Document:

EX-10.3

 Exhibit 10.3 
 KEEP WELL AGREEMENT 
 This Agreement dated the 26th day of September, 2005 between Honda Motor Co., Ltd. as keep well
provider (“HMC”) having an address at 1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan and Honda Canada Finance Inc. (“HCFI”), a Canada corporation, having an address at 3650 Victoria Park Avenue, Suite
400, North York, Ontario M2H 3P7. 
 WHEREAS, HMC is the ultimate parent company of HCFI; 

WHEREAS, HCFI incurs, from time to time, with the authorization of its Board of Directors, certain indebtedness for borrowed money, and HMC may,
from time to time, confirm in writing that the benefits of this Agreement apply to such indebtedness (such indebtedness of HCFI as to which HMC has provided such a confirmation, collectively referred to as “Debt”); and 

WHEREAS, to facilitate HCFI’s continued sale and/or incurrence of Debt, HMC and HCFI desire to enter into this Agreement. 

NOW, THEREFORE, in consideration of the foregoing and subject to the terms and conditions herein contained, the parties hereto agree as follows:

  

	1.	STOCK OWNERSHIP OF HCFI 

 At all times
during the term of this Agreement, HMC shall own and hold, directly or indirectly, the legal title to and beneficial interest in, at least 80% of the issued and outstanding shares of stock of HCFI having the right to vote for the election of members
of the Board of Directors of HCFI, and shall not (a) pledge, directly or indirectly, or in any way encumber or otherwise dispose of any such shares of stock of HCFI or (b) permit any of HMC’s subsidiaries to do so; provided, however,
that nothing in this Clause shall prevent HMC or any of its subsidiaries from transferring any such shares to HMC or one or more direct or indirect wholly owned subsidiaries of HMC. 

 

	2.	MAINTENANCE OF NET WORTH 

 On the last day
of each of HCFI’s fiscal years during the term of this Agreement, HMC agrees that it shall cause HCFI to have a positive consolidated tangible net worth. For the purposes of this Agreement, “tangible net worth” means
(a) the shareholders’ equity less (b) any intangible assets, each as determined in accordance with the generally accepted accounting principles in Canada, as in effect from time to time. 

 

	3.	MAINTENANCE OF LIQUIDITY 

 (a) At all
times during the term of this Agreement, HMC shall ensure that HCFI has sufficient liquidity and funds to meet its payment obligations under any Debt of HCFI in accordance with its terms, or where necessary, HMC will make available to HCFI, or HMC
shall procure for HCFI, sufficient funds to enable HCFI to meet such payment obligations in accordance with such terms. 
 (b) HCFI will use the
funds made available to it by HMC in respect of its obligations pursuant to Clause 3(a) solely for the fulfillment of its payment obligations in respect of Debt. Any claims of HMC arising from any provisions of funds to HCFI by HMC pursuant to
Clause 3(a) shall be subordinated to the claims of all holders of Debt with respect to such Debt, whether or not such claims exist at the time such funds are made available to HCFI, and HMC will not demand payment of such claims of HCFI unless and
until all outstanding Debt has been paid in full. 
 The term “holder”, as used in this Agreement with respect to any Debt,
shall include, in addition to any person, firm, corporation or other entity to which such Debt is owed, any trustee or other authorized representative appointed by and acting on behalf of such person, firm, corporation or other entity with respect
thereto. 

	4.	TERM, MODIFICATION, AMENDMENT AND TERMINATION 

 (a) Subject to Clause 4(c) below, this Agreement may be terminated by either party hereto upon giving to the other party 30 days’ prior written notice, with a copy thereof to each Rating Agency (as
defined below) rating any such Debt, if any. 
 (b) Subject to Clause 4(c) below, this Agreement may be modified or amended only by the written
agreement of the parties hereto and upon 30 days’ prior written notice to each Rating Agency rating any such Debt, if any, accompanied by a copy of the form of amendment. 
 (c) Notwithstanding any other provisions of this Agreement, no termination or modification of, or amendment to, this Agreement shall be effective with respect to any Debt outstanding at the time that
written notice of such termination, modification or amendment is delivered to each Rating Agency in accordance with Clause 4(a) or 4(b) above, as the case may be, unless (i) such termination, modification or amendment is permitted under the
documentation governing such Debt, (ii) each affected holder of such Debt (or, in the case of Debt issued or incurred pursuant to documentation that permits this Agreement to be terminated, modified or amended with the consent of less than all
of the holders of such Debt, the requisite holders of such Debt) otherwise consent(s) in writing, or (iii) with respect to Debt that is rated by one or more Rating Agencies, each such Rating Agency confirms in writing that the rating assigned
to such Debt by such Rating Agency will not be withdrawn or reduced by reason thereof. 
 (d) For purposes of this Agreement and with respect to
any Debt, “Rating Agency” shall mean any rating agency that (i) has been requested by HMC or HCFI to issue a rating in respect of such Debt, (ii) has issued such a rating and such rating remains in effect at the time of
the termination, modification or amendment referred to in this Clause 4, and (iii) has been specifically referred to as a rating agency in documentation in effect at the time of the termination, modification or amendment relating to the
relevant Debt (each such rating agency, a “Rating Agency”). 
  

	5.	NOT A GUARANTEE 

 This Agreement is not,
and nothing herein contained and nothing done pursuant hereto by HMC shall be deemed to constitute, a guarantee by HMC of the payment of any Debt or other obligation, indebtedness or liability of any kind or character whatsoever of HCFI. 

 

	6.	ENFORCEABILITY 

 (a) Subject to Clause
6(b) below, this Agreement shall not be enforceable against HMC by anyone other than (i) HCFI, or (ii) if any case is commenced under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act
(Canada) or the Winding Up and Restructuring Act (Canada) (in each case, as amended from time to time, and collectively, the “Insolvency Statutes”) by or against HCFI, the debtor in possession or any trustee (a
“Trustee”), receiver/receiver and manager or interim receiver ( collectively, the “Receiver”) appointed thereunder. In the event of (1) a breach by HMC in performing a provision of this Agreement and
(2) the insolvency of HCFI while any Debt is outstanding, the remedies of a Holder of Debt shall include the right, if no proceeding in respect of HCFI has already been commenced under any Insolvency Statute, to file an application in respect
of HCFI for the appointment of a Trustee or Receiver by any court having jurisdiction over such proceeding in order to pursue HCFI’s rights under this Agreement against HMC. 
 (b) Notwithstanding Clause 6(a) above, HMC and HCFI accept and agree that all holders of outstanding Debt (“Benefited Holders”) may (i) demand in writing that HCFI enforce its rights
under this Agreement and (ii) proceed directly against HMC to enforce compliance by HMC with its obligations under this Agreement if HCFI fails or refuses to take action to enforce its rights under this Agreement within 30 days following
HCFI’s receipt of demand for such enforcement by such holder. 

  
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	7.	SUCCESSORS; BENEFICIARIES 

 This Agreement
shall be binding upon the parties hereto and upon their respective successors and assigns. Except to the extent provided in Clause 3(b), Clause 4(c) and Clause 6 above with respect to Benefited Holders, this Agreement shall not confer or be deemed
to confer upon any other person, firm, corporation or other entity any benefits, rights or remedies. 
  

	8.	JURISDICTION 

 Each of the parties hereto
hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in the Borough of Manhattan in New York City, for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in
any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Nothing herein shall affect the right of either party to commence legal proceedings or otherwise
proceed against the other party in any other jurisdiction. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such proceeding brought
in any such court and any claim that any such proceeding brought in any such court has been brought in an inconvenient forum. 
  

	9.	GOVERNING LAW 

 This Agreement shall be
governed by and construed in accordance with such laws of the State of New York, without regard to principles of conflicts of law that would result in the application of the law of any other jurisdiction. 

  
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	10.	COUNTERPARTS 

 This Agreement may be
executed in any number of counterparts each of which shall be deemed an original. 
  

			
	HONDA MOTOR CO., LTD.
		
	By:	 	 /s/ Saloshi Aoki

	Name:	 	Saloshi Aoki
	Title:	 	Executive Vice President and Representative Director
	
	HONDA CANADA FINANCE INC.
		
	By:	 	 /s/ Yuetsu Sato

	Name:	 	Yuetsu Sato
	Title:	 	President

  
 4EX-10.4

 Exhibit 10.4 
 SUPPORT COMPENSATION AGREEMENT 
 This Support Compensation Agreement
(“Agreement”) dated as of October 1, 2005, between Honda Motor Co., Ltd. (“HMC”), a Japanese corporation having an address at No. 1-1 Minami-Aoyama, 2-chrome, Minato-ku, Tokyo 107-8556, Japan, and Honda Canada Finance
Inc. (“HCFI”), a Canadian corporation with an address at 3650 Victoria Park Avenue, Suite 400, North York, Ontario M2H 3P7 (HMC and HCFI together constituting the “Parties” to this Agreement). 

WHEREAS, the Parties have executed that certain Keepwell Agreement dated September 26, 2005 (the “Keepwell Agreement”), pursuant to which
HMC agrees, inter alia, to assure that HCFI has the liquidity to punctually meet its payment obligations under any Debt, as defined in the Keepwell Agreement, and that HCFI has a positive consolidated tangible net worth; and 

WHEREAS, the Parties wish to specify the compensation that HMC will be entitled to receive from HCFI as consideration for undertaking its obligations
under the Keepwell Agreement. 
 NOW, THEREFORE, in consideration of the foregoing the Parties hereby agree that: 

 

	1.	PAYMENTS 

 1.01. (a) As
consideration for HMC’s undertaking its obligations under the Keepwell Agreement, HCFI agrees to pay a fee to HMC (the “Keepwell Fee”) for each calendar quarter beginning on or after the date of this Agreement (“Coverage
Period”) equal to the Period Average, as defined in paragraph (b) of this section, of each type of Keepwell Obligation, as defined in paragraph (c) of this section, multiplied by the Fee Rate for that type of Keepwell Obligation, as
specified in paragraph (d) of this section. 
 (b) The Period Average is the sum divided by three of the amounts
outstanding at the end of the last Canadian Business Day (“Business Day”) of each month of the Coverage Period, disregarding any adjustments under FAS 133 and FAS 52. 

(c) The types of Keepwell Obligations are: 
 (i) Debt, as defined in the Keepwell Agreement, with an initial maturity of one year or less (“Short-Term Keepwell Obligations”), and 

(ii) Such Debt with an initial maturity of more than one year (“Medium-Term Keepwell Obligations”). 

(d) The Fee Rates are: 
 (i) For Short-Term Keepwell Obligations, one-fourth of one-half multiplied by the Short-Term Support Value, as specified in Attachment A to this Agreement, and 

(ii) For Medium-Term Keepwell Obligations with maturities of from one year to five years, one-fourth of one-half
multiplied by the Medium-Term Support Value, as specified in Attachment A to this Agreement. 

	2.	PAYMENT TERMS 

 2.01. (a)
Within two Business Days after the end of a Coverage Period, HCFI shall send to HMC a Support Compensation Report (“Report”) for the Coverage Period substantially in the form of Attachment B to this Agreement, which contains HCFI’s
calculation of the Keepwell Fee owed to HMC for the Coverage Period. 
 (b) When HMC receives a Report pursuant to paragraph
(a) of this section 2.01, HMC shall promptly review the Report and inform HCFI if it disagrees with any part of the Report, in which case the Parties shall confer to resolve the disagreement, and, if necessary, HCFI shall promptly send HMC a
revised Report. 
 (c) If the HMC accepts a Report (either the initial Report or a revised Report), HMC shall send HCFI an
invoice for the amount shown in the Report as owed to HMC, and HCFI shall pay that amount within 15 Business Days from the date of the invoice. 
 2.02. HCFI may offset against a Keepwell Fee the amount of any expenses that HCFI has incurred on behalf of HMC since the effective date of this Agreement (and not previously used as an offset under this
section) in connection with any obligation subject to the Keepwell Agreement, provided that HCFI lists these expenses in the Report covering the Keepwell Fee against which the offset is claimed. 

2.03. If any amount payable by HCFI pursuant to this Agreement is subject to withholding tax in Canada, HCFI is authorized to withhold
and pay such tax to Canada rather than to HMC, but HCFI shall note the tax to be withheld in the Report that calculates the taxable amount. 
 2.04. (a) All payments to HMC pursuant to this Agreement shall be determined and made in Canadian dollars. 
 (b) For purposes of determining Period Average Keepwell Obligations, the amount of such Obligations that are not denominated in Canadian dollars shall be converted to Canadian dollars at prevailing
exchange rates on the last Business Day of the Coverage Period over which the Period Average is determined. 
  

	3.	TERM OF AGREEMENT 

 3.01.
The initial term of this Agreement shall expire on March 31, 2006, but shall automatically be renewed for subsequent 12-month terms unless one Party gives written notice of non-renewal to the other Party more than 30 days prior to the end of a
term. 
 3.02. Notwithstanding section 3.01 of this Agreement, HCFI’s duties under this Agreement shall terminate when the
Keepwell Agreement terminates and HCFI has paid HMC the amounts due under the Reports for all Coverage Periods through the one during which the Keepwell Agreement terminates. 

  
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	4.	OTHER PROVISIONS 

 4.01.
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of Japan. 
 4.02. The
Attachments to this Agreement are part of this Agreement, and capitalized terms in the Attachments shall have the same meaning as they do in the rest of this Agreement. 
 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. 

 

					
	HONDA MOTOR CO., LTD
		
	By:	 	 /s/ Yoichi Hojo

		 	Name:	 	Yoichi Hojo
		 	Title:	 	General Manager, Finance
	
	HONDA CANADA FINANCE INC.
		
	By:	 	 /s/ Harald Ladewig

		 	Name:	 	Harald Ladewig
		 	Title:	 	Treasurer

  
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 ATTACHMENT A 
 FEE RATES 
  

	1.	INITIAL FEE RATES 

 1.01
Unless modified pursuant to sections 2.01 through 2.03 of this Attachment A: 
  

	 	(i)	The Short-Term Support Value is 0.093 percent; 

 and 
  

	 	(ii)	The Medium-Term Support Value is 0.145 percent. 

  

	2.	MODIFICATION OF FEE RATES 

2.01 If a Triggering Event, as defined in section 2.03 of this Attachment, occurs, the Parties shall negotiate whether and to what extent
the Short-Term and Medium Term Support Values (“Support Values”) should be modified and, if they cannot agree, shall hire a third party satisfactory to both Parties to determine Support Values that are consistent with arm’s length
principles promulgated by the Organization for Economic Cooperation and Development. The determination of the third party shall be binding on the Parties, and the Parties shall share equally the costs of obtaining the determination. 

2.02 If new Support Values are determined pursuant to section 2.01 of this Attachment, the new Support Values shall be recorded in a
schedule to this Attachment and shall be effective at the beginning of the first Coverage Period following the date of the Triggering Event, unless the Parties agree on a different effective date. 

2.03 For purposes of this Attachment, a Triggering Event is: 
 (a) A notice from one Party to the other of a desire to reconsider the Support Values, 
 (b) A payment by HMC required under the Keepwell Agreement, or 
 (c) A change in
the credit rating of HMC by Standard & Poor’s and Moody’s Investor Service, Inc. 

 ATTACHMENT B 
 FORM OF SUPPORT COMPENSATION REPORT 
 SUPPORT COMPENSATION REPORT 

FROM HCFI TO HMC 

REGARDING THE KEEPWELL AGREEMENT 
 FOR THE PERIOD [Dates of Coverage Period] 
  

									
	 	 	 	  	Short-Term
Keepwell
Obligations	  	Short-Term
Keepwell
Obligations	  	Total
	 A.     
	 	 Month-End Obligations
	  		  		  	
	 B.     
	 	
1st Month
	  		  		  	
	 C.     
	 	
2nd Month
	  		  		  	
	 D.     
	 	
3rd Month
	  		  		  	
	 E.     
	 	 Period Avg. Obligations [(B+C+D)/3]
	  		  		  	
					
	 F.      
	 	 Support Value
	  		  		  	
	 G.     
	 	 Share Factor [ = 1/2]
	  		  		  	
	 H.     
	 	 Fee Rate [(F/4)G]
	  		  		  	
					
	 I.       
	 	 Keepwell Fee [E x H]
	  		  		  	
					
	 J.      
	 	 Offsets
	  		  		  	
		 	 [List]
	  		  		  	
	 K.     
	 	 Total Offsets
	  		  		  	
					
	 L.     
	 	 Payment Due [I - K]
	  		  		  	
	 M.    
	 	 Withholding Tax
	  		  		  	
	 N.     
	 	 Net Payment Due [L - M]

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