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EXHIBIT 10.66
NISSAN PUBLIC OWNERSHIP ADDENDUM
This Nissan Public Ownership Addendum (the "Addendum") is entered into effective
the date last set forth below by Nissan Motor Corporation in U.S.A. ("Nissan" or
"Seller") and [Dealer Name] ("Dealer Common Name" or "Dealer"]. In consideration
of the agreements and mutual covenants set forth herein, and other good and
valuable consideration, the receipt and sufficiency which is hereby
acknowledged, the parties hereto agree as follows:
1. THE PUBLIC OWNERSHIP ADDENDUM
The Public Ownership Addendum is an Addendum to, supplements and modifies the
Nissan Dealer Sales and Service Agreement between Nissan and Dealer (the "Dealer
Agreement"), including the Standard Provisions thereto (the "Standard
Provisions"). To the extent that this Addendum conflicts with the Dealer
Agreement, the Addendum controls and shall govern the relationship between the
parties. The Dealer Agreement, to the extent not modified or amended, remains in
full force and effect.
2. DEFINITIONS
The parties agree that the following terms, as used in the Addendum and the
Dealer Agreement shall be defined exclusively as set forth below.
"NISSAN PRODUCTS" shall mean Nissan Vehicles, Genuine Parts and Accessories,
Nissan Security+Plus and such other products and services offered by Nissan to
Dealer and designated in writing by Nissan as a Nissan Product.
"DEALER PRINCIPAL" shall mean the person named in the Final Article of the
Dealer Agreement as "Principal Owner" upon whose personal qualifications,
expertise, integrity, experience, ability and representations Nissan has relied
in entering into this Addendum, and any successor approved in writing by Nissan.
For purposes of this Addendum, the terms "Dealer Principal" and "Principal
Owner" are used interchangeably.
"BUSINESS PLAN" shall mean the written plan meeting Nissan's approval that is
prepared and executed by the Dealer and that contains Dealer's plan and
commitment to develop its business throughout the PMA, including but not limited
to its plan and commitment with respect to organizational, operational,
financial, succession and other issues as well as certain standards on which its
performance hereunder will be evaluated.
3. OWNERSHIP
This Agreement has been entered into by Nissan in reliance upon the commitment,
representation, and agreement of Dealer to provide the personal services of
Dealer Principal and Executive Manager; and in reliance upon the representations
and agreements of Dealer as follows: i) Dealer represents that PUBLIC COMPANY
owns 100% of HOLDING COMPANY, (if applicable) and PUBLIC COMPANY will, at all
times during the term of this Addendum, exercise full management and control of
HOLDING COMPANY; ii) Dealer represents that
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HOLDING COMPANY owns 100% of Dealer and will, at all times during the term of
this Addendum, exercise full management and control of Dealer.
In view of the fact that the Dealer Agreement and this Addendum is a personal
services agreement, and in view of its objectives and purposes, this Addendum
and the rights and privileges conferred on Dealer hereunder are not assignable,
transferable or salable; and no property right or interest herein is or shall be
deemed to be sold, conveyed or transferred. Dealer agrees, on behalf of itself,
PUBLIC COMPANY, and HOLDING COMPANY, that any change in the ownership of Dealer
other than specified herein requires the prior written consent of Nissan, if
Dealer desires to remain an Authorized Nissan Dealer. Dealer agrees that,
without the prior written consent of Nissan: i) No sale, pledge, hypothecation
or other transfer of any of the capital stock or ownership interest of Dealer or
HOLDING COMPANY will be made. ii) Dealer or HOLDING COMPANY will not be merged
with or into, or consolidated with, any other entity without Nissan's prior
written consent, nor will the principal assets necessary for the performance of
Dealer's obligations under this Addendum or the Dealer Agreement be sold,
transferred or assigned without Nissan's prior, written consent. Dealer and
HOLDING COMPANY represent that no capital stock, or securities convertible into
capital stock, of Dealer or HOLDING COMPANY will be issued, sold or otherwise
transferred by Dealer and HOLDING COMPANY directly or indirectly to any
automobile manufacturer, automobile distributor, or potential competitor of
Seller, or any affiliate of any of the foregoing.
If any person or entity acquires more than 20% of PUBLIC COMPANY'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"), Dealer must terminate the Dealer Agreement or transfer Dealer's
principal assets or 100% of the outstanding stock of Dealer to a third party
acceptable to Nissan unless, within 90 days after notification of Nissan's
determination, the Adverse Person's ownership interest is reduced to less than
20%.
The parties to this Addendum expressly agree that, while changes in the
ownership of PUBLIC COMPANY and HOLDING COMPANY may not be entirely within the
control of Dealer, in light of the personal services nature of the Dealer
Agreement and Nissan's substantial interest in the owners of its dealers and
distribution network, and in consideration of Nissan's willingness to enter into
this Public Ownership Addendum with dealer, any transaction involving the
ownership and stock of PUBLIC COMPANY and HOLDING COMPANY which violates the
provisions of this Section 3 of this Addendum shall constitute a substantial and
material breach of the Dealer Agreement and this Addendum and grounds for
termination of the Dealer Agreement and this Addendum.
4. MANAGEMENT
The Dealer Agreement and this Addendum have been entered into in reliance on the
following representations and agreements of Dealer that: i). The Dealer
Principal of Dealer will, subject to any other obligations set forth in the
Dealer Agreement and this Addendum, devote his/her professional efforts to the
business operations of Dealer and the entity for which he/she is
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responsible. ii) Executive Manger will devote his full time and professional
efforts to the affairs of Dealer. iii) The Officers and Directors of Dealer are
set forth in Schedule "A".
Nissan 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 their mutual the purposes and objectives. The Dealer Agreement
and Addendum have been entered into by Nissan in reliance upon, and in
consideration of, among other things, the following representations and
agreements of PUBLIC COMPANY, HOLDING COMPANY and Dealer, that: i) The Dealer
Principal and the Executive Manager shall have full and complete control over
the Dealership Operations, subject to the powers of the Board of Directors of
Dealer, to manage the business and affairs of Dealer, and at all times the
Dealer Principal shall be a member of the Board of Directors of Dealer and the
Executive Manager shall be an officer of Dealer. ii) The Board of Directors of
Dealer shall delegate the day to day management of the Dealership Operations to
the Executive Manager. The Board of Directors of Dealer will not exercise any
extraordinary powers or interfere unduly in the day-to-day Dealership
Operations. iii) Executive Manager, subject to any other obligations set forth
in the Dealer Agreement, shall be physically present at the Dealership
Facilities on a full-time basis. iv) Dealer acknowledges and agrees that, in
view of the increased responsibilities of the Dealer Principal of Dealer, Nissan
has and will apply heightened standards with respect to the personal, business
and financial qualifications, expertise, reputation, integrity, experience and
ability of a proposed Dealer Principal.. v) Nissan may from time to time develop
standards and/or procedures for evaluating the performance of Dealer. Nissan
may, from time to time, evaluate the performance of the Dealer and will advise
Dealer, the Dealer Principal and the Executive Manager of the results of such
evaluations.
5. TERM
This Addendum and the Dealer Agreement shall have a term commencing on its
effective date and continuing for a term of five years unless sooner terminated
in accordance with the provisions of the Dealer Agreement and this Addendum. .
Should Dealer be in full compliance with its obligations under the Dealer
Agreement and this Addendum at the end of this term, Dealer will be offered a
new Dealer Agreement and Public Ownership Addendum, in the form then in use by
Nissan.
6. BUSINESS PLAN
Dealer and Nissan shall periodically execute a Business Plan in the form
specified in Nissan's Business Planning Process Workbook that describes how
Dealer will fulfill its sales, service, customer relations, marketing and other
commitments hereunder. The Business Plan is subject to Nissan's approval, is an
essential part of the Dealer Agreement and Public Ownership addendum and is
hereby incorporated in and made a part of this Addendum and the Dealer
Agreement.
The Business Plan shall include the following elements: i) a statement of
Dealer's legal and financial structure, including capitalization, line of credit
and equity ownership; ii) the sales, service, customer relations, marketing and
other standards on which Dealer's performance will
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be evaluated; iii.) a detailed organizational structure and staffing plans for
the dealer; iv) specific plans for maximizing owner loyalty and customer
satisfaction; v) advertising, merchandising, and marketing plans; vi)
successorship, including the identity of the proposed successors to Dealer,
Dealer Principal (Principal Owner) and/or Executive Manager; and vii) other
standards or plans as agreed by Nissan and dealer. The standards on which
dealer's sales performance will be evaluated will include (i) market share
objectives for Nissan products set by the parties, and (ii) sales penetration
achieved by dealer in each of the various segments in which Nissan vehicles
compete.
Dealer shall review and update its Business Plan annually, or more often if
needed, and submit it to Nissan for review and approval. If Nissan determines
that changes to the proposed Business Plan are necessary, Dealer will make such
changes and resubmit the proposed Business Plan to Nissan. The updated business
plan shall (i) analyze Dealer's performance relative to the objectives,
standards, and plans set forth in the business plan for the preceding year or
other period, (ii) identify any deficiencies in Dealer's performance, and (iii)
specify the steps that Dealer will take to remedy such deficiencies.
If, based on the evaluation thereof made by Nissan, Dealer shall fail to
substantially fulfill its responsibilities with respect to: i) the
implementation of the plans set forth in the Business Plan, including but not
limited to any deviation therefrom; ii) the performance of its sales, service,
customer relations or other obligations based on the standards established
therefor in the Business Plan; or iii) any other material responsibilities
assumed by Dealer, Nissan will notify Dealer of such failure and will review
with Dealer the nature and extent of such failure and the reasons which, in
Nissan's opinion, account for such failure. Thereafter, Nissan will provide
Dealer with a reasonable opportunity to correct the failure. If Dealer fails to
make substantial progress towards remedying such failure before the expiration
of such period, Nissan may terminate the Dealer Agreement, such termination to
be effective at least sixty (60) days after notice is given
7. OTHER DEALER RESPONSIBILITIES
A. BRANDING AND BUSINESS NAME: Dealer shall actively and effectively promote
the "Nissan" name. Under no circumstances shall the name "Nissan" be
subordinated to or promoted less aggressively than any other name (e.g., "PUBLIC
COMPANY") by Dealer.
B. FINANCIAL AND OPERATIONAL REPORTING: Dealer shall furnish to Nissan annual
reviewed financial statements and, upon demand, shall furnish annual certified
financial statements, and otherwise disclose to Nissan in a format satisfactory
to Nissan the financial and operational results of Dealer's Nissan business.
C. EXAMINATION AND AUDIT: Nissan shall be entitled, 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 Dealer,
HOLDING COMPANY AND PUBLIC COMPANY relating to the business, ownership or
operations of Dealer.
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D. DISCLOSURE OF FINANCIAL INFORMATION TO AFFILIATED COMPANIES: Nissan shall
be entitled to disclose to and receive from affiliated companies, including but
not limited to Nissan Motor Acceptance Corporation, all financial statements and
reports provided by Dealer, HOLDING COMPANY and/or PUBLIC COMPANY
8. DISPUTE RESOLUTION PROCESS
A. EXCLUSIVE REMEDY: The parties acknowledge that, at the state and federal
levels, various courts and agencies would, in the absence of this Paragraph 8,
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. ss.ss. 1 et seq.), NISSAN, ON THE ONE HAND, AND DEALER, HOLDING
COMPANY AND PUBLIC COMPANY, ON THE OTHER HAND, AGREE THAT THE DISPUTE RESOLUTION
PROCESS OUTLINED IN THIS PARAGRAPH 12, 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 PUBLIC OWNERSHIP ADDENDUM, THE
DEALER AGREEMENT OR 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. If Mediation does not resolve the
Dispute to their mutual satisfaction, the Dealer or Nissan can submit the
Dispute to Binding Arbitration. Section 16 of the Standard Provisions is deleted
in its entirety.
B. MEDIATION Dealer or Nissan can submit a Dispute to Mediation. Mediation is
conducted by a panel consisting of a Nissan representative designated by Nissan,
a Dealer representative designated by Dealer, and an independent professional
mediator chosen by the parties' representatives. The Mediation Panel will
evaluate each position and recommend a solution. This recommended solution is
not binding.
C. BINDING ARBITRATION: 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, with the prevailing party to recover its
costs and attorneys fees from the other party. all awards of the arbitration are
binding and non-appealable except as otherwise provided in the United States
Arbitration Act. Judgment upon any award rendered by the arbitrator(s) may be
entered and enforced in any court having jurisdiction.
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9. RELEASE
Dealer hereby releases Nissan from any and all claims and causes of action that
they or any of them may have against Nissan for money damages or other relief
relating to or arising out of any event occurring prior to the execution of the
Addendum, except for any accounts payable by Nissan to Dealer in connection with
the provision of any services under the Dealer Agreement and any claim described
in Section 11.A.1 of the Standard Provisions. In connection with this release,
Dealer expressly acknowledges and waive their respective rights under California
Civil Code, Section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
10. EXCLUSIVITY AND RIGHT OF FIRST REFUSAL
A. EXCLUSIVITY: The additional provisions set forth in Attachment "A" --
"Exclusivity Provisions" -- are hereby incorporated in and made a part of this
Addendum and Dealer Agreement.
B. RIGHT OF FIRST REFUSAL: The additional provisions set forth in Attachment
"B" -- "Right of First Refusal" -- are hereby incorporated in and made a part of
this Addendum and Dealer Agreement.
11. SPECIAL CONDITIONS
WITNESS WHEREOF, the parties have executed this Nissan Addendum in triplicate as
of _______________________________, _______________, at Carson, California.
[DEALER]: NISSAN:
By: By:
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Title: Title:
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ATTACHMENT A
TO
NISSAN PUBLIC OWNERSHIP ADDENDUM
EXCLUSIVITY PROVISIONS
In order for Dealer to maintain competitive dealership facilities
to effectively market Nissan Products, Dealer hereby agrees to comply at all
times hereunder with the following provisions (hereinafter "Exclusivity
Provisions").
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. 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
incident 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.
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.
e) Dealer agrees that under Article Third of the Agreement and
Section 15 of the Standard Provisions Seller may reasonably
require any proposed buyer of Dealer's assets to agree to
identical Exclusivity Provisions as a condition of Seller's
consent to the change of ownership.
f) Any failure by Dealer to abide by the foregoing subparts (a)
through (e) shall constitute a material breach of this Agreement
warranting its termination, and shall constitute "good cause" for
termination.
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ATTACHMENT B
TO
NISSAN PUBLIC OWNERSHIP ADDENDUM
RIGHTS OF FIRST REFUSAL
DEALERSHIP ASSETS OR OWNERSHIP INTERESTS
Whenever Dealer proposes to sell its principal assets or the
owners of Dealer propose to sell a majority ownership interest in
Dealer, in addition to its rights under Articles Third and Fourth
of the Dealer Agreement and Section 15.B of the Standard
Provisions, Nissan shall have the right and option to purchase the
dealership assets or ownership interests pursuant to this
Paragraph 10.
i. If Nissan chooses to exercise its option, it must do so in
its written refusal to consent to the proposed sale or
transfer pursuant to Section 15.B. Dealer agrees not to
complete any proposed change or sale prior to the
expiration of the period for exercise of Nissan's option
and without Nissan'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
Nissan's notice exercising its option.
ii. After being exercised, Nissan's option may be assigned to
any party, and Nissan hereby agrees to guarantee the full
payment of the purchase price by such assignee. Nissan's
rights under this Paragraph 10 shall be binding on and
enforceable against any assignee or successor in interest
of Dealer or purchaser of Dealer's assets. Nissan shall
have no obligation to exercise its rights hereunder.
iii. If Dealer has entered into a bona fide written buy/sell
agreement respecting its Nissan dealership, Nissan's right
under this Paragraph 10 shall be a right of first refusal,
enabling Nissan to assume the prospective purchaser's
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. Nissan
may request and Dealer agrees to provide all other
documents relating to Dealer and to the proposed transfer,
including, but not limited to, those reflecting any other
agreements or understandings between the parties to the
buy/sell agreement. Nissan shall have ninety (90) days from
its receipt of all such documents in which to exercise its
right of first refusal hereunder. If Dealer refuses either
to provide such documentation or to state in writing that
no such documents exist, it shall be presumed that the
agreement is not bona fide.
iv. In the absence of a bona fide written buy/sell agreement,
Nissan shall have the option, but no obligation, under this
Paragraph 10 to purchase the
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principal assets of Dealer utilized in the Dealership
Operations, including real property and leasehold interest,
and to terminate this Addendum 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 of Dealer shall include the right to
lease the Dealership Facilities. The purchase price of
Dealer's assets shall be at their fair market value as a
going concern as negotiated by the parties and the other
terms of sale shall be those agreed by Dealer and Nissan.
If Dealer and Nissan are unable to reach a negotiated
settlement in a reasonable time, the price and other terms
of sale shall be established by arbitration pursuant to the
Dispute Resolution Process established in Paragraph 12
hereof. If Nissan determines that the buy/sell agreement is
not bona fide, Nissan will so notify Dealer. Dealer shall
have ten (10) days from its receipt of such notice within
which to withdraw its proposal. Nissan's exercise of its
rights hereunder shall be null and void if Dealer withdraws
its proposal within such time period.
v. Dealer shall transfer the affected property by Warranty
Deed conveying marketable title free and clear of liens,
claims, mortgages, encumbrances, tenancies and occupancies.
The Warranty Deed shall be in proper form for recording and
Dealer shall deliver complete possession of the property at
the time of delivery of the Deed. Dealer shall also furnish
to Nissan 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.
REAL PROPERTY
Whenever Dealer proposes to sell or lease any of its Dealership
Facilities and/or Dealership Locations, in addition to its rights
under Article Third and Fourth of the Dealer Agreement and Section
15.B of the Standard Provisions, Nissan shall have the right and
option to purchase or lease said Dealership Facilities and/or
Dealership Locations pursuant to this Paragraph 10.B.
i) If Nissan chooses to exercise its right of first refusal,
it must do so by written notice delivered to Dealer within
ninety (90) days of Nissan'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 Nissan's right of first
refusal and without Nissan's prior written consent, and
agrees to allow Nissan to perform an environmental study of
the property. Dealer also agrees to furnish to Nissan
copies of any easements, licenses, environmental studies or
other documents affecting 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 Nissan's notice exercising its right of first refusal.
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ii) After being exercised, Nissan's right to purchase or lease
may be assigned to any party, and Nissan hereby agrees to
guarantee the full payment of the purchase price or the
rental payment by such assignee. Nissan's rights under this
Paragraph 10.B shall be binding on and enforceable against
any assignee or successor in interest of Dealer or
purchaser of Dealer's assets. Nissan 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 CMO Addendum
by Dealer.
iii) Dealer shall transfer the affected property by Warranty
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 assign any permit or licenses which are
necessary for the conduct of the Dealership Operations.
iv) In addition to any other rights Nissan may have at law, in
equity or hereunder, any sale or lease of the Dealership
Facilities and/or the Dealership Locations in violation of
this right of first refusal shall be voidable by Nissan.