EXHIBIT 10.15
HONDA
AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
207435
CH MOTORS LTD. DBA
XXXXXX HONDA
00000 XXXXXXXX XXXXXXXXX
XXXXXXXXXXXX, XXXXXXX 00000-0000
AMERICAN HONDA MOTOR CO., INC.
A
This is an agreement between the Honda Automobile Division, American
Honda Motor Co., Inc. (American Honda) and CH MOTORS LTD. (Dealer) a(n)
Partnership doing business as Xxxxxx Honda. By this agreement, which is made and
entered into at Torrance, California, effective the 11th day of June, 2001,
American Honda gives to Dealer the nonexclusive right to sell and service Honda
Products at the Dealership Location. It is the purpose of this Agreement,
including the Honda Automobile Dealer Sales and Service Agreement Standard
Provisions (Standard Provisions), which are incorporated herein by reference, to
set forth the rights and obligations which Dealer will have as a retail seller
of Honda Products. Achievement of the purpose of this Agreement is premised upon
the mutual understanding and cooperation between American Honda and Dealer.
American Honda and Dealer have each entered into this Agreement in reliance on
the integrity and ability and expressed intention of each to deal fairly with
the consuming public and with each other.
For consistency and clarity, terms which are used frequently in this
Agreement have been defined in Article 12 of the Standard Provisions.
B
American Honda grants to Dealer the nonexclusive right to buy Honda
Products and to identify Honda itself as a Honda dealer at the Dealership
Location. Dealer assumes the obligations specified in this Agreement and agrees
to sell and service effectively Honda Products within Dealer's Primary Market
Area and to maintain premises satisfactory to American Honda.
C
Dealer covenants and agrees that this Agreement is personal to Dealer,
to the Dealer Owner, and to the Dealer Manager, and American Honda has entered
into this Agreement based upon their particular qualifications and attributes
and their continued ownership or participation in Dealership Operations. The
parties therefore recognize that the ability of Dealer to perform this Agreement
satisfactorily and the Agreement itself are both conditioned upon the continued
active involvement in or ownership of Dealer by either:
(1.) the following person(s) in the percentage(s) shown:
PERCENT OF
NAME ADDRESS TITLE OWNERSHIP
Xxxxxx Jax Management LLC Partner 1%
Xxxxxx Automotive Corp. Partner 99%
(2)
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an individual personally owning an interest in Dealer of at least 25% and who
has presented to American Honda a firm and binding contract giving to him the
right and obligation of acquiring an ownership interest in Dealer in excess of
50% within five years of the commencement of Dealership Operations and being
designated in that contract as Dealer operator.
D
Dealer represents, and American Honda enters into this
Agreement in reliance upon the representation, that Xxxxxx X. Xxxxx exercises
the functions of Dealer Manager and is in complete charge of Dealership
Operations with authority to make all decisions on behalf of Dealer with respect
to Dealership Operations. Dealer agrees that there will be no charge in Dealer
Manager without the prior written approval of American Honda.
E
American Honda has approved the following premise as the
location(s) for the display of Honda Trademarks and for Dealership Operations.
HONDA NEW VEHICLE
SALES SHOWROOM PARTS AND SERVICE FACILITY
00000 Xxxxxxxx Xxxx. 00000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000-0000 Xxxxxxxxxxxx, XX 00000-0000
USED VEHICLE DISPLAY
SALES AND GENERAL OFFICES AND SALES FACILITIES
00000 Xxxxxxxx Xxxx. 00000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000-0000 Xxxxxxxxxxxx, XX 00000-0000
F
There shall be no voluntary or involuntary change, direct or
indirect, in the legal or beneficial ownership or executive power or
responsibility of Dealer for the Dealership Operations, specified in Paragraphs
C and D hereof, without the prior written approval of American Honda.
G
Dealer agrees to maintain, solely with respect to the
Dealership Operations, minimum net working capital of $3,000,200, minimum
owner's equity of $1,500,100*, and flooring and a line or lines of credit in the
aggregate amount of $5,884,800 with banks or financial institutions approved by
America Honda for use in connection with Dealer's purchases of and carrying of
inventory of Honda Products, all of which American Honda and Dealer agree are
required to enable Dealer to perform its obligations pursuant to this Agreement.
If Dealer also carries on another business or sells other products, Dealer's
total net working capital, owner's equity and lines of credit shall be increased
by an appropriate amount.
* As determined by Effective Net Worth. Effective Net Worth is calculated as the
Total Net Worth plus 50% of the LIFO Reserve less Total Other Assets.
H
This Agreement is made for the period beginning June 11, 2001
and ending November 30, 2003, unless sooner terminated. Continued dealings
between American Honda and Dealer after the expiration of this Agreement shall
not constitute a renewal of this Agreement for a term, but rather shall be on a
day-to-day basis, unless a new agreement or a renewal of this Agreement is fully
executed by both parties.
I
This Agreement may not be varied, modified or amended except
by an instrument in writing, signed by duly authorized officers of the parties,
referring specifically to this Agreement and the provision being modified,
varied or amended.
J
Neither this Agreement, nor any part thereof or interest
therein, may be transferred or assigned by Dealer, directly or indirectly,
voluntarily or by operation of law, without the prior written consent of
American Honda.
CH MOTORS LTD. dba
Xxxxxx Honda By /s/ X. X. Xxxxxx
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(Dealer)
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(Corporate or Firm Name)
AMERICAN HONDA MOTOR CO., INC.
HONDA AUTOMOBILE DIVISION
By /s/ Xxxxxxx Xxxxxxxx
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ADDENDUM TO HONDA
AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
This Addendum (the "Addendum") dated June 11, 2001, is entered into between CH
Motors Ltd. ("Dealer"), a Florida limited partnership with its principal place
of business at 00000 Xxxxxxxx Xxxx., Xxxxxxxxxxxx, Xxxxxxx 00000-0000, and
American Honda Motor Co., Inc. ("American Honda"), a California corporation,
with its principal place of business at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000.
WHEREAS, Dealer and American Honda are entering into the Honda
Automobile Dealer
Sales and Service Agreement including the Standard Provisions (the "Dealer
Agreement"), a copy of which is attached hereto, as of the date hereof; and
WHEREAS, Dealer and American Honda desire that this Addendum and the Framework
Agreement between American Honda Motor Co., Inc. and Certain Entities and
Individuals Known Collectively as the "Xxxxxx Group" (the "Agreement") to be
incorporated and become part of the Dealer Agreement;
NOW THEREFORE, in consideration of the mutual covenants set forth herein and in
the Dealer Agreement and other good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. STATUS OF THE ADDENDUM. This Addendum is hereby incorporated into and is
made part of the Dealer Agreement. The Dealer Agreement and this Addendum
shall, when possible, be read as an integrated document; however, if there
is any conflict between the terms of this Addendum and the Dealer
Agreement, this Addendum shall govern.
2. INCORPORATION OF THE APPLICABLE TERMS OF THIS AGREEMENT. Dealer represents
and warrants that it has read the Agreement and acknowledges that the
Agreement includes provisions that pertain to Xxxxxx'x management,
ownership, and right to acquire and transfer Honda dealerships and other
matters. Dealer acknowledges that it is a member of the Xxxxxx Group, as
that phrase is used in the Agreement. Dealer has executed the Agreement
and agrees to be bound by all provisions of the Agreement that are
applicable to or affect it and/or the actions of any Honda and Acura
dealership owned by Dealer. Dealer and American Honda agree that the terms
and conditions of the Agreement are hereby incorporated into and made part
of the Dealer Agreement.
3. ADDITIONAL TERMS. Dealer shall satisfy the following terms on a continuing
basis during the term of the Dealer Agreement, as well as during any
periods following any renewal or extension of the Dealer Agreement:
a. EXCLUSIVE FACILITIES. As provided in Paragraph 1.7 of the Agreement,
Dealer shall provide separate, exclusive, freestanding Honda
Dealership Operations that are in full and timely compliance with
American Honda standards and guidelines relating to Honda Dealership
Operations, facility design, functionality and capacity, and
enhancements to American Honda's brand image, which standards and
guidelines American Honda may reasonably modify from time to time,
shall exclusively offer a full range of Honda Products and services
and shall not offer competing products or services from its
Dealership Premises.
ADDENDUM TO HONDA
AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
b. HONDA EXCLUSIVE MINIMUM FACILITY REQUIREMENTS. The Dealership
Premises for the Dealer shall provide the following Honda exclusive
minimum square footage requirements, arranged in a manner conducive
to the reasonable sales and service of Honda Automobiles, Honda
Parts and accessories:
BUILDING
Honda Sales Showroom Display 6,055 Sq. Ft.
(Memo: Showroom Display Vehicles) 5
Administration 2,440 Sq. Ft.
Honda Service 13,083 Sq. Ft.
Stall/Lifts 20/13
Service Reception Stalls 12
Honda Parts and Accessories Department 13,281 Sq. Ft.
(Memo: Parts Storage - 10,881 Ft.)
Total Building 34,859 Sq. Ft.
Total Useable Land (Including Building Footprint) 253,764 Sq. Ft.
(Memo: Display/Parking Spaces) 865
Recommended Site Frontage 510 Feet
c. MINIMUM CAPITAL REQUIREMENTS. Dealer agrees that the Honda
Dealership Operations shall meet American Honda's minimum capital
requirements at all times. The minimum capital requirements shall be
determined by American Honda from time to time and, as of the date
hereof, shall be the amounts specified below:
o American Honda's current minimum working capital requirement
for Dealer is $3,000,200.
o American Honda's current effective net worth requirement is
$1,500,100, or 50% of the working capital requirement, for the
Honda dealership at the Dealership Premises. Effective net
worth is calculated as the net worth plus 50% of the LIFO less
Total Other Assets. 50% of the net worth must be in the form
of stock or additional paid in capital. Subordinated notes are
not acceptable alternatives as net worth investments.
o A wholesale line of credit is to be established and maintained
by Dealer with a financial institution approved by American
Honda for the exclusive purpose of purchasing and maintaining
a representative inventory of new Honda Automobiles. The
current minimum amount of such line is $5,884,800.
d. FINANCIAL STATEMENT SUBMISSION. Dealer agrees to continue to comply
with American Honda's dealer financial requirements as specified in
the Dealer Agreement. These specifically provide that Dealer will
furnish a complete, timely and accurate financial statement on a
monthly basis, electronically, and on the form required by American
Honda.
e. PERSONNEL MINIMUM REQUIREMENTS. Dealer agrees to employ Honda
service and parts staff which meets at all times the minimum service
and parts training standards
ADDENDUM TO HONDA
AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
specified by American Honda for its authorized dealers and whose
members are properly licensed.
f. COMMUNICATIONS EQUIPMENT. Dealer agrees to provide appropriate data
communications equipment, compatible with American Honda
specifications, which currently must accommodate Dealer
Communications System (DCS) Interactive Network and HONDANET.
4. NO GUARANTEE OF FINANCIAL SUCCESS. Dealer recognizes and acknowledges that
American Honda's approval of Dealer's application and Dealership Premises
does not in any way constitute a representation, assurance, or guarantee
by American Honda that Dealer will achieve any particular level of sales,
operate at a profit, or realize any return on Dealer's investment.
5. AUTOMOBILE AVAILABILITY. Dealer recognizes and acknowledges that American
Honda cannot and does not guarantee a specific number of new Honda
Automobiles to be made available for resale by the Dealer. American Honda
assumes no liability in the event of losses incurred during periods of
unavailability, nor does unavailability excuse Dealer's performance.
6. COMPLIANCE WITH AND IMPACT OF APPLICABLE LAWS. Dealer shall comply at
Dealer's own expense with all applicable state and federal laws, including
those pertaining to vehicle dealerships. Dealer shall secure all licenses
and permissions in accordance with such laws and bear all the cost related
thereto.
7. ASSUMPTION OF COSTS. Dealer will complete the above actions solely at
Dealer's own expense and without responsibility on the part of American
Honda.
8. SEVERABILITY. If any provision of this Addendum should be held invalid or
unenforceable for any reason whatsoever, or conflicts with any
applicable law, this Addendum will be considered divisible as to such
provision(s), and such provision(s) will be deemed amended to comply
with such law, or if it (they) cannot be so amended without materially
affecting the tenor of the Dealer Agreement, then it (they) will be
deemed deleted from the Dealer Agreement in such jurisdiction, and in
either case, the remainder of the Dealer Agreement will be valid and
binding to the greatest extent possible. Notwithstanding the foregoing,
if, as a result of any provision of the Dealer Agreement (including
this Addendum) being held invalid or unenforceable, American Honda's
ability to control the selection of the Dealer Owner, Executive
Manager, or the Dealer Manager or to otherwise maintain its ability to
exercise reasonable discretion over the selection of the actual
individual who is managing Dealer is materially restricted beyond the
terms of the Dealer Agreement of the Agreement or the Amendment,
American Honda shall be permitted to invoke the repurchase provisions
of Section 6.2.4 of the Agreement.
ADDENDUM TO HONDA
AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
9. DISPUTE RESOLUTION. All disputes pertaining to this Addendum shall be
resolved pursuant to dispute resolution provisions in Section 8 of the
Agreement.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first
above written.
CH Motors, Ltd. dba XXXXXX HONDA
BY: /s/ X. X. Xxxxxx
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Authorized Agent
AMERICAN HONDA MOTOR CO., INC.
HONDA DIVISION
BY: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Executive Vice President
