EXHIBIT 10.68
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 Seller, 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 Smart Choice Automotive Group, Inc. ("SMCH"), Smart Cars, Inc. ("Smart Cars,
Inc."), and the Dealer. In addition to Dealer, Seller intends to look to SMCH,
Smart Cars, Inc., 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, SMCH, Smart Cars, Inc.,
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 Accessories
in accordance with Section 5 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and 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 tile Dealer Principal and Executive Manager named in the
Final Article of this Agreement and in reliance upon the representations and
agreements of SMCH, Smart Cars, Inc., and Dealer as follows:
(i) Smart Cars, Inc., 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 officers of Dealer are as set forth in attached Schedule "A".
(iii) Smart Choice Automotive Group Inc., ("SMCH") owns 100% of the
outstanding stock of Smart Cars, Inc., and First Choice Stuart 1, Inc.
("Stuart" or "Dealer"). (see Attachment "A" attached).
(b) Changes in Ownership. In view of tile 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
SMCH, Smart Cars, Inc., and Dealer, and no property right or interest is or
shall be deemed to be sold, conveyed or transferred to SMCH, Smart Cars, Inc.
and Dealer under this Agreement. SMCH, Smart Cars, Inc., Dealer, the Dealer
Principal and the Executive Manager agree that any change in tile ownership of
Dealer or in Smart Cars, Inc., 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:
(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) no sale, pledge, hypothecation or other transfer of any of the
currently outstanding capital stock of Smart Cars, Inc., and Dealer will be made
and no additional shares of capital stock, partnership interest or securities
convertible into shares of capital stock, of Smart Cars, Inc., and Dealer will
be issued or sold.
(iii) neither Dealer nor Smart Cars, Inc., will be merged with or into,
or consolidate 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.
(iv) Smart Cars, Inc., 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 Smart Cars, Inc., and Dealer, the
issuance or sale of additional shares of capital stock, partnership interest or
securities convertible into shares of capital stock, of Smart Cars, Inc., and
Dealer, or the merger of Smart Cars, Inc., and Dealer with or into, or the
consolidation of Smart Cars, Inc., and Dealer with any other entity, if as a
result of such transaction, the Smart Cars, Inc., and Dealer will cease to own
at least 100% of the capital stock or interest of Dealer.
(v) If any person or entity, acquires more than 20% of SMCH'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"), SMCH 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%.
Any transaction involving the capital stock of Smart Cars, Inc., and
Dealer which does not violate subparagraph (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 by 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 Smart Cars, Inc., (other than changes in the
ownership of Smart Cars, Inc. 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. SMCH, Smart Cars, Inc., and
Dealer further agree that they will not challenge, contest, dispute, or
litigate:
(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.
The stock certificates representing the stock or analogous instrument
demonstrating ownership of Dealer and Smart Cars, Inc., will have legends which
notify a potential purchaser of such stock of the limitations on transfer set
forth in this Article Third. Dealer, and Smart Cars, Inc. represent and agree
that none of Smart Cars, Inc., or Dealer will register their capital stock, or
securities convertible into their capital stock for sale or resale to the public
under any state or federal securities laws. Smart Cars, Inc., and Dealer agree
that no capital stock, or securities convertible into capital stock, of Dealer
will be issued, sold or otherwise transferred by Dealer and Smart Cars, Inc.,
directly or indirectly, to any automobile manufacturer, automobile distributor,
any motor vehicle dealer, any other person who could reasonably be considered a
competitor or potential competitor of Seller, or any affiliate of any of the
foregoing. However, with the exception of the immediately preceding sentence and
the stock restriction set forth in Article Third (b)(v), Nissan does not intend
to restrict the transfer of equity or interests in SMCH.
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 Smart Cars, Inc., and Dealer that:
(i) Executive Manager will devote 100% of his time to the affairs of
Dealer.
(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 SMCH, Smart Cars, Inc., and Dealer, that:
(i) There must be an approved Executive Manager, acceptable to Nissan,
employed by Dealer. As long as Xxxxx is employed by Smart Cars, Inc., and XxXxxx
or Executive Manager 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 Xxxx X. Xxxxx and Executive Manager will, so long as such
replacements are employed by SMCH, Smart Cars, Inc., 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 management of
the Dealership Operations to the Executive Manager, and SMCH and Smart Cars,
Inc., 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 Smart Cars, Inc., 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. In
addition, SMCH, Smart Cars, Inc., and Dealer agree that no chief executive
officer, or person performing services and having responsibilities similar to a
chief executive officer, of Smart Cars, Inc., will be appointed, directly or
indirectly, without the prior written consent of Seller. Dealer shall give
Seller prior notice of any proposed change in Dealer Principal or Executive
Manager or the appointment of any chief executive or similar officer of Smart
Cars, Inc., and immediate notice of the death or incapacity of any Dealer
Principal or Executive Manager. No change in Dealer Principal or Executive
Manager and no appointment of a chief executive or similar officer of Smart
Cars, Inc. 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 Smart Cars, Inc., 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 or 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 management
of Dealer and Smart Cars, Inc., and agrees that a change without such consent
from Seller is void, of no force and effect, and grounds for termination. SMCH,
Smart Cars, Inc., and Dealer further agree that they will not challenge,
contest, dispute, or litigate:
(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 or the appointment of any chief
executive or similar officer of Smart Cars, Inc.; SMCH and Smart Cars, Inc.,
agree 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, Executive Manager
or chief executive or similar officer of Smart Cars, Inc., must possess personal
qualifications, expertise, reputation, integrity, experience and ability which
are, in the opinion of Seller, satisfactory. Seller will determine whether, in
its 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 and any chief
executive or similar officer of Smart Cars, Inc., 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 quarterly 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-45/9-88, 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.
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, SMCH, Smart Cars, Inc. and Dealer jointly and severally,
represent 10 Seller that:
(i) All of the documents and correspondence provided to Seller by SMCH,
Smart Cars, Inc., 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,
SMCH, Smart Cars, Inc., and Dealer, jointly and severally, agree with Seller
that:
(i) Dealer will at all times be involved in the operation of the Nissan
dealership currently operated by it and Dealer will not conduct any other type
of business.
(ii) No distributions will be made to the stockholders or partners of
Dealer and Smart Cars, Inc., if such distributions would cause Dealer to fail to
meet any of the Guides and Standards relating to the capitalization of Dealer.
In particular, Smart Cars, Inc., 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) SMCH, Smart Cars, Inc., and Dealer hereby, jointly and severally,
indemnify and hold harmless, Seller, its officers, directors, affiliates and
agents, and each person who controls Seller within he 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
SMCH, Smart Cars, Inc., 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.
(iv) One of the conditions to the effectiveness of this Agreement by
Seller is the delivery of an opinion of counsel to all of the parties hereto
(other than Seller) to the effect that this Agreement has been duly executed and
delivered by each of the parties thereto (other than Seller) and is the legal,
valid and binding obligation of each of such parties enforceable in accordance
with its terms.
ARTICLE TENTH: Right of First Refusal, Exclusivity
A. Seller's Right of First Refusal, Exclusivity
In addition to its rights under this Agreement, in the event that Smart
Cars, Inc., 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), 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 arid 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 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 Smart Cars, Inc., and the other terms of sale shall be those
agreed by Seller, Dealer and Smart Cars, Inc.,
(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 and
Smart Cars, Inc., Dealer and Smart Cars, Inc., 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 Tenth. 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 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, 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.
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.
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.
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 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, Smart
Cars, Inc., SMCH, Xxxxx 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 Smart Cars, Inc., SMCH,
Xxxxx 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 1 2.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 Director level and a duplicate original thereof is delivered
personally or by mail to the Dealership Location. This Agreement shall bind
Dealer and the other parties hereto only when it is signed by: a duly authorized
officer or executive of Dealer or such party if a corporation; one of the
general partners of Dealer or such party if a partnership; or Dealer or such
party if an individual.
ARTICLE THIRTEENTH: Amendments to Standard Provisions
(a) Section 1.0 of the Standard Provisions is hereby amended to read as
follows:
"0. '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 6.1 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 arid
supporting data of SMCH, Smart Cars, Inc., and Dealer relating to the business,
ownership or operations of Dealer."
(c) Section 1 2.A.(I) 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 Smart Cars, Inc., Inc.,
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; 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,
Smart Cars, Inc., Inc., or SMCH and any third party or between the owners and
management personnel of Dealer relating to the management or ownership of Dealer
and Smart Cars, Inc., develops or exists which, in the reasonable judgment of
Seller, tends to adversely affect the conduct of the Dealership Operations or
the interests of Dealer or 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, Smart Cars, Inc., and/or
SMCH, or any of their owners or management occurs, which substantially impairs
the reputation or financial standing of Dealer or any of its management
subsequent to the execution of this Agreement:"
(g) Exhibits A and B are hereby incorporated by reference.
ARTICLE FOURTEENTH: Branding I Business Name
The parties acknowledge and agree that Dealer shall do business as
"Stuart Nissan." 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 "Stuart 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. "SMCH") 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 is the higher of
national, regional, state or DMA average, adjusted for segment popularity, 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 the higher of
national, regional, state or DMA average as set forth in the Business plan.
(c) 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 (c),
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 TN ANY COURT HAVING JURISDICTION.
(d) 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;
(e) 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, 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.
FINAL ARTICLE
The Dealer is First Choice Stuart 1, Inc., a corporation formed under the laws
of the State of Florida doing business as Stuart Nissan. Dealer is located in
Stuart, Florida.
The other parties to this Agreement are SMART CARS, INC. a corporation
incorporated under the laws of the State of Florida and SMART CHOICE AUTOMOTIVE
GROUP, INC. a corporation incorporated under the laws of the State of Florida,
and Xxxx X. Xxxxx.
The Dealer Principal is Xxxx X. Xxxxx.
The Executive Manager is Xxxxxx XxXxxx.
Expiration Date: August 19, 2002
Working Capital Guide Requirement: $ 492,300
Net Worth Guide Requirement: $ 746,800
Flooring Line: $ 2 ,031,115
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate effective as of the 29th day of August, 1997 at Carson, California.
SELLER:
NISSAN DIVISION
NISSAN MOTOR CORPORATION IN USA
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------- -------------------------
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx
Vice President Regional Vice President
SMART CHOICE AUTOMOTIVE GROUP, INC.
By: /s/ Xxxx X. Xxxxx
----------------------
Xxxx X. Xxxxx
Its: Chairman and CEO
SMART CARS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------
Xxxx X. Xxxxx
Its: President
FIRST CHOICE STUART 1, INC.
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Its: Dealer Principal
Attachment A
First Choice Stuart 1, Inc.
Nissan Dealer Term Sales & Service Agreement
First Choice Stuart 1, Inc.
100% Owner
Smart Cars, Inc.
100% Owner
Smart Choice Automotive Group, Inc.
See Schedule B for Ownership
Schedule A
First Choice Stuart 1, Inc.
Officers
President Xxxx X. Xxxxx
Vice President Xxxxxx XxXxxx
Vice President Xxxxxx X. Xxxxxxx
Secretary Xxxxx Xxxx Xxxxxxxxxx, Jr.
Treasurer Xxxx X. Xxxxx
Schedule B
Smart Choice Automotive Group
Major Stockholders
Shareholder Shares % of Total
----------- ------ ----------
Xxxxx X. Xxxxxx 575,375 6.7%
Xxxxxx X. Xxxxxx 588,694 6.8%
Xxxxxx Xxxxxx 588,695 6.8%
