ACURA
Automobile Dealer
Sales and Service
Agreement
Standard Provisions
ACURA AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
TABLE OF CONTENTS
PAGE
1. THE OBLIGATIONS OF AMERICAN HONDA.........................................1
2. SALE OF ACURA PRODUCTS TO DEALER..........................................3
3. THE OBLIGATIONS OF DEALER.................................................5
4. WARRANTY..................................................................8
5. ADVERTISING AND PROMOTIONAL PROGRAMS......................................9
6. TRADEMARKS AND SERVICE MARKS..............................................9
7. GENERAL BUSINESS REQUIREMENTS............................................10
8. APPOINTMENT OF SUCCESSOR AND REPLACEMENT DEALERS.........................12
9. TERMINATION OF AGREEMENT.................................................13
10. RIGHTS, OBLIGATIONS AND DEALINGS UPON TERMINATION........................17
11. GENERAL PROVISIONS.......................................................21
12. DEFINITIONS..............................................................23
ACURA AUTOMOBILE DEALER SALES AND SERVICE AGREEMENT
STANDARD PROVISIONS
The following Standard Provisions are, by reference, incorporated in and made a
part of the Acura Automobile Dealer's Sales and Service Agreement. These
Standard Provisions accompany the Acura 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, Acura Products in a fair and reasonable
manner in order that Dealer may conduct Dealership Operations in a
businesslike manner. In fulfilling this obligation, Acura 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 Acura 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 Acura 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 Acura 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.
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.
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 Acura Products as
American Honda deems necessary for Dealership Operations.
1.5 American Honda agrees to maintain a nationwide system of
authorized dealers of Acura Products. In order that those
authorized dealers may be assured of the benefits of comprehensive
advertising of Acura 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.
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1.7 American Honda agrees to assume the defense of Dealer and to
indemnify Dealer against any money judgment, less any offset
recovered by Dealer, in any lawsuit naming Dealer as a defendant,
where such lawsuit relates to: (a) an alleged breach of any Acura
warranty relating to Acura Products; (b) bodily injury or property
damage claimed to have been caused by a defect in the design,
manufacture or assembly of an Acura 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 Acura 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 Acura 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 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 ACURA PRODUCTS TO DEALER
2.1 To the extent that Acura Products are the subject of dealer order,
such orders will be submitted and
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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 Acura
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 Acura
Automobiles to Dealer in such quantities and types as are ordered
by Dealer, American Honda and Dealer recognize that Acura
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 Acura Automobiles
among authorized dealers of Acura 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 any time and from time to
time to establish and revise prices and other terms, including
payment by Dealer, for its sales of Acura Products to Dealer.
Revised prices, terms or provisions will apply to the sale of any
Acura 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 Acura 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 Acura 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 Acura Products will pass to Dealer upon tender of the Acura
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 Acura 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
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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 Acura 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 Acura Products to their
original place of shipment plus any demurrage, storage and
restocking charges.
2.6 As between American Honda and Dealer, American Honda assumes
responsibility for damage to Acura 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 Acura 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 Acura Products.
2.8 American Honda reserves the right at any time to change or modify,
without notice, any specification, design or model of Acura
Products. In the event of any change or modification with respect
to any Acura Products, Dealer will not be entitled to have such or
similar change or modification made with respect to any other
Acura Products, except as may be required by applicable law.
American Honda may, however, in its sole discretion, make such
changes or modifications to all Acura 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 Acura 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 Acura 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,
Acura Products, and to promote and
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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 Acura 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 Acura
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 Acura
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.
3.5 Dealer agrees that it will not make any misrepresentations or
misleading statements regarding the items making up the total
selling price of Acura Products or as to the prices or charges
relating to such items. With the understanding that Dealer is the
sole judge of the price at which it sells Acura Products, dealer
recognizes that a retail customer has the right to purchase Acura
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 Acura 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 Acura 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
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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 Acura
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 Dealer's business and in the
sale and promotion of Acura 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
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issued by American Honda, regardless of where the Acura Product
involved was purchased. To protect and maintain the goodwill and
reputation of Acura Products and the Acura 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.
3.13 Dealer fully understands that the success of its Dealership
Operations depends to a great extent upon the amount of net
working capital, owner's 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 Acura Products promptly and, to do so, maintain its
minimum net working capital, owner's 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, owner's 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
Acura Products, or such other motor vehicles or equipment as may
be sold or serviced by Dealer, or (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 Acura 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
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it any other obligation or liability in connection with any Acura
Product or component thereof.
4.2 Dealer agrees that it will expressly incorporate any warranty
furnished by American Honda with an Acura Automobile as a part of
each order form or other contract for the sale of such Acura
Automobile by Dealer to any buyer. Dealer further agrees that it
will deliver to the buyer of all Acura Products, at the time of
delivery of such Acura 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 Dealer's sale.
5. ADVERTISING AND PROMOTIONAL PROGRAMS
5.1 Dealer agrees to develop and actively utilize programs for the
advertisement and promotion of Acura Products and its servicing of
such products. Such programs will include the prominent display
and use or demonstration of Acura Automobiles. Dealer further
agrees to cooperate with all reasonable promotional programs
developed by American Honda.
5.2 Dealer agrees that it will not advertise, promote or trade in
Acura 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 Acura 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.
6. TRADEMARKS AND SERVICE MARKS
6.1 Dealer agrees that American Honda has the exclusive right to use
and to control the use of the Acura Trademarks and but for the
right and license granted by Paragraph 6.2 hereof to use and
display the Acura Trademarks, Dealer would have no right to use
the same.
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6.2 Dealer is hereby granted the nonexclusive right and license to use
and display the Acura 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 Acura Products
at retail at the Dealership Location. Dealer agrees that it will
promptly discontinue the use of any of the Acura Trademarks or
change the manner in which any of the Acura Trademarks is used
when required to do so by American Honda.
6.3 American Honda and Dealer recognize that Dealer is free to sell
Acura 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 Acura Products, Dealer specifically agrees that it will not
display Acura 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.
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 Acura 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
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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 Acura 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 Acura 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 Acura Product at such price.
Dealer further understands and agrees that it is the sole judge of
the price at which it sells Acura 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
Acura
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Products by American Honda to Dealer and will maintain accurate
records of the same, which records will be available to American
Honda, or its designee, during regular business hours for
inspection.
7.8 Dealer understands and agrees that, while it has responsibility
for the promotion and retail sale and servicing of Acura 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 Acura Products in
the Primary Market Area.
8. APPOINTMENT OF SUCCESSOR AND REPLACEMENT DEALERS
8.1 The parties recognize that Acura 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.
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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.
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:
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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 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
Acura 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 Acura Products or
the Acura 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.I Dealers 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 Acura 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 8.
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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 Acura 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 Acura Products.
9.4.O Dealer's breach of any provision of the Agreement or
Dealer's failure to comply with any contained in the
Agreement.
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 an Acura 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 Acura 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
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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 grounds(s).
9.8 The acceptance by American Honda of orders from Dealer or the
continued sale of Acura 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 Acura Trademarks or American
Honda.
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
Acura 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.
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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 Acura Products and will discontinue selling
Acura 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 Acura Trademarks and any words, symbols and marks
which are confusingly similar thereto; will remove all signs
bearing any Acura Trademark and will destroy all stationery,
repair orders, advertising and solicitation materials, and all
other printed matter bearing any Acura Trademark or referring
directly or indirectly to American Honda or Acura 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 an Acura 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 Acura Products and which was
acquired or obtained by Dealer from American Honda. Dealer will
destroy any sign bearing an Acura 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 Acura
Products, Dealer will make such records available. 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 Acura 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 Acura Automobiles, are new and of the then
current model year, as designated
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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 Acura Parts, are new, listed as current in
the Parts Price Book, unused, undamaged, in their original
package and in first-class resalable condition.
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 an Acura Trademark as were authorized in advance
by American Honda and all service information and materials,
special tools and equipment designed specifically for service of
Acura Automobiles and which were purchased from American Honda and
are usable on current Acura 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 Acura 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 Acura Products.
10.7.A The price for Acura 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 Acura 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 of American Honda's receipt of
goods to be repurchased.
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10.7.B Dealer agrees to store Acura 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 Acura 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 Acura
Products are inspected and accepted by American Honda for
repurchase. Storage of such Acura 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 Acura 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.
10.7.D Only those Acura 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 Acura Products
which do not meet those requirements.
10.7.E Dealer warrants and represents that all Acura 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
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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 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 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 Acura
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
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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.
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 Acura
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 Acura 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
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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.
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 Acura Automobile Division that markets Acura
Automobiles.
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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 Acura
Products, and any other activities undertaken by Dealer related to
Acura 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 Acura 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 Acura automobile line as defined by American Honda.
12.9 Acura Parts means parts, accessories and optional equipment
marketed by American Honda for use with Acura Automobiles.
12.10 Acura Products means Acura Automobiles and Acura Parts.
12.11 Acura Trademarks means the various trademarks, service marks,
names and designs which American Honda uses or is authorized to
use in connection with Acura 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 Acura Automobile Dealer's Sales and
Service Agreement and these Standard Provisions which are
incorporated therein by reference.
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Dealer agrees to maintain, solely with respect to the Dealership
Operations, minimum net working capital of $218,524.00, minimum owner's equity
of $272,968.00, and flooring and a line or lines of credit in the aggregate
amount of $753,760.00 with banks or financial institutions approved by American
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.
H
This Agreement is made for the period beginning January 19, 1993 and
ending January 31, 1994, 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.
Danbury Auto Partnership
Danbury Auto Partnership
t/a FAIR HONDA By___________/s/___________
- ------------------------------ (Dealer)
(Corporate or Firm Name)
AMERICAN HONDA MOTOR CO., INC. (Corporate Seal)
HONDA AUTOMOBILE DIVISION
By____________/s/_______________
Thomas G. Elliott
Executive Vice President