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EXHIBIT 10.71
AGREEMENT BETWEEN
NISSAN MOTOR CORPORATION IN U.S.A.
AND
SUNBELT AUTOMOTIVE GROUP, INC.
This agreement dated April ___, 1998, is entered into by and between
Sunbelt Automotive Group, ("Sunbelt"), a Georgia corporation, with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and Nissan Motor Corporation in U.S.A. ("NMC"), a California corporation,
with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Agreement").
RECITALS
WHEREAS, NMC distributes Nissan and Infiniti brand automobile products
in the continental United States through a network of authorized independent
dealers; and
WHEREAS, Sunbelt is in the automobile businesses of retailing and
servicing automobile products, and has acquired or may acquire, through its
wholly owned affiliates or subsidiaries, several Nissan and Infiniti automobile
dealerships;
WHEREAS NMC's and Sunbelt's interests could conflict, and it is the
intent of the parties to develop a mutually beneficial business relationship;
NOW THEREFORE, Sunbelt and NMC agree as follows:
AGREEMENT
1. ADHERENCE TO THE POLICY
The Nissan and Infiniti dealerships owned by Sunbelt, or its wholly owned
affiliates or subsidiaries, have already agreed to comply with NMC's dealer
agreements and policies and, by this Agreement, Sunbelt agrees to not interfere
with such compliance by its NMC authorized dealerships and to itself comply with
and be bound by the terms of NMC's policies, including, but not limited to,
NMC's policy limiting the number of dealers owned or controlled, directly or
indirectly, by a single entity (the "Ownership Policy"), which is summarized as
follows: i) No individual or entity may have an ownership or management
interest, direct or indirect, in Dealers whose Primary Marketing Area's (PMA's)
competitive segment registration count comprises more than 5% of Nissan's or
Infiniti's (as applicable) total, national competitive segment registrations
based on the sum of the retail competitive segment registrations contained
in all PMAs associated with the dealers; ii) No individual or entity may hold
ownership or management, direct or indirect, in Dealers whose PMA's competitive
segment registration count comprises more than 20% of any Nissan or Infiniti (as
applicable) region's total competitive segment registrations contained in all
PMA's associated with
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dealers in that region; iii) In order for any entity to acquire additional
Nissan or Infiniti dealerships, within the limits of this Agreement, the Nissan
or Infiniti dealerships which it owns or controls, directly or indirectly, must:
(a) be in full compliance with all of the terms of its respective Dealer
Agreements; (b) meet, in all material respects, all of the applicable Nissan or
Infiniti market representation and other standards and policies; and (c) with
respect to the NMC Division and Region at issue, the Nissan or Infiniti
dealerships which the entity owns or controls must, in the aggregate and with
respect to at least 50% of those individual dealerships, have performed at or
above all performance levels set forth in the Business Plans for those
dealerships over the proceeding 12 month period; and iv) If the proposed
acquisition of any Nissan or Infiniti dealership would cause an individual or
entity to exceed the Ownership Policy, NMC will reject a dealer's application
for approval of such ownership transfer until such time as the purchasing
individual or entity shall be able to complete the acquisition within the
requirements of this Policy. Notwithstanding the foregoing, NMC may withhold
consent to a proposed acquisition, even if that acquisition satisfies the
parameters of the Ownership Policy, based on the grounds set forth in the Nissan
Dealer Agreement and applicable state law.
2. IDENTIFICATION OF OWNERS OF SUNBELT
Sunbelt represents and warrants that Schedule A hereto identifies each
individual or entity that owns, controls or has a beneficial interest in 5% or
more of Sunbelt and/or of its affiliates or subsidiaries. In the event Sunbelt
becomes aware of any change of ownership, control or interest that results in an
individual or entity not listed on Schedule A obtaining such ownership, control
or beneficial interest, Sunbelt shall provide NMC with the documentation and
information required by Schedule A with respect to such individual or entity.
Sunbelt will provide NMC with copies of all filings that Sunbelt becomes aware
of that are made with the SEC and comparable filings made with state agencies by
persons or entities that own, control or have a beneficial interest in 5% or
more of Sunbelt and/or any of its affiliates or subsidiaries. Without limiting
the foregoing, Sunbelt will use its best efforts to provide such information
regarding individuals that own, control or have a beneficial interest in 5% or
more of Sunbelt as NMC may from time to time reasonably request.
3. CHANGE IN OWNERSHIP OF SUNBELT
If any person or entity acquires more than 20% of Sunbelt'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"), Sunbelt 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 determination, the Adverse Person's ownership interest is
reduced to less than 20%.
4. SEPARATE LEGAL ENTITIES FOR EACH NISSAN AND INFINITI DEALERSHIP
Sunbelt shall (i) create or maintain separate legal entities for each Nissan and
Infiniti
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dealership that it owns, directly or indirectly, shall obtain a separate motor
vehicle license for each such dealership, and shall maintain separate financial
statements for each such dealership; and (ii) where such Nissan or Infiniti
dealerships are part of a Contiguous Market Ownership Area pursuant to a
Contiguous Market Ownership Addendum, maintain a single corporate entity for the
dealerships in that Area and shall otherwise comply with the licensing and
reporting requirements set forth in that Addendum; provided, however, that if at
the time of acquisition of any Nissan or Infiniti dealership by Sunbelt such
dealership is not in compliance with the requirements of clauses (i) or (ii) of
this paragraph, as applicable, Sunbelt will use its reasonable efforts to cause
the dealership to comply with such requirements of clauses (i) or (ii) as soon
as practicable.
5. BRANDING/BUSINESS NAME
Consistent with NMC policy, the name "Nissan" or "Infiniti," as applicable,
shall prominently appear in the d/b/a and marketing of each dealership. Sunbelt
agrees that each Nissan and Infiniti dealership owned or controlled by Sunbelt,
directly or indirectly, shall include in its promotional, marketing and
advertising efforts the approved name of the Dealership or another name approved
by Nissan that includes the Nissan or Infiniti name and, that said dealerships
shall actively and effectively promote primarily the "Nissan" or "Infiniti"
name. Under no circumstances shall the name "Nissan" or "Infiniti" be
subordinated to or promoted less aggressively than any other name (e.g. "Sunbelt
Automotive Group" or "Sunbelt").
6. AUTHORITY OF THE DEALER PRINCIPAL
Each Nissan and Infiniti dealership owned or controlled by Sunbelt, directly or
indirectly, shall have a Dealer Principal who is delegated full authority to
perform the obligations of Dealer Principal under the terms and conditions set
forth in the applicable Nissan or Infiniti Dealer Sales and Service agreement
("Agreement"), to determine, approve, and implement the terms and provisions of
the Agreement, to make, sign, and execute any documents or further agreements,
both oral and written, between the dealer and NMC, to commit himself to the
achievement of the purposes and objectives of the Agreement, to take any and all
actions which the Dealer Principal may deem prudent, necessary, or appropriate
to effect the foregoing Agreement and to resolve all matters of the terms and
implementation as he shall deem necessary in connection therewith. Sunbelt shall
not authorize or permit the Dealer Principal to take any action inconsistent
with the terms, purposes, and objectives of the Agreement.
Whenever Sunbelt nominates a new Dealer Principal candidate for a Nissan or
Infiniti dealership, NMC shall have the right to withhold a decision concerning
approval or rejection of the candidate for a period of up to one year, at its
sole discretion; provided, however, that the candidate may operate in the
probationary capacity of Dealer Principal until NMC has approved or rejected
him/her. Such delay or exercise of this evaluation period does not imply
approval of the Dealer Principal candidate.
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Should Sunbelt reduce or modify the authority of the Dealer Principal, contrary
to the requirements of this and the Dealer Agreement, it must notify Nissan
immediately as to the specific changes in authority. Upon such notice, Nissan
will evaluate the modification of authority and notify Sunbelt of its response.
Should Nissan, in its reasonable discretion, object to the changes, Sunbelt must
resolve the situation to Nissan's satisfaction or restore the authority to that
which existed prior to the modification.
NMC shall be entitled to and shall, in fact, rely upon the personal
qualifications, experience, reputation, integrity, ability, and representations
of the individual named as Dealer Principal.
Any successor Dealer Principal or Executive Manager 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. Sunbelt and NMC 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 a dealership's day-to-day operations is critical
to the success of such dealership in performing its obligations under the
respective Agreement. NMC may from time to time develop standards and/or
procedures for evaluating the performance of the Dealer Principal and Executive
Manager and of Sunbelt's Nissan and Infiniti dealership personnel generally.
NMC may, from time to time, evaluate the performance of the Dealer Principal and
Executive Manager, based on the standards established in the
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dealership's business plan, and will advise Sunbelt, the respective Dealer
Principal and the Executive Manager of the results of such evaluations and the
way in which any deficiencies affect such dealership's performance of its
obligations under the applicable Agreement.
7. DESIGNATED SUNBELT CONTACT OFFICIAL
Sunbelt shall designate a Sunbelt executive (other than the Dealer Principal of
the dealership) who will respond directly to any questions or concerns of NMC
regarding the relationship with NMC, the operation or performance of the
dealership(s) generally as a group, or other issues that may arise. That
executive will have full authority, in accordance with Sunbelt's management
policies, to discuss, address, negotiate and resolve all such issues. Matters
pertaining to a specific dealership will be addressed by Nissan with that
dealership's Dealer Principal.
8. FINANCIAL DISCLOSURES
Sunbelt shall provide NMC with copies of all information and materials filed by
Sunbelt with the Securities Exchange Commission under the Securities Exchange
Act of 1934, as amended, including, but not limited to, quarterly and annual
financial statement filings, prospectuses and other materials related to Sunbelt
and/or its automotive affiliates and subsidiaries.
9. SOLE AGREEMENT OF THE PARTIES
There are no prior agreements or understandings, either oral or written, between
the parties affecting this Agreement, except as otherwise specified or referred
to in this Agreement. No change or addition to, or deletion of any portion of
this Agreement shall be valid or binding upon the parties hereto unless approved
in a writing signed by an officer of each of the parties hereto.
10. SEVERABILITY
If any provision of this Agreement should be held invalid or unenforceable for
any reason whatsoever, or conflicts with any applicable law, this Agreement will
be considered divisible as to such provision(s), and such provision(s) will be
deemed amended to comply with such law, or if it (they) cannot be so amended
without materially affecting the tenor of the Agreement, then it (they) will be
deemed deleted from this Agreement in such jurisdiction, and in either case, the
remainder of the Agreement will be valid and binding.
11. NO IMPLIED WAIVERS
The failure of either party at any time to require performance by the other
party of any provision herein shall in no way affect the right of such party to
require such
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performance at any time thereafter, nor shall any waiver by any party of a
breach of any provision herein constitute a waiver of any succeeding breach of
the same or any other provision, nor constitute a waiver of the provision
itself.
12. CONCURRENCE AND ACKNOWLEDGMENT
Sunbelt acknowledges that NMC's policies and standards are prepared by NMC based
upon NMC's evaluation of the marketplace and other factors, and that NMC may
amend its policies and standards from time to time. Sunbelt further agrees that
it will not interfere in the day-to-day operations of Dealer, and will neither
take, nor permit Dealer to take actions inconsistent with NMC's policies or
Dealer's or Dealer Principal's obligations as set forth in the applicable Sales
and Service Agreement or other executed agreements.
13. APPLICABLE LAW
This Agreement shall be governed by and construed according to the laws of the
State of California. The parties to this Agreement acknowledge that it is not
a "Dealer" or "Franchise" Agreement, is not governed by State or Federal
Manufacturer/Dealer laws, and that it does not need to be filed with any
Governmental or Administrative agencies under these laws.
14. BENEFIT
This Agreement is entered into by and between NMC and Sunbelt for their sole and
mutual benefit. Neither this Agreement nor any specific provision contained in
it is intended or shall be construed to be for the benefit of any third party.
15. NOTICE TO THE PARTIES
Any notices permitted or required under the terms of this Agreement shall be
directed to the following respective addresses of the parties, or if either of
the parties shall have specified another address by notice in writing to the
other party, then to the address last specified:
NISSAN MOTOR CORPORATION IN U.S.A.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Manager, Multiple Market and Public Ownership
Sunbelt Automotive Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
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16. DISPUTE RESOLUTION
The parties acknowledge that, at the state and federal level, various courts and
agencies would, in the absence of this Section 16, 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. l 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").
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 Sunbelt. 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 Sunbelt 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, OR ANOTHER
PROGRAM AGREED TO BY THE PARTIES, 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.
17. INDEMNITY
Sunbelt hereby agrees to indemnify and hold harmless, NMC, its officers,
directors, affiliates and agents, and each person who controls NMC 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
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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 Sunbelt
of any securities.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SUNBELT AUTOMOTIVE GROUP, INC. NISSAN MOTOR CORPORATION INC.
U.S.A.
By: By:
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Its: Its:
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