EXHIBIT 10.6
NISSAN
DEALER TERM SALES AND SERVICE AGREEMENT
THIS AGREEMENT is entered into effective the day last set forth below by and
between the Nissan Division of NISSAN MOTOR CORPORATION IN U.S.A., a
California corporation, hereinafter called "Seller," and the entities and
natural persons identified in the Final Article of this Agreement.
INTRODUCTION
The purpose of this Agreement is to establish Dealer as an authorized dealer
of Nissan Products and to provide for the sale and servicing of Nissan
Products in a manner that will best serve owners, potential owners and
purchasers of Nissan Products as well as the interests of Nissan Motor
Corporation in U.S.A. ("Seller", "Nissan" or "NMC"), Dealer and other
Authorized Nissan Dealers. This Agreement sets forth: the rights which
Dealer will enjoy as an Authorized Nissan Dealer; the responsibilities which
Dealer assumes in consideration of its receipt of these rights; and the
respective conditions, rights and obligations of Seller and Dealer that apply
to Seller's grant to Dealer of such rights and Dealer's assumption of such
responsibilities. It is understood that each term and undertaking
hereinafter described is material, and relied upon, as the quid pro quo and
consideration for this Agreement.
This is a personal services Agreement. In entering into this Agreement and
appointing Dealer as provided below, Seller is relying, among other things,
upon the personal qualifications, expertise, reputation, integrity,
experience, ability and representations of the individual named in the Final
Article of this Agreement as Dealer Principal (the "Dealer Principal"), the
individual named in the Final Article of this Agreement as Executive Manager,
and the representations of Cross-Continent Auto Retailers, Inc. ("C-CAR"),
and Sahara Nissan, Inc., ("Dealer"). In addition to Dealer, Seller intends
to look to C-CAR, the Dealer Principal and the Executive Manager for the
performance of Dealer's obligations hereunder.
Nissan Products are intended for discriminate owners with the expectation
that such owners will be loyal and proud, but also demanding toward Seller
and Dealer with respect to Nissan Products and the manner in which they are
sold and serviced. Owners, potential owners and purchasers of Nissan
Products are expected to want, and are entitled to do business with, dealers
who enjoy the highest reputation in their communities and have well located,
attractive and efficient places of business, courteous personnel and
outstanding service and parts facilities. Nissan Products must be sold by
enthusiastic dealers who are not interested in short term results only but
are willing to look toward long term goals and who are devoted to creating
and maintaining a positive total ownership experience for owners of Nissan
Products. Seller's standard of excellence for Nissan Products must be
matched by the dealers who sell them to the public and who service them
during their operative lives.
Achievement of the purposes of this Agreement is premised upon mutual
understanding and cooperation between Seller and Dealer. Dealer has entered
into this Agreement in reliance upon Seller's integrity and expressed
intention to deal fairly with Dealer and the consuming public. Seller has
entered into this Agreement in reliance upon the integrity and ability of the
Dealer Principal and Executive Manager and their expressed intention to deal
fairly with the consuming public and Seller.
It is the responsibility of Seller to market Nissan Products throughout the
Territory. It is the responsibility of Dealer to actively promote the retail
sale of Nissan Products and to provide courteous and efficient service of
Nissan Products. The success of both Seller and Dealer will depend on how
well they each fulfill their respective responsibilities under this
Agreement. It is recognized that: Seller will endeavor to provide motor
vehicles of excellent quality and workmanship and to establish a network of
Authorized Nissan Dealers that can provide an outstanding sales and service
effort at the retail level; and Dealer will endeavor to fulfill its
responsibilities through aggressive, sound, ethical selling practices and
through conscientious regard for customer service in all aspects of its
Nissan Dealership Operations.
Seller and Dealer shall refrain from engaging in conduct or activities which
might be detrimental to or reflect adversely upon the reputation of Seller,
Dealer or Nissan Products and shall engage in no discourteous, deceptive,
misleading or unethical practices or activities.
For consistency and clarity, terms which are used frequently in this
Agreement have been defined in Section 1 of the Standard Provisions. All
terms used herein which are defined in the Standard Provisions shall have the
meaning stated in said Standard Provisions. These definitions should be read
carefully for a proper understanding of the provisions in which they appear.
To achieve the purposes referred to above, Seller, C-CAR, Dealer, the Dealer
Principal and the Executive Manager agree as follows:
ARTICLE FIRST: Appointment of Dealer
Subject to the conditions and provisions of this Agreement, Seller:
(a) appoints Dealer as an Authorized Nissan Dealer and grants Dealer
the non-exclusive right to buy from Seller those Nissan Products specified in
Dealer's current Product Addendum hereto, for resale, rental or lease at or
from the Dealership Locations established and described in accordance with
Section 2 of the Standard Provisions; and
(b) grants Dealer a non-exclusive right, subject to and in accordance
with Section 6.K of the Standard Provisions, to identify itself as an
Authorized Nissan Dealer, to display the Nissan Marks in the conduct of its
Dealership Operations and to use the Nissan Marks in the advertising,
promotion and sale of Nissan Products in the manner provided in this
Agreement.
ARTICLE SECOND: Assumption of Responsibilities by Dealer
Dealer hereby accepts from Seller its appointment as an Authorized Nissan
Dealer and, in consideration of its appointment and subject to the other
conditions and provisions of this Agreement, hereby assumes the
responsibility for:
(a) establishing and maintaining at the Dealership Location the
Dealership Facilities in accordance with Section 2 of the Standard Provisions;
(b) actively and effectively promoting the sale at retail (and, if
Dealer elects, the leasing and rental) of Nissan Vehicles within Dealer's
Primary Market Area in accordance with Section 3 of the Standard Provisions;
(c) servicing Nissan Vehicles and for selling and servicing Nissan
Parts and Accessories in accordance
with Section 5 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and in
Nissan Products in accordance with Section 5 of the Standard Provisions; and
(e) performance of the additional responsibilities set forth in this
Agreement, including those specified in Section 6 of the Standard Provisions.
ARTICLE THIRD: Ownership
(a) OWNERS. This Agreement has been entered into by Seller in reliance
upon, and in consideration of, among other things, the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations with respect thereto of the Dealer Principal and Executive
Manager named in the Final Article of this Agreement and in reliance upon the
representations and agreements of C-CAR, and Dealer as follows:
(i) C-CAR will at all times own 100% of the capital stock of Dealer
and Dealer will at all times be maintained as a separate entity.
(ii) The Executive Committee of Dealer is set forth in attached
Schedule "A".
(iii) The officers of Dealer are as set forth in attached Schedule "A".
(iv) Cross-Continent Auto Retailers, Inc., ("C-CAR") owns 100% of the
outstanding stock of Sahara Nissan, Inc. (see Attachment "A" attached).
(b) CHANGES IN OWNERSHIP. In view of the fact that this is a personal
services agreement with the Dealer Principal and Executive Manager and in
view of its objectives and purposes, this Agreement and the rights and
privileges conferred on Dealer hereunder are not assignable, transferable or
salable by C-CAR, and Dealer, and no property right or interest is or shall
be deemed to be sold, conveyed or transferred to C-CAR and/or Dealer under
this Agreement. C-CAR, Dealer, the Dealer Principal and the Executive
Manager agree that any change in the ownership of Dealer, other than
specified herein requires the prior written consent of Seller IF DEALER
DESIRES TO REMAIN AN AUTHORIZED NISSAN DEALER and that without the prior
written consent of Seller, which consent will not be unreasonably withheld:
(i) no sale, pledge, hypothecation or other transfer of any of the
currently outstanding capital stock or partnership interest of Dealer will be
made and no additional shares of capital stock, partnership interest or
securities convertible into shares of capital stock, of Dealer will be issued
or sold.
(ii) Dealer will not be merged with or into, or consolidated with, any
other entity, and none of the principal assets necessary for the performance
of Dealer's obligations under this Agreement will be sold, transferred or
assigned.
(iii) C-CAR will not enter into any transaction, including, without
limitation, any sale, pledge, hypothecation or other transfer of any of the
currently outstanding capital stock of Dealer, the issuance or sale of
additional shares of capital stock, partnership interest or securities
convertible into shares of capital stock of Dealer, or the merger of Dealer
with or into another entity, or the consolidation of Dealer with any other
entity, if as a result of such transaction, C-CAR, or a wholly owned
subsidiary, will cease to own at least 100% of the capital stock or interest
of Dealer.
(iv) If any person or entity, after the date of this Agreement, acquires
more than 20% of C-CAR's common stock, issued and outstanding, at any time,
and Nissan determines that such person or entity does not have interests
compatible with those of Nissan, or is otherwise not qualified to have an
ownership interest in a Nissan dealership (an "Adverse Person"), C-CAR must
terminate its dealer agreements with Nissan or transfer the Nissan
dealerships to a third party acceptable to Nissan unless, within 90 days
after Nissan's notice of such determination, the adverse Person's ownership
interest is reduced to less than 20%.
Any transaction involving the capital stock of C-CAR and Dealer which
does not violate subparagraph (i)-(iv) above may be effected without
obtaining the prior written consent of Seller and without triggering a
termination event under Section 12.A.(2) of the Standard Provisions.
Dealer shall give Seller prior notice of any proposed change in said
ownership requiring the consent of Seller and immediate notice of the death
or incapacity of any Dealer Principal or Executive Manager. No such change,
and no assignment of this Agreement or of any right or interest herein, shall
be effective against Seller unless and until embodied in an appropriate
amendment to or assignment of this Agreement, as the case may be, duly
executed and delivered by Seller and Dealer. Seller shall not, however,
unreasonably withhold its consent to any such change, subject to Seller's
Rights of First Refusal set forth in Article Tenth of this Agreement. Seller
shall have no obligation to transact business with any person who is not
named either as a Dealer Principal or Executive Manager of Dealer hereunder
or otherwise to give effect to any proposed sale or transfer of the
ownership, partnership interest or management of Dealer and (other than
changes in the ownership of and Dealer which are expressly permitted by this
Article Third) prior to having concluded the evaluation of such a proposal as
provided in Section 15 of the Standard Provisions. Dealer acknowledges
Seller's right to require consent to any change in the ownership of Dealer,
and agrees that any change or transfer without such consent from Seller is
void, and of no force and effect, and grounds for termination. C-CAR and
Dealer further agree that they will not challenge, contest, dispute, or
litigate, accept as provided by this Agreement:
(i) any action taken by Seller (including, without limitation,
termination of this Agreement) in response to an attempt to transfer
ownership of Dealer (except as provided by this Agreement) without Seller's
consent; or
(ii) any decisions by Seller to withhold consent to a proposed change in
ownership of Dealer.
ARTICLE FOURTH: Management
(a) This Agreement has been entered into by Seller in reliance upon,
and in consideration of, among other things, the personal qualifications,
expertise, reputation, integrity, experience, ability and representations
with respect thereto of the person named as Dealer Principal in the Final
Article of this Agreement and in reliance on the following representations
and agreements of and Dealer that:
The Executive Manager of Dealer will, subject to any other obligations
set forth in this Agreement, devote full time efforts to the business and
day-to-day operations of the entity for which they are responsible.
(b) DEALER. Seller and Dealer agree that the retention by Dealer of
qualified management is of critical importance to the successful operation of
Dealer and to the achievement of the purposes and objectives of this
Agreement. This Agreement has been entered into by Seller in reliance upon,
and in consideration of, among other things, the personal qualifications,
expertise, reputation, integrity, experience, ability and representations
with respect thereto of the persons named as Dealer Principal and Executive
Manager in the Final Article of this Agreement and in reliance on the
following representations and agreements of C-CAR, and Dealer, that:
(i) There must be an approved Executive Manager, acceptable to
Nissan, employed by Dealer. As long as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ is employed by
C-CAR and the Executive Manager subject to the provisions of Article 15(g) is
employed by Dealer, they will have full and complete control over the
Dealership Operations, subject only to the powers of the Board of Directors
of Dealer to manage the business and affairs of Dealer, and they will at all
times be members of the Board of Directors of Dealer. In addition, any
replacements for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and Executive Manager will, so long as
such replacements are employed by C-CAR, and Dealer, have full and complete
control over the Dealership Operations, subject only to the powers of the
Board of Directors of Dealer to manage the business and affairs of Dealer,
and such replacements will at all times be members of the Board of Directors
of Dealer.
(ii) the Board of Directors of Dealer shall delegate the day to day
management of the Dealership Operations to the Executive Manager identified
in Article 15(g), and C-CAR and will not amend its Certificate of
Incorporation or By-laws to provide that its Board of Directors is entitled
to exercise any extraordinary powers or interfere unduly in the Dealership
Operations.
(iii) Executive Manager, subject to any other obligations set forth in
this Agreement, shall continually provide his personal services in operating
the dealership and will be physically present at the Dealership Facilities on
a full-time basis.
(c) CHANGES IN MANAGEMENT. In view of the fact that this is a personal
services Agreement with the Dealer Principal and Executive Manager and in
view of its objectives and purposes, Dealer and C-CAR agree that any change
in the Dealer Principal or Executive Manager from that specified in the Final
Article of this Agreement requires the prior written consent of Seller, which
consent shall not be unreasonably withheld. Dealer shall give Seller prior
notice of any proposed change in Dealer Principal or Executive Manager and
notice of the appointment of any chief executive or similar officer of C-CAR
and immediate notice of the death or incapacity of any Dealer Principal or
Executive Manager. No change in Dealer Principal or Executive Manager shall
be effective unless and until embodied in an appropriate amendment to this
Agreement duly executed and delivered by all of the parties hereto. Subject
to the foregoing, Dealer and C-CAR shall make their own, independent
decisions concerning the hiring and firing of its employees, including,
without limitation, the Dealer Principal and Executive Manager.
Dealer shall give Seller prior written notice of any proposed change in
Dealer Principal, notice of any change in Executive Manager, and immediate
notice of the death or incapacity of Dealer Principal or Executive Manager.
No change in Dealer Principal or Executive Manager shall be effective unless
and until embodied in an appropriate amendment to this Agreement duly
executed and delivered by all of the parties hereto. Dealer acknowledges
Seller's right (as set forth herein and in the Standard Provisions) to
require consent to any change in the Executive Manager of Dealer and agrees
that a change without such consent from Seller is void, of no force and
effect, and grounds for termination. C-CAR, and Dealer further agree that
they will not challenge, contest, dispute, or litigate, except as provided in
the dispute resolution provisions of this Agreement:
(i) any action taken by Seller (including, without limitation,
termination of this Agreement) in response to an attempt to change the
management of Dealer without Seller's consent; or
(ii) any decision by Seller to withhold consent to a proposed change in
management of Dealer; or
(iii) any decision by Seller to withhold approval of a proposed
management candidate.
To enable Seller to evaluate and respond to Dealer concerning any
proposed change in Dealer Principal or Executive Manager, Dealer agrees to
provide, in the form requested by Seller and in a timely manner, all
applications and information customarily requested by Seller to evaluate the
proposed change. While Seller shall not unreasonably withhold its consent to
any such change, it is agreed that any successor Dealer Principal or
Executive Manager must possess personal qualifications, expertise,
reputation, integrity, experience and ability which are, in the reasonable
opinion of Seller, satisfactory. Seller will determine whether, in its
reasonable opinion, the proposed change or appointment is likely to result in
a successful dealership operation with capable management that will
satisfactorily perform Dealer's obligations under this Agreement. Seller
shall have no obligation to transact business with any person who is not
named as a Dealer Principal or Executive Manager of Dealer hereunder prior to
having concluded its evaluation of such person.
Any successor Dealer Principal or Executive Manager of Dealer must meet
the following minimum requirements in order to be submitted to Seller for
approval:
(i) At least three years of experience as a general manager of an
automobile dealer in a major metropolitan area or similar position involving
all aspects of the day-to-day operations of such an automobile dealership
(including, without limitation, new and used vehicle sales, service, parts
and administration); and
(ii) A demonstrated track record of success in his/her prior
automobile dealership activities as measured by the dealerships' performance
under his/her management. The dealership(s) shall have consistently
demonstrated at least the following:
1. An above average level of sales performance when measured
against regional or zone averages and as measured against sales performance
objectives established by the manufacturer; and
2. An above average level of customer satisfaction when measured
against regional or zone averages for the make; and
3. A history of cooperation and good relations with
manufacturer(s) and/or distributor(s).
(d) EVALUATION OF MANAGEMENT. Dealer and Seller understand and
acknowledge that the personal qualifications, expertise, reputation,
integrity, experience and ability of the Dealer Principal and Executive
Manager and their ability to effectively manage Dealer's day-to-day
Dealership Operations is critical to the success of Dealer in performing its
obligations under this Agreement. Seller may from time to time develop
standards
and/or procedures for evaluating the performance of the Dealer Principal and
Executive Manager and of Dealer's personnel generally. Seller may, from time
to time, evaluate the performance of the Dealer Principal and Executive
Manager and will advise Dealer, the Dealer Principal and the Executive
Manager of the results of such evaluations and the way in which any
deficiencies affect Dealer's performance of its obligations under this
Agreement.
(e) COMPENSATION OF EXECUTIVE MANAGER. Executive Manager will have a
substantial portion of his compensation tied to Dealer's overall performance
with respect to objectives for sales, market penetration and customer service
which will be established at annual intervals.
ARTICLE FIFTH: Additional Provisions
The additional provisions set forth in the attached "Nissan Dealer Sales
and Service Agreement Standard Provisions," bearing form number NDA-4S/9-88,
as amended in Article Thirteenth of this Agreement, and excepting only the
provisions contained in Sections 4, 14 and 16, are hereby incorporated in and
made a part of this Agreement. The Notice of Primary Market Area, Dealership
Facilities Addendum, Product Addendum, Dealership Identification Addendum,
Holding Company Addendum, if applicable, and all Guides and Standards
referred to in this Agreement (including references contained in the Standard
Provisions referred to above) are hereby incorporated in and made a part of
this Agreement. Dealer further agrees to be bound by and comply with: the
Warranty Manual; Seller's Manuals or Instructions heretofore or hereafter
issued by Seller to Dealer; any amendment, revision or supplement to any of
the foregoing; and any other manuals heretofore or hereafter issued by Seller
to Dealer.
ARTICLE SIXTH: Termination of Prior Agreements
This Agreement cancels, supersedes and annuls all prior contracts,
agreements and understandings except as stated herein, all negotiations,
representations and understandings being merged herein. No waiver,
modification or change of any of the terms of this Agreement or change or
erasure of any printed part of this Agreement or addition to it (except
filling of blank spaces and lines) will be valid or binding on Seller unless
approved in writing by the President or an authorized Vice President of
Seller.
ARTICLE SEVENTH: Term
This Agreement shall have a term commencing on the effective date hereof
and, subject to its earlier termination in accordance with the provisions of
this Agreement, expiring on the expiration date indicated in the Final
Article of this Agreement. Subject to other applicable provisions hereof,
this Agreement shall automatically terminate at the end of such stipulated
term without any action by Dealer, Seller or any of the other parties hereto.
If Dealer is in compliance with this Agreement at the end of the Term,
Seller will offer to renew the terms of this Agreement under substantially
similar terms and provisions.
ARTICLE EIGHTH: License of Dealer
If Dealer is required to secure or maintain a license for the conduct of
its business as contemplated by this Agreement in any state or jurisdiction
where any of its Dealership Operations are to be conducted or any of its
Dealership Facilities are located, this Agreement shall not be valid until
and unless Dealer shall have furnished Seller with written notice specifying
the date and number, if any, of such license or licenses issued to Dealer,
Dealer shall notify Seller immediately in writing if Dealer shall fail to
secure or maintain any and all such licenses or renewal thereof or, if such
license or licenses are suspended or revoked, specifying the effective date
of any such suspension or revocation.
ARTICLE NINTH: Additional Representations and Warranties
(a) All of the representations and covenants made to Seller by the
other parties to this Agreement have been made jointly and severally by each
of the parties hereto which has made any such representation or covenant.
(b) In addition to the representations set forth elsewhere in this
Agreement, C-CAR, and Dealer jointly and severally, represent to Seller that:
(i) All of the documents and correspondence provided to Seller by
C-CAR, and Dealer, or any of their agents in connection with the
solicitation of Seller's consent to this Agreement, are true and correct
copies of such documents.
(c) In addition to the covenants set forth elsewhere in this Agreement,
C-CAR, and Dealer, jointly and severally, agree with Seller that:
(i) Dealer will at all times be involved in the operation of the Nissan
dealership and will not conduct any other type of business.
(ii) No distributions will be made to the stockholders or partners of
Dealer if such distributions would cause Dealer to fail to meet any of the
Guides and Standards relating to the capitalization of Dealer. In particular,
Dealer will not be permitted to voluntarily redeem any of its preferred
stock, if prior to and after giving effect to such redemption Dealer fails to
meet any of the Guides and Standards relating to capitalization of Dealer.
(iii) C-CAR, and Dealer hereby, jointly and severally, indemnify and hold
harmless, Seller, its officers, directors, affiliates and agents, and each
person who controls Seller within the meaning of the Securities Act of 1933,
as amended (the "Act"), from and against any and all losses, claims, damages
or liabilities, to which they or any of them may become subject under the
Act, the Securities Exchange Act of 1934, as amended, or any other federal or
state securities law, rule or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of the sale by
C-CAR, or Dealer of any securities. The indemnification provided for in
this paragraph shall be exclusive of, and in addition to, any indemnification
pursuant to Section 10 of the Standard Provisions.
ARTICLE TENTH: Right of First Refusal, Exclusivity
A. Seller's Right of First Refusal
In addition to its rights under this Agreement, in the event that C-CAR or
Dealer should desire to enter into a transaction, which if not approved by
Seller, would result in a breach of the covenants set forth in Article Third,
Sections (a)(i), (a)(ii), (a)(iii), (a)(iv) or (b) of this Agreement or in the
event that any of the covenants set forth in the fourth full paragraph of
Article Third, Section (b), Article Fourth, Section (a)(vii) or Article Ninth,
Section (c)(ii) of this Agreement are breached, Seller shall have the additional
right and option to purchase the dealership assets or ownership interests
pursuant to this Article Tenth.
(a) If Seller chooses to exercise its right of first refusal, it must do
so in its written refusal to consent to the proposed sale or transfer pursuant
to Section 15 of the Standard Provisions or, if Section 15 of the Standard
Provisions does not apply, within sixty (60) days of receipt of notification
that a event triggering Seller's right of first refusal hereunder has occurred.
Dealer agrees not to complete any proposed change or sale prior to the
expiration of the period for exercise of Seller's right of first refusal and
without Seller's prior written consent. Such exercise shall be null and void if
Dealer withdraws its proposal within thirty (30) days following Dealer's receipt
of Seller's notice exercising its rights of first refusal.
(b) After being exercised, Seller's right to purchase may be assigned to
any party, and Seller hereby agrees to guarantee the full payment of the
purchase price by such assignee. Seller's rights under this Article Tenth shall
be binding on and enforceable against any assignee or successor in interest of
Dealer or purchaser of Dealer's assets. Seller shall have no obligation to
exercise its rights hereunder.
(c) If Dealer has entered into a bona fide written buy/sell agreement
respecting its Nissan dealership, Seller's right under this Article Tenth shall
be a right of first refusal, enabling Seller to assume the prospective
purchaser's purchase rights and obligations under such buy/sell agreement. The
purchase price and other terms of sale shall be those set forth in such
agreement and any related documents. Seller may request and Dealer agrees to
provide all other documents relating to Dealer and the proposed transfer,
including, but not limited to, those reflecting any other agreements or
understandings between the parties to the buy/sell agreement. If Dealer refuses
either to provide such documentation or to state in writing that no such
document exists, it shall be presumed that the agreement is not bona fide.
(d) If Seller reasonably determines pursuant to paragraph (c) above that
the buy/sell agreement is not bona fide, Seller will so notify Dealer. Dealer
shall have ten (10) days from its receipt of such notice within which to
withdraw its proposal. Seller's exercise of its rights hereunder shall be null
and void if Dealer withdraws its proposal within such time period. If the
proposal is not withdrawn, Seller shall have the option, but no obligation,
under this Article Tenth to purchase the principal assets of Dealer utilized in
the Dealership Operations, including real estate and leasehold interest or to
purchase the ownership interests of Dealer, and to terminate this Agreement and
all rights granted Dealer hereunder. If the Dealership Facilities are leased by
Dealer from an affiliated company, the right to purchase the principal assets,
or the ownership interests, of Dealer, shall include the right to lease the
Dealership Facilities. The purchase price shall be at the then fair market
value as determined by an independent appraiser selected by Seller and
reasonably acceptable to Dealer and the other terms of sale shall be those
agreed by Seller, Dealer and C-CAR.
(e) Dealer shall transfer the affected property free and clear of liens,
claims, mortgages, and encumbrances.
(f) In addition to any other rights Seller may have at law, in equity or
hereunder, any conveyance of the dealership in violation of this right of first
refusal shall be voidable by Seller.
(g) In the event that Seller elects not to exercise its right to
purchase the dealership assets or the ownership interests of the Dealer;
Dealer and C-CAR agree that it will offer to sell such assets or interests
to the Dealer's then current management team or to some other entity or
persons acceptable to Seller. If such individuals are not interested in such
a transaction and no other entity or individuals acceptable to Seller can be
found then this Agreement will be terminable at Seller's option, by deliver
of written notice to Dealer.
B. Right of First Refusal on Sale or Lease of Property to a Third Party.
a) In addition to its rights under Articles Third and Fourth and
Section 15 of the Standard Provisions, Dealer agrees that should Dealer seek to
sell or lease all or substantially all of the Approved Site to a third party for
use as a Nissan New Motor Vehicle Dealership, Seller shall have the additional
right and option, but not the obligation, to purchase or lease the Approved Site
pursuant to this Article Thirteenth. A sale or lease for use other than a
Nissan New Motor Vehicle Dealership is void.
b) If Seller chooses to exercise its right of first refusal, it must
do so by written notice delivered to Dealer within 60 days of Seller's receipt
of notice of the proposed sale or lease by Dealer. Dealer agrees not to
complete any proposed sale or lease prior to the expiration of the period for
exercise of Seller's right of first refusal and without Seller's prior written
consent, and agrees to allow Seller to perform an environmental study of the
property. Such exercise shall be null and void if Dealer withdraws its sale or
lease proposal within thirty (30) days following Dealer's receipt of Seller's
notice exercising its right of first refusal.
c) After being exercised, Seller's right to purchase or lease may be
assigned to any party, and Seller hereby agrees to guarantee the full payment of
the purchase price or the rental payment by such assignee. Seller's rights
under this Article Thirteenth shall be binding on and enforceable against any
assignee or successor in interest of Dealer or purchaser of Dealer's assets.
Seller shall have no obligation to exercise its rights hereunder, and Seller may
rescind its offer if the property is determined to be contaminated pursuant to
an environmental study. Such contamination shall be deemed a breach of this
agreement by dealer, provided that Dealer is advised of the breach and provided
with a reasonable opportunity to remediate, or cause the remideation of, the
contamination.
d) Should Seller actually purchase or lease the facility, Dealer
shall also furnish to Seller copies of any easements, licenses, environmental
studies or other documents affecting the property in Dealer's possession.
e) Dealer shall transfer the affected property by deed conveying
marketable title free and clear of liens, claims, mortgages, encumbrances,
tenancies and occupancies, or, if applicable, by an assignment of any existing
lease. The Warranty Deed shall be in proper form for recording. Dealer shall
deliver complete possession of the property at the time of delivery of the Deed
or lease assignment. Dealer shall also furnish to Seller copies of any
easements, licenses, or other documents affecting the property and shall assign
any permits or licenses which are necessary for the conduct of the Dealership
Operations, to the extent that such are assignable.
f) In addition to any other rights Seller may have at law, in equity
or hereunder, any sale or lease of the Approved Site in violation of this right
of first refusal shall be voidable by Seller
C. Exclusivity Provisions.
In order for Dealer to maintain competitive Dealership Facilities to
effectively market Nissan Products, Dealer hereby agrees to abide by and never
challenge, except as provided by the dispute resolution provisions provided in
this Agreement, the following provisions (hereinafter "Exclusivity Provisions").
These Exclusivity Provisions shall be effective on or before the execution of
the Agreement, and continue in effect thereafter so long as Dealer (or its
principals) are authorized Nissan dealers and these provisions shall be binding
on any successors-in-interest, assigns or purchasers of Dealer:
a) The only line-make of new, unused motor vehicles which Dealer
shall display and sell at the Dealership Facilities shall be the Nissan line and
make of motor vehicles. Dealer shall not conduct any dealership operations for
any other make or line of new, unused vehicles from the Dealership Facilities
throughout the term of this Agreement.
b) Dealer shall sell and maintain a full line of Genuine Nissan
Parts and Accessories at the Dealership Facilities and shall provide a full
range of automotive servicing for Nissan vehicles at the Dealership Facilities
pursuant to Section 5 of the Standard Provisions to the Agreement. Nothing
contained herein, however, shall preclude Dealer from offering parts,
accessories or servicing for vehicles of other lines or makes so long as such
products or services are incidental to Dealer's Nissan Dealership Operations;
c) Dealer shall not advertise or promote any make or line of new,
unused vehicles from the Dealership Facilities other than the Nissan line; and
d) Dealer shall not install or maintain any sign at or near the
Dealership Facilities which would tend to lead the public into believing that
any line or make of vehicles other than the Nissan line is sold at the
Dealership Facilities.
ARTICLE ELEVENTH: Breach By Dealer
In the event (i) that any of the representations and warranties of Dealer,
C-CAR, ▇▇▇▇▇▇▇▇▇ or Executive Manager, contained in this Agreement shall prove
not to have been true and correct when made or (ii) of any breach or violation
of any of the covenants made by Dealer and C-CAR, ▇▇▇▇▇▇▇▇▇ or Executive
Manager, in Articles Third, Fourth and Ninth of this Agreement or (iii) of the
occurrence of any of the events warranting termination of this Agreement as set
forth in Section 12.A of the Standard Provisions, Seller may terminate this
Agreement, prior to the expiration date hereof, by giving Dealer written notice
thereof, such termination to be effective upon the date specified in such
notice, or such latter date as may be required by any applicable statute with
the effect set forth in Section 13 of the Standard Provisions.
ARTICLE TWELFTH: Execution of Agreement
This Agreement, and any Addendum or Amendment or Notice with respect
thereto, shall be valid and binding on Seller only when it bears the signature
of either the President or an authorized Vice President of Seller and, when such
signature is a facsimile, the manual countersignature of an authorized employee
of Seller at the Regional Vice President or Director level, and a duplicate
original thereof is delivered personally or by mail to the Dealership Location.
ARTICLE THIRTEENTH: Amendments to Standard Provisions
(a) Section 1.O of the Standard Provisions is hereby amended to read as
follows:
"O. 'Principal Owners(s)' shall mean the persons named as Dealer Principal
in the Final Article of this
Agreement upon whose personal qualifications, expertise, integrity,
experience, ability and representations Seller has relied in entering into
this Agreement."
(b) Section 6.I of the Standard Provisions is hereby amended to read as
follows:
"Seller shall have the right, at all reasonable times during regular
business hours, to inspect the Dealership Facilities and to examine, audit and
make and take copies of all records, accounts and supporting data relating to
the sale, sales reporting, service and repair of Nissan Products by Dealer.
Whenever possible, Seller shall attempt to provide Dealer with advance notice of
an audit or examination of Dealer's operations. Seller shall also have the
right, at all reasonable times during regular business hours and upon advance
notice, to examine, audit and make and take copies of all records, accounts and
supporting data of and Dealer relating to the business, ownership or operations
of Dealer."
(c) Section 12.A.(1) of the Standard Provisions is hereby amended to read
as follows:
"(1) Any actual or attempted sale, transfer, assignment or delegation,
whether by operation of law or otherwise, by Dealer or C-CAR of any interest in
or right, privilege or obligation under this Agreement, or of the principal
assets necessary for the performance of Dealer's responsibilities under this
Agreement, without, in either case, the prior written consent of Seller having
been obtained, which consent shall not be unreasonably withheld;"
(d) Section 12.A.(3) of the Standard Provisions is hereby amended to read
as follows:
"(3) Removal, resignation, withdrawal or elimination from Dealer for any
reason of the Executive Manager, or removal, resignation, withdrawal or
elimination from Dealer of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as President, or removal,
resignation, withdrawal or elimination from Dealer of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Executive
Manager; provided, however, in each case, Seller shall give Dealer a reasonable
period of time within which to replace such person with a individual
satisfactory to Dealer as the case may be, and Seller in accordance with Article
Fourth of this Agreement; or the failure of Dealer to retain an Executive
Manager who, in accordance with Article Fourth of this Agreement, in Seller's
reasonable opinion, is competent, possesses the requisite qualifications for the
position, and who will act in a manner consistent with the continued interests
of both Seller and Dealer."
(e) Section 12.B.(2)(i) of the Standard Provisions is hereby amended to
read as follows:
"(i) any dispute, disagreement or controversy between or among Dealer, or
C-CAR and any third party or between the owners and management personnel of
Dealer relating to the management or ownership of Dealer and develops or exists
which, in the reasonable judgment of Seller, tends to adversely affect the
conduct of the Dealership Operations or the interests of Seller; or"
(f) Section 12.B.(2)(ii) of the Standard Provisions is hereby amended to
read as follows:
"(ii) any other act or activity of Dealer, and/or C-CAR, or any of their
senior management occurs, which substantially impairs the reputation or
financial standing of Dealer subsequent to the execution of this Agreement:"
(g) Exhibits A and B are hereby incorporated by reference.
ARTICLE FOURTEENTH: Branding/Business Name
The parties acknowledge and agree that Dealer shall do business as ▇▇▇▇
▇▇▇▇▇▇▇ Nissan, or such other name Dealer desires which is acceptable to and
approved by Nissan, which approval will not be unreasonably withheld. Dealer
agrees to include in its promotional, marketing and advertising efforts the
approved name of the Dealership or another name approved by Nissan that includes
the Nissan name. In all television, radio, print and
other advertising and marketing conducted by dealer, Dealer shall refer to
itself as "▇▇▇▇ ▇▇▇▇▇▇▇ Nissan" or such other approved name. Dealer shall
actively and effectively promote primarily the "Nissan" name. Under no
circumstances shall the name "Nissan" be subordinated to or promoted less
aggressively than any other name (eg. "C-CAR") by Dealer.
ARTICLE FIFTEENTH: Special Conditions
(a) Adequate Representation of Entire Line of Nissan Vehicles
Dealer shall actively and effectively promote the sale of Nissan's entire line
of vehicles and products to customers located throughout the Primary Market
Area. In evaluating Dealer's sales performance, in addition to those factors
established in the Standard Provisions, Nissan will evaluate Dealer's
performance by vehicle segment. Dealer is obligated to adequately represent
Nissan in each and every model line. Adequate representation shall be
understood to be the Federal DMA composite average, as set forth in the Business
plan.
(b) Nissan Products
The definition of "Nissan Products" in the Standard Provisions is amended to
mean Nissan Vehicles (defined as Nissan Cars and Nissan Trucks as well as
"near-new" Nissan Vehicles of the current and three prior model years),
Genuine Parts and Accessories, Nissan Security+Plus and such other products
and services offered by Nissan to Dealer and designated by Nissan as a Nissan
Product. Dealer shall actively and effectively promote the sale of Nissan
Products. Effectiveness with respect to Nissan Security+Plus sales is
measured by the ratio of Security+Plus sales to new vehicles sales, compared
to regional average as set forth in the Business plan.
Agreement Not to Protest Establishment of Additional Dealer in the Las
Vegas Market Area
As a condition to, and in consideration of, Nissan entering into the Agreement
with C-CAR and Dealer, all parties acknowledge that Nissan may establish an
additional Nissan dealer in the Las Vegas market area; acknowledge that the
market is growing rapidly and this circumstance may result in a need for
additional Nissan representation in that area; that this growth may render such
an establishment as reasonable; and that the growth and current market
circumstances may constitute "Good Cause" under Section 482.36358 Nevada Revised
Statutes. Dealer and C-CAR further represent that, Dealer and C-CAR are
advising Nissan that they do not intend to protest, object to, oppose, or in any
way interfere with, delay or obstruct the establishment of additional Nissan
representation in this area, except as provided in the dispute resolution
provisions of this Agreement, and that Dealer and C-CAR recognize that Nissan
is relying on these representations in entering into the Agreement with them.
(d) Dispute Resolution Process
The parties acknowledge that, at the state and federal level, various
courts and agencies would, in the absence of this Article Fifteenth (d), be
available to them to resolve claims or controversies which might arise between
them. The parties agree that it is inconsistent with their relationship for
either to use courts or governmental agencies to resolve such claims or
controversies.
THEREFORE, CONSISTENT WITH THE PROVISIONS OF THE UNITED STATES
ARBITRATION ACT (9 U.S.C. SEC. 1 ET SEQ.), THE PARTIES TO THIS AGREEMENT AGREE
THAT THE DISPUTE RESOLUTION PROCESS OUTLINED IN THIS SECTION, WHICH INCLUDES
BINDING ARBITRATION, SHALL BE THE EXCLUSIVE MECHANISM FOR RESOLVING ANY DISPUTE,
CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR
TO THE RELATIONSHIP BETWEEN THE PARTIES, INCLUDING BUT NOT LIMITED TO CLAIMS
UNDER ANY STATE OR FEDERAL STATUTES (HEREINAFTER "DISPUTES"). Section 16 of the
Standard Provisions is deleted in its entirety.
There are two steps in the Dispute Resolution Process: Mediation and Binding
Arbitration. All Disputes must first be submitted to Mediation, unless that
step is waived by written agreement of the parties. Mediation is conducted by a
panel consisting of an equal number of representatives of the parties designated
by Nissan and selected by Dealer. The Mediation Panel will evaluate each
position and recommend a solution. This recommended solution is not binding.
If a dispute has not been resolved after Mediation, or if Dealer and Nissan have
agreed in writing to waive Mediation, the Dispute will be settled by Binding
Arbitration. SPECIFICALLY, THE PARTIES AGREE TO RESOLVE ALL SUCH DISPUTES BY
BINDING ARBITRATION CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION, WITH THE PREVAILING PARTY TO
RECOVER ITS COSTS AND ATTORNEY'S FEES FROM THE OTHER PARTY. ALL ARBITRATION
AWARDS ARE BINDING AND NON-APPEALABLE, EXCEPT AS OTHERWISE PROVIDED IN THE
UNITED STATES ARBITRATION ACT. JUDGMENT UPON ANY SUCH AWARD MAY BE ENTERED AND
ENFORCED IN ANY COURT HAVING JURISDICTION.
(e) Business Plan
Dealer and Nissan shall execute a Business Plan in the form specified in
the Business Planning Process Workbook that describes how Dealer will fulfill
it sales, service, customer relations and other commitments hereunder, including
heightened performance standards that Dealer commits to meet.
(f) Option to Purchase
If the Dealer Agreement is to expire or be terminated: i) Voluntarily by
Dealer; ii) By Nissan upon the occurrence of any of the events specified in
Section 12A. of the Standard Provisions to the Agreement (as modified herein);
or iii) As a result of the death or physical or mental incapacity of Principal
Owners without an Approved Successorship Plan, then Nissan has the option to
Purchase the principal assets of Dealer utilized in the dealership business,
including such real property as Nissan may elect to purchase, and cancel the
Agreement and all rights granted Dealer thereunder. The purchase price of the
dealership assets and real property and other terms will be determined by
agreement between the parties or, if the parties are unable to reach agreement
in a reasonable time, by arbitration pursuant to the Dispute Resolution Process
established in Paragraph 12 hereof. Nissan must advise Dealer of its intent to
exercise this option within 30 days after one party notifies the other of its
intent to terminate the Agreement. Nissan may assign its right to exercise its
option to purchase under this paragraph to any third party.
(g) Executive Manager Evaluation
Dealer shall retain a qualified Executive Manager meeting Seller's approval
to be named under the Final Article of this Agreement.
Dealer has proposed ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as Executive Manager. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has not
been approved as Executive Manager by Nissan, but Nissan is willing to evaluate
him under its executive management evaluation program. Accordingly, the
qualifications and performance of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the individual proposed to be
named as the Executive Manager of Dealer, shall be evaluated by Seller during
the first six (6) months of the term of this Agreement pursuant to Seller's
executive management evaluation program. If at the end of such six (6) month
period, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Dealer's performance in all departments of the
dealership (including sales, service, parts and customer satisfaction) is not
satisfactory to Seller under the evaluation program guidelines, Dealer shall be
obligated to retain another individual who is a qualified Executive Manager to
be named under the Final Article of this Agreement within sixty (60) days of the
date that Seller notifies Dealer that ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has not met the executive
management requirements of Seller as described above. If ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
Dealer perform satisfactorily during this evaluation period, then Nissan will
approve him as Executive Manager.
Acquisition of Land, through purchase or lease, to meet NMC Facility Guide
Requirements.
Dealer agrees to acquire sufficient land, through purchase or lease, in
order to meet NMC Facility Guide Requirements.
(i) C-CAR agrees to update its Nissan Dealer Term Sales and Service
Agreements, for all Nissan dealerships which it owns or controls, to a form
substantially identical with this Agreement.
FINAL ARTICLE
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The Dealer is Sahara Nissan, Inc., a corporation formed under the laws of the
state of Nevada. Dealer is located in Las Vegas, Nevada.
The other parties to this Agreement are Cross-Continent Auto Retailers, Inc., a
corporation incorporated under the laws of the state of Delaware, and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
The Dealer Principal is ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
The Proposed Executive Manager is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
Expiration Date: July 1, 2002
Working Capital Guide Requirement: $1,175,600
Net Worth Guide Requirement: $2,091,200
Flooring Line: $5,913,310
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate effective as of the ________ day of July, 1997 at Carson, California.
SELLER:
NISSAN DIVISION
NISSAN MOTOR CORPORATION IN USA
By: By:
------------------------------ -------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President, Nissan Division Regional Vice President, Southwest
Region
CROSS-CONTINENT AUTO RETAILERS, INC.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Chairman and CEO
SAHARA NISSAN, INC.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Dealer Principal