EX-10
Exhibit 10.5.3 American Honda Standard Provisions
EXHIBIT 10.5.3
HONDA AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
The following Standard Provisions are, by reference, incorporated in
and made a part of the Honda Automobile Dealer's Sales and Service
Agreement. These Standard Provisions accompany the Honda Dealer's Sales and
Service Agreement which has been executed on behalf of both American Honda
and Dealer.
1. THE OBLIGATIONS OF AMERICAN HONDA
1.1. It is the obligation of American Honda to supply to Dealer,
and to all authorized dealers, Honda Products in a fair and reasonable manner
in order that Dealer may conduct Dealership Operations in a businesslike
manner. In fulfilling this obligation, Honda Products may be supplied either
on the basis of dealer order or on the basis of allocation, depending on
market conditions and availability. There are numerous factors which affect
the availability of Honda Products. Among those factors are component
availability and production capacity, consumer demand, strikes and other
labor troubles, weather and transportation conditions, and government
regulations. Because such factors affect individual dealer supply, American
Honda necessarily reserves discretion in accepting orders and allocating and
distributing Honda Products, and its judgment and decision in such matters
will be final.
1.2. To assist Dealer in the fulfillment of its obligations
under the Agreement, which it has as a retail seller of Honda Products,
American Honda agrees to provide Dealer sales, service and parts support.
1.2.A. To assist Dealer in fulfilling its sales
responsibility, American Honda agrees to offer general and specialized
product information and to provide field sales personnel to advise and
counsel Dealer's sales organization on sales-related subjects such as
merchandising, training and sales management.
1.2.B. To assist Dealer in fulfilling its service and
parts responsibilities, American Honda agrees to offer, or cause to be
offered, general and specialized service and parts training courses. Based
on the service training needs of Dealer's service personnel, to be determined
by American Honda with the assistance of Dealer, Dealer agrees to have
members of Dealer's service organization attend such courses. Further,
American Honda agrees to make available to Dealer field service personnel
capable of advising and counseling Dealer's service personnel on
service-related subjects, including product quality, technical adjustments,
repairs and replacement of product components, recall, product improvement or
product update campaigns which American Honda may conduct, owner complaints,
warranty administration, service and parts merchandising, and training and
service management.
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1.3. To assist Dealer in planning, establishing and maintaining
the Dealership Premises, American Honda will, at its sole option, make
available to Dealer, upon request, sample copies of building layout plans or
facility planning recommendations, including sales, service and parts space
and the placement, installation and maintenance of recommended signs. In
addition, representatives of American Honda will be available to Dealer from
time to time to counsel and advise Dealer and its personnel in connection
with Dealer's planning and equipping the Dealership Premises.
1.4. American Honda agrees to make available to Dealer, at
reasonable cost, such sales, service and parts manuals, brochures, special
service tools and equipment and other data for Honda Products as American
Honda deems necessary for Dealership Operations.
1.5. American Honda agrees to maintain a nationwide system of
authorized dealers of Honda Products. In order that those authorized dealers
may be assured of the benefits of comprehensive advertising of Honda
Products, American Honda agrees to establish and maintain general advertising
programs in such manner and amount as it may deem appropriate and will make
sales promotion and campaign materials available to Dealer.
1.6. American Honda agrees to compensate Dealer for the labor
and parts used by Dealer in performing its obligations under any American
Honda warranty and in connection with any recall, product improvement or
product update campaign which American Honda may undertake and require Dealer
to perform. Such compensation will be in such reasonable amounts, and
pursuant to such requirements and instructions, as American Honda shall
establish from time to time, and such compensation shall constitute full and
complete payment by American Honda to Dealer for such work.
1.7. American Honda agrees to assume the defense of Dealer and
to indemnify Dealer against any money judgment, less any off set recovered by
Dealer, in any lawsuit naming Dealer as a defendant, where such lawsuit
relates to: (a) an alleged breach of any Honda warranty relating to Honda
Products; (b) bodily injury or property damage claimed to have been caused by
a defect in the design, manufacture or assembly of a Honda Product prior to
delivery thereof to Dealer (other than a defect which could have been
detected by Dealer in a reasonable inspection); or (c) a misrepresentation or
misleading statement of American Honda; provided, however, that if any
information discloses the possibility of Dealer error or omission in
servicing or otherwise (including but not limited to Dealer not having
performed all recalls of which Dealer has notice on the Honda Product
involved in the lawsuit if the defect subject to the recall is alleged or
contended to be a contributing cause of the breach of warranty, injury or
damage which is the subject matter of the lawsuit), or should it appear that
the Honda Product involved in such lawsuit had been altered by or for Dealer,
or if Dealer has violated any of the provisions of this Paragraph 1.7, then
Dealer will immediately obtain its own counsel and defend itself, and
American Honda will not be obligated to defend or indemnify Dealer further.
Dealer will promptly notify American Honda of any claim which Dealer will
assert American Honda might be obligated to defend under this Paragraph 1.7.
American Honda will have not less than thirty (30) days to conduct a
reasonable investigation to initially determine whether or not American Honda
is obligated to defend under this Paragraph 1.7. Dealer will take the steps
necessary to protect its own interests involved in the lawsuit until American
Honda assumes the active defense of Dealer. American Honda will, upon
assuming the defense of Dealer, reimburse Dealer for all attorneys' fees or
court costs incurred by Dealer from the date of the tender. American Honda,
upon assuming Dealer's defense, will have the right to retain and direct
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counsel of its own choosing, and Dealer will cooperate in all matters during
the course of defending the lawsuit. If, upon final judgment in a lawsuit,
it is determined that American Honda wrongfully failed or refused to defend
Dealer, American Honda will reimburse Dealer for all costs and attorneys'
fees incurred by Dealer from the date of the tender of defense.
2. SALE OF HONDA PRODUCTS TO DEALER.
2.1. To the extent that Honda Products are the subject of dealer
order, such orders will be submitted and processed in accordance with
procedures established by American Honda. No order will be binding on
American Honda, as evidenced by either the issuance of an invoice or shipment
of the ordered Honda Products, and any such order may be accepted in whole or
in part. All orders by Dealer will be deemed firm orders and binding upon
the Dealer, except that at any time prior to acceptance, an order may be
canceled by Dealer by giving actual notice to American Honda in writing of
the desire by Dealer to cancel such order.
2.2. While it is the intent of American Honda to provide Honda
Automobiles to Dealer in such quantities and types as are ordered by Dealer,
American Honda and Dealer recognize that Honda Automobiles may not always be
available in desired quantities. It is therefore understood and agreed that
American Honda, at its sole election, will have the right to allocate Honda
Automobiles among authorized dealers of Honda Products in a fair and
reasonable manner. American Honda will provide to Dealer an explanation, in
writing, of any allocation system it may adopt.
2.3. American Honda will have the right at anytime and from time
to time to establish and revise prices and other terms, including payment by
Dealer, for its sales of Honda Products to Dealer. Revised prices, terms or
provisions will apply to the sale of any Honda Products as of the effective
date of the revised prices, terms or provisions, even though a different
price or different terms may have been in effect at the time such Honda
Products were allocated to or ordered by Dealer.
2.4. American Honda will have the right to select the
distribution points and the mode of transportation and may pay carriers for
all charges in effecting delivery of Honda Products to Dealer. Dealer agrees
to pay to American Honda such charges for delivery as American Honda may
assess. Subject to the terms of sale which may be established from time to
time by American Honda, risk of loss to Honda Products will pass to Dealer
upon tender of the Honda Products to Dealer or its authorized agent, and
title will pass to Dealer upon receipt by American Honda of payment.
2.5. If Dealer should fail or refuse or for any reason be unable
to accept delivery of any Honda Products ordered by Dealer, or if Dealer
should request diversion of a shipment from American Honda,, Dealer will be
responsible for and pay to American Honda, promptly on demand, all costs and
expenses incurred by American Honda in filling and shipping Dealer's order
and by reason of such diversion, including costs of demurrage and storage,
plus restocking charges as determined by American Honda. American Honda may
direct that such returned Honda Products be delivered to another destination,
but the amount charged Dealer for return to such other destination will not
be greater than the costs and expenses of returning such Honda Products to
their original place of shipment plus any demurrage, storage and restocking
charges.
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2.6. As between American Honda and Dealer, American Honda
assumes responsibility for damage to Honda Products caused prior to delivery
to Dealer or its authorized agent.
2.7. American Honda will not be liable in any manner for delay
or failure in supplying any Honda Products where such delay or failure is the
result of any event beyond the control of American Honda. Such event may
include, but is not limited to, any law or regulation or any acts of God,
foreign or civil wars, riots, interruptions of navigation, shipwrecks, fires,
strikes, lockouts, or other labor troubles, embargoes, blockades, demand for,
or delay or failure of any supplier to deliver or in making delivery, of
Honda Products.
2.8. American Honda reserves the right at any time to change or
modify, without notice, any specification, design or model of Honda
Products. In the event of any change or modification with respect to any
Honda Products, Dealer will not be entitled to have such or similar change or
modification made with respect to any other Honda Products, except as may be
required by applicable law. American Honda may, however, in its sole
discretion, make such changes or modifications to all Honda Products in its
inventory or control, whether or not invoiced to Dealer. No such change will
be considered a model year change unless specified by American Honda
2.9. American Honda may at any time discontinue, without
obligation to Dealer or Dealer's customers, the sale of any Honda Products,
or models or lines thereof or any other items, goods or services. Further,
American Honda will have no obligation, under any circumstances, to accept
orders for any Honda Products which are not in current inventory.
3. THE OBLIGATIONS OF DEALER.
3.1. It is the obligation of Dealer to promote and sell, at
retail, Honda Products, and to promote and render service, whether or not
under warranty, for those products within the Dealer's Primary Market Area.
3.2. Dealer's performance of its sales obligations for Honda
Products will be evaluated by American Honda on the basis of such reasonable
criteria as American Honda may develop from time to time, including, but not
limited to, such reasonable sales objectives as American Honda may establish
and a comparison of Dealer's sales performance with other authorized dealers
of Honda Products.
3.3. To enable Dealer to fulfill its obligations satisfactorily,
Dealer agrees to establish and maintain an adequate and trained sales and
customer relations organization. Dealer further agrees to establish and
maintain a complete service and parts organization, including a qualified
service manager and a qualified parts manager and a number of competent
service and parts personnel adequate to care for the service obligations to
be performed by Dealer under the Agreement.
3.4. Dealer agrees to acknowledge, investigate and resolve
satisfactorily all complaints received from owners of Honda Products in a
businesslike manner in order to secure and maintain the goodwill of the
public. Any complaint received by Dealer which, in the opinion of Dealer,
cannot be readily remedied, shall be promptly reported to American Honda by
Dealer.
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3.5. Dealer agrees that it will not make any misrepresentations
or misleading statements regarding the items making up the total selling
price of Honda Products or as to the prices or charges relating to such item&
With the understanding that Dealer is the sole judge of the price at which it
sells Honda Products, dealer recognizes that a retail customer has the right
to purchase Honda Automobiles without being required to purchase any optional
equipment or accessories which the purchaser does not want or order unless
such equipment or accessories are required under applicable laws or
regulations.
3.6. Dealer agrees to make certain that all Honda Products sold
by it have received predelivery services and inspection in accordance with
applicable procedures and directives issued by American Honda. Dealer
further agrees that all Honda Products sold by it will be in proper operating
condition prior to delivery to any customer. To enable Dealer to fulfill its
obligations in this regard, Dealer agrees that an appropriate number of its
service personnel will be fully qualified to perform all necessary
predelivery service and inspection.
3.7. Dealer agrees to comply with, and operate consistent with,
all applicable provisions of the National Traffic and Motor Vehicle Safety
Act of 1966 and the Federal Clean Air Act, as amended, including such
applicable rules and regulations as may be issued thereunder, and all other
applicable federal, state and local motor vehicle safety and emission control
requirements. In the interests of motor vehicle safety and emission control,
American Honda agrees to provide to Dealer, and Dealer to American Honda,
such information and assistance as may reasonably be requested by the other
in connection with the performance of obligations imposed on either party by
the National Traffic and Motor Vehicle Safety Act of 1966 and the Federal
Clean Air Act, as amended, and the rules and regulations issued thereunder,
and all other applicable federal, state and local motor vehicle safety and
emission control requirements.
3.8. Dealer agrees to conduct a used vehicle operation at or in
connection with the Dealership Premises, to the extent reasonably required to
enhance the opportunity for sales of Honda Automobiles.
3.9. American Honda and Dealer recognize that it may be
necessary for American Honda to formulate new or different policies or
directives to meet new or changing technology, laws or circumstances. In the
operation of Dealers business and in the sale and promotion of Honda
Products, in rendering service and in all other activities of the Dealership
Operations, Dealer will follow all reasonable directives, suggestions and
policies of American Honda. All written directives, suggestions and policies
of American Honda contained in any of its bulletins or manuals, which are in
effect as of the date of the Agreement or are issued thereafter, will be
deemed a part of the Agreement.
3.10. Dealer agrees that it will, at all times, maintain in
effect all licenses required for Dealership Operations and for the Dealership
Premises.
3.11. Dealer agrees that it will comply with all laws, rules,
regulations and guides relating to the conduct of its business.
3.12. Dealer agrees that it will perform any and all warranty,
recall, product improvement or product update service in compliance with
instructions and directives issued by American Honda, regardless of where the
Honda Product involved was purchased. To protect and maintain the goodwill
and reputation of Honda Products and the Honda Trademarks, Dealer agrees that
it will not charge any customer for warranty service or any work done in
connection with such warranty, recall, product improvement or update or any
other service as to which Dealer is reimbursed by American Honda.
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3.13. Dealer fully understands that the success of its Dealership
Operations depends to a great extend upon the amount of net working capital,
owners equity, flooring and lines of credit which Dealer maintains.
Accordingly, for the benefit of both American Honda and Dealer, Dealer agrees
that it will, at all times, pay for Honda Products promptly and, to do so,
maintain its minimum net working capital, owners equity, flooring and lines
of credit in the amounts specified in Paragraph G of the Agreement. American
Honda will have the right, reasonably, to specify an increased amount of
minimum net working capital, owners equity, flooring, or lines of credit to
be used in Dealership Operations and Dealer agrees promptly to establish and
maintain the increased amount. Dealer and American Honda agree to execute
such new documents as American Honda may reasonably require to evidence
revised capital requirements.
3.14. Dealer agrees to assume the defense of American Honda and
to indemnify American Honda against any money judgment less any offset
recovered by American Honda, in any lawsuit naming American Honda as a
defendant where such lawsuit relates to: (a) an alleged failure by Dealer to
comply, in whole or in part, with any obligation assumed by Dealer pursuant
to the Agreement, (b) Dealer's alleged negligent or improper repairing or
servicing of Honda Products, or such other motor vehicles or equipment as may
be sold or serviced by Dealer, (c) Dealer's alleged breach of any contract
between Dealer and Dealer's customer, or (d) Dealer's alleged
misrepresentation or misleading statement, either direct or indirect, to any
customer of Dealer. American Honda may, at its sole option and at its
expense, participate in defending any such lawsuit.
4. WARRANTY.
4.1. Dealer understands and agrees that the only warranties that
will be applicable to Honda Products will be such written warranty or
warranties as may be furnished by American Honda. Except for its express
liability under such written warranties, American Honda neither assumes nor
authorizes any other person or party to assume for it any other obligation or
liability in connection with any Honda Product or component thereof.
4.2. Dealer agrees that it will expressly incorporate any
warranty furnished by American Honda with a Honda Automobile as a part of
each order form or other contract for the sale of such Honda Automobile by
Dealer to any buyer. Dealer further agrees that it will deliver to the buyer
of all Honda Products, at the time of delivery of such Honda Products, copies
of such applicable warranties as may be furnished by American Honda. Dealer
agrees to abide by and implement in all other respects American Honda's
warranty procedures in effect at the time of Dealers sale.
5. ADVERTISING AND PROMOTIONAL PROGRAMS.
5.1. Dealer agrees to develop and actively utilize programs for
the advertisement and promotion of Honda Products and its servicing of such
products. Such programs will include the prominent display and use or
demonstration of Honda Automobiles. Dealer further agrees to cooperate with
all reasonable promotional programs developed by American Honda.
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5.2. Dealer agrees that it will not advertise, promote or trade
in Honda Products or the servicing thereof in such a manner as to injure or
be detrimental to the goodwill and reputation of American Honda and the Honda
Trademarks. Dealer further agrees that it will not publish or otherwise
disseminate any advertisement or announcement or use any form or media of
advertising which is objectionable to American Honda. Dealer agrees to
discontinue immediately any advertisement or form of advertising deemed
objectionable upon request of American Honda.
5.3. Subject to applicable federal, state or local ordinances,
regulations and statutes, Dealer agrees to erect and maintain, at the
Dealership Location, at Dealer's expense, authorized product and service
signs of types required by American Honda, as well as such other authorized
signs as are necessary to advertise the Dealership Operations effectively and
as are required by American Honda.
8. TRADEMARKS AND SERVICE MARKS.
6.1. Dealer agrees that American Honda has the exclusive right
to use and to control the use of the Honda Trademarks and but for the right
and license granted by Paragraph 6.2 hereof to use and display the Honda
Trademarks, Dealer would have no right to use the same.
6.2. Dealer is hereby granted the nonexclusive right and license
to use and display the Honda Trademarks at the Dealership Premises. Such use
or display is limited to that which is necessary in connection with the sale,
offering for sale and servicing of Honda Products at retail at the Dealership
Location. Dealer agrees that it will promptly discontinue the use of any of
the Honda Trademarks or change the manner in which any of the Honda
Trademarks is used when requested to do so by American Honda.
6.3. American Honda and Dealer recognize that Dealer is free to
sell Honda Products to customers wherever they may be located. However, in
order that American Honda may establish and maintain an effective network of
authorized dealers for the sale and service of Honda Products, Dealer
specifically agrees that it will not display Honda Trademarks, or, either
directly or indirectly, establish any place or places of business for the
conduct of any of its Dealership Operations except at the locations and for
the purpose described in Paragraph E of the Agreement without the prior
written approval of American Honda. Dealer further agrees that the rights
and license granted by Paragraph 6.2 hereof will be automatically canceled
upon a change in the location of the Dealership Location unless such change
in location was previously approved in writing by American Honda. Dealer
further agrees that such right and license terminates with the termination of
the Agreement.
6.4. If Dealer refuses or neglects to keep and perform its
obligations assumed under this Article 6 or under paragraph 10.3 hereof,
Dealer will reimburse American Honda for all costs, attorneys' fees and other
expenses incurred by American Honda in connection with any action to require
Dealer to comply therewith.
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7. GENERAL BUSINESS REQUIREMENTS.
7.1. It is to the mutual benefit of Dealer and American Honda
that uniform accounting systems and practices be maintained by authorized
dealers. Accordingly, Dealer agrees to maintain such systems and practices
as are required by American Honda. In the event Dealer engages in the sale
of any other product, Dealer agrees to maintain and keep separate records and
books relating to the sale and servicing of Honda Products.
7.2. Dealer agrees to furnish monthly to American Honda, on or
before the times designated by American Honda, on forms prescribed by
American Honda, a complete and accurate financial and operating statement
covering the preceding month and calendar-year-to-date operations and showing
the true and accurate condition of Dealership Operations. Financial
statements and other business information furnished to American Honda will
not be submitted to any third party unless authorized by Dealer or required
by law, or the information is pertinent to a proceeding in which American
Honda and Dealer are parties.
7.3. Dealer agrees to keep complete and current records
regarding the sale and servicing of Honda Products and to prepare for
American Honda such reports, based on those records, as American Honda may
reasonably request. In order that policies and procedures relating to the
applications for reimbursement for warranty and other applicable work and for
other credits or reimbursements may be applied uniformly to all authorized
dealers, Dealer agrees to prepare, keep current and retain records in support
of requests for reimbursement or credit in accordance with policies and
procedures designated by American Honda.
7.4. Dealer agrees to permit, during reasonable business hours,
American Honda, or its designee, to examine, audit, reproduce and take copies
of all reports, accounts and records pertaining to the sale, servicing and
inventorying of Honda Products, including, but not limited to, records in
support of claims for reimbursement or credit from American Honda, and with
the prior approval of Dealer, which approval will not be unreasonably
withheld, to interview Dealer employees with respect thereto.
7.5. Dealer agrees that Dealership Operations will be conducted
in the normal course of business during and for not less than the days of the
week and hours of the day customary for automobile dealerships in the Primary
Market Area.
7.6. Dealer agrees and understands that any retail price which
may be suggested by American Honda is merely a suggested price, and Dealer
has no obligation to sell any Honda Products at such price. Dealer further
understands and agrees that it is the sole judge of the price at which it
sells Honda Products and the price it charges others for service, subject
only to applicable local, state and federal laws, rules and regulations.
7.7. Dealer understands and agrees that it will be responsible
for and will pay any and all taxes, whether sales, use or excise, and all
other governmental or municipal charges imposed upon the sale of Honda
Products by American Honda to Dealer and will maintain accurate records of
the same, which record's will be available to American Honda, or its
designee, during regular business hours for inspection.
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7.8. Dealer understands and agrees that, while it has
responsibility for the promotion and retail sale and servicing of Honda
Products within the Primary Market Area, it has no territorial exclusivity.
Further, American Honda reserves the right, based upon reasonable criteria,
to appoint other authorized dealers of Honda Products in the Primary Market
Area.
8. APPOINTMENT OF SUCCESSOR AND REPLACEMENT DEALERS.
8.1. The parties recognize that Honda Products are marketed
through a system of authorized dealers developed by American Honda and that
customers and American Honda have a vital interest in the preservation and
efficient operation of the system. American Honda has the responsibility of
continuing to administer the system and of selecting the most suitable dealer
candidate in each circumstance. Accordingly, Dealer agrees that American
Honda has the right to select each successor and replacement dealer and to
approve its owners and principal management and the location of dealership
facilities. Further, Dealer agrees to provide written notice to American
Honda of any potential change in the involvement, ownership or management
specified in Paragraphs C and D of the Agreement. No change affecting such
involvement, ownership or management will be made without the prior written
approval of American Honda, which approval will not be unreasonably withheld.
8.2. Upon Dealer's request, American Honda will execute with
Dealer a Successor Addendum designating proposed Dealer operators or owners
of a successor dealer to be established if the Agreement expires or is
terminated because of death or incapacity. The request must be executed by
all persons identified in Paragraph C of the Agreement and all proposed
dealer operators or owners and be submitted to American Honda prior to such
death or incapacity, provided that such proposed dealer operators or owners
must be acceptable to American Honda.
8.3. Dealer, but not American Honda, may cancel any executed
Successor Addendum. If American Honda notifies Dealer that it does not plan
to permit Dealership Operations to continue at the Dealership Location,
American Honda shall have no obligation to execute a new Successor Addendum.
8.4. If the Agreement expires or is terminated because of death
or incapacity and Dealer and American Honda have not executed a Successor
Addendum, the remaining owners, successors or heirs may propose a successor
dealer entity to continue Dealership Operations at the Dealership Location.
Such proposal must be made within thirty days of the event causing expiration
or termination by submitting a written proposal to American Honda. Such
proposal will be accepted by American Honda if it does not introduce new
owners or if the proposed new owners are acceptable to American Honda.
8.5. Any successor dealer entity approved by American Honda
pursuant to this Article 8 must establish that it can conduct Dealership
Operations in an efficient and businesslike manner. Such successor dealer
entity will have one year to meet reasonable performance criteria established
from time to time by American Honda. In the event such successor dealer
entity fails to meet those criteria, such failure will be separate grounds
for termination of the Agreement.
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9. TERMINATION OF AGREEMENT.
9.1. The Agreement may be terminated, at any time, by mutual
agreement of American Honda and Dealer.
9.2. Dealer may terminate the Agreement, at any time, by giving
American Honda notice of such termination. Such termination shall be
effective upon the date specified by Dealer, or if no date is specified, then
upon receipt by American Honda of such notice.
9.3. American Honda may terminate the Agreement, at any time, by
serving on Dealer a written notice of such termination by certified or
registered mail to Dealer at the Dealership Premises. Subject to other
provisions of the Agreement, termination will be effective ninety (90) days
after mailing of such notice to dealer or such longer period as American
Honda may specify, provided, however, that termination will be effective ten
(10) days after mailing if for an occurrence of any circumstance referred to
in Paragraphs 9.4.A, 9.4.B, 9.4.J or 9.4.M hereof.
9.4. It is recognized that each of the following grounds is
within control of Dealer or originates from action taken by Dealer or its
employee(s) and is contrary to the spirit and objectives of the Agreement.
Therefore, American Honda may terminate the Agreement upon the occurrence of
any of the following:
9.4.A. Failure by Dealer to secure and continuously
maintain any license necessary for the conduct by Dealer of its business
pursuant to the Agreement or the termination or expiration without renewal,
or suspension or revocation of any such license for any reason whatsoever,
whether or not license is reinstated.
9.4.B. Any change, transfer or attempted transfer by
Dealer or any Dealer owner, voluntarily or by operation of law, of the whole
or any part of the Agreement or any interest or legal or beneficial ownership
therein or any right or obligation thereunder, directly or indirectly, such
as, for example only, by way of a sale of an underlying ownership interest in
Dealer or the Dealership Premises or a change in the persons having
control or managerial authority, without prior written consent of American
Honda. Any purported change, transfer or assignment shall be null and void
and not binding on American Honda.
9.4.C. Any dispute, disagreement, controversy or
personal difficulty between or among Dealer Owners or in the management of
Dealer which, in American Honda's opinion, may adversely affect the conduct
of Dealer's business, or the presence in the management of Dealer of any
person who, in American Honda's opinion, does not have or no longer has
requisite qualifications for his position.
9.4.D. Impairment of the reputation or the financial
standing of Dealer or of any Dealer Owner subsequent to the execution of the
Agreement; or the ascertainment by American Honda of any facts existing at or
prior to execution of the Agreement which tend to impair such reputation or
financial standings; or the failure of Dealer continuously to meet American
Honda's minimum requirements of net working capital, owner's equity or
line(s) of credit.
9.4.E. Failure by Dealer to pay, within ten (10) days
after written demand from American Honda, any delinquent accounts or other
monies due to American Honda from Dealer.
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9.4.F. Submission or participation in the submission
to American Honda of any false or fraudulent statement, application, report,
request for issuance of reimbursement, compensation, refund or credit,
including but not limited to any false or fraudulent claim for warranty work,
labor rate, set-up reimbursement or warranty coverage.
9.4.G. Use by Dealer of any deceptive or fraudulent
practice, whether willful, negligent or otherwise, in the sale of any Honda
Product
9.4.H. Any conviction in any court of original
jurisdiction of Dealer or any Dealer Owner or any employee of the Dealership
Operations for any crime or violation of any law if, in the opinion of
American Honda, such conviction or violation may adversely affect the conduct
of the Dealership Operations or tend to be harmful to the goodwill of
American Honda or to the reputation of Honda Products or the Honda
Trademarks, or the violation or refusal or neglect of Dealer to comply with
the provisions of the National Traffic and Motor Vehicle Safety Act of 1966,
as amended, or the Clean Air Act, or any rules, regulations or standards
under either of said Acts, including but not limited to performance of any
product update or recall operation as directed by American Honda.
9.4.l. Dealer's entering into any agreement,
combination, understanding or contract, oral or written, with any other
corporation, person, firm or other legal entity for the purpose of fixing
prices of Honda products or otherwise violating any law.
9.4.J. Dealer's abandonment of Dealership Premises or
failure to maintain Dealership Operations as a going business, open during
customary business hours for the days and hours as are customary for
automobile dealerships in the Primary Market Area, provided such failure is
not due to causes beyond Dealer's control. Failure of the Dealership
Premises to remain open for seven (7) consecutive days will constitute,
without more, such abandonment.
9.4.K Death or incapacity of any Dealer Owner or Dealer
Manager, subject to the provisions of Article S.
9.4.L. Failure of Dealer to make improvements,
alterations or modifications of its Dealership Premises which are required to
meet reasonable facility requirements of American Honda or which Dealer has
agreed or represented to American Honda that Dealer will make or do.
9.4.M. The movement of Dealership Premises to a new
location or the establishment of an additional location for the sale or
service of any Honda Products without the prior written approval of American
Honda.
9.4.N. The failure of Dealer to provide adequate
representation, promotion, sales or service, including warranty work, of any
Honda Products.
9.4.O. Dealer's breach of any provision of the
Agreement or Dealers failure to comply with any contained in the Agreement.
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9.5. The Agreement will also be terminated upon written notice
by American Honda in the event:
9.5.A Of termination of American Honda's distribution
agreement as a Honda Automobile distributor.
9.5.B. Of withdrawal by American Honda from the market
in which Dealer is located.
9.5.C. American Honda will, for any reason,
discontinue the distribution of Honda Automobiles.
9.6. Upon the occurrence of any of the following facts or
circumstances, the Agreement will terminate automatically, without notice or
other action by American Honda or Dealer, and upon such termination, any
dealings between American Honda and dealer will be on a day-to-day basis at
the sole option of American Honda and may be discontinued at any time by
American Honda:
9.6.A Insolvency by any definition of Dealer, or
9.6.B. The existence of facts or circumstances which
would allow the voluntary commencement by Dealer, or the involuntary
commencement against Dealer, of any proceedings under any bankruptcy act or
law or under any state insolvency law, or
9.6.C. The appointment of a receiver or other officer
having similar powers for Dealer or the Dealership Premises; or
9.6.D. Any levy against Dealer under attachment,
garnishment or execution or similar process which is not within ten (10) days
vacated or removed by payment or bonding.
9.7. American Honda may select any applicable provision under
which it elects to terminate the Agreement and give notice thereunder,
notwithstanding the existence of any other grounds for termination or the
failure to refer to such other grounds in the notice of termination. The
failure by American Honda to specify additional ground(s) for cancellation in
its notice will not preclude American Honda from later establishing that
termination is also supported by such additional ground(s).
9.8. The acceptance by American Honda of orders from Dealer or
the continued sale of Honda Products to Dealer or any other act or course of
dealing of American Honda after termination of the Agreement will not be
construed as or deemed to be a renewal of the Agreement for any further term
or a waiver of such termination. Any dealings after termination will be on a
day-to-day basis.
9.9. In all cases, Dealer agrees to conduct itself and
Dealership Operations until the effective date of termination and after
termination or expiration of the Agreement, so as not to injure the
reputation or goodwill of the Honda Trademarks or American Honda.
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10. RIGHTS, OBLIGATIONS AND DEALINGS UPON TERMINATION.
10.1. Upon the mailing of a written notice of termination or
after date of the expiration of the Agreement without renewal, American Honda
will have the right to cancel all pending orders of Dealer for Honda
Products, special tools and equipment, whether previously accepted by
American Honda or not, except as specifically otherwise provided in this
Section 10. Notwithstanding the foregoing, if American Honda chooses to fill
any orders, it will not be obligated to fill any other orders and will not be
precluded from changing the terms of any sale.
10.2. Not later than the effective date of the termination or
expiration of the Agreement, Dealer will cease to hold itself out as being
authorized to sell Honda Products and will discontinue selling Honda Products
or performing service as an authorized dealer.
10.3. In addition to the requirements of Section 10.2, not later
than the effective date of the termination or expiration of the Agreement,
Dealer will, at its sole expense, discontinue any and all uses of any Honda
Trademarks and any words, symbols and marks which are confusingly similar
thereto; will remove all signs bearing any Honda Trademark and will destroy
all stationery, repair orders, advertising and solicitation materials, and
all other printed matter bearing any Honda Trademark or referring directly or
indirectly to American Honda or Honda Products in any way which might make it
appear to members of the public that Dealer is still an authorized dealer.
The foregoing will include, but not be limited to, discontinuing the use of a
Honda Trademark as part of Dealer's business and corporate name. Dealer will
also deliver to American Honda, at American Honda's place of business, or to
a person designated by American Honda, or will destroy the same upon request
by American Honda, any and all technical or service literature, advertising
and other printed material then in Dealer's possession which relates to Honda
Products and which was acquired or obtained by Dealer f rom American Honda.
Dealer will destroy any sign bearing a Honda Trademark which has not been
repurchased by American Honda.
10.4. In the event the Agreement is terminated pursuant to the
provisions of paragraph 9.3 hereof, upon request of American Honda for
copying Dealer's records of predelivery service, warranty service, recall or
update service or other service of Honda Products. In the event the
Agreement is terminated pursuant to the provisions of paragraphs 9.1 or 9.2
hereof, upon the request of American Honda, Dealer will deliver to American
Honda copies of such Dealer records.
10.5. Dealer may, at any time within five (5) days after the
effective date of termination or expiration of the Agreement, notify American
Honda in writing of Dealer's desire to have American Honda repurchase from
Dealer Honda Products in Dealer's inventory which were purchased from
American Honda and which, when American Honda accepts sole possession:
10.5.A. In the case of Honda Automobiles, are new and
of the then current model year, as designated by American Honda, unused,
undamaged and in first-class resalable condition, regardless of whether or
not American Honda has exercised its right of inspection; and
10.5.B. In the case of Honda Parts are new, listed as
current in the Parts Price BooK unused, undamaged, in their original package
and in first-class resalable condition.
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10.6. Upon termination or expiration without renewal, upon
request of Dealer given no later than five (5) days after the effective date
of termination or expiration, American Honda will repurchase all signs which
use a Honda Trademark as were authorized in advance by American Honda and all
service information and materials, special tools and equipment designed
specifically for service of Honda Automobiles and which were purchased from
American Honda and are usable on current Honda Products, provided that such
signs, information, materials, tools and equipment are less than five (5)
years old and are in good working order.
10.7. American Honda will repurchase from Dealer Honda Products
and signs, information, materials, tools and equipment as aforesaid on the
condition that Dealer furnishes an inventory to American Honda within thirty
(30) days after the termination or expiration without renewal of the
Agreement and complies strictly with all procedures and conditions of
repurchase issued by American Honda at the time of repurchase. American
Honda Will have the right and option to assign to another person or entity
the right to purchase such Honda Products.
10.7.A. The price for Honda Products, other than tools,
equipment, information, materials and signs, will be the price at which they
were originally purchased by Dealer from American Honda or the price last
established by American Honda for the sale of identical Honda Products,
whichever may be lower, and in either case will be less all prior refunds and
allowances made by American Honda with respect thereto, if any. The price
for tools, equipment, information, materials and signs will be the price paid
by Dealer reduced by straight-line depreciation on the basis of a useful life
of five (5) years. In all cases, the price will be reduced by any applicable
restocking charge which may be in effect at the time American Honda's receipt
of goods to be repurchased.
10.7.B. Dealer agrees to store Honda Products and other
items which American Honda desires or is obligated to repurchase until
receipt from American Honda of rejection of repurchase or instructions for
shipping and return to American Honda. Dealer agrees to strictly follow and
abide by all instructions for return as may be issued from time to time by
American Honda. All Honda Products will be properly and suitably packaged
and containered for safe transportation to American Honda. All damage,
regardless of nature or cause, will be the responsibility of Dealer until the
Honda Products are inspected and accepted by American Honda for repurchase.
Storage of such Honda Products and other items will be at Dealer's expense
for a period of ninety (90) days after Dealer requests repurchase and
provides an inventory as provided by paragraphs 10.6 and 10.7 hereof.
Thereafter, Dealer will be entitled to charge American Honda a reasonable
storage charge.
10.7.C. American Honda, or its designee, at such
reasonable time and for such a reasonable period of time as American Honda
may determine, will have the right to enter the premises where items for
repurchase are being held for the purpose of checking the inventory submitted
by Dealer or examining, inspecting and inventorying any and all Honda
Products. If American Honda agrees to repurchase and Dealer fails to furnish
an inventory, Dealer will reimburse American Honda for all costs of American
Honda taking an inventory.
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10.7.D. Only those Honda Products meeting the
requirements of Paragraphs 10.5 and 10.6 hereof are or will be eligible for
return to American Honda. American Honda will not be obligated to give
Dealer credit for any Honda Products which do not meet those requirements.
10.7.E. Dealer warrants and represents that all Honda
Products tendered to American Honda for repurchase will be free of all liens,
encumbrances, security interests or attachments at the time repurchase is
requested by Dealer. Clear title will be vested in American Honda upon
receipt of goods. Dealer will execute and deliver any documents necessary to
vest clear title in American Honda, and Dealer will be responsible for
complying with all applicable procedures, including but not limited to those
relating to bulk transfers.
10.7.F. Dealer will pay all freight and insurance
charges from Dealer to the place of delivery designated by American Honda,
provided that Dealer will not be liable for any amount greater than the
freight and insurance charges from Dealer to American Honda's closest
automobile warehouse or parts center as American Honda may designate. Claims
for damage or allegedly caused by any carrier will be the sole responsibility
of Dealer, and in no event will American Honda be obligated to make a claim
against a carrier or be liable to Dealer for damage.
10.7.G. As a condition of repurchase and
notwithstanding any other agreement or offer to repurchase, payment for
repurchase will first be applied against any obligations or money owed by
Dealer to American Honda. All payment due from American Honda to Dealer
pursuant to any provisions of the Agreement or in connection with the
termination of the Agreement or in connection with the termination of the
Agreement will be made by American Honda after receipt of the goods to be
repurchased and after all debits and credits have been ascertained and
applied to Dealer's accounts, and Dealer has delivered to American Honda the
manufacturer's certificate of origin or other document of title for Honda
Automobiles tendered to American Honda for repurchase. In the event it be
found that a balance is due from Dealer to American Honda, Dealer will pay
such sum to American Honda within ten (10) days of written notice of such
balance.
11. GENERAL PROVISIONS.
11.1. Dealer acknowledges that only the President or a designated
Vice President, Secretary or Assistant Secretary of American Honda is
authorized to execute the Agreement, agree to any variation, modification or
amendment of any of the provisions thereof, including authorized location, or
to make commitments for or on behalf of American Honda. No other employee of
American Honda may make any promise or commitment on behalf of American Honda
or in any way bind American Honda. Dealer agrees that it will not rely on
any statements or purported statements except from personnel as authorized
hereinabove.
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11.2. The Agreement contains the entire agreement between Dealer
and American Honda. Dealer acknowledges that no representations or
statements other than those expressly set forth therein were made by American
Honda or any officer, employee, agent or representative thereof, or were
relied upon by Dealer in entering into the Agreement. The Agreement
terminates and supersedes, as of the execution thereof, all prior agreements
relating to Honda Products, if any.
11.3. Dealer hereby waives, abandons and relinquishes any and all
claims of any kind and nature whatsoever arising from or out of or in
connection with any prior agreement entered into between Dealer and American
Honda; provided, however, that nothing herein contained shall be deemed a
release or waiver of any claim arising out of prior sales of Honda Products
by American Honda to Dealer.
11.4. The Agreement is personal to the individuals identified as
principals, owner(s), partners or shareholder(s) in Paragraph C. Neither the
Agreement, nor any part hereof or any interest therein, may be transferred or
assigned by Dealer, in whole or in part, directly or indirectly, voluntarily
or by operation of law, without the prior written approval of American
Honda. Any attempted transfer or assignment will be void and not binding
upon American Honda.
11.5. All notices, notifications or requests under or pursuant to
the provisions of the Agreement will be directed to the address of the
principal places of business of the respective parties to the Agreement. If
either party cannot effect notice at the place of business of the other
because a party has abandoned its place of business or refuses to accept
notice, then, and only in such case, notice may be served on American Honda
through its designated agent for service of process and upon Dealer through
the Department of Motor Vehicles (or its equivalent) in the state where the
Dealership Location is authorized by American Honda.
11.6. The waiver by either party of any breach or violation of or
default under any provision of the Agreement will not be a waiver by such
party of any other provision or of any subsequent breach or violation thereof
or default thereunder. The failure or delay of either party to take prompt
action upon any breach or violation of the Agreement will not be deemed a
waiver of the right to take action for such breach, default or violation at
any time in the future.
11.7. Dealer agrees to keep confidential and not disclose,
directly or indirectly, any information which American Honda designates as
confidential.
11.8. The Agreement is and shall be deemed to have been entered
into in California and shall be governed by and construed in accordance with
the laws of the State of California.
11.9. If any provision of this Agreement should be held invalid
or unenforceable for any reason whatsoever or to conflict with any applicable
law, the Agreement will be considered divisible as to such provisions, and
such provisions will be deemed amended to comply with such law, or if it
cannot be so amended without materially altering the tenor of the Agreement,
then it will be deemed deleted from the Agreement in such jurisdiction, and
in either case, the remainder of the Agreement will be valid and binding.
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11.10. The terms of the Agreement may not be modified except
in writing signed by an authorized officer of the parties. Without limiting
the generality of the foregoing, no course of dealing will serve to modify or
alter the terms of the Agreement.
11.11. Dealer is an independent business. The Agreement
does not constitute Dealer the agent or legal representative of American
Honda for any purpose whatsoever. Dealer is not granted any expressed or
implied right or authority to assume or create any obligation on behalf of or
in the name of American Honda or to bind American Honda in any manner or
thing whatsoever. Dealer has paid no consideration for the Agreement.
Neither the Agreement nor any right granted under it is a property right.
11.12. The expiration or termination of the Agreement will
not extinguish any claims American Honda may have for the collection of money
or the enforcement of any obligations which may be in the nature of
continuing obligations.
12. DEFINITIONS.
12.1. American Honda means American Honda Motor Co., Inc. a
California corporation, and the Honda Automobile Division that markets Honda
Automobiles.
12.2. Dealer means the person, firm, corporation, partnership or
other legal entity that signs the Agreement and each of the persons
identified in Paragraph C.
12.3. Dealer Manager means the principal manager of Dealer
identified in Paragraph D upon whose personal service American Honda relies
in entering into the Agreement.
12.4. Dealer Owner means the owner(s) of Dealer identified in
Paragraph C upon whose personal service American Honda relies in entering
into the Agreement.
12.5. Dealership Location means the location approved by American
Honda for the purpose of conducting Dealership Operations.
12.6. Dealership Operations means all operations contemplated by
the Agreement. These operations include the sale and service of Honda
Products, and any other activities undertaken by Dealer related to Honda
Products, including rental and leasing operations, used car sales and body
shop operations, and finance and insurance operations, whether conducted
directly or indirectly by Dealer.
12.7. Dealership Premises means the facilities provided by Dealer
at its Dealership Location for the conduct of Dealership Operations as
approved by American Honda.
12.8. Honda Automobiles means such new passenger cars as are from
time to time offered for sale by American Honda to Dealer for resale as part
of the Honda automobile line as defined by American Honda.
12.9. Honda Parts means parts, accessories and optional equipment
marketed by American Honda for use with Honda Automobiles.
12.10. Honda Products means Honda Automobiles and Honda
Parts.
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12.11. Honda Trademarks means the various trademarks,
service marks, names and designs which American Honda uses or is authorized
to use in connection with Honda Products or services relating thereto.
12.12. Primary Market Area means the geographical area
designated for Dealer by American Honda from time to time.
12.13. The Agreement means the Honda Automobile Dealer's
Sales and Service Agreement and these Standard Provisions which are
incorporated therein by reference.
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