<PAGE>
 
                                                                 EXHIBIT 10.3.12

                      NISSAN CONTIGUOUS MARKET OWNERSHIP
                      ----------------------------------                  
                           HOLDING COMPANY AGREEMENT
                           -------------------------

     This Nissan Contiguous Market Ownership Holding Company Agreement (the "CMO
     Holding Company Agreement") is entered into this 30th day of JUNE, 1997, by
     and among Nissan Motor Corporation in U.S.A. ("Nissan"), and FirstAmerica
     Automotive, Inc., ("FAA" or "Holding Company") concerning the commitments
     and obligations of FAA in respect to its subsidiaries, Smart Nissan, Inc.,
     ("Marin Nissan") and FAA Serramonte, Inc., ("Serramonte Nissan") and any
     other entities which FAA may acquire within the designated area described
     hereinafter as the "Peninsula CMO".

                                   RECITALS
                                   --------     

     WHEREAS, Nissan has developed a distribution network plan that seeks to
     create a Contiguous Market Ownership Area in the San Francisco Bay Area
     (the "Peninsula CMO");

     WHEREAS, Nissan recognizes this new distribution plan is to be implemented
     over time with consideration of existing dealers' rights;

     WHEREAS, FAA has approached Nissan with a request to develop the Peninsula
     CMO;

     WHEREAS, Nissan has advised FAA that Nissan would approve their acquisition
     of individual dealers, provided FAA satisfies Nissan's requirements for
     applicants; and Nissan has advised FAA that Nissan cannot make existing
     dealers sell or otherwise transfer their dealerships to FAA;

     WHEREAS, FAA acknowledges the rights of existing dealers, yet commits to
     use its best good faith and reasonable efforts to acquire dealerships
     within the Peninsula CMO, with an intent to form the complete Peninsula CMO
     marketing territory;

     WHEREAS, FAA acknowledges that Nissan's business concept for the CMO
     envisioned entering into one Nissan Dealer Sales and Service Agreement with
     one corporate entity for the entire CMO;

     WHEREAS, FAA, while affirming its commitment to implement Nissan's CMO
     concept in the Peninsula CMO, has requested, in order to accommodate their
     business purposes, that Nissan permit FAA to maintain the corporate
     entities they are creating (or subsequently will acquire or create) to form
     the CMO and that Nissan enter into separate, but related, dealer agreements
     with these entities;

     WHEREAS, FAA owns 100% of the stock of the subsidiary dealer corporation
     (currently Smart Nissan, Inc., and FAA Serramonte, Inc.).

     WHEREAS, Nissan has communicated its willingness to accommodate FAA's
     request subject to FAA's agreement to the terms and conditions set forth
     herein;

     WHEREAS, based on the foregoing, Nissan will enter into separate, but
     related dealer agreements with Marin Nissan and Serramonte Nissan in
     connection with the formation of the Peninsula CMO;
<PAGE>
 
     NOW, THEREFORE, in consideration of the agreements and mutual covenants set
     forth herein, and other good and valuable consideration, the receipt and
     sufficiency which is hereby acknowledged, the parties hereto agree as
     follows:

                                   AGREEMENT
                                   ---------     


1.   THE CMO HOLDING COMPANY AGREEMENT
     ---------------------------------


     FAA acknowledges that while, technically, the Peninsula CMO is comprised of
     separate dealer corporations, as a practical matter, and consistent with
     its intent as originally communicated, Nissan intends, and FAA agrees, that
     Nissan will treat these wholly-owned subsidiary dealer corporations, and
     their related Sales and Service Agreements, as part and parcel of one
     single CMO entity for all purposes under this and those separate
     Agreements. Specifically, the parties to this agreement acknowledge and
     agree that, while the Peninsula CMO is comprised of separate dealer
     corporations, Holding Company and Nissan will treat those dealers and their
     dealer agreements as one dealer with one agreement FOR ALL PURPOSES,
     consistent with the CMO concept reflected in the CMO Addenda to those
     dealer's agreements. Accordingly, with respect to allocation of vehicles,
     financial reporting, sales incentives, business plans, performance
     standards and evaluation and for all other purposes under the Sales &
     Service Agreements, Nissan will treat Marin Nissan, Serramonte Nissan, and
     any and all subsequently acquired or created dealer entities within the
     Peninsula CMO, as if they were one dealer operating within the Peninsula
     CMO. Similarly, defaults or breaches of the Dealer Sales & Service
     Agreement by either Marin Nissan or Serramonte Nissan will constitute a
     breach of both agreements. Holding Company shall cause Marin Nissan and
     Serramonte Nissan, and any subsequently acquired and/or created dealer
     entities, to cooperate fully in accomplishing the objectives and intent of
     the CMO addenda to their agreements, including the Business Plans and
     Market Area Plans incorporated therein, and this Holding Company CMO
     Agreement. Moreover, FAA agrees that it will exercise its control and
     ownership in ways consistent with this agreement and will not take any
     actions or allow its subsidiaries in the Peninsula CMO to take any action
     inconsistent with the intent of this Agreement.

     ONE AGREEMENT OBJECTIVE
     -----------------------

     FAA agrees that when reasonable business considerations permit FAA to merge
     Marin Nissan, Serramonte Nissan, or any subsequently acquired or created
     dealer entities acquired in the Peninsula CMO, FAA will merge the companies
     so as to achieve the joint business objective of one dealer company for the
     Peninsula CMO area.

     Until such time, however, Nissan will not enforce its policy and the
     contractual obligation that each and every dealer corporation appoint an
     exclusively dedicated Executive Manager as manager of the dealer
     corporation. Specifically, the appointment of a qualified Executive
     Manager, acceptable to Nissan, as the Executive Manager of all CMO Nissan
     dealerships will not be deemed a breach of the related dealer agreements.

2.   CMO HOLDING COMPANY AGREEMENT TERM
     ----------------------------------

     This Agreement shall have a term beginning with, running concurrent to, and
     expiring simultaneously as, the Nissan Dealer Term Sales and Service
     Agreements of all FAA owned

                                       2
<PAGE>
 
     dealer entities within the Peninsula CMO (currently including Marin Nissan
     and Serramonte Nissan). Termination of any of the Nissan Dealer Sales and
     Service Agreements of dealer entities owned and controlled by FAA and
     constituting the Peninsula CMO (currently including those of Marin Nissan
     or Serramonte Nissan) will constitute termination of all dealer agreements
     of dealer entities within the Peninsula CMO, and will, at Nissan's option,
     cause this CMO Holding Company Agreement to terminate with no further
     notice or act required by any party.

3.  TRANSFERS
    ---------

          In view of the efforts and resources that Nissan has expended in order
          to establish the Peninsula CMO, if FAA, or dealer entities within the
          Peninsula CMO owned and controlled FAA (currently including Marin
          Nissan or Serramonte Nissan), proposes to sell those dealership assets
          necessary for the conduct of appropriate and effective Dealership
          Operations, or those Dealership Facilities necessary to conduct
          Dealership Operations, without Nissan's consent, Nissan in its sole
          discretion may require that FAA, and any FAA owned or controlled
          dealer entities within the Peninsula CMO (currently including Marin
          Nissan or Serramonte Nissan) sell all or none of such assets or
          Dealership Facilities comprising the Peninsula CMO to a proposed buyer
          acceptable to Nissan.

          Holding Company acknowledges and agrees to identical Rights of First
          Refusal on Dealership Assets and Dealership Facilities as are
          contained the Dealer Agreements for the subsidiary Dealer entities
          within the Peninsula CMO as well as identical Option to Purchase
          provisions.

4.  DISPUTE RESOLUTION PROCESS
    --------------------------

     A.   EXCLUSIVE REMEDY
          ----------------

          The parties acknowledge that, at the state and federal levels, various
          courts and agencies would, in the absence of this Paragraph 4, 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. (S)(S) 1 et seq.), NISSAN, FAA, IN ITS OWN
          RIGHT AND AS THE OWNER OF THE PENINSULA CMO DEALER(s) (CURRENTLY
          INCLUDING MARIN NISSAN AND SERRAMONTE NISSAN) AGREE THAT THE DISPUTE
          RESOLUTION PROCESS OUTLINED IN THIS PARAGRAPH 12, WHICH INCLUDES
          BINDING ARBITRATION, SHALL BE THE EXCLUSIVE MECHANISM FOR RESOLVING
          ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING IN ANY
          WAY TO THIS AGREEMENT OR TO THE RELATIONSHIP BETWEEN THE PARTIES,
          INCLUDING BUT NOT LIMITED TO CLAIMS UNDER ANY STATE OR FEDERAL
          STATUTES (hereinafter "Disputes").

                                       3
<PAGE>
 
          There are two steps in the Dispute Resolution Process: a) Mediation
          and b) Binding Arbitration. All Disputes must first be submitted to
          Mediation, unless that step is waived by written agreement of the
          parties. If Mediation does not resolve the Dispute to their mutual
          satisfaction, the HOLDING COMPANY or Nissan can submit the Dispute to
          Binding Arbitration.

     B.   MEDIATION
          ---------

          Any party to this Agreement can submit a Dispute to Mediation.
          Mediation is conducted by a panel consisting of a Nissan
          representative designated by Nissan, a HOLDING COMPANY representative
          designated by HOLDING COMPANY, and an independent professional
          mediator chosen by the parties' representatives. The Mediation Panel
          will evaluate each position and recommend a solution. This recommended
          solution is not binding.

     C.   BINDING ARBITRATION
          -------------------

          If a Dispute has not been resolved after Mediation, or if HOLDING
          COMPANY and Nissan have agreed in writing to waive Mediation, the
          Dispute will be settled by Binding Arbitration in accordance with the
          procedures in the Dealer Dispute Resolution Guide, with the prevailing
          party to recover its costs and attorneys fees from the other party.
          All awards of the arbitration are binding and non-appealable except as
          otherwise provided in the United States Arbitration Act. Judgment upon
          any award rendered by the arbitrator(s) may be entered and enforced in
          any court having jurisdiction.



FIRSTAMERICA AUTOMOTIVE, INC.         NISSAN MOTOR CORPORATION IN U.S.A.




By: /s/ Thomas A. Price               By: /s/ Thomas H. Eastwood, Vice President
   --------------------                   --------------------------------------
     Thomas A Price                       Thomas H. Eastwood, Vice President
     President and CEO                    Nissan Division                   



                                      By: /s/ Jules Calavadetscher
                                      ------------------------------------------
                                      Jules Clavadetscher      
                                      Regional Vice President   


Acknowledged

Smart Nissan, Inc.                    FAA Serramonte, Inc 


By: /s/ Thomas A. Price, President    By: /s/ Thomas A. Price, President 
    ------------------------------        ------------------------------
     Thomas A Price President              Thomas A Price, President 

                                       4
<PAGE>
 
                      NISSAN CONTIGUOUS MARKET OWNERSHIP
                      ----------------------------------
                     AREAS FORMATION AND LINKAGE AGREEMENT
                     -------------------------------------                   

This Nissan Contiguous Market Ownership Areas Formation and Linkage Agreement
(the "CMO Formation and Linkage Agreement") is entered into this 30th day of
JUNE, 1997, by and among Nissan Motor Corporation in U.S.A. ("Nissan"), and
FirstAmerica Automotive, Inc., ("FAA") concerning the commitments and
obligations of FAA and Nissan in respect to the acquisition and formation of
Contiguous Market Ownership Areas ("CMO") in the San Francisco Bay Area,
specifically, the "Peninsula CMO", the "South Bay CMO", the "East Bay CMO" and
the "East Shore CMO".

                                   RECITALS
                                   --------     

WHEREAS, Nissan has developed a distribution network plan that seeks to create
CMOs in the San Francisco Bay Area (the Peninsula CMO, South Bay CMO, East Bay
CMO, and East Shore CMO);

WHEREAS, Nissan recognizes this new distribution plan is to be implemented over
time with consideration of existing dealers' rights;

WHEREAS, FAA has approached Nissan with a request to acquire and develop these
CMOs;

WHEREAS, Nissan has advised FAA that Nissan would approve their acquisition of
individual dealers within the CMOs, provided FAA satisfies Nissan's requirements
for applicants; and Nissan has advised FAA that Nissan cannot make existing
dealers sell or otherwise transfer their dealerships to FAA;

WHEREAS, FAA acknowledges the rights of existing dealers, yet commits to use its
best good faith and reasonable efforts to acquire dealerships within the CMOs,
with an intent to form the complete San Francisco Bay Area CMO marketing
territories;

WHEREAS, FAA acknowledges that Nissan's business concept for the CMO envisioned
entering into one Nissan Dealer Sales and Service Agreement with one entity for
each CMO;

WHEREAS, FAA, desires affirm its commitment to implement Nissan's CMO concept in
each CMO;

WHEREAS, FAA will have dealer subsidiaries in operation in one or more of the
Bay Area CMOs, and FAA has committed to, and intends to continue to acquire
Nissan Dealers to complete the formation and operation of all San Francisco Bay
Area CMOs;

WHEREAS, Nissan and FAA have negotiated agreements to allow FAA's operation of
Bay Area CMOs, specifically, any CMO Holding Company Agreements, the Nissan
Dealer Term Sales and Service Agreements for each individual dealer entity, if
appropriate, and the relevant Nissan CMO Agreements for Bay Area CMOs;

WHEREAS, FAA and Nissan mutually agree and acknowledge that Nissan has placed
extraordinary trust in the qualifications, integrity, and ability of FAA and
Thomas A. Price; the 
<PAGE>
 
parties mutually acknowledge that Nissan's agreement and intent to approve FAA
and Price as Contiguous Multiple CMO Operators ("CMCMO") is unique to FAA and
Price based upon Nissan's experience, relationship, and the commitments between
the parties; and, accordingly, that a prospective transferee of one or more of
the CMOs must have the same high qualifications, and, further, that even a
qualified CMO operator may not have the extraordinary qualifications necessary
to be approved as a CMCMO.

WHEREAS, FAA and Nissan desire to treat the San Francisco Bay Area CMOs as part
and parcel of a single market;

NOW, THEREFORE, in consideration of the agreements and mutual covenants set
forth herein, and other good and valuable consideration, the receipt and
sufficiency which is hereby acknowledged, the parties hereto agree as follows:

                                   AGREEMENT
                                   ---------

1.   THE CMO FORMATION AND LINKAGE AGREEMENT
     --------------------------------------- 

     FAA acknowledges that the San Francisco Bay Area market is a single
     metropolitan market area which has been divided by Nissan into four CMOs
     (Peninsula, South Bay, East Bay, and East Shore CMOs) for promotion and
     marketing purposes. FAA agrees to use its best efforts to acquire all
     Nissan dealership operations within the four CMO areas. Nissan and FAA
     acknowledge that this will be a process that must occur over time, and that
     Nissan cannot take any action adverse to current dealers in order to, or in
     an effort to, require them to sell or transfer their dealerships to FAA.
     Should FAA be successful in acquiring Nissan dealerships within the four
     CMOs in the San Francisco Bay Area, Nissan agrees to approve that
     acquisition, provided that FAA continues to possess the generally applied
     qualifications necessary to become an Authorized Nissan Dearer.

     Nissan and FAA acknowledge that each CMO, though a part of the San
     Francisco Bay Market Area, has been designed to be sufficient to achieve
     the benefits of a CMO as an independent entity. Nevertheless, as a
     practical matter, and consistent with its intent as originally
     communicated, Nissan intends, and FAA agrees, that Nissan will treat these
     wholly-owned subsidiary dealer corporations, and their related Nissan
     Dealer Term Sales and Service Agreements, the Nissan Contiguous Market
     Ownership Agreements, and any relevant Nissan CMO Holding Company
     Agreement, as part and parcel of the single marketing entity in the San
     Francisco Bay Area market. Consistent with the CMO concept reflected in the
     CMO Agreements for the constituent CMOs, FAA agrees that it will exercise
     its control and ownership of each CMO in ways consistent with this
     agreement and will not take any actions or allow its subsidiaries in the
     San Francisco Bay Area CMOs to take any action inconsistent with the intent
     of this Agreement.

2.   CMO FORMATION AND LINKAGE AGREEMENT TERM
     ----------------------------------------

     This Agreement shall be in effect while FAA, or any subsidiary dealer
     entity, is operating as an Authorized Nissan Dealer within a CMO in the San
     Francisco Bay Area, unless amended
<PAGE>
 
     by the parties. Termination of all Nissan dealer activities owned or
     controlled by FAA will constitute termination this CMO Formation and
     Linkage Agreement with no further notice or act required by any party.

3.   TRANSFERS
     ---------

          In view of Nissan's distribution plan and the efforts and resources
          that Nissan has expended in order to establish the San Francisco Bay
          Area CMOs, if FAA proposes or attempts to sell or otherwise transfer
          of any one of the four San Francisco Bay Area CMOs, or those
          dealership assets necessary for the conduct of appropriate and
          effective CMO Operations, without Nissan's consent, Nissan in its
          reasonable discretion, may require that FAA, or any subsidiary entity,
          sell, transfer or terminate, one, all, or any combination thereof of
          the CMOs in the San Francisco Bay Area, to a proposed buyer acceptable
          to Nissan.

          Further, Nissan reserves the right, that, should FAA desire to
          transfer two or more of the San Francisco Bay Area CMOs, then Nissan,
          in its sole discretion, may require FAA to transfer to an entity
          possessing the same, unusually high qualifications. Should Nissan, in
          its sole discretion, not consent to a transfer of two or more of the
          San Francisco Bay Area CMOs to a single entity, then Nissan may
          require FAA to transfer these CMOs, if at all, to separate CMO
          operators, acceptable to Nissan.

          FAA acknowledges and agrees to identical Rights of First Refusal in
          the CMO interests that each individual dealer or dealer entity (on
          specific Dealership Assets and Dealership Facilities) as are contained
          the Dealer Agreements, as well as any Right of First Refusal contained
          in the individual CMO Agreements, as well as identical Option to
          Purchase provisions.

4.   DISPUTE RESOLUTION PROCESS
     --------------------------

     A.   EXCLUSIVE REMEDY
          ----------------

          The parties acknowledge that, at the state and federal levels, various
          courts and agencies would, in the absence of this Paragraph 4, 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. (S)(S) 1 et seq.), NISSAN, FAA, IN ITS OWN
          RIGHT AND AS THE OWNER OF THE PENINSULA CMO DEALER(s) (CURRENTLY
          INCLUDING MARIN NISSAN AND SERRAMONTE NISSAN), THE PENINSULA CMO
          DEALERS (s) (CURRENTLY INCLUDING CONCORD NISSAN AND DUBLIN NISSAN) THE
          SOUTH BAY CMO DEALER(s) (CURRENTLY STEVENS CREEK) AND THE EAST SHORE
          CMO (CURRENTLY NO FAA DEALERS WITHIN THIS CMO), AGREE THAT THE DISPUTE
          RESOLUTION PROCESS OUTLINED IN THIS PARAGRAPH 4, WHICH INCLUDES
          BINDING ARBITRATION, SHALL BE THE EXCLUSIVE 
<PAGE>
 
          MECHANISM FOR RESOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT
          OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR TO THE RELATIONSHIP
          BETWEEN THE PARTIES, INCLUDING BUT NOT LIMITED TO CLAIMS UNDER ANY
          STATE OR FEDERAL STATUTES (hereinafter "Disputes").

          There are two steps in the Dispute Resolution Process: a) Mediation
          and b) Binding Arbitration. All Disputes must first be submitted to
          Mediation, unless that step is waived by written agreement of the
          parties. If Mediation does not resolve the Dispute to their mutual
          satisfaction, FAA or Nissan can submit the Dispute to Binding
          Arbitration.

     B.   MEDIATION
          ---------

          Any party to this Agreement can submit a Dispute to Mediation.
          Mediation is conducted by a panel consisting of a Nissan
          representative designated by Nissan, a FAA representative designated
          by FAA, and an independent professional mediator chosen by the
          parties' representatives. The Mediation Panel will evaluate each
          position and recommend a solution. This recommended solution is not
          binding.

     C.   BINDING ARBITRATION
          -------------------

          If a Dispute has not been resolved after Mediation, or if FAA and
          Nissan have agreed in writing to waive Mediation, the Dispute will be
          settled by Binding Arbitration in accordance with the procedures in
          the Commercial Arbitration Procedures of the American Arbitration
          Association, with the prevailing party to recover its costs and
          attorneys fees from the other party. All awards of the arbitration are
          binding and non-appealable except as otherwise provided in the United
          States Arbitration Act. Judgment upon any award rendered by the
          arbitrator(s) may be entered and enforced in any court having
          jurisdiction.

FirstAmerica Automotive, Inc.       NISSAN MOTOR CORPORATION in U.S.A.


By: /s/ Thomas A. Price             By: /s/ Thomas H. Eastwood, Vice President
    --------------------                --------------------------------------
     Thomas A Price                     Thomas H. Eastwood, Vice President  
     President and CEO                  Nissan Division                      



                                    By: /s/ Jules Clavadetscher
                                        ---------------------------------------
                                        Jules Clavadetscher        
                                        Regional Vice President