate the
Agreement.

 

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Termination upon Death or Permanent Disability

(g) Death or permanent disability of any of Dealer’s Owners holding a majority or
controlling ownership interest in Dealer or the permanent disability of Dealer Operator
may, at the MINI Division’s option, result in the termination of this Agreement, upon
written notice by the MINI Division to Dealer. The MINI Division shall provide such notice
within a reasonable time after such death or permanent disability. Termination hereunder
shall be effective sixty (60) days from the date of such notice.

Successor in Event of Death or Permanent Disability

(h) Notwithstanding the provisions in Paragraph 20(g), in the event of the death or
permanent disability of any of the Dealer’s Owners, if the beneficial interest in Dealer
passes directly to the surviving spouse and children, or to any of them, and if:

(1) Either or both of the persons included in Paragraph 5 (a)(4) and (5) of the MINI
Car Dealer Agreement remain(s) unchanged; or

(2) Within ninety (90) days after the death or permanent disability of such Dealer
Owners, arrangements are completed for the assumption of the management of Dealer by
persons acknowledged in writing by the MINI Division to be satisfactory to it;

then the MINI Division will not terminate the Agreement by reason of such death or
permanent disability before the end of twelve (12) months after the death or permanent
disability of such Dealer Owners and, if the Agreement expires sooner than twelve (12)
months after the death or permanent disability of such Dealer Owners, the MINI Division
will offer to enter into a new Agreement with Dealer for an extension period equal to the
difference between twelve (12) months and the number of days between the date of death or
permanent disability of such Dealer Owners and the expiration date of this Agreement. Such
new Agreement will be in substantially the same form as the Agreement then currently
offered by.the MINI Division or an Affiliated Entity to its Dealers. Prior to the
expiration of such extension period and after completion of the MINI Division’s evaluation
of the performance of Dealer’s management during such period, the MINI Division will review
with Dealer the changes, if any, in the management or equity interests of Dealer required
by the MINI Division as a condition to renewing or extending the aforementioned new
Agreement with Dealer.

 

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Successor Nominee

(i) Dealer may amend the Dealer Agreement to nominate a Successor, designating proposed
Dealer Owners of a Successor Dealer to be established if this Agreement is terminated
because of death or permanent disability. A Successor Nominee, however, must be an
individual and shall not be a trust, partnership, corporation, or any other entity. Dealer
may also cancel a Successor Nominee by providing notice to the MINI Division that it
intends to amend the Dealer Agreement to delete and/or substitute a new Successor Nominee.
The request to amend the Dealer Agreement
or to cancel a Successor Nominee must be executed by all of Dealer’s Owners and be received
by the MINI Division prior to such death or permanent disability. In the case of the
nomination of a Successor, any proposed Dealer Owners must be acceptable to the MINI
Division. If a Successor Nominee is not acceptable to the MINI Division, Dealer and the
MINI Division will create a developmental plan which, if successfully accomplished, will
qualify the Successor Nominee to eventually become a Dealer Owner.

In the case of cancellation of a Successor Nominee, the MINI Division agrees to delete the
name of the party listed in Paragraph 5(a)(6) upon receipt of that notice. If, due to
changed circumstances, the MINI Division believes or has a reasonable basis to believe the
Successor Nominee is or should be disqualified, the MINI Division will notify Dealer that
the proposed owner is no longer acceptable. A subsequent Successor Nominee will be
designated or a developmental plan will be created by mutual agreement between the MINI
Division and Dealer.

If the MINI Division has notified Dealer Owners in writing before the death or permanent
disability of such owners that the MINI Division does not plan to continue to have a dealer
at Dealer’s location, the MINI Division shall accept a Successor Nominee upon the
Successor’s written commitment to relocate Dealer’s MINI Car Operations within a reasonable
time to a mutually acceptable location.

 

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PARAGRAPH 21 — CONTINUATION OF BUSINESS RELATIONS

Continuation of Business Relations After Expiration or Prior Termination

(a) This Agreement can be extended or renewed only through an express written instrument to
that effect executed in accordance with Paragraph 25(q) of the Dealer Agreement. Any
business relations of any nature whatsoever between the MINI Division and Dealer after the
expiration of the Agreement, or after its prior termination pursuant to Paragraph 20,
without such written instrument, shall not operate as an extension or renewal of the
Agreement. Nevertheless, all such business relations, so long as they are continued, shall
be governed by terms identical with the provisions of this Agreement.

 

53

 

PARAGRAPH 22 — RIGHTS AND LIABILITIES UPON EXPIRATION OR PRIOR TERMINATION

Cancellation of Pending Orders and Post Expiration and Termination Obligations

(a) Upon the expiration or prior termination of this Agreement all pending orders of Dealer
for MINI Products previously accepted by the MINI Division will be considered canceled and
Dealer shall immediately do the following:

(1) MINI Signs — Dealer shall remove, at its own expense, all MINI signs displayed at
Dealer’s Facility and sell and deliver (deliver only if the signs are leased) the same
to the MINI Division at Dealer’s Facility in suitable condition and packing for
transportation. To the extent that the Dealer purchased those signs, the MINI Division
of BMW NA will pay to Dealer, promptly following such delivery, Dealer’s purchase price
for such signs reduced by straight-line depreciation on the basis of a seven-year
useful life. To the extent that the Dealer leased those signs, there shall be no
repurchase and the lease(s) shall be automatically terminated;

(2) Discontinuance of Use of MINI Trademarks — Dealer acknowledges that the license and
right to the use of the MINI trademarks ceases upon Dealer’s voluntary resignation or
termination as a Dealer, or upon the expiration of this Agreement, whichever occurs
first. In such event, Dealer shall immediately cease holding itself out as a MINI
dealer and refrain from using MINI trademarks and trade names in any fashion
whatsoever. Moreover, Dealer agrees not to use any similar trademarks or trade names
and shall refrain from any other activity which states or implies that it is authorized
to deal in or service MINI Products. If Dealer shall refuse or neglect to comply with
the provisions of Paragraph 22(a)(1) and (2), Dealer agrees that the BMW Group and the
MINI Division of BMW NA shall suffer irreparable harm from the unauthorized use of MINI
trademarks and/or trade names. Furthermore, Dealer shall reimburse the MINI Division of
BMW NA for all costs and expenses (including attorneys fees) incurred by the MINI
Division in connection with legal proceedings to require Dealer’s compliance;

(3) Orders and Files — Dealer shall transfer to the MINI Division of BMW NA, or the
MINI Division’s designee or designees, all orders for sale by Dealer of MINI Vehicles
and Original MINI Parts then pending with Dealer, all deposits made thereon, whether in
cash or in kind, and all of its warranty files and files of prospective customers for
MINI Products, or complete copies of all such files;

(4) Customer Lists — Dealer shall provide the MINI Division of BMW NA with the correct
names, addresses, and telephone numbers of all customers who purchased MINI Vehicles
from Dealer and the service records of all current and active service customers. To the
extent they are available for such customers, Dealer will provide the MINI Division
with correct facsimile numbers and email addresses for the customers; and

(5) Literature — Dealer shall deliver to the MINI Division of BMW NA at the MINI
Division’s place of business, or to the MINI Division’s designee or designees, free of
charge, any and all technical or service literature, advertising, other printed
material, compact discs, diskettes, and any other technological medium relating to MINI
Products then in Dealer’s possession which were acquired or obtained by Dealer from the
MINI Division, such as, for example, sales instruction manuals and promotional
materials.

 

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Purchase of Dealer’s Inventory of MINI Products by the MINI Division

(b) Within ninety (90) days of the expiration or prior termination of this Agreement and
provided further that all of Dealer’s Obligations to the MINI Division have been paid or
satisfied in full, the MINI Division, upon Dealer’s compliance with the provisions
hereinafter set forth, will purchase from Dealer and Dealer will sell and deliver to the
MINI Division, the following:

(1) New MINI Vehicle Inventory — the MINI Division will purchase all new, unused,
undamaged, and unmodified MINI Vehicles then unsold in Dealer’s inventory which are in
first-class salable condition and of the then current model year or the immediately
preceding model year, provided that such MINI Vehicles were purchased by Dealer from
the MINI Division (or in the ordinary course of business from other Dealers). The price
for such MINI Vehicles shall be the Net Purchase Price at which they were originally
purchased from the MINI Division;

(2) New Original MINI Parts Inventory — the MINI Division will purchase all new,
unused, and undamaged Original MINI Parts (other than the special MINI tools
specifically covered in Paragraph 22(b)(3) below), in original packaging, not
classified as obsolete or “special” by the MINI Division, and listed in the then
current MINI Parts Price List, then unsold in Dealer’s inventory which are in
first-class, salable condition; provided such Original MINI Parts were purchased by
Dealer from the MINI Division. The price at which the MINI Division will purchase such
Original MINI Parts shall be the price last established by the MINI Division under the
MINI Division standard parts order for the sale of identical Original MINI Parts to
dealers, less a 15% handling and restocking charge; and

(3) Special MINI Tools — the MINI Division will purchase all required special MINI
tools applicable to MINI Vehicles including electronic testing equipment and computer
hardware and software, if any, provided that such tools were purchased by Dealer from
the MINI Division, and provided any sets of such tools are complete and no parts or
components are missing or otherwise unusable. The price at which the MINI Division will
purchase such special MINI tools shall be reasonably determined by the MINI Division,
but in no event will such price be less than Dealer’s purchase price for such tools
reduced by straight-line depreciation on the basis of a three-year useful life.

 

55

 

Any and all items to be sold by Dealer to the MINI Division pursuant to the provisions
of Paragraph 22(b)(2) and (3) shall be delivered by Dealer to the MINI Division at
Dealer’s Facilities in suitable condition and boxed and/or packed for transportation,
which transportation shall be at the MINI Division’s expense. In the event Dealer fails
to so box and pack any Original MINI Parts or special MINI tools to be sold hereunder,
the MINI Division may do so and deduct the expenses of such boxing and packing from the
applicable price thereof.

As a condition precedent to the obligations of the MINI Division under Paragraph 22(b)
to repurchase any MINI Vehicles, Original MINI Parts, or special MINI tools, Dealer
shall permit the MINI Division and the MINI Division’s designee or designees, at such
time and for such periods of time as the MINI Division reasonably shall determine, to
enter Dealer’s Facility for the purpose of inspection and/or taking an inventory of all
or any part of Dealer’s stock of MINI Vehicles, Original MINI Parts, and special MINI
tools. At the request of the MINI Division, Dealer shall comply in all respects with
the provisions of all applicable bulk sales acts or similar statutes protecting a
transferee of personal property with respect to liabilities of the transferor.

In making payments in accordance with Paragraph 22(b), the MINI Division reserves the
right to do the following:

(i) To pay any financial institution retaining a security interest in any of
the items to be repurchased by the MINI Division such sums as are necessary
to obtain good, unencumbered, and marketable title to such items;

(ii) To pay any claimant, in accordance with any applicable statute, such
sums as may be necessary to acquire good, unencumbered, and marketable title,
free of any interest, right or claim of such claimant, to the items being
repurchased by the MINI Division; and

(iii) To set off the amount due Dealer including, without limitation, amounts
due Dealer from the MINI Division for the repurchase of MINI Products
hereunder against any amount which may be due the MINI Division from Dealer,
including, without limitation, reimbursement of expenses incurred by the MINI
Division pursuant to (i) or (ii) above.

Notwithstanding anything to the contrary contained in Paragraph 22, in no event will the
MINI Division be required to purchase any item from Dealer unless Dealer is able to convey
title to such item free and clear of all liens, claims, encumbrances, and security
interests.

 

56

 

PARAGRAPH 23 — INDEMNIFICATION

Indemnification by the MINI Division

(a) Subject to the provisions of Paragraph 23, the MINI Division shall indemnify and hold
Dealer harmless against any judgment which may be rendered against Dealer, plus reasonable
attorneys fees and court costs, resulting from lawsuits seeking monetary damages commenced
against Dealer by third parties concerning:

(1) Bodily injury or property damage (including damage to MINI Products) claimed to
have been caused by an alleged defect in the design, manufacture, or assembly of MINI
Products; provided, however, that any claimed defect in manufacture or assembly was not
such as should have been detected by Dealer in a reasonable inspection of the MINI
Products, whether in the performance of the Dealer’s pre-delivery inspection and
conditioning, during the course of repair and/or maintenance, or otherwise;

(2) Failure of MINI Products to conform, because of changes in standard equipment or
material component parts, to any description thereof set forth in advertisements or
product brochures made available to Dealer by the MINI Division and allegedly relied on
by the first retail purchaser thereof, unless Dealer shall have received written notice
of such changes from the MINI Division prior to the date of delivery of the affected
MINI Product to such purchaser; or

(3) Any damage to MINI Products repaired by the MINI Division prior to the time any
affected MINI Product is delivered to the Dealer, unless Dealer shall have received
notice of such damage and repair from the MINI Division prior to the date of delivery
of the affected MINI Product to the first retail purchaser thereof.

In the event that any lawsuit making allegations as set forth in (1) through (3) above is
brought naming Dealer as a defendant, the MINI Division will, following receipt of notice
as provided in subparagraph (c) of this Paragraph, undertake at its sole expense and
through counsel selected or approved by the MINI Division, the defense of said action on
behalf of Dealer.

The MINI Division is specifically authorized by Dealer to settle or to continue to defend
any such lawsuit brought against Dealer, provided that the MINI Division shall be solely
liable for the payment of the amount of any settlement which it effects or judgment that is
rendered.

Should the MINI Division for any reason refuse to undertake the defense of Dealer when it
is otherwise obligated to do so under this subparagraph, Dealer may conduct its own defense
and, in that event, the MINI Division’s liability shall be limited solely to the costs of
such defense, including reasonable attorneys fees, court costs, and the amount of any
judgment or final settlement paid by Dealer (provided, however, that Dealer shall notify
the MINI Division in writing within twenty (20) days of such judgment or settlement).

The MINI Division shall have the right to decline to accept Dealer’s defense or, after
accepting the defense but prior to trial, to tender the defense back to Dealer, and Dealer
shall accept such tender if the MINI Division reasonably concludes that the allegations or
claims being pursued are no longer those set forth in (1) through (3) above.

 

57

 

Indemnification by Dealer

(b) Subject to the provisions of Paragraph 23, Dealer shall indemnify and hold the MINI
Division harmless against any judgment which may be rendered against the MINI Division,
plus reasonable attorneys fees and court costs, resulting from lawsuits seeking monetary
damages commenced against the MINI Division by third parties concerning:

(1) Dealer’s alleged failure to perform or negligent or willfully malfeasant
performance of: (i) the service obligations assumed by it pursuant to Paragraph 14 of
this Agreement; or (ii) any maintenance or repair service on MINI Products or such
other motor vehicles or products as may be sold or serviced by Dealer;

(2) Dealer’s alleged breach of any contract between Dealer and Dealer’s customer;
provided, however, that the breach was not caused by any act or omission on the part of
the MINI Division which the MINI Division unreasonably failed to notify Dealer of prior
to the date of Dealer entering into the contract with its customer; or

(3) Dealer’s alleged independent warranties, misleading statements, misrepresentations,
or unfair or deceptive acts or practices, whether through advertisements or otherwise,
affecting any individual or entity; provided, however, that the alleged warranties,
statements, representations, deceptive acts or practices or advertisements are not
based on information or material produced or supplied by the MINI Division and are not
subsequently superseded or withdrawn by the MINI Division upon notification to Dealer.

In the event that any lawsuit making allegations as set forth in (1) through (3) above is
brought naming the MINI Division as a defendant, Dealer will, following receipt of notice
as provided in Paragraph 23(c), undertake at its sole expense and through counsel selected
by Dealer and approved by the MINI Division, the defense of said action on behalf of the
MINI Division. Dealer is specifically authorized by the MINI Division to settle or to
continue to defend any such lawsuit brought against the MINI Division, provided that Dealer
shall be solely liable for the payment of the amount of any settlement which it effects or
judgment that is rendered.

Should Dealer for any reason refuse to undertake the defense on behalf of the MINI Division
when it is otherwise obligated to do so under this subparagraph, the MINI Division may
conduct its own defense and, in that event, Dealer’s liability shall be limited solely to
the costs of such defense
including reasonable attorneys fees, court costs, and the amount of any judgment or final
settlement paid by the MINI Division (provided, however, that the MINI Division shall
notify Dealer in writing within twenty (20) days of such judgment or settlement).

Dealer shall have the right to decline to accept the MINI Division’s defense or, after
accepting the defense but prior to trial, to tender the defense back to the MINI Division,
and the MINI Division shall accept such tender, if Dealer reasonably concludes that the
allegations being pursued are no longer those set forth in (1) through (3) above.

 

58

 

Notification 

(c) Whenever a lawsuit is commenced against either the MINI Division or Dealer or both of
them, and either party seeks indemnification from the other, each shall, within fifteen
(15) days after service of the complaint notify the other in writing of any request to
assume its defense and to indemnify it, and shall provide at the time copies of any
pleadings or other court papers which have been served upon the party giving notice, as
well as all information then available regarding the first customer, the plaintiff, and the
circumstances giving rise to the suit.

IN THE EVENT THIS PROVISION IS FOR ANY REASON NOT COMPLIED WITH, SUBPARAGRAPHS (a) AND (b)
OF PARAGRAPH 23 SHALL NOT APPLY FOR PURPOSES OF THAT LAWSUIT OR WITH RESPECT TO ANY CLAIM
OR LAWSUIT ARISING OUT OF ALLEGATIONS OR TRANSACTIONS ANTEDATING THE FIRST CLAIM OR LAWSUIT
INVOLVING THE AFFECTED MINI PRODUCT.

The request to assume the defense and to indemnify shall be accepted or rejected, in
writing, by the party to whom it is delivered within thirty (30) days following its
receipt. Prior to receipt of a response to its request, each party agrees to take all
reasonable steps to ensure that the defense to the action is in no way prejudiced, whether
by action or inaction. If the request is accepted, the party making the request shall
cooperate fully in the defense of the suit in such manner and to such extent as the party
assuming the defense may reasonably require; provided, however, that subparagraphs (a) and
(b) of Paragraph 23 shall be applicable commencing with the date on which the request is
accepted and any expenses or other obligations incurred prior to such acceptance by the
party making the request shall be borne solely by such party.

 

59

 

Allegations Involving Both the MINI Division and Dealer

(d) If at any time in a lawsuit it is alleged that there is liability on the part of both
the MINI Division (on any or all of the bases set forth in Paragraph 23(a)) and Dealer (on
any or all of the bases set forth in Paragraph 23(b)), each party shall be responsible for
its own defense, including costs and attorneys fees, unless at any time after the
commencement of such suit one party offers to undertake the total defense and the other
party agrees thereto in writing, in which event the provisions of subparagraphs (a) and (b)
hereof shall be controlling, as appropriate to the circumstances of such agreement.

The responsibility of the MINI Division or Dealer for its own defense pursuant to this
subparagraph (d), or pursuant to any other circumstances not within the scope of Paragraph
23, shall in no way affect or alter the legal rights, if any, either may have to
indemnification or contribution from the other.

 

60

 

PARAGRAPH 24 — ALTERNATE DISPUTE RESOLUTION

Alternate Dispute Resolution

(a) The MINI Division and Dealer agree to minimize disputes between them. However, in the
event that disputes arise, the MINI Division and Dealer agree that they will attempt to
resolve all matters between them before any formal action is taken to seek any
administrative or judicial adjudication or governmental review.

A MINI BOARD (“BOARD”) will act as the Administrator of all disputes between the MINI
Division and Dealer arising out of this Agreement. The BOARD will consist of two
representatives of the MINI Division who will be selected by the MINI Division and two
representatives of MINI Dealers who will be selected by the MINI passenger car dealer
organization. The BOARD will determine eligibility requirements, develop procedures to
ensure a fair and equitable decision (“ADR PROCEDURES”), and select individuals to
participate in a DISPUTE RESOLUTION PANEL (“PANEL”) to hear an eligible dispute. The PANEL
shall consist of at least one MINI Division representative, one MINI Car Dealer
representative, and one independent person, selected by the BOARD, or a designated
facilitator company chosen by the BOARD.

The BOARD shall also monitor the dispute resolution process, periodically report to the
MINI Division and the MINI passenger car dealer organization on the effectiveness of this
process and, when required, make recommendations for changes in this process.

The MINI Division and Dealer agree that the process outlined in this Paragraph 24 and
developed by the BOARD in the ADR PROCEDURES shall be mandatory. The PANEL’s recommendation
will be non-binding, unless prior to appearing before the PANEL the parties agree to be
bound by the decision of the PANEL. The purpose of the PANEL will be to recommend a
resolution and work with the parties to reach a fair and equitable solution to their
dispute in a cost-effective, efficient manner, and to avoid formal adjudication or
government intervention.

If either party to this Agreement fails to refer a matter subject to Paragraph 24 to the
dispute resolution process or initiates any action in court or an administrative agency
prior to issuance of a PANEL recommendation on a dispute, that party shall pay all costs,
fees and expenses, including attorneys fees, of the other party which arise out of the
enforcement of this Paragraph 24.

 

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PARAGRAPH 25 — MISCELLANEOUS PROVISIONS

Approval or Consent by the MINI Division 

(a) Any approval or consent given by the MINI Division must be in writing and
signed by duly authorized representatives of the MINI Division.

Divisibility

(b) If any provision of this Agreement contravenes or is prohibited by the laws of any
state or other jurisdiction which are held to be applicable to this Agreement, such
provision shall be limited to the extent necessary so that it will not render this
Agreement invalid, unlawful, or unenforceable, in whole or part, under such laws, but all
other provisions of this Agreement shall remain in full force and effect.

Termination of Prior Agreements

(c) This Agreement terminates and supersedes all prior written or oral agreements, if any,
between the MINI Division and Dealer relating to the subject matter hereof, except with
respect to any trade indebtedness which may be owing by either the MINI Division or Dealer
to the other and except that this Agreement shall not operate to cancel any of Dealer’s
unfilled orders with the MINI Division for any MINI Products placed with the MINI Division
pursuant to the provisions of any agreement terminated or superseded by this Agreement.

Notices

(d) Any notices under or pursuant to the provisions of this Agreement shall be directed to
the respective addresses of the parties as stated in the Dealer Agreement or, if either of
the parties shall have specified another address by notice to the other party in writing,
to the address last specified. The parties shall advise each other promptly, in writing, of
any change of address.

No Implied Waivers

(e) Except as otherwise provided in this Agreement, the failure of either party at any time
to require performance by the other party of any provision hereof shall in no way affect
the full right to require such performance at any time thereafter, nor shall the waiver by
either party of a breach of any provision hereof constitute a waiver of any succeeding
breach of the same or any other provision or constitute a waiver of the provision itself.

 

62

 

Dealer Not an Agent and Disclaimer of Further Liability by the MINI Division and the BMW
Group

(f) Dealer is not an agent of the MINI Division, and the MINI Division owes no fiduciary
duty to Dealer. Dealer will conduct its MINI Car Operations on its own behalf and for its
own account. Dealer has no power or authority to act for or to bind the MINI Division
and/or the BMW Group
and shall not represent directly, indirectly, or by implication that the Dealer has any
such power or authority. Furthermore, except as expressly provided in this Agreement, the
MINI Division will not be liable for any expenditure made or incurred by Dealer in
connection with Dealer’s performance of its obligations pursuant to the Agreement.

Dealer agrees that it has no rights, without limitation, arising from or in connection with
any agreement between the MINI Division and any other MINI dealer and that Dealer is not a
third party beneficiary of any such agreement. In addition, nothing herein grants Dealer
any rights to enforce any such agreement. Dealer also agrees that no third party shall have
any enforceable rights under this Agreement.

Accounts Payable

(g) All monies or accounts due Dealer shall be net of Dealer’s indebtedness to BMW NA, its
subsidiaries, affiliates, and MINI Division. The MINI Division of BMW NA may: (1) deduct
any amounts due or to become due from Dealer to BMW NA, its subsidiaries, affiliates, and
MINI Division; and/or (2) set-off and/or recoup any amounts due from Dealer from any
amounts in the possession of, or being held by, BMW NA, its subsidiaries, affiliates, and
MINI Division relating to this Agreement or any other agreement between Dealer and any of
those parties.

Continuing Security Interests

(h) Except as specifically provided by any other provision of this Agreement, the security
interests granted to the MINI Division of BMW NA, hereunder, shall not be affected by any
provision in any other instrument, including, but not limited to, invoices, purchase
orders, purchase order acknowledgments, and other forms; and the terms of this Agreement
relating to such security interests may only be modified, amended, or changed by a writing
signed by both parties specifically referring td this Agreement.

Assignment of Security Interests

(i) The MINI Division of BMW NA may assign the security interests granted to it under this
Agreement or any part thereof, including its security interests in particular items of
Collateral and, upon notifying the Dealer, the assignee shall be entitled to the full
performance of the covenants, rights, and remedies contained in Paragraph 18 of the
Agreement in so far as they apply to the Collateral assigned. Dealer will not assert any
claims, defenses, offsets, or recoupments against the assignee that it may have against the
MINI Division.

Assignment of Dealer Agreement by the MINI Division of BMW NA

(j) The MINI Division of BMW NA may assign this Agreement to an Affiliated Entity or a
successor without the approval or consent of Dealer, provided that the Affiliated Entity or
successor becomes responsible for fulfilling the terms and conditions of the Dealer
Agreement.

 

63

 

Limitations Re Dealer Stock and Assets

(k) Dealer agrees that it shall not pledge its stock as security for any obligations to
individuals or entities, including, but not limited to, corporations, partnerships, trusts,
and financial institutions. Dealer, however, may pledge its assets, subject to the security
interests provided for in this Agreement, as security to individuals or entities,
including, but not limited to, corporations, partnerships, trusts, and financial
institutions (the term assets as used herein excludes stock). Dealer further agrees that
this Agreement is not an asset of the Dealer and may not be pledged as security for any
obligation.

MINI Division’s Right to Specific Performance

(I) Since Dealer’s performance of its obligations under this Agreement is of such a nature
that it is impossible to measure, in money, the damages which will be suffered by the MINI
Division in the event Dealer should fail to perform any of its obligations, Dealer agrees
that, in the event of any such failures or performance on its part, the MINI Division shall
be entitled to maintain an action or proceeding to compel the specific performance by
Dealer of these obligations and Dealer agrees not to urge in any such action or proceedings
the claim or defense that the MINI Division has an adequate remedy at law.

Reservation of Rights

(m) The MINI Division reserves any and all rights not expressly set forth in this
Agreement.

Headings 

(n) The headings contained in this Agreement have been inserted for convenient reference
only and shall not in any way affect the construction, interpretation, or meaning of the
text.

Entire Agreement and Representations

(o) This Agreement contains the entire agreement between the MINI Division and Dealer.
Dealer acknowledges that no representation or statement has been made to it on behalf of
the BMW Group, the MINI Division and/or any agents, representatives, or employees of either
the BMW Group or the MINI Division that in any way tend to change or modify any of the
terms or provisions of the Agreement or that in any manner prevents this Agreement from
becoming effective. Dealer further acknowledges that there is no other agreement or
understanding, except those specifically provided for in this Agreement, either oral or
written, between Dealer and the BMW Group and/or the MINI Division affecting this Agreement
or relating to the subject matter hereof.

 

64

 

Execution of Agreement

(p) This Agreement shall not become effective until signed by a duly authorized officer of
Dealer, if a corporation; or by a duly authorized representative of Dealer, if a limited
liability company; or by one of the general partners of Dealer, if a partnership; or by the
named individual, if a sole proprietorship; and countersigned by two authorized MINI
Division representatives.

Modification of Agreement

(q) No representative of the MINI Division shall have the authority to waive any of the
provisions of this Agreement or to make any amendment or modification of or any other
change in, addition to, or deletion of any portion of this Agreement or to make any other
agreement which imposes any obligation on either the MINI Division or Dealer which is not
specifically imposed by this Agreement or which renews or extends this Agreement; unless
such waiver, amendment, modification, change, addition, deletion, or agreement is reduced
to writing and signed by two authorized representatives of the MINI Division and by the
authorized representative of Dealer specified in Paragraph 25(p) of this Agreement.

New Jersey Law

(r) This Agreement shall be deemed to have been entered into in the State of New Jersey and
shall be construed and interpreted in accordance with New Jersey law. Furthermore, any
questions as to the validity of this Agreement, the performance of any of its terms and
conditions, or of any contractual rights or obligations of the parties to this Agreement,
shall be governed by and resolved in accordance with New Jersey law.

 

65

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