STANDARD PROVISIONS
DEALER
SALES AND SERVICE
AGREEMENT
GENERAL MOTORS CORPORATION
TABLE OF CONTENTS FOR STANDARD PROVISIONS
PAGE
PURPOSE OF AGREEMENT....................................................... 1
ARTICLE 1. APPOINTMENT AS AUTHORIZED DEALER............................... 2
ARTICLE 2. DEALER OPERATOR................................................ 2
ARTICLE 3. DEALER OWNER................................................... 2
ARTICLE 4. AUTHORIZED LOCATIONS........................................... 2
4.1. Dealer Network Planning........................................... 2
4.2. Area of Primary Responsibility.................................... 3
4.3. Establishment of Additional Dealers............................... 3
4.4. Facilities........................................................ 4
4.4.1. Location................................................... 4
4.4.2. Change in Location or Use of Premises...................... 4
4.4.3. Size....................................................... 5
4.4.4. Dealership Image and Design................................ 5
4.4.5. Dealership Equipment....................................... 5
ARTICLE 5. DEALER'S RESPONSIBILITY TO PROMOTE, SELL AND SERVICE PRODUCTS. 6
5.1. Responsibility to Promote and Sell................................ 6
5.2. Responsibility to Service......................................... 7
5.3. Customer Satisfaction............................................. 8
5.4. Business Planning................................................. 8
ARTICLE 6. SALE OF PRODUCTS TO DEALERS.................................... 8
6.1. Sale of Motor Vehicles to Dealer.................................. 8
6.2. Sale of Parts and Accessories to Dealer........................... 9
6.3. Prices and Other Terms of Sale.................................... 9
6.3.1. Motor Vehicles............................................. 9
6.3.2. Parts and Accessories...................................... 9
6.4. Inventory......................................................... 10
6.4.1. Motor Vehicle Inventory.................................... 10
6.4.2. Parts and Accessories...................................... 10
6.5. Warranties on Products............................................ 10
ARTICLE 7. SERVICE OF PRODUCTS............................................ 11
7.1. Service for Which Division Pays................................... 11
7.1.1. New Motor Vehicle Pre-Delivery Inspections and
Adjustments................................................ 11
7.1.2. Warranty and Special Policy Repairs........................ 11
7.1.3. Campaign Inspections and Corrections....................... 11
7.1.4. Payment for Pre-Delivery Adjustments, Warranty, Campaign
and Transportation Damage Work............................. 11
7.2. Parts, Accessories, and Body Repairs.............................. 12
7.2.1. Warranty and Policy Repairs................................ 12
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7.2.2. Representations and Disclosures as to Parts and
Accessories................................................ 12
7.2.3. Body Repairs............................................... 12
7.2.4. Tools and Equipment........................................ 12
ARTICLE 8. TRAINING....................................................... 12
ARTICLE 9. REVIEW OF DEALER'S SALES AND SERVICE PERFORMANCE............... 13
ARTICLE 10. CAPITALIZATION................................................ 13
ARTICLE 11. ACCOUNTS AND RECORDS.......................................... 14
11.1. Uniform Accounting System........................................ 14
11.2. Examination of Accounts and Records.............................. 14
11.3. Confidentiality of Dealer Data................................... 14
ARTICLE 12. CHANGES IN MANAGEMENT AND OWNERSHIP........................... 14
12.1. Succession Rights Upon Death or Incapacity....................... 15
12.1.1. Successor Addendum........................................ 15
12.1.2. Absence of Successor Addendum............................. 16
12.1.3. Successor Dealer Requirements............................. 16
12.1.4. Term of New Dealer Agreement.............................. 16
12.1.5. Limitation on Offers...................................... 16
12.1.6. Cancellation of Addendum.................................. 17
12.2. Other Changes in Ownership or Management......................... 17
12.3. Right of First Refusal to Purchase............................... 18
12.3.1. Creation and Coverage..................................... 18
12.3.2. Purchase Price and Other Terms of Sale.................... 18
12.3.3. Consummation.............................................. 19
12.3.4. Assignment................................................ 19
12.3.5. Transfer Involving Family Members and Dealer Management... 19
ARTICLE 13. BREACHES AND OPPORTUNITY TO REMEDY............................ 20
13.1. Certain Acts or Events........................................... 20
13.2. Failure of Performance by Dealer................................. 21
ARTICLE 14. TERMINATION OF AGREEMENT...................................... 22
14.1. By Dealer........................................................ 22
14.2. By Agreement..................................................... 22
14.3. Failure to be Licensed........................................... 22
14.4. Incapacity of Dealer Operator.................................... 22
14.5. Acts or Events................................................... 23
14.6. Reliance on Any Applicable Termination Provision................. 24
14.7. Transactions After Termination................................... 24
14.7.1. Effect on Orders.......................................... 24
14.7.2. Termination Deliveries.................................... 24
14.7.3. Effect of Transactions After Termination.................. 24
ARTICLE 15. TERMINATION ASSISTANCE........................................ 25
15.1. Deferral of Effective Date....................................... 25
15.2. Purchase of Personal Property.................................... 25
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15.2.1. Division's Obligations.................................... 25
15.2.2. Dealer's Responsibilities................................. 26
15.2.3. Payment................................................... 27
15.2.4. Assignment of Rights...................................... 27
15.3. Assistance on Premises........................................... 27
15.3.1. Division's Obligation..................................... 27
15.3.2. Owned Premises............................................ 28
15.3.3. Leased Premises........................................... 28
15.3.4. Rent and Price............................................ 29
15.3.5. Limitations on Obligation to Provide Assistance........... 29
ARTICLE 16. DISPUTE RESOLUTION PROCESS.................................... 30
ARTICLE 17. GENERAL PROVISIONS............................................ 30
17.1. No Agent or Legal Representative Status.......................... 30
17.2. Responsibility for Operations.................................... 30
17.3. Taxes............................................................ 31
17.4. Indemnification by General Motors................................ 31
17.5. Trademarks and Service Marks..................................... 32
17.6. Notices.......................................................... 33
17.7. No Implied Waivers............................................... 33
17.8. Assignment of Rights or Delegation of Duties..................... 33
17.9. No Third Party Benefit Intended.................................. 34
17.10. Accounts Payable................................................ 34
17.11. Sole Agreement of Parties....................................... 34
17.12. Applicable Law.................................................. 34
17.13. Superseding Dealer Agreements................................... 35
GLOSSARY................................................................... 36
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STANDARD PROVISIONS
The following Standard Provisions are part of Division's Dealer Sales and
Service Agreement (Form GMMS 1012).
PURPOSE OF AGREEMENT
The purpose of this Agreement is to promote a relationship between Division
and its Dealers which encourages and facilitates cooperation and mutual effort
to satisfy customers, and permits Division and its dealers to fully realize
their opportunities for business success. Division has established a network of
authorized dealers operating at approved locations to effectively sell and
service its Products and to build and maintain consumer confidence and
satisfaction in Dealer and Division. Consequently, Division relies upon each
Dealer to provide appropriate skill, capital, equipment, staff and facilities to
properly sell, service, protect the reputation, and satisfy the customers of
Division's Products in a manner that demonstrates a caring attitude toward those
customers. At the same time, Dealer relies upon Division to provide sales and
service support and to continually strive to enhance the quality and
competitiveness of its Products.
This mutual dependence requires a spirit of cooperation, trust and
confidence between Division and its dealers. To facilitate attainment of
cooperation, trust and confidence, and to provide Division with the benefit of
dealer advice regarding many decisions which affect dealer business operations,
Division has established mechanisms to obtain dealer input in the decision-
making process. These mechanisms are described in Division's Dealer Sales and
Service Agreement.
This Agreement (i) authorizes Dealer to sell and service Division's
Products and represent itself as a Division Dealer; (ii) states the terms under
which Dealer and Division agree to do business together; (iii) states the
responsibilities of Dealer and Division to each other and to customers; and
(iv) reflects the mutual dependence of the parties in achieving their business
objectives.
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ARTICLE 1. APPOINTMENT AS AUTHORIZED DEALER
Division appoints Dealer as a non-exclusive dealer of Division Products.
Dealer has the right to buy Products and the obligation to market and service
those Products in accordance with this Agreement and related documents.
ARTICLE 2. DEALER OPERATOR
This is a Personal Services Agreement, entered into in reliance on the
qualifications of Dealer Operator identified in Paragraph Third, and on Dealer's
assurance that Dealer Operator will provide personal services by exercising full
managerial authority over Dealership Operations. Dealer Operator will have an
unencumbered ownership interest in Dealer of at least 15 percent at all times.
A Dealer Operator must be a competent business person, an effective manager,
must have demonstrated a caring attitude toward customers, and should have a
successful record as a merchandiser of automotive products and services or
otherwise have demonstrated the ability to manage a dealership. The experience
necessary may vary with the potential represented by each dealer location.
ARTICLE 3. DEALER OWNER
Division enters into this Agreement in reliance on the qualifications of
dealer owner(s) identified in the Dealer Statement of Ownership. Division and
Dealer agree each dealer owner will continue to own, both of record and
beneficially, the percentage stated in the Dealer Statement of Ownership, unless
a change is made in accordance with Article 12.
ARTICLE 4. AUTHORIZED LOCATIONS
4.1. DEALER NETWORK PLANNING
Because Division distributes its Products through a network of authorized
dealers operating from approved locations, those dealers must be appropriate in
number, located properly, and have proper facilities to represent and service
Division's Products competitively and to permit each dealer
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the opportunity to achieve a reasonable return on investment if it fulfills its
obligations under its Dealer Agreement. Through such a dealer network, the
Division can maximize the convenience of customers in purchasing Products and
having them serviced. As a result, customers, dealers, and the Division all
benefit.
To maximize the effectiveness of its dealer network, Division agrees to
monitor marketing conditions and strive, to the extent practicable, to have
dealers appropriate in number, size and location to achieve the objectives
stated above. Such marketing conditions include Division's sales and
registration performance, present and future demographic and economic
considerations, competitive dealer networks, the ability of Division's existing
dealers to achieve the objectives stated above, the opportunities available to
existing dealers, and other appropriate circumstances.
4.2. AREA OF PRIMARY RESPONSIBILITY
Dealer is responsible for effectively selling, servicing and otherwise
representing Division's Products in the area designated in a Notice of Area of
Primary Responsibility. Division retains the right to revise Dealer's Area of
Primary Responsibility at Division's sole discretion consistent with dealer
network planning objectives. If Division determines that marketing conditions
warrant a change in Dealer's Area of Primary Responsibility, it will advise
Dealer in writing of the proposed change, the reasons for it, and will consider
any information the Dealer submits. Dealer must submit such information in
writing within 30 days of receipt of notice of the proposed change. If Division
thereafter decides the change is warranted, it will issue a revised Notice of
Area of Primary Responsibility.
4.3. ESTABLISHMENT OF ADDITIONAL DEALERS
Division reserves the right to appoint additional dealers but Division will
not exercise this right without first analyzing dealer network planning
considerations.
Prior to establishing an additional dealer within Dealer's Area of Primary
Responsibility, Division will advise Dealer in writing and give Dealer thirty
days to present relevant information
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before Division makes a final decision. Division will advise Dealer of the
final decision, which will be made solely by Division pursuant to its business
judgment. Nothing in this Agreement is intended to require Dealer's consent to
the establishment of an additional dealer.
Neither the appointment of a dealer at or within three miles of a former
dealership location as a replacement for the former dealer nor the relocation of
an existing dealer will be considered the establishment of an additional Dealer
for purposes of this Article 4.3. Such events are within the sole discretion of
Division, pursuant to its business judgment.
4.4. FACILITIES
4.4.1. LOCATION
Dealer agrees to conduct Dealership Operations only from the approved
location(s) within its Area of Primary Responsibility. The Location and
Premises Addendum identifies Dealer's approved location(s) and facilities
("Premises"). If more than one location is approved, Dealer agrees to conduct
from each location only those Dealership Operations authorized in the Addendum
for such location.
4.4.2. CHANGE IN LOCATION OR USE OF PREMISES
If Dealer wants to make any change in location(s) or Premises, or in the
uses previously approved for those Premises, Dealer will give Division written
notice of the proposed change, together with the reasons for the proposal, for
Division's evaluation and final decision in light of dealer network planning
considerations. No change in location or in the use of Premises, including
addition of any other vehicle lines, will be made without Division's prior
written authorization.
Before Division requires any changes in Premises, it will consult with
Dealer, indicate the rationale for the change, and solicit Dealer's views on the
proposal. If, after such review with Dealer, Division determines a change in
premises or location is appropriate, the Dealer will be allowed a reasonable
time to implement the change. Any such changes will be reflected in a new
Location and Premises Addendum or other written agreement executed by Dealer and
Division.
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Nothing herein is intended to require the consent or approval of any dealer
to a proposed relocation of any other dealer.
4.4.3. SIZE
Dealer agrees to provide Premises at its approved location(s) that will
promote the effective performance and conduct of Dealership Operations, and the
Division's image and goodwill. Consistent with Division's dealer network
planning objectives and Division's interest in maintaining the stability and
viability of its dealers, Dealer agrees that its facilities will be sized in
accordance with Division's requirements for that location.
Division agrees to establish and maintain a clearly stated policy for
determining reasonable dealer facility space requirements and to periodically
re-evaluate those requirements to ensure that they continue to be reasonable.
4.4.4. DEALERSHIP IMAGE AND DESIGN
The appearance of Dealer's Premises is important to the image of Dealer and
Division, and can affect the way customers perceive Division's Products and its
dealers generally. Dealer therefore agrees that its premises will be properly
equipped and maintained, and that the interior and exterior retail environment
and signs will comply with any reasonable requirements Division may establish to
promote and preserve the image of Division and its dealers.
Division will monitor developments in automotive and other retailing to
ensure that Division's image and facility requirements are responsive to changes
in the marketing environment.
Division will take into account existing economic and marketing conditions,
and consult with dealers as described in Division's Dealer Sales and Service
Agreement, in establishing such requirements.
4.4.5. DEALERSHIP EQUIPMENT
Effective performance of Dealer's responsibilities under this Agreement
requires that the dealership be reasonably equipped to communicate with
customers and the Division and to properly
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diagnose and service Products. Accordingly, Dealer agrees to provide for use in
the Dealership Operations any equipment reasonably designated by Division as
necessary to Dealer's effective performance under this Agreement. Division will
make such designations only after having consulted with dealers as described in
Division's Dealer Sales and Service Agreement.
ARTICLE 5. DEALER'S RESPONSIBILITY TO PROMOTE,
SELL AND SERVICE PRODUCTS
5.1. RESPONSIBILITY TO PROMOTE AND SELL
5.1.1. Dealer agrees to effectively, ethically and lawfully sell and
promote the purchase, lease and use of Products by consumers located in its Area
of Primary Responsibility. To achieve this objective, Dealer agrees to:
(a) maintain an adequate force of trained sales personnel;
(b) explain to Product purchasers the items which make up the
purchase price and provide purchasers with itemized invoices;
(c) not charge customers for services for which Dealer is reimbursed
by General Motors;
(d) include in customer orders only equipment or accessories
requested by customer or required by law; and
(e) ensure that the customer's purchase and delivery experience are
satisfactory.
If Dealer modifies or sells a modified new Motor Vehicle, or installs any
equipment, accessory or part not supplied by General Motors, or sells any non-
General Motors service contract for a Motor Vehicle, Dealer will disclose this
fact on the purchase order and bill of sale, indicating that the modification,
equipment, accessory or part is not warranted by General Motors or, in the case
of a service contract, the coverage is not provided by General Motors or an
affiliate.
5.1.2. Dealer is authorized to sell new Motor Vehicles only to customers
located in the United States. Dealer agrees that it will not sell new Motor
Vehicles for resale or principal use outside
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the United States. Dealer also agrees not to sell any new Motor Vehicles which
were not originally manufactured for sale and distribution in the United States.
5.1.3. Division will conduct general advertising programs to promote the
sale of Products for the mutual benefit of Division and dealers. Division will
make available to Dealer advertising and sales promotion materials from time to
time and advise Dealer of any applicable charges.
5.2. RESPONSIBILITY TO SERVICE
5.2.1. Dealer agrees to maximize customer satisfaction by providing
courteous, convenient, prompt, efficient and quality service to owners of Motor
Vehicles, regardless of from whom the Vehicles were purchased. All service will
be performed and administered in a professional manner and in accordance with
all applicable laws and regulations, and this Agreement, including the Service
Policies and Procedures Manual, as amended from time to time.
5.2.2. Dealer agrees to maintain an adequate service and parts
organization as recommended by Division, including a competent, trained service
and parts manager(s), trained service and parts personnel and, where service
volume or other conditions make it advisable, a consumer relations manager.
5.2.3. Dealer and Division will each provide the other with such
information and assistance as may reasonably be requested by the other to
facilitate compliance with applicable laws, regulations, investigations and
orders relating to Products.
5.2.4. To build and maintain consumer confidence in, and satisfaction
with, Dealer and Division, Dealer will comply with Divisional procedures for the
investigation and resolution of Product-related complaints.
5.2.5. Division will make available to Dealer current service and parts
manuals, bulletins, and technical data publications relating to Motor Vehicles.
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5.3. CUSTOMER SATISFACTION
Dealer and Division recognize that appropriate care for the customer will
promote customer satisfaction with Division's Products and its dealers, which is
critically important to our current and future business success. Dealer
therefore agrees to conduct its operations in a manner which will promote
customer satisfaction with the purchase and ownership experience. Division
agrees to provide Dealer with reasonable support to assist Dealer's attainment
of customer satisfaction. At its discretion, Division will monitor the
satisfaction of Dealer's customers, and report the results to Dealer. Any
written response from Dealer concerning a customer satisfaction report issued to
Dealer will become a part of the report.
5.4. BUSINESS PLANNING
To enable Dealer to most effectively meet its obligations under this
Agreement, and to enable Division to effectively support Dealer's efforts,
Dealer agrees to develop and implement a Business Plan if such is required by
Division.
ARTICLE 6. SALE OF PRODUCTS TO DEALERS
6.1. SALE OF MOTOR VEHICLES TO DEALER
Division will periodically furnish Dealer one or more Motor Vehicle Addenda
specifying the current model types or series of new Motor Vehicles which Dealer
may order under this Agreement. Division may change a Motor Vehicle Addendum by
furnishing a superseding one, or may cancel an Addendum at any time.
Division will endeavor to distribute new Motor Vehicles among its dealers
in a fair and equitable manner. Many factors affect the availability and
distribution of Motor Vehicles to dealers, including component availability and
production capacity, sales potential in Dealer's Area of Primary Responsibility,
varying consumer demand, weather and transportation conditions, governmental
regulations, and other conditions beyond the control of General Motors.
Division reserves to itself
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discretion in accepting orders and distributing Motor Vehicles, and its
judgments and decisions are final. Upon written request, Division will advise
Dealer of the total number of new Motor Vehicles, by series, sold to Dealers in
Dealer's Zone or Branch during the preceding month.
6.2. SALE OF PARTS AND ACCESSORIES TO DEALER
New, reconditioned or remanufactured automotive parts and accessories
marketed by General Motors and listed in current Dealer Parts and Accessories
Price Schedules or supplements furnished to Dealer are called Parts and
Accessories.
Orders for Parts and Accessories will be submitted and processed according
to written procedures established by General Motors or other designated
suppliers.
6.3. PRICES AND OTHER TERMS OF SALE
6.3.1. MOTOR VEHICLES
Prices, destination charges, and other terms of sale applicable to
purchases of new Motor Vehicles will be those established according to Vehicle
Terms of Sale Bulletins furnished periodically to Dealer.
Prices, destination charges, and other terms of sale applicable to any
Motor Vehicle may be changed at any time. Except as otherwise provided in
writing, changes apply to Motor Vehicles not shipped to Dealer at the time the
changes are made effective.
Dealer will receive written notice of any price increase before any Motor
Vehicle to which such increase applies is shipped, except for initial prices for
a new model year or for any new model or body type. Dealer has the right to
cancel or modify the affected orders by delivering written notice to Division
within 10 days after its receipt of the price increase notice.
6.3.2. PARTS AND ACCESSORIES
Prices and other terms of sale applicable to Parts and Accessories are
established by General Motors according to the Parts and Accessories Terms of
Sale Bulletin furnished to Dealer.
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Prices and other terms of sale applicable to Parts and Accessories may be
changed by General Motors at any time. Such changes apply to Parts and
Accessories not shipped to Dealer at the time changes become effective.
6.4. INVENTORY
6.4.1. MOTOR VEHICLE INVENTORY
Dealer recognizes that customers expect Dealer to have a reasonable
quantity and variety of current model Motor Vehicles in inventory. Accordingly,
Dealer agrees to order and stock and Division agrees to make available, subject
to Article 6.1, a mix of models and series of Motor Vehicles identified in the
Motor Vehicle Addendum in quantities adequate to enable Dealer to fulfill its
obligations in its Area of Primary Responsibility.
6.4.2. PARTS AND ACCESSORIES
Dealer agrees to stock sufficient Parts and Accessories made available by
General Motors to perform warranty repairs and policy adjustments and meet
customer demand.
6.5. WARRANTIES ON PRODUCTS
General Motors warrants new Motor Vehicles and Parts and Accessories
(Products) as explained in documents provided with the Products or in the
Service Policies and Procedures Manual.
EXCEPT AS OTHERWISE PROVIDED BY LAW, THE WRITTEN GENERAL MOTORS WARRANTIES
ARE THE ONLY WARRANTIES APPLICABLE TO PRODUCTS. WITH RESPECT TO DEALERS, SUCH
WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES OR LIABILITIES, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY LIABILITY FOR COMMERCIAL LOSSES BASED UPON NEGLIGENCE
OR MANUFACTURER'S STRICT LIABILITY. EXCEPT AS MAY BE PROVIDED UNDER AN
ESTABLISHED GENERAL MOTORS PROGRAM OR PROCEDURE, GENERAL MOTORS NEITHER ASSUMES
NOT AUTHORIZES ANYONE TO ASSUME FOR IT ANY OTHER OBLIGATION OR LIABILITY IN
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CONNECTION WITH PRODUCTS, AND GENERAL MOTORS MAXIMUM LIABILITY IS TO REPAIR OR
REPLACE THE PRODUCT.
ARTICLE 7. SERVICE OF PRODUCTS
7.1. SERVICE FOR WHICH DIVISION PAYS
7.1.1. NEW MOTOR VEHICLE PRE-DELIVERY INSPECTIONS AND ADJUSTMENTS
Because new vehicle delivery condition is critical to customer
satisfaction, Dealer agrees to perform specified pre-delivery inspections and
adjustments on each new Motor Vehicle and verify completion according to
procedures identified in the Service Policies and Procedures Manual.
7.1.2. WARRANTY AND SPECIAL POLICY REPAIRS
Dealer agrees to perform (i) required warranty repairs on each qualified
Motor Vehicle at the time of pre-delivery service and when requested by owner,
and (ii) special policy repairs approved by Division. When the vehicle is
returned to the owner, Dealer will provide owner a copy and explanation of the
repair document reflecting all services performed.
7.1.3. CAMPAIGN INSPECTIONS AND CORRECTIONS
Division will notify Dealer of suspected unsatisfactory conditions on
Products and issue campaign instructions. Dealer agrees to inspect and correct
suspected unsatisfactory conditions on Products in accordance with the
instructions. Dealer will also determine that campaign inspections and
corrections have been made on new and used Motor Vehicles in its inventory prior
to sale, and follow-up on Products on which campaigns are outstanding.
Division may ship, and Dealer agrees to accept, unordered parts and
materials required for campaigns. Upon campaign completion, Dealer will receive
credit for excess parts and materials so shipped if they are returned or
disposed of according to Division's instructions.
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7.1.4. PAYMENT FOR PRE-DELIVERY ADJUSTMENTS, WARRANTY, CAMPAIGN AND
TRANSPORTATION DAMAGE WORK
For Dealer's performance of services, pre-delivery inspections and
adjustments, warranty repairs, special policy repairs, campaign inspections and
corrections, and transportation damage repairs, Division will provide or pay
Dealer for the Parts and other materials required and will pay Dealer a
reasonable amount for labor. Payment will be made according to policies in the
Service Policies and Procedures Manual. Dealer will not impose any charge for
such service on owners or users except where a deductible or pro-rata charge
applies.
7.2. PARTS, ACCESSORIES, AND BODY REPAIRS
7.2.1. WARRANTY AND POLICY REPAIRS
Dealer agrees to use only genuine GM or General Motors approved Parts and
Accessories in performing warranty repairs, special policy repairs, and any
other repairs paid for by Division, in accordance with the applicable provisions
of the Service Policies and Procedures Manual.
7.2.2. REPRESENTATIONS AND DISCLOSURES AS TO PARTS AND ACCESSORIES
In servicing vehicles marketed by General Motors, Dealer agrees to disclose
the use of non-General Motors parts and accessories as set forth in Article
5.1.1.
7.2.3. BODY REPAIRS
Dealer agrees to provide quality body repair service for Motor Vehicles.
Dealer can provide this service through its own body shop, or by arrangement
with an alternate repair establishment.
7.2.4. TOOLS AND EQUIPMENT
Dealer agrees to provide essential service tools as required by Division
and other tools and equipment as necessary to fulfill its responsibilities to
properly diagnose and service Products.
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ARTICLE 8. TRAINING
Properly trained personnel are essential to the success of Dealer and
Division, and to providing customers with a satisfactory sales and service
experience. Division agrees to make available or recommend to Dealer product,
sales, service and parts, accounting and business management training courses
for Dealer personnel. Division will make such training available as
conveniently in time and location as practical circumstances permit. Division
will assist Dealer in determining training requirements and periodically will
require that Dealer have personnel attend specific courses. Dealer agrees to
comply with any such reasonable training requirements and pay any specified
training charges. Division will consult with dealers as described in Division's
Dealer Sales and Service Agreement prior to determining the training courses or
programs from which an individual Dealer's requirements under this Article may
be established. Specific minimum service training requirements will be
described in Division's Service Policies and Procedure Manual.
Division will make available personnel to advise and counsel Dealer
personnel on sales, service, parts and accessories, and related subjects.
ARTICLE 9. REVIEW OF DEALER'S SALES AND SERVICE PERFORMANCE
Dealer's performance of its obligations is essential to the effective
representation of Division's Products, and to the reputation and goodwill of
Dealer, Division, and other Division dealers. Periodically, Division will
review various aspects of Dealer's sales and service performance. Division and
Dealer will use the review process to identify areas in which improvements or
changes are necessary so that Dealer can take prompt action to achieve
acceptable performance.
ARTICLE 10. CAPITALIZATION
The Capital Standard Addendum reflects the minimum net working capital
necessary for Dealer to conduct Dealership Operations. Dealer agrees to
maintain at least this level of net working
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capital. Division will issue a new Addendum if changes in operating conditions
or Divisional guidelines indicate capital needs have changed materially.
To avoid damage to goodwill which could result if Dealer is financially
unable to fulfill its commitments, Dealer agrees to have and maintain a separate
line of credit from a financial institution available to finance its purchase of
new vehicles. The amount of the line of credit will be sufficient for Dealer to
meet its obligations under Article 6.4.
ARTICLE 11. ACCOUNTS AND RECORDS
11.1. UNIFORM ACCOUNTING SYSTEM
A uniform accounting system facilitates an evaluation of Dealer business
management practices and the impact of Division's policies and practices.
Division therefore agrees to maintain, and Dealer agrees to use and maintain
records in accordance with, a uniform accounting system set forth in an
accounting manual furnished to Dealer.
Dealer also agrees to timely submit true and accurate applications or
claims for payments, discounts or allowances; true and correct orders for
Products and reports of sale and delivery; and any other reports or statements
required by Division, in the manner specified by Division, and to retain such
records for at least two years.
11.2. EXAMINATION OF ACCOUNTS AND RECORDS
Dealer agrees to permit any designated representative of Division to
examine, audit, and take copies of any of the accounts and records Dealer is to
maintain under the accounting manual and this Agreement. Dealer agrees to make
such accounts and records readily available at its facilities during regular
business hours. Division agrees to furnish Dealer with a list of any reproduced
records.
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11.3. Confidentiality of Dealer Data
Division agrees not to furnish any personal or financial data submitted to
it by Dealer to any non-affiliated entity unless authorized by Dealer, required
by law, or pertinent to judicial or administrative proceedings, or to
proceedings under the Dispute Resolution Process.
ARTICLE 12. CHANGES IN MANAGEMENT AND OWNERSHIP
The parties recognize that customers and authorized dealers, as well as
shareholders and employees of General Motors, have a vital interest in the
continued success and efficient operation of Division's dealer network.
Accordingly, Division has the responsibility of continuing to administer the
network to ensure that dealers are owned and operated by qualified persons able
to meet the requirements of this Agreement.
12.1. SUCCESSION RIGHTS UPON DEATH OR INCAPACITY
12.1.1. SUCCESSOR ADDENDUM
Dealer can apply for a Successor Addendum designating a proposed dealer
operator and/or owners of a successor dealer to be established if this Agreement
expires or is terminated because of death or incapacity. Division will execute
the Addendum provided Dealer is meeting its obligations under this Agreement and
under any Dealer Agreement which Dealer may have with other Divisions of General
Motors for the conduct of Dealership Operations at the approved location; and
the proposed dealer operator is, and will continue to be, employed full-time by
Dealer or a comparable automotive dealership, and is already qualified or is
being trained to qualify as a dealer operator; and provided all other proposed
owners are acceptable.
Division may refuse to enter into a Successor Addendum with Dealer if
Division has previously notified Dealer it does not plan to continue Dealership
Operations at the approved location, except for renewal of an existing Successor
Addendum where the same proposed dealer operator continues to be qualified.
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Upon expiration of this Agreement, Division will, upon Dealer's request,
execute a new Successor Addendum provided a new and superseding dealer agreement
is executed with Dealer, and Dealer, the proposed dealer operator and dealer
owners are then qualified as described above.
12.1.2. ABSENCE OF SUCCESSOR ADDENDUM
If this Agreement expires or is terminated because of death or incapacity
and Dealer and Division have not executed a Successor Addendum, the Dealer
Operator or, if there is not a remaining Dealer Operator, the remaining dealer
owners may propose a successor dealer to continue the operations identified in
this Agreement. The proposal must be made to Division in writing at least 30
days prior to the expiration or termination of this Agreement, including any
deferrals.
12.1.3. SUCCESSOR DEALER REQUIREMENTS
Division will accept a proposal to establish a successor dealer submitted
by a proposed dealer operator under this Article 12.1 provided:
(a) the proposed successor dealer and the proposed dealer operator
are ready, willing and able to meet the requirements of a new dealer
agreement at the approved location(s);
(b) Division approves the proposed dealer operator and all proposed
owners not previously approved for the existing Dealership Operations;
(c) all outstanding monetary obligations of Dealer to General Motors
have been satisfied; and
(d) Dealer has not been previously notified that Division may
discontinue Dealership Operations at that location.
12.1.4. TERM OF NEW DEALER AGREEMENT
The dealer agreement offered a successor dealer will be for a three-year
term. Division will notify the successor dealer in writing at least 90 days
prior to the expiration date whether the successor dealer has performed
satisfactorily and, if so, that Division will offer a new dealer agreement.
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12.1.5. LIMITATION ON OFFERS
Dealer will be notified in writing of the decision on a proposal to
establish a successor dealer submitted under Article 12.1 within 60 days after
Division has received from Dealer all applications and information reasonably
requested by Division. Division may condition its offer of a dealer agreement
on the relocation of dealership operations to an approved location by successor
dealer within a reasonable time. Division's offer of a new dealer agreement
under this Article 12.1 will automatically expire if not accepted in writing by
the proposed successor dealer within 60 days after it receives the offer.
12.1.6. CANCELLATION OF ADDENDUM
Dealer may cancel an executed Successor Addendum at any time prior to the
death of a Dealer Operator or Dealer Owner, or the incapacity of Dealer
Operator. Division may cancel an executed Successor Addendum only if the
proposed dealer operator is no longer qualified under Article 12.1.1.
12.2. OTHER CHANGES IN OWNERSHIP OR MANAGEMENT
If Dealer proposes a change in Dealer Operator, a change in ownership, or a
transfer of the dealership business or its principal assets to any person
conditioned upon Division's entering into a dealer agreement with that person,
Division will consider Dealer's proposal and not arbitrarily refuse to approve
it, subject to the following:
12.2.1. Dealer agrees to give Division prior written notice of any
proposed change or transfer described above. Dealer understands that if any
such change is made prior to Division's approval of the proposal, termination of
this Agreement will be warranted and Division will have no further obligation to
consider Dealer's proposal.
12.2.2. Division agrees to consider Dealer's proposal, taking into
account factors such as (a) the personal, business, and financial qualifications
of the proposed dealer operator and owners, and (b) whether the proposed change
is likely to result in a successful dealership operation with acceptable
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management, capitalization, and ownership which will provide satisfactory sales,
service, and facilities at an approved location, while promoting and preserving
competition and customer satisfaction.
12.2.3. Division will notify Dealer in writing of Division's decision on
Dealer's proposal within 60 days after Division had received from Dealer all
applications and information reasonably requested by Division. If Division
disagrees with the proposal, it will specify its reasons.
12.2.4. Any material change in Dealer's proposal, including change in
price, facilities, capitalization, proposed owners, or dealer operator, will be
considered a new proposal, and the time period for Division to respond shall
recommence.
12.2.5. Division's prior written approval is not required where the
transfer of equity ownership or beneficial interest to an individual is (a) less
than ten percent in a calendar year, and (b) between existing dealer owners
previously approved by Division where there is no change in majority ownership
or voting control. Dealer agrees to notify Division within 30 days of the date
of the change and to execute a new Dealer Statement of Ownership.
12.2.6. Division is not obligated to approve any proposed changes in
management or ownership under this Article unless Dealer makes arrangements
acceptable to Division to satisfy any indebtedness of Dealer to General Motors.
12.3. RIGHT OF FIRST REFUSAL TO PURCHASE
12.3.1. CREATION AND COVERAGE
If Dealer submits a proposal for a change of ownership under Article 12.2,
Division will have a right of first refusal to purchase the dealership assets
regardless of whether the proposed buyer is qualified to be a dealer. If
Division chooses to exercise this right, it will do so in its written response
to Dealer's proposal. Division will have a reasonable opportunity to inspect
the assets, including real estate, before making its decision.
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12.3.2. PURCHASE PRICE AND OTHER TERMS OF SALE
(a) BONA FIDE AGREEMENT
If Dealer has entered into a bona fide written buy/sell agreement, the
purchase price and other terms of sale will be those set forth in such agreement
and any related documents, unless Dealer and Division agree to other terms.
Upon Division's request, Dealer agrees to provide all documents relating to
the proposed transfer. If Dealer refuses to provide such documentation or state
in writing that such documents do not exist, it will be presumed that the
agreement is not bona fide.
(b) ABSENCE OF BONA FIDE AGREEMENT
In the absence of a bona fide written buy/sell agreement, the purchase
price of the dealership assets will be determined by good faith negotiations by
Dealer and Division. If agreement cannot be reached within a reasonable time,
the price and other terms of sale will be established by arbitration according
to the rules of the American Arbitration Association.
12.3.3. CONSUMMATION
Dealer agrees to transfer the property by Warranty Deed, where possible,
conveying marketable title free and clear of liens and encumbrances. The
Warranty Deed will be in proper form for recording and Dealer will deliver
complete possession of the property when the Deed is delivered. Dealer will
also furnish copies of any easements, licenses or other documents affecting the
property and assign any permits or licenses necessary for the conduct of
Dealership Operations.
12.3.4. ASSIGNMENT
Division's rights under this section may be assigned to any third party
("Assignee"). If there is an assignment, Division will guarantee full payment
of the purchase price by the Assignee. Division shall have the opportunity to
discuss the terms of the buy/sell agreement with a potential Assignee.
Division's rights under this Article are binding on and enforceable against
any Assignee or successor in interest of Dealer or purchaser of Dealer's assets.
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12.3.5 TRANSFER INVOLVING FAMILY MEMBERS AND DEALER MANAGEMENT
When the proposed change of ownership involves a transfer by a dealer owner
solely to a member or members of his or her immediate family, or to a qualifying
member of Dealer's Management, the Division's right of first refusal will not
apply. An "immediate family member" shall be the spouse, child, grandchild,
spouse of a child or grandchild, brother, sister or parent of the dealer owner.
A "qualifying member of Dealer's Management" shall be an individual who has been
employed by Dealer for at least two years and otherwise qualifies as a dealer
operator.
ARTICLE 13. BREACHES AND OPPORTUNITY TO REMEDY
13.1. CERTAIN ACTS OR EVENTS
The following acts or events, which are within the control of Dealer or
originate from action taken by Dealer or its management or owners, are material
breaches of this Agreement. If Division learns that any of the acts or events
has occurred, it may notify the Dealer in writing. If notified, Dealer will be
given the opportunity to respond in writing within 30 days of receipt of the
notice, explaining or correcting the situation to Division's satisfaction.
13.1.1. The removal, resignation, withdrawal, or elimination from Dealer
for any reason of any Dealer Operator or dealer owner without Division's prior
written approval.
13.1.2. Any attempted or actual sale, transfer, or assignment by Dealer
of this Agreement or any of the rights granted Dealer hereunder, or any
attempted or actual transfer, assignment or delegation by Dealer of any of the
responsibilities assumed by it under this Agreement contrary to the terms of
this Agreement.
13.1.3. Any change, whether voluntary or involuntary, in the record or
beneficial ownership of Dealer as set forth in the Dealer Statement of Ownership
furnished by Dealer, unless permitted by Article 12.2.5 or pursuant to
Division's written approval.
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13.1.4. Any undertaking by Dealer or any of its owners to conduct, either
directly or indirectly, any of the Dealership Operations at any unapproved
location.
13.1.5. Any sale, transfer, relinquishment, or discontinuance of use by
Dealer of any of the Dealership Premises or other principal assets required in
the conduct of the Dealership Operations, without Division's prior written
approval.
13.1.6. Any dispute among the owners or management personnel of Dealer
which, in Division's opinion, may adversely affect the Dealership Operations or
the interests of Dealer or Division.
13.1.7. Refusal by Dealer to timely furnish sales, service or financial
information and related supporting data, or to permit Division's examination or
audit of Dealer's accounts and records.
13.1.8. A finding by a government agency or court of original
jurisdiction or a settlement arising from charges that Dealer, or a predecessor
of Dealer owned or controlled by the same person, had committed a misdemeanor or
unfair or deceptive business practice which, in Division's opinion, may
adversely affect the reputation or interests of Dealer or Division.
13.1.9. Willful failure of Dealer to comply with the provisions of any
laws or regulations relating to the sale or service of Products.
13.1.10. Submission by Dealer of false applications or reports, including
false orders for Products or reports of delivery or transfer of Products.
13.1.11. Failure of Dealer to maintain the line of credit required by
Article 10.
13.1.12. Failure of Dealer to timely pay its obligations to General
Motors.
13.1.13. Any other material breach of Dealer's obligations under this
Agreement not otherwise identified in this Article 13 or in Article 14.
If Dealer's response demonstrates that the breach has been corrected, or
otherwise explains the circumstances to Division's satisfaction, then Division
shall confirm this fact in writing to Dealer.
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If, however, Dealer's response does not demonstrate that the breach has
been corrected, or explain the circumstances to Division's satisfaction,
termination is warranted and Division may terminate this Agreement upon written
notice to Dealer. Termination will be effective 60 days following Dealer's
receipt of the notice.
13.2. FAILURE OF PERFORMANCE BY DEALER
If Division determines that Dealer's Premises are not acceptable, or that
Dealer has failed to adequately perform its sales or service responsibilities,
including those responsibilities relating to customer satisfaction and training,
Division will review such failure with Dealer.
As soon as practicable thereafter, Division will notify Dealer in writing
of the nature of Dealer's failure and of the period of time (which shall not be
less than six months) during which Dealer will have the opportunity to correct
the failure.
If Dealer does correct the failure by the expiration of the period,
Division will so advise the Dealer in writing.
If, however, Dealer does not correct the failure by the expiration of the
period, Division may terminate this Agreement by giving dealer 90 days advance
written notice.
ARTICLE 14. TERMINATION OF AGREEMENT
14.1. BY DEALER
Dealer has the right to terminate this Agreement without cause at any time
upon written notice to Division. Termination will be effective 30 days after
Division's receipt of the notice, unless otherwise mutually agreed in writing.
14.2. BY AGREEMENT
This Agreement may be terminated at any time by written agreement between
Division and Dealer.
Termination assistance will apply only as specified in the written
termination agreement.
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14.3. FAILURE TO BE LICENSED
If Division or Dealer fails to secure or maintain any license required for
the performance of obligations under this Agreement or such license is suspended
or revoked, either party may immediately terminate this Agreement by giving the
other party written notice.
14.4. INCAPACITY OF DEALER OPERATOR
Because this is a Personal Services Agreement, Division may terminate this
Agreement by written notice to Dealer if Dealer Operator is so physically or
mentally incapacitated that the Dealer Operator is unable to actively exercise
full managerial authority. The effective date of termination will be stated in
such written notice and will be not less than three months after receipt of such
notice.
14.5. ACTS OR EVENTS
If Division learns that any of the following has occurred, it may terminate
this Agreement by giving Dealer written notice of termination. Termination will
be effective on the date specified in the notice.
14.5.1. Conviction in a court of original jurisdiction of Dealer, or a
predecessor of Dealer owned or controlled by the same person, or any Dealer
Operator or dealer owner of any felony.
14.5.2. Insolvency of Dealer; or filing by or against Dealer of a
petition in bankruptcy; or filing of a proceeding for the appointment of a
receiver or trustee for Dealer, provided such filing or appointment is not
dismissed or vacated within thirty days; or execution by Dealer of an assignment
for the benefit of creditors or any foreclosure or other due process of law
whereby a third party acquires rights to the operation, ownership or assets of
Dealer.
14.5.3. Failure of Dealer to conduct customary sales and service
operations during customary business hours for seven consecutive business days.
14.5.4. Any misrepresentation to General Motors by Dealer or by any
Dealer Operator or owner in applying for this Agreement, or in identifying the
Dealer Operator, or record or beneficial ownership of Dealer.
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14.5.5. Submission by Dealer of false applications or claims for any
payment, credit, discount, or allowance, including false applications in
connection with incentive activities, where the false information was submitted
to generate a payment to Dealer for a claim which would not otherwise have
qualified for payment.
Termination for failure to correct other breaches will be according to the
procedures outlined in Article 13.
14.6. RELIANCE ON ANY APPLICABLE TERMINATION PROVISION
The terminating party may select the provision under which it elects to
terminate without reference in its notice to any other provision that may also
be applicable. The terminating party subsequently also may asset other grounds
for termination.
14.7. TRANSACTIONS AFTER TERMINATION
14.7.1. EFFECT ON ORDERS
If Dealer and Division do not enter into a new Dealer Agreement when this
Agreement expires or is terminated, all of Dealer's outstanding orders for
products will be automatically cancelled except as provided in this Article
14.7.
Termination of this Agreement will not release Dealer or Division from the
obligation to pay any amounts owing the other, nor release Dealer from the
obligation to pay for Special Vehicles if Division has begun processing such
orders prior to the effective date of termination.
14.7.2. TERMINATION DELIVERIES
If this Agreement is voluntarily terminated by Dealer or expires or is
terminated because of the death or incapacity of a Dealer Operator or death of a
Dealer Owner, without a termination or expiration deferral, Division will use
its best efforts consistent with its distribution procedures to furnish Dealer
with Motor Vehicles to fill Dealer's bona fide retail orders on hand on the
effective date of termination or expiration, not to exceed, however, the total
number of Motor Vehicles invoiced to Dealer for retail sale during the three
months immediately preceding the effective date of termination.
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14.7.3. EFFECT OF TRANSACTIONS AFTER TERMINATION
Neither the sale of Products to Dealer nor any other act by Division or
Dealer after termination of this Agreement will be construed as a waiver of the
termination.
ARTICLE 15. TERMINATION ASSISTANCE
15.1. DEFERRAL OF EFFECTIVE DATE
If this Agreement is scheduled to expire or terminate because of the death
or incapacity of a Dealer Operator or the death of a Dealer Owner and Dealer
requests an extension of the effective date of expiration or termination thirty
days prior to such date, Division will defer the effective date for up to a
total of eighteen months after such death or incapacity occurs to assist Dealer
in winding up its Dealership Operations.
15.2. PURCHASE OF PERSONAL PROPERTY
15.2.1. DIVISION'S OBLIGATIONS
If this Agreement expires or is terminated and Division does not offer
Dealer or a replacement dealer that has substantially the same ownership (more
than 50 percent including total family ownership) a new Dealer Agreement,
Division will offer to purchase the following items of personal property (herein
called Eligible Items) from Dealer at the prices indicated:
(a) New and unused Motor Vehicles of the current model year purchased
by Dealer from Division at a price equal to the net prices and charges that
were paid to General Motors;
(b) Any signs owned by Dealer of a type recommended in writing by
Division and bearing any Marks at a price agreed upon by Division and
Dealer. If Division and Dealer cannot agree on a price, they will select a
third party who will set the price;
(c) Any essential tools recommended by Division and designed
specifically for service of Motor Vehicles that Division offered for sale
during the three years preceding termination at
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prices established in accordance with the applicable pricing formula in
the Service Policies and Procedures Manual; and
(d) Unused and undamaged Parts and Accessories that (i) are still in
the original, resalable merchandising packages and in unbroken lots (in the
case of sheet metal, a comparable substitute for the original package may
be used); (ii) are listed for sale in the then current Dealer Parts and
Accessories Price Schedules (except "discontinued" or "replaced" Parts and
Accessories); and (iii) were purchased by Dealer either directly from
General Motors or from an outgoing dealer as a part of Dealer's initial
Parts and Accessories inventory. Prices will be those dealer prices in
effect at the time General Motors receives the Parts and Accessories, less
any applicable allowances whether or not any such allowances were made to
Dealer when Dealer purchased the Parts and Accessories. In addition, an
allowance of five percent of dealer price for packing costs and
reimbursement for transportation charges to the destination specified by
General Motors will be credited to Dealer's account.
15.2.2. DEALER'S RESPONSIBILITIES
Division's obligation to purchase Eligible Items is subject to Dealer
fulfilling its responsibility under this subsection.
Within fifteen days following the effective date of termination or
expiration of this Agreement, Dealer will furnish Division with a list of
vehicle identification numbers and such other information as Division may
request pertaining to eligible Motor Vehicles. Dealer will deliver the eligible
Motor Vehicles to a destination determined by Division that will be in a
reasonably proximity to Dealer's Premises.
Within two months following the effective date of termination or expiration
of this Agreement, Dealer will mail or deliver to General Motors a complete and
separate list of each of the Eligible Items other than Motor Vehicles. Dealer
will retain the Eligible Items until receipt of written shipping
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instructions from General Motors. Within thirty days after receipt of
instructions, Dealer will ship the Eligible Items, transportation charges
prepaid, to the destinations specified in the instructions.
Dealer will take action and execute and deliver such instruments as
necessary to (a) convey to Division and General Motors good and marketable title
to all Eligible Items to be purchased, (b) comply with the requirements of any
applicable state law relating to bulk sales or transfer, and (c) satisfy and
discharge any liens or encumbrances on Eligible Items prior to their delivery to
Division and General Motors.
15.2.3. PAYMENT
Subject to Article 17.10, Division will pay for the Eligible Items as soon
as practicable following their delivery to the specified destinations. Payment
may be made directly to anyone having a security or ownership interest in the
Eligible Items.
If Division has not paid Dealer for the Eligible Items within two months
after delivery, and if Dealer has fulfilled its termination obligations under
this Agreement, Division will, at Dealer's written request, estimate the
purchase price of the unpaid Eligible Items and all other amounts owed Dealer by
General Motors. After deducting the amounts estimated to be owing General
Motors and its subsidiaries by Dealer, Division will advance Dealer 75 percent
of the net amount owed Dealer and will pay the balance, if any, as soon as
practicable thereafter.
15.2.4. ASSIGNMENT OF RIGHTS
If Division has decided to appoint a replacement dealer at Dealer's
location, Dealer may sell its Eligible Items and if approved in writing by
Division, assign its rights under this Article 15.2 to a designated replacement
dealer provided the replacement dealer assumes Dealer's obligations under this
Article.
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15.3. ASSISTANCE ON PREMISES
15.3.1. DIVISION'S OBLIGATION
Subject to Article 17.10, Division agrees to give Dealer assistance in
disposing of the Premises if (i) this Agreement expires for any reason or is
terminated by Division under Articles 13.2 or 14.4 and (ii) Dealer is not
offered a new Dealer Agreement. Such assistance shall be given only on Premises
that are described in the Location and Premises Addendum and only if:
(a) they are used solely for Dealership Operations (or similar
dealership operations under agreements with other Divisions of General
Motors which will be terminated simultaneously with this Agreement); and
(b) they are not substantially in excess of space requirements at the
time of termination or, if they are substantially in excess, they became
excessive because of a reduction in the requirements applicable to Dealer's
facilities.
Any Dealer request for such assistance must be in writing and received by
Division within thirty days of the expiration or termination of this Agreement.
Premises that consist of more than one parcel of property or more than one
building, each of which is separately usable, distinct and apart from the whole
or any other part with appropriate ingress or egress, shall be considered
separately under this Article 15.3.
15.3.2. OWNED PREMISES
Division will provide assistance on owned Premises by either (a) locating a
purchaser who will offer to purchase the Premises at a reasonable price, or (b)
locating a lessee who will offer to lease the Premises. If Division does not
locate a purchaser or lessee within a reasonable time, Division will itself
either purchase or, at its option, lease the Premises for a reasonable term at a
reasonable rent. If the cause of termination or expiration is a death or the
incapacity of the Dealer Operator, Division may instead pay Dealer a sum equal
to a reasonable rent for a period of twelve months immediately following the
effective date of termination or expiration of this Agreement.
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15.3.3. LEASED PREMISES
Division will provide assistance on leased Premises by either:
(a) locating a tenant(s), satisfactory to lessor, who will sublet for
the balance of the lease or assume it; or
(b) arranging with the lessor for the cancellation of the lease
without penalty to Dealer; or
(c) reimbursing Dealer for the lesser of the rent specified in the
lease or settlement agreement or a reasonable rent for a period equal to
the lesser of twelve months from the effective date or termination or
expiration of the balance of the lease term.
Upon request, Dealer will use its best efforts to effect a settlement of
the lease with the lessor subject to Division's prior approval of the terms.
Division is not obligated to reimburse Dealer for rent for any month during
which the Premises are occupied by Dealer or anyone else after the first month
following the effective date of termination or expiration.
15.3.4. RENT AND PRICE
Division and Dealer will fix the amount of a reasonable rent and a
reasonable price for the Premises by agreement at the time Dealer requests
assistance. The factors to be considered in fixing those amounts are:
(a) the adequacy and desirability of the Premises for a dealership
operation; and
(b) the fair market value of the Premises. If Division and Dealer
cannot agree, the fair market value will be determined by the median
appraisal of three qualified real estate appraisers, of whom Dealer and
Division will each select one and the two selected will select the third.
The cost of appraisals will be shared equally by Dealer and Division.
15.3.5. LIMITATIONS ON OBLIGATION TO PROVIDE ASSISTANCE
Division will not be obligated to provide assistance on Premises if Dealer:
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(a) fails to accept a bona fide offer from a prospective purchaser,
sublessee or assignee;
(b) refuses to execute a settlement agreement with the lessor if the
agreement would be without cost to Dealer;
(c) refuses to use its best efforts to effect a settlement when
requested by Division; or
(d) refuses to permit Division to examine Dealer's books and records
if necessary to verify claims of Dealer under this Article.
Any amount payable by Division as rental reimbursement or reasonable rent
shall be proportionately reduced if the Premises are leased or sold to another
party during the period for which such amount is payable. Payment of rental
reimbursement or reasonable rent is waived by Dealer if it does not file its
claim therefor within two months after the expiration of the period covered by
the payment. Upon request, Dealer will support its claim with satisfactory
evidence of its accuracy and reasonableness.
ARTICLE 16. DISPUTE RESOLUTION PROCESS
Division and Dealer agree that mutual respect, trust and confidence are
vital to the relationship between Division and Dealer. So that such respect,
trust and confidence can be maintained, and differences that may develop between
Dealer and Division may be resolved amicably, Division and Dealer agree to
resolve disputes in accordance with the Dispute Resolution Process, a copy of
which has been provided to Dealer.
ARTICLE 17. GENERAL PROVISIONS
17.1. NO AGENT OR LEGAL REPRESENTATIVE STATUS
This Agreement does not make either party the agent or legal representative
of the other for any purpose, nor does it grant either party authority to assume
or create any obligation on behalf of or in the name of the others. No
fiduciary obligations are created by this Agreement.
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17.2. RESPONSIBILITY FOR OPERATIONS
Except as provided in this Agreement, Dealer is solely responsible for all
expenditures, liabilities and obligations incurred or assumed by Dealer for the
establishment and conduct of its operations.
17.3. TAXES
Dealer is responsible for all local, state, federal, or other applicable
taxes and tax returns related to its dealership business and will hold General
Motors harmless from any related claims or demands made by any taxing authority.
17.4. INDEMNIFICATION BY GENERAL MOTORS
General Motors will assume the defense of Dealer and indemnify Dealer
against any judgment for monetary damages or rescission of contract, less any
offset recovered by Dealer, in any lawsuit naming Dealer as a defendant relating
to any Product that has not been altered when the lawsuit concerns:
17.4.1. Breach of the General Motors warranty related to the Product,
bodily injury or property damage claimed to have been caused solely by a defect
in the design, manufacture, or assembly of a Product by General Motors (other
than a defect which should have been detected by Dealer in a reasonable
inspection of the Product);
17.4.2. Failure of the Product to conform to the description set forth in
advertisements or product brochures distributed by General Motors because of
changes in standard equipment or material component parts unless Dealer received
notice of the changes prior to retail delivery of the affected Product by
Dealer; or
17.4.3. Any substantial damage to a Product purchased by Dealer from
General Motors which has been repaired by General Motors unless Dealer has been
notified of the repair prior to retail delivery of the affected Product.
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If General Motors reasonably concludes that allegations other than those
set forth in 17.4.1, 17.4.2, or 17.4.3 above are being pursued in the lawsuit,
General Motors shall have the right to decline to accept the defense or
indemnify dealer or, after accepting the defense, to transfer the defense back
to Dealer and withdraw its agreement to indemnify Dealer.
Procedures for requesting indemnification, administrative details, and
limitations are contained in the Service Policies and Procedures Manual under
"Indemnification." The obligations assumed by General Motors are limited to
those specifically described in this Article and in the Service Policies and
Procedures Manual and are conditioned upon compliance by Dealer with the
procedures described in the Manual. This Article shall not affect any right
either party may have to seek indemnification or contribution under any other
contract or by law and such rights are hereby expressly preserved.
17.5. TRADEMARKS AND SERVICE MARKS
General Motors or affiliated companies are the exclusive owners or
licensees of the various trademarks, service marks, names and designs ("Marks")
used in connection with Products and services.
Dealer is granted the non-exclusive right to display Marks in the form and
manner approved by Division in the conduct of its dealership business. Dealer
agrees to permit any designated representative of Division upon the Premises
during regular business hours to inspect Products or services in connection with
Marks.
Dealer will not apply to register any Marks either alone or as part of
another mark, and will not take any action which may adversely affect the
validity of the Marks or the goodwill associated with them.
Dealer agrees to purchase and sell goods bearing Marks only from parties
authorized or licensed by Division or General Motors.
Marks may be used as part of the Dealer's name with Division's written
approval.
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Dealer agrees to change or discontinue the use of any Marks upon Division's
request.
Dealer agrees that no company owned by or affiliated with Dealer or any of
its owners may use any Mark to identify a business without Division's written
permission.
Upon termination of this Agreement, Dealer agrees to immediately
discontinue, at its expense, all use of Marks. Thereafter, Dealer will not use,
either directly or indirectly, any Marks or any other confusingly similar marks
in a manner that Division determines is likely to cause confusion or mistake or
deceive the public.
Dealer will reimburse Division for all legal fees and other expenses
incurred in connection with action to require Dealer to comply with this Article
17.5.
17.6. NOTICES
Any notice required to be given by either party to the other in connection
with this Agreement will be in writing and delivered personally or by first
class or express mail or by facsimile. Notices to Dealer will be directed to
Dealer or its representatives at Dealer's principal place of business and,
except for indemnification requests made pursuant to Article 17.4, notices by
Dealer will be directed to the appropriate Zone or Branch Manager of the
Division(s) of General Motors.
17.7. NO IMPLIED WAIVERS
The delay or failure of either party to require performance by the other
party or the waiver by either party of a breach of any provision of this
Agreement will not affect the right to subsequently require such performance.
17.8. ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES
Dealer has not paid any fee for this Agreement. Neither this Agreement nor
any right granted by this Agreement is a property right.
Except as provided in Article 12, neither this Agreement nor the rights or
obligations of Dealer may be sold, assigned, delegated or otherwise transferred.
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Division may assign this Agreement and any rights, or delegate any
obligations, under this Agreement to any affiliated or successor company, and
will provide Dealer written notice of such assignment or delegation. Such
assignment or delegation shall not relieve Division of liability for the
performance of its obligations under this Agreement.
17.9. NO THIRD PARTY BENEFIT INTENDED
This Agreement is not enforceable by any third parties and is not intended
to convey any rights or benefits to anyone who is not a party to this Agreement.
17.10. ACCOUNTS PAYABLE
All monies or accounts due Dealer are net of Dealer's indebtedness to
Division, General Motors and its subsidiaries. In addition, Division may deduct
any amounts due or to become due from Dealer to Division or General Motors, or
any amounts held by Division, from any sums or accounts due or to become due
from Division, General Motors or its subsidiaries.
17.11. SOLE AGREEMENT OF PARTIES
Except as provided in this Agreement, Division has made no promises to
Dealer, Dealer Operator, or dealer owner and there are no other agreements or
understandings, either oral or written, between the parties affecting this
Agreement or relating to any of the subject matters covered by this Agreement.
Except as otherwise provided herein, this Agreement cancels and supersedes
all previous agreements between the parties that relate to any matters covered
herein, except as to any monies which may be owing between the parties.
No agreement between Division and Dealer which relates to matters covered
herein, and no change in, addition to (except the filling in of blank lines) or
erasure of any printed portion of this Agreement, will be binding unless
permitted under the terms of this Agreement or related documents, or approved in
a written agreement executed as set forth in Division's Dealer Sales and Service
Agreement.
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17.12. APPLICABLE LAW
This Agreement is governed by the laws of the State of Michigan. However,
if performance under this Agreement is illegal under a valid law of any
jurisdiction where such performance is to take place, performance will be
modified to the minimum extent necessary to comply with such law if it was
effective as of the effective date of this Agreement.
17.13. SUPERSEDING DEALER AGREEMENTS
If Division offers a superseding form of dealer agreement to Division's
dealers generally at any time prior to expiration of this Agreement, Division
may terminate this Agreement by prior written notice to Dealer, provided
Division offers Dealer a dealer agreement in the superseding form for a term of
not less than the unexpired term of this Agreement.
Unless otherwise agreed in writing, the rights and obligations of Dealer
that may otherwise become applicable upon termination or expiration of the term
of this Agreement shall not be applicable if Division and Dealer execute a
superseding dealer agreement, and the matured rights and obligations of the
parties hereunder shall continue under the new agreement.
Dealer's performance under any prior agreement may be considered in an
evaluation of Dealer's performance under this or any succeeding agreement.
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GLOSSARY
1. AREA OF PRIMARY RESPONSIBILITY -- The geographic area designated by
Division from time to time in a Notice of Area of Primary
Responsibility.
2. DEALER -- The corporation, partnership or proprietorship that signs
the Dealer Agreement with Division.
3. DEALER AGREEMENT -- The Dealer Sales and Service Agreement, including
the Agreement proper that is executed, the Standard Provisions, all of
the related Addenda, the Accounting and Service Policies and
Procedures Manuals, and the Terms of Sale Bulletins.
4. DEALERSHIP OPERATIONS -- All operations contemplated by the Dealer
Agreement. These operations include the sale and service of Products
and any other activities undertaken by Dealer related to Products,
including rental and leasing operations, used vehicle sales and body
shop operations and finance and insurance operations whether conducted
directly or indirectly by Dealer.
5. DIVISION -- The unit of General Motors Corporation that has entered
into a Dealer Agreement with Dealer authorizing it to market and
service Division's Motor Vehicles.
6. GENERAL MOTORS -- General Motors Corporation.
7. MOTOR VEHICLES -- All current model types or series of new motor
vehicles specified in any Motor Vehicle Addendum and all past General
Motors motor vehicles marketed through Motor Vehicle Dealers.
8. PRODUCTS -- Motor Vehicles, Parts and Accessories.
9. SERVICE POLICIES AND PROCEDURES MANUAL -- The Manual issued
periodically which details certain administrative and performance
requirements for Dealer service under the Dealer Agreement.
10. SPECIAL VEHICLES -- Motor Vehicles that have limited marketability
because they differ from standard specifications or incorporate
special equipment.
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