A Distributor is an authorized wholesale distributor of Falken brand passenger and light truck tires supplied by Falken.
The Dealer is a retail seller, not a wholesaler, of passenger and/or light truck tires. A Dealer has completed and submitted to Distributor
a Falken Fanatic Program Dealer Enrollment Application (the "Enrollment Application") and desires to participate in
the Falken Fanatic Program (as defined below) which is conducted by Distributor and supported by Falken,
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the Parties agree as follows:
The Falken Fanatic Program. The Falken Fanatic Program (the "Program") is a sales incentive program in which Dealer can earn cash rewards
for sales of tires ("Tires") in the tire lines ("Tire Lines") set forth in the Falken Fanatic Program Outline (the "Program Outline")
attached hereto as Exhibit A. Program Requirements. In order to participate in the Program and earn cash rewards, Dealer must satisfy
each of the following requirements: Make an initial purchase from Distributor of a minimum quantity of twenty-four (24) Tires for each
designated retail location as listed on the Enrollment Application (each a “Location” and collectively, the “Locations”). Dealer shall not
sell Tires at any location other than the Locations. Concurrently with the execution of this Agreement, Dealer shall deliver to Distributor an
opening firm purchase order meeting these minimum purchase requirements. Purchase a minimum of one hundred (100) Tires for each Location in each
calendar quarter, ending on March 31, June 30, September 30 and December 31. The minimum purchase requirement for periods of less than a full
calendar quarter shall be prorated based on the number of days remaining in the quarter divided by the total number of days in the quarter.
Purchase and display a minimum of three (3) Tire Lines at each Location.
1. Program Rewards. As long as Dealer meets the program requirements as set forth in Sections 2 and 4, Dealer shall earn cash rewards
(the "Rewards") in the amounts set forth in Program Outline based on all purchases of Tires from Distributor per Location.
A "purchase" shall be deemed to have occurred upon issuance of an invoice by Distributor. The Rewards shall be calculated and
paid on a quarterly basis by Falken directly to Dealer.
2. Dealer Operations.
In order to participate in the Program, Dealer shall perform each of the following:
(a) Exercise its best efforts to promote and sell the Tires.
(b) Provide high quality, professional passenger and light truck tire service to its retail customers.
(c) Maintain each Location in a high-quality and professional condition. The facilities shall be clean, well-lit,
and in good repair. Inventory and products on display shall be well organized and easily accessible.
(d) Identify each Location with Falken Tire brand identification.
(e) Administer and service all Falken customer service programs, in accordance with Falken's warranty and adjustment
(f) Refrain from making any false, misleading or disparaging representations or statements or from otherwise engaging
in any trade practices which may affect adversely the high image, credibility, or reputation of Falken or the Tires.
(g) Make no representations to consumers or to the trade with respect to Tire specifications or features, except such
as may be approved in writing or published by Falken.
(h) Make available, at the request of Distributor or Falken, all sales and purchase information necessary to verify
performance pursuant to the terms of this Agreement.
(i) At the request of Distributor or Falken, participate in training programs including self-study and certification.
(j) Comply in all respects with the manuals, specifications, guidelines and instructions regarding the storage,
handling and installation of the Tires which have been provided by Distributor or Falken.
(k) Comply with all applicable existing and future laws, regulations and acts of the governmental entities and
(l) Dealer may resell the Tires only to end users. Dealer shall not resell Tires to wholesalers or other retailers.
3. Inadequate Supply. To the extent that Dealer is unable to obtain an adequate supply of Tires from Distributor,
Dealer may purchase Tires from other authorized Falken Fanatic Program distributors ("Secondary Program Distributors"). Dealer shall earn Rewards
on purchases of Tires from Secondary Program Distributors, provided, however, Rewards shall not be earned on purchases of Tires from Secondary
Program Distributors in excess of 20% of Dealer's total combined purchases of Tires from Distributor and Secondary Program Distributors for the
4. Change of Distributor. In the event that Dealer desires to change its distributor, Dealer may submit a Distributor
Change Request to Falken. A Distributor Change Request form may be obtained by contacting Falken. A change request may not be submitted more
than one (1) time in a calendar year. If multiple Dealer Locations are under the same tax identification number and/or ownership, the Distributor
Change Request shall apply to all Dealer Locations. Falken may approve or deny the change request in its sole and absolute discretion.
If approved, the change will not go into effect until at least one (1) month after a new Dealer Participation Agreement is signed by
Dealer and the new distributor and approved by Falken.
5. Trademarks and Serial Numbers. During the term of this Agreement, Dealer may use Falken’s trademarks and trade names
(collectively, "Marks") only for the purpose of advertising, promoting and selling the Tires, but not otherwise. Dealer agrees that it shall not use
any of the Marks on any Dealer created advertising or promotional materials without Falken's prior written approval, which approval may be withheld in
Falken's sole and absolute discretion. Dealer shall use the Marks only in connection with and in a manner consistent with the scope of this Agreement
and, if instructed by Distributor or Falken, accompanied by the symbol ® designating the federal registration of the Marks. Dealer acknowledges that
the Marks and all rights therein are owned by and belong to Falken or its parent company, Sumitomo Rubber Industries, Ltd. ("SRI") and will not, during
the term of this Agreement or thereafter, attack the title of Falken or SRI in and to the Marks, nor will do anything to destroy, impair or in any way
impede the effect and validity of the Marks. Dealer shall refrain from removing, altering or obliterating Marks or serial numbers from the Tires or
from utilizing any Marks on any other products. Dealer shall acquire no rights whatsoever in any Marks by virtue of this Agreement.
6. Term and Termination. This Agreement shall commence upon the execution of this Agreement by Distributor, Dealer and
approval by Falken. This Agreement shall not become effective, unless and until approved and signed by Falken, which approval or disapproval shall
be in Falken's sole and absolute discretion. This Agreement shall remain in effect through December 31 of the current calendar year, subject to
automatic renewals for successive one year terms (each such renewal term running from January 1 through December 31 of each subsequent year), unless
and until Dealer shall have delivered to the Distributor and Falken or Falken or Distributor shall have delivered to Dealer, a notice of non-renewal
not less than thirty (30) days prior to the end of the term then in effect. If Dealer breaches Sections 2, 5 or 7, Falken or Distributor may
immediately terminate this Agreement by giving written notice. If Dealer defaults in the performance of any other obligation hereunder and fails
to cure such default within seven (7) days of notice of such default, Falken or Distributor may terminate this Agreement by giving written notice.
Dealer, Distributor or Falken may terminate this Agreement, with or without cause, by giving not less than thirty (30) days prior written notice.
The Parties agree that Falken may amend or modify the terms and conditions of the Program (including without limitation, the Tire Lines, minimum
purchase requirements and Program Rewards) at the end of any calendar quarter by giving written notice not less than thirty (30) days prior to the
end of such calendar quarter.
7. Disclosure and Protection of Confidential Information. The Parties agree that all
information furnished by Distributor or Falken to Dealer or by Dealer to Distributor or Falken hereunder, in whatever form, except promotional and
advertising material, is “Confidential Information.” The receiving entity (the "Receiving Entity") agrees that it will use all Confidential
Information disclosed to it by another entity (the "Disclosing Entity") only in furtherance of its performance under this Agreement, and for no
other purpose, disclosing Confidential Information only to those of its employees or other authorized agents (who shall have agreed in writing to
be bound by reasonable confidentiality obligations) as will be directly concerned with performance under this Agreement. Except as provided above,
the Receiving Entity agrees that during the term of this Agreement (including any renewals or extensions hereof) and for a period of ten years after
the termination or expiration hereof, it will not disclose Confidential Information of the other to any other person or entity without the express,
prior written consent of the Disclosing Entity. Each Party agrees that it will protect the confidentiality of the Confidential Information with the
same degree of care with which it protects its own confidential information. The foregoing confidentiality obligations shall survive termination of
this Agreement and shall remain binding on the Parties and their respective affiliates, successors and assigns until a written release of such
restrictions is executed by the other. All Confidential Information furnished to a Party hereunder (including all copies thereof) is and shall
remain the property of the Disclosing Entity, and shall be returned or otherwise disposed of as instructed by the Disclosing Entity promptly upon
demand or upon the termination or expiration of this Agreement.
8. Relationship of the Parties. Each Party, for all purposes hereunder, shall be an independent contractor.
Neither Party nor its officers, employees or agents are granted by this Agreement or otherwise any express or implied right or authority by the other,
neither Party or its officers, employees or agents shall take any action which would have the effect of creating the appearance of such authority,
to assume or create any obligation or responsibility on behalf of or in the name of the other or any of its affiliates, or to bind the other or any
of its affiliates in any manner or thing whatsoever. Falken is not a party to this Agreement but is a third party beneficiary of this Agreement.
The Parties agree that Falken shall have the rights specified in the provisions of this Agreement and the power to enforce those rights directly against
either or both of the Parties.
9. Audit. Falken shall have the right during the term of this Agreement and for two (2) years thereafter, to inspect,
examine and make copies of the books and records of Dealer as it may be necessary to verify reported sales of Tires were retail in nature and sold to
an end user. Such inspection and examination shall be made during business hours upon reasonable prior notice and not more often than once per calendar
10. Miscellaneous. Neither Party may assign or transfer any rights or obligations under this Agreement, without the prior
written consent of the other Party. Any notice required under this Agreement shall be in writing and effected by delivery to such Party in person,
by Federal Express or other reputable courier, by facsimile (provided that an additional copy of such document or consent is delivered by regular mail),
or by sending the same by registered or certified mail, return receipt requested, and shall be deemed received upon personal delivery if delivered
personally, by Federal Express or other reputable courier or by facsimile, or four (4) business days after deposit in the mail in the United States,
postage prepaid, addressed to the person to receive such notice or communication at the address for the Party as set forth in the Enrollment Application.
Either Party may change its address to which notices are to be sent to it by giving notice of such change in the manner provided in this Section.
Failure of either Party to enforce any of the terms of this Agreement shall not be construed as a waiver of rights thereunder preventing the subsequent
enforcement of such provisions or the recovery of damages for breach thereof. If any portion of this Agreement, including the Exhibits hereto and made
a part hereof, is held to violate, or to be invalid or unenforceable under, any applicable laws of any government or subdivision thereof, or the portion
declared to be in violation of or invalid or unenforceable under any such law shall be reformed (to the extent possible) or treated as being of no force
or effect, and this Agreement shall be construed as though such portion had not been inserted herein, and the remainder of this Agreement shall remain
in full force and effect. This Agreement, all transactions executed hereunder and the legal relations between the Parties shall be governed and
construed solely in accordance with the laws of the State of California, without reference to its conflict of laws rules. In the event of a
controversy or claim arising out of or relating to this Agreement, or the breach hereof, the Parties consent to the jurisdiction and venue of a court
of applicable subject matter jurisdiction located in San Bernardino County, California or the Central District of California.
This Agreement, together with the Exhibits attached hereto and made a part hereof, constitutes the entire Agreement between the Distributor and Dealer,
superseding any prior agreement between the Parties or their predecessors or affiliates with respect to the subject matter hereof. No modification or
amendment to this Agreement shall be binding unless in writing and signed by authorized representatives of both Distributor and Dealer and approved in
writing by Falken. This Agreement may be executed in any number of separate counterparts, each of which shall be deemed to be an original but which
together shall constitute one and the same instrument.
Falken Fanatic Program Outline