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 natural persons and entities
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 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 Dealer wishes an
opportunity to qualify for a regular Nissan Dealer Sales and Service Agreement
for Nissan Products and understands that for that purpose Dealer first must
fulfill all of Dealer's undertakings hereinafter described.
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") and the individual named
in the Final Article of this Agreement as Executive Manager and the
representations of UAG Atlanta V, Inc., UAG and the Dealer. In addition to
Dealer, Seller intends to look to UAG Atlanta V, Inc., UAG, 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.
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
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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, UAG Atlanta V. 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) appoint 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
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Vehicles within Dealer's Primary Market Area in accordance with Section 3 of the
Standard Provisions;
(c) servicing Nissan Vehicles and for selling and servicing Nissan
Parts and Accessories in accordance with Section 5 of the Standard Provisions;
(d) building and maintaining consumer confidence in Dealer and in
Nissan Products in accordance with Section 5 of the Standard Provisions; and
(e) performance of the additional responsibilities set forth in this
Agreement, including those specified in Section 6 of the Standard Provisions.
ARTICLE THIRD: Ownership
(a) OWNERS. This Agreement has been entered into by Seller in
reliance upon and in consideration of, among other things, the personal
qualifications, expertise, reputation, integrity, experience, ability and
representations with respect thereto of the Dealer Principal and Executive
manager named in the Final Article of this Agreement and in reliance upon the
representations and agreements of UAG Atlanta V, Inc., UAG and the Dealer as
follows:
(i) UAG Atlanta V, 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 Executive Committee of Dealer is set forth in attached
Schedule "A".
(iii) The officers of Dealer are as set forth in attached Schedule
"A".
(iv) United Auto Group, Inc. ("UAG") owns 100% of the outstanding
stock of UAG Atlanta V, Inc. and Xxxxxxx Nissan, Inc., (see Attachment "A"
attached).
(b) CHANGES IN OWNERSHIP. In view of the fact that this is a
personal services agreement with the Dealer Principal and Executive Manager and
in view of its objectives and purposes, this Agreement and the rights and
privileges conferred on Dealer hereunder are not assignable, transferable or
salable by UAG Atlanta V, Inc. and Dealer, and no property right or interest is
or shall be deemed to be sold, conveyed or transferred to Dealer, UAG Atlanta V,
Inc. and Dealer under this Agreement. Dealer, UAG Atlanta V, inc., the Dealer
Principal and the Executive Manager agree that any change in the ownership of
Dealer, UAG Atlanta V, 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:
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(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 UAG Atlanta V, Inc. and Dealer will be
made and no additional shares of capital stock, partnership interest or
securities convertible into shares of capital stock, of UAG Atlanta V, Inc. and
Dealer will be issued or sold.
(iii) neither Dealer nor UAG Atlanta V, 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) UAG Atlanta V, 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 UAG Atlanta V, Inc. and
Dealer, the issuance or sale of additional shares of capital stock, partnership
interest or securities convertible into shares of capital stock, of UAG Atlanta
V, Inc. and Dealer, or the merger of UAG Atlanta V, Inc. and Dealer with or
into, or the consolidation of UAG Atlanta V, inc. and Dealer with any other
entity, if as a result of such transaction, the UAG Atlanta V, Inc. and Dealer
will cease to own at least 100% of the capital stock or interest of Dealer.
(v) If any person or entity, after the date of the initial public
offering, acquires more than 20% of UAG's common stock issued and outstanding at
any time and Nissan determines that such person or entity does not have
interests comparable with those of Nissan, or is otherwise not qualified to have
an ownership interest in a Nissan dealership (an "Adverse Person"), UAG 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 UAG Atlanta V, 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,
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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 UAG Atlanta V, Inc. (other than changes in the
ownership of UAG Atlanta V, 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. Dealer and UAG Atlanta V,
Inc. further agree that either 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 UAG Atlanta V, 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 UAG Atlanta V, Inc. represent and
agree that none of UAG Atlanta V. 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. UAG Atlanta V, 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 UAG
Atlanta V, 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 UAG.
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,
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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 UAG Atlanta V, Inc. and Dealer
that:
(i) each of Xxxxxx Xxxxx ("Olney") and Xxxxxxxxxx will, subject to any
other obligations set forth in this Agreement, devote 100% of their time to the
business and day-to-day operations of the entity for which they are responsible.
(ii) Olney 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 Dealer and UAG Atlanta V, Inc. that:
(i) Olney is currently employed as the Executive Manger of Dealer. As
long as Xxxxxxxxxx is employed by UAG Atlanta V, Inc., and Olney 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 Xxxxxxxxxx and
Xxxxx will, so long as such replacements are employed by UAG Atlanta V, 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 Dealers.
(ii) the Board of Directors of Dealer shall delegate the management of the
Dealership Operations to Olney and Dealer 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) Olney will, subject to any other obligations set forth in this
Agreement, 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
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and Executive Manager and in view of its objectives and purposes, Dealer and UAG
Atlanta V, 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, UAG Atlanta V, Inc. and Dealer
agree that no chief executive officer, or person performing services and having
responsibilities similar to a chief executive officer of UAG Atlanta V, Inc.
will be appointed, directly or indirectly, without the prior written consent of
Sellers. 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 UAG Atlanta V, 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 UAG Atlanta V, 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
UAG Atlanta V, 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 UAG Atlanta V, Inc. agree that a change without such consent from
Seller is void, of no force and effect, and grounds for termination. Dealer and
UAG Atlanta V, Inc. further agree that either 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 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
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officer of UAG Atlanta V, Inc., UAG Atlanta V, Inc. agrees to provide, in the
form requested by Seller and in a timely manner, all applications and
information customarily requested by Seller to evaluate the proposed change.
While Seller shall not unreasonably withhold its consent to any such change, it
is agreed that any successor Dealer Principal, Executive Manager or chief
executive or similar officer of UAG Atlanta V. 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 UAG Atlanta V, Inc., 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
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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. Olney 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-4S/9-88, as
amended in Article Thirteenth of the 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 is earlier termination in accordance with the provisions of this
Agreement, expiring on the earlier of: i) 18 months from the effective date of
the
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Agreement; or ii) The acquisition by UAG, or its subsidiaries or affiliates, of
another Atlanta metro Nissan Dealership. 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, Dealer and UAG Atlanta V, Inc., jointly and severally, represent to
Seller that:
(i) all of the documents and correspondence provided to Seller
by Dealer, UAG Atlanta V, Inc., UAG 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, Dealer and UAG Atlanta V, Inc., 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 UAG Atlanta V, 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, UAG Atlanta V, Inc. will not be
permitted to voluntarily redeem any of its preferred stock, if prior to and
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after giving effect to such redemption Dealer fails to meet any of the Guides
and Standards relating to capitalization of Dealer.
(iii) The UAG Atlanta V, 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 the meaning of
the Securities Act of 1933, as amended (the "Act"), from and against any and all
losses, claims, damages or liabilities, to which they or any of them may become
subject under the Act, the Securities Exchange Act of 1934, as amended, or any
other federal or state securities law, rule or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out of
the sale by the UAG Atlanta V, 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:
A. Right of First Refusal on Sale or Lease of Property to a Third
Party.
(a) In addition to its rights under Articles Third and Fourth and
Section 15 of the Standard Provisions, Dealer agrees that should Dealer seek to
sell or lease all or substantially all of the Approved Site to a third party for
use as a Nissan New Motor Vehicle Dealership, Seller shall have the additional
right and option, but not the obligation, to purchase or lease the Approved Site
pursuant to this Article Thirteenth. A sale or lease for use other than a
Nissan New Motor Vehicle Dealership is void.
(b) If Seller chooses to exercise its right of first refusal, it must
do so by written notice delivered to Dealer within 60 days of Seller's receipt
of notice of the proposed sale or lease by Dealer. Dealer agrees not to
complete any proposed sale or lease prior to the expiration of the period for
exercise of Seller's right of first refusal and without Seller's prior written
consent, and agrees to allow Seller to perform an environmental study of the
property. Such exercise shall be null and void if Dealer withdraws its sale or
lease proposal within thirty (30) days following Dealer's receipt of Seller's
notice exercising its right of first refusal.
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(c) After being exercised, Seller's right to purchase or lease may be
assigned to any party, and Seller hereby agrees to guarantee the full payment of
the purchase price or the rental payment by such assignee. Seller's rights
under this Article Thirteenth shall be binding on and enforceable against any
assignee or successor in interest of Dealer or purchaser of Dealer's assets.
Seller shall have no obligation to exercise its rights hereunder, and Seller may
rescind its offer if the property is determined to be contaminated pursuant to
an environmental study. Such contamination shall be deemed a breach of this
agreement by dealer.
(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.
B. 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 it
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 Approved Site shall be the Nissan line and make of
motor vehicles. Dealer shall not conduct any dealership operations for any
other make or line of vehicles from the Approved Site.
(b) Dealer shall sell and maintain a full line of Genuine Nissan
Parts and Accessories at the Approved Site and shall provide a full range of
automotive servicing for Nissan
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vehicles at the Approved Site 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 Approved Site other than the Nissan line.
(d) Dealer shall not install or maintain any sight at or near the
Approved Site 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 Approved Site.
C. Option to Purchase Dealership for Asset Value
Nissan shall have the option to purchase the Dealership for Asset
Value upon the occurrence of any of the following events: i) The expiration of
18 months from the effective date of this Agreement; or ii) The acquisition by
UAG or its subsidiary or affiliate of another Atlanta Metro area Nissan Dealer;
or iii) The negotiation of, or entry into an agreement for the sale of the
Dealership by UAG, UAG Atlanta V or Dealer during the Term of this Agreement.
In the event that Nissan exercises this option to purchase the Dealership, UAG
and Dealer would be responsible for the building and land at the Dealership
Facilities.
For purposes of this option, the term "Asset Value" shall mean the
fair market value of the Dealership's Genuine Nissan parts and special tools
only. In the event that Nissan exercises its option to Purchase the Dealership
in accordance with these provisions, Dealer and Nissan shall attempt, in good
faith, to agree on the Asset Value of the Dealership. If Dealer and Nissan are
unable for any reason to agree on the Asset Value of the Dealership within 30
days of Nissan's exercise of its Option to Purchase, Dealer and Nissan shall
each, within 10 days thereafter, select an appraiser and notify the other party
of the name, address and qualifications of such appraiser. If the two
appraisers agree on the Asset Value, the amount shall be binding upon Dealer and
Nissan. If the two appraisers are unable to agree upon the Asset Value of the
dealership within 15 days of their selection, the two appraisers shall select a
third appraiser to make the determination of Asset Value, which determination
shall be binding on Dealer and Nissan. The costs and expenses of any appraiser
selected by a party shall be borne solely by such party, and the costs and
expenses of a third appraiser shall be shared equally between the Dealer and
Nissan.
Dealer shall transfer the affected property free and clear of all
liens, claims and encumbrances.
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ARTICLE ELEVENTH: Breach by Dealer
In the event (i) that any of the representations and warranties of
Dealer, UAG Atlanta V, Inc., UAG, Xxxxxxxxxx or Xxxxx 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 UAG Atlanta V,
Inc., UAG, Xxxxxxxxxx or Olney in Articles Third, Fourth and Ninth of this
Agreement or upon the occurrence of any of the events warranting termination of
this Agreement as set forth in Section 12.A of the Standard Provisions, Seller
may terminate this Agreement, prior to the expiration date hereof, by giving
Dealer written notice thereof, such termination to be effective upon the date
specified in such notice, or such latter date as may be required by any
applicable statute with the effect set forth in Section 13 of the Standard
Provisions.
ARTICLE TWELFTH: Execution of Agreement
This Agreement, and any Addendum or amendment or notice with respect
thereto, shall be valid and binding on Seller only when it bears the signature
of either the President or an authorized Vice President of Seller and, when such
signature is a facsimile, the manual countersignature of an authorized employee
of Seller at the 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.O of the Standard Provisions is hereby amended to read
as follows:
"O. 'Principal Owner(s)' shall mean the persons named as Dealer
Principal in the Final Article of this Agreement upon whose personal
qualifications, expertise, integrity, experience, ability and representations
Seller has relied in entering into this Agreement."
(b) Section 6.I of the Standard Provisions is hereby amended to read
as follows:
"Seller shall have the right, at all reasonable times during regular
business hours, to inspect the Dealership Facilities and to examine, audit and
make and take copies of all records, accounts and supporting data relating to
the sale, sales reporting, service and repair of Nissan Products by Dealer.
Whenever possible, Seller shall attempt to provide Dealer with advance notice of
an audit or examination of Dealer's operations. Seller shall also have the
right, at all reasonable times during
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regular business hours and upon advance notice, to examine, audit and make and
take copies of all records, accounts and supporting date of UAG Atlanta V, Inc.
and Dealer relating to the business, ownership or operations of Dealer."
(c) Section 12.A.(1) of the Standard Provisions is hereby amended to
read as follows:
"(1) Any actual or attempted sale, transfer, assignment or
delegation, whether by operation of law or otherwise, by Dealer or UAG Atlanta
V, 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, or removal, resignation, withdrawal or
elimination from Dealer of Xxxxxxxxxx as President, or removal, resignation,
withdrawal or elimination from Dealer of Olney as Executive Vice President or
Executive Manager; provided, however, in each case, Seller shall give Dealer a
reasonable period of time within which to replace such person with an 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, UAG
Atlanta V, Inc., or UAG and any third party or between the owners and management
personnel of Dealer relating to the management or ownership of Dealer and UAG
Atlanta V, Inc. develops or exists which, in the reasonable judgment of Seller,
trends to adversely affect the conduct of the Dealership Operations or the
interests of Dealer or Seller; or"
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(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, UAG Atlanta V, Inc. and/or
UAG, 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: Facility Requirements
Based on the April 1996 Market Study, the existing facility must be expanded and
modernized to include the used vehicle sales building and service department
area in order to comply with current Nissan Motor Corporation facility
guidelines and improve customer service and accessibility.
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FINAL ARTICLE
The Dealer is Xxxxxxx Nissan, Inc., a corporation formed under the laws of the
_____________________. Dealer is located in ________________, Georgia.
The other parties to this Agreement are UAG Atlanta V, Inc., a corporation
incorporated under the laws of the _______________, UAG, a corporation
incorporated under the laws of the state of Delaware, Xxxx Xxxxxxxxxx
("Xxxxxxxxxx") and Xxxxxx Xxxxx ("Xxxxx").
The Dealer Principal is Xxxxxxxxxx.
The Executive Manager is Olney.
Expiration Date: May 1, 1998
Working Capital Guide Requirement: $ 600,700
Net Worth Guide Requirement: $ 809,425
Flooring Line: $1,783,850
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate effective as of the _____ day of ____________, 1996 at Carson,
California.
SELLER:
NISSAN DIVISION
NISSAN MOTOR DIVISION CORPORATION IN USA
By:___________________________ By:__________________________
Its:__________________________ Its:_________________________
UAG ATLANTA V, INC.
By:____________________________
Its:____________________
XXXXXXX NISSAN, INC.
By:____________________________
Its:_____________________
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XXXX XXXXXXXXXX
______________________________
XXXXXX XXXXX
______________________________
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SCHEDULE A
UNITED AUTO GROUP, INC.
STOCK OWNERSHIP AS OF FEBRUARY 29, 1996
--------------------------------------------------------------------------------
Name of the Shareholder Class Number of Percentage
Shares Owned
--------------------------------------------------------------------------------
Trade Auto Holdings, Inc. Common 2,816.227 40.30%
f/k/a '21' Auto Holdings, Inc.
--------------------------------------------------------------------------------
Xxxxx, Xxxx Common 156,250 2.24%
--------------------------------------------------------------------------------
Aeneas Venture Corporation Preferred 2,252,983 32.24%
--------------------------------------------------------------------------------
AIF II, L.P. Preferred 1,433,716 20.52%
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxx Preferred 79,858 1.14%
--------------------------------------------------------------------------------
Xxxxxxxxxx, Xxxx Preferred 19,964 .29%
--------------------------------------------------------------------------------
Xxxxxx, Xxxxxx Preferred 39,929 .57%
--------------------------------------------------------------------------------
Kroll, Juleps Preferred 79,858 1.14%
--------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx Preferred 4,259 .06%
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxx Preferred 4,259 .06%
--------------------------------------------------------------------------------
Xxxxx xxx-Xxxxx, Xxxxx Preferred 2,129 .03%
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxx Preferred 2,130 .03%
--------------------------------------------------------------------------------
Assu Venture Preferred 27,951 .40
--------------------------------------------------------------------------------
Natio Fonds Venture 2 Preferred 27,951 .40%
--------------------------------------------------------------------------------
Natio Vie Development Preferred 39,927 .57%
--------------------------------------------------------------------------------
-21-
--------------------------------------------------------------------------------
Total Common and 6,987,391 100%
Preferred
--------------------------------------------------------------------------------
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