Addendum to ASA Affiliation Agreement
This Addendum to the ASA Affiliation Agreement (hereinafter referred to as "Addendum") is entered into on the last date signed below and with an effective date of January 1, 1999, by and between the Automotive Service Association (a Texas not-for-profit corporation) hereinafter referred to as "ASA" and ________________, a nonprofit corporation hereinafter referred to as "Affiliate."
WHEREAS ASA and Affiliate have determined it is in each party's best interest to incorporate language to further explain, modify and amend certain provisions of the new Affiliation Agreement (hereinafter referred to as "Agreement").
NOW THEREFORE, in consideration of the foregoing and of the mutual promises and agreements hereinafter set forth, ASA and Affiliate hereby agree as follows:
1. This Addendum shall be attached to and become a part of the Agreement. Both Agreement and Addendum are to be executed simultaneously.
2. The Agreement shall be modified, explained, and amended as stated in this Addendum.
3. The following provisions are applicable only to the provisions of the Agreement specifically designated as follows:
ASA Affiliation Agreement Section Explanation, Modification, or Amendment I. A. Third line, "of the area designated herein" merely references the authorized territory, as stated earlier in the same sentence.
Affiliate and local members continue to have the right to use ASA trademarks and trade names. These rights include the ASA metal signs and decals.
This section of the Agreement reserves the right for ASA to enter into affiliation agreements with other organizations. This right is in accordance with Article IX of the ASA bylaws that give this responsibility to the ASA board of directors. Examples were ASA-Arizona and ASA-Tucson and ASA-Missouri and ASA-Kansas City.
To our knowledge, the board of directors has never taken approval of new Affiliates lightly. From a practical standpoint, so long as an r than what is currently applicable.
The board of directors, in accordance with ASA bylaws, has the sole responsibility to govern the association and to promulgate policies and procedures. Some of these policies and procedures may apply to Affiliates.
ASA understands that membership categories may have different titles for the same types of category members at Affiliates. With the right to use the ASA trade name, however, comes the obligation to pursue the same interest and represent the same members that is in accordance with ASA bylaws. This includes regular members, associate members (or allied members), and educational members. Of course, honorary members and senior active members are self-explanatory. Insurance associate members is not a category that has been used and will likely be reviewed later by the ASA board of directors. This sentence is meant to assure that Affiliates operate for the benefit of regular members in the automotive service business and not associate ASA trademarks and trade names with nonrelated businesses.
I. D. The sharing of membership activity (ASA with Affiliate and Affiliate with ASA) is for the purpose of benefiting all concerned (members, potential members, and both organizations).
I. E. "Financially viable" and with a tax exempt status is meant to assure that Affiliates are operating for the benefit of its membership and not simply stock piling dues (cash) with no purpose. We all have an obligation to expend funds for the benefit of members. It is also meant to protect ASA from potential liability where an organization is using its trade name, but doesn't have the funds to meet its obligations. Situations have existed in the past with Affiliates where regular meetings or activities were not conducted nor even a board of directors or officers were in existence. These types of situations are not effective and do not provide a service to members and do pose potentially dangerous possibilities.
I. F. ASA and Affiliates either comply with laws and regulations or they don't. Our intent is that all parties shall use their best efforts to comply with applicable laws and regulations.
I. H. One of the main functions of an Affiliate, we hope, is to provide educational training for its members. This provision is simply meant to ensure that the Affiliate will not hinder ASA's efforts to develop technical and management education and to encourage sound, proper and ethical practices and will, hopefully, share in these efforts.
The key word in this provision is "encouraged." Under no circumstances will ASA national mandate, nor could ASA do so, that Affiliates organize or conduct AMI courses or technical courses.
ASA's bylaws, Article III 1.1 defines a regular member as "automotive service businesses who provide automotive repairs/services to the motoring public."
I. L. The Agreement states that "Affiliate shall not be a member of or otherwise Affiliate with any other national, international or regional automotive organization that maintains substantially inconsistent positions on issues with those of ASA or that has a conflict of interest with ASA......" The key word here is "substantially." If an Affiliate is granted the right to use trademarks and trade names owned by ASA, the Affiliate should not affiliate with another group that is so inconsistent with the goals of ASA or has such a conflict of interest that members of ASA are not properly represented or would be confused as to ASA's goals and aspirations. If an Affiliate believes such an association is necessary, that Affiliate ought to join a different group so as to avoid confusion and pursue their different purpose. This provision applies only to the Affiliate. Certainly, this does not mean that an Affiliate could not form alliances with other groups to accomplish common legislative goals to benefit members. Of course, members are free and encouraged to join any group they may choose.
II. A. ASA is not concerned with the actual financial numbers of an Affiliate but is primarily interested in ensuring that an Affiliate is financially viable and able to provide services to its membership. ASA national provides audited financial information both in its financial report and on its Web site. If an Affiliate is going to use ASA's valuable trade name, the prudent practice is to ensure that the Affiliate is financially responsible. Over the last 20 years, at least six Affiliates have had serious financial difficulties or needed financial backing from ASA national to continue operations. We agree that the Affiliate's responsibility is to its members, but when using the ASA name, there is also a responsibility to ASA. As far as being a separate corporate entity performing its duties as an independent contractor, we would agree except for the fact that the Affiliates are using ASA's name. If someone were performing services for ASA under another name as a vendor, we would have no interest in their financial information other than to assure their ability to perform their job. However, if an entity uses the ASA name and provides services to many of the same members who belong to ASA, that Affiliate must be financially responsible and has a higher duty of care.
Our outside counsel and CPA firm consider this requirement a sound business practice to follow, not only to protect ASA but to protect the Affiliate and its leadership. Some state statutes provide that some directors and officers of nonprofit organizations may be relieved of liability if relying in good faith upon written reports prepared by independent CPAs. This requirement is not meant to be onerous or to unnecessarily expend funds but is intended to cause and create good accounting practices and hopefully to avoid some past instances from occurring.
The Agreement specifies an annual audit to be conducted by an independent CPA which is ASA's preference. ASA's goal is to assure that affiliates are and remain financially responsible for the benefit of their membership. Although ASA's preference is to have an audit, which not only would offer protection to ASA and the affiliate but to the Affiliate's officers and directors, ASA will accept a review by an independent CPA on an annual basis.
III. C. ASA has a designated employee whose primary duties are to be the liaison to Affiliates and to provide services for their convenience and benefit. Any requests of the national staff should be coordinated through this individual so that duplication of effort can be avoided. We often have instances where Affiliate Executive Directors call several staff people with the same request, which is inefficient and nonproductive.
With regard to ASA's current Washington representative, Bob Redding's firm, "yes" Bob is an attorney and is paid by ASA national for a specified number of hours of his professional time. Since ASA is paying the bill, Bob's time is used and managed as designated by ASA, which is only fair. Bob's function is for national representation, although the Washington office does monitor state and local activities.
IV. F. This paragraph simply means that when representing national policies and positions, those positions be represented precisely in the format made by ASA division operations committees and the board of directors of ASA. This paragraph does not mean that Affiliates must have positions or policies the same as those promulgated by ASA national.
IV. G. This paragraph is a trademark clause and is meant to protect the valuable trademarks and names of ASA. If an Affiliate finds reason or a need to disparage (defined by Webster's Dictionary to mean: "1. To lower in esteem; discredit; 2. To speak slightingly of; belittle") or harm the reputation of ASA, that Affiliate should join another group or start its own. Such conduct is self-destructive and only confuses ASA membership. This clause does not mean, however, that any individual regular member may not speak their mind.
V. A. All agreements properly drafted should have a termination provision that can be exercised by either party. This paragraph is for the benefit and protection of both parties. Sometimes relationships simply do not work out; nothing is forever and this provision is a two-way street.
V. B. To repeat prior comments, there are some policies and procedures that do affect the Affiliates. This responsibility lies with the ASA board of directors and is its responsibility in governing ASA.
VI. F. Any agreement with separate legal entities requires an independent contractor clause that is intended to limit liability for both parties for the acts of the other.
VI. G. This clause simply states that any legal actions will be brought in Tarrant County, Texas, where ASA national is located. This clause does not preclude mediation between parties if a dispute should occur. Again, this language is standard when a national organization is authorizing other organizations to use its name and be affiliated.
4. Unless specifically contained in this Addendum, no other provisions of the Agreement are modified or amended and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the ASA Affiliation Agreement to be executed by and duly authorized by the officers as of the last date written below:
AUTOMOTIVE SERVICE ASSOCIATION AFFILIATE
By: _____________________ By: _________________
Its: _____________________ Its: _________________
Date: ___________________ Date: ________________
asainfo@asashop.org Copyright © 2000 Automotive Service Association. All rights reserved.