Floor Plan Agreement
Exhibit
99.1
Borrower:
AutoUnderwriters
of America, Inc.
0000
X. Xxxxx Xx, Xxxxx 000
Xxx
Xxxx, Xxxxxxxxxx, 00000
Lender:
Got
Cars
000
Xxx Xxxxxx
XxXxxxxx,
Xxxxx 00000
This
Floor Plan Agreement is made and endtered into this 19th
day of April, 2007, between, Auto Underwriters of America, Inc. “AUA”, and Got
Cars.
Whereas,
AUA desires Got Cars to secure a floor plan in the mount of $400,000.00 (FOUR
HUNDRED THOUSAND DOLLARS AND NO CENTS) for the use of AUA in its business of
buying and selling automobiles; and
Whereas
AUA and Got Cars desire to set forth the terms and conditions for the
collateralization of this floor plan agreement, the handling of drafts under
this agreement, the repayment of fees and expenses incurred by Got Cars under
this agreement, and the compensation to be paid to Got Cars for participating
in
this agreement.
Now
therefore, for and in consideration of the promises and mutual agreements set
forth herein, the parties agree as follows:
Term
and Termination.
This agreement shall be effective as of April 9, 2007, and shall continue in
full force and effect for a period not less than one year.
AUA
may terminate this agreement prior to one year, provided however, that it first
give Got Cars ninety (90) days notice of its intent to terminate this agreement
and all of AUA’s loans in favor of Got Cars have been paid in full, including
principal, interest, costs, expenses, attorneys’ fees, and other fees and
charges. AUA may terminate this agreement after one year, provided however,
that
it first give Got Cars thirty (30) days of notice of its intent to terminate
this agreement and all of AUA’s loans in favor of Got Cars have been paid in
full, including principal, interest, costs, expenses, attorneys’ fees, and other
fees charges.
Got
Cars may terminate this agreement prior to one year, provided it first give
AUA
ninety (90) days notice of its intent to terminate this agreement. Upon notice
of termination, AUA has ninety (90) days to pay all outstanding balances due
on
any loans in favor of Got Cars, including principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, except where this agreement
provides that such amounts would be due earlier than ninety (90) days. After
one
year has passed, Got Cars, at its sole discretion, may terminate this agreement
for any reason provided it first give AUA thirty (30) days notice of its intent
to terminate this agreement. Upon notice of termination, AUA has (30) days
to
pay all outstanding balances due on any loans in favor of Got Cars, including
principal, interest, costs, expenses, attorneys’ fees, and other fees and
charges, except where this agreement provides that such amounts would be due
earlier that thirty (30) days.
Collateralization.
AUA will be using the line of credit secured by Got Cars from Post Oak bank
to
purchase vehicles. Vehicles purchased by AUA to sell will be applied as
collateral to an advance against this line of credit. To secure this line of
credit, AUA will assign a deposit account in the amount of one hundred fifty
thousand ($150,000) to Got Car’s lender, Post Oak bank, to be used as collateral
on the loan acquired by Got Cars for the basis of this agreement. Got Cars
will
acquire a line of credit with Post Oak bank for no less than four hundred
thousand dollars ($400,000) to be used solely for the purposes of flooring
vehicles to be sold by AUA. Got Cars will not increase the amount of the loan
from Post Oak bank beyond the four hundred thousand dollars ($400,000) without
the express written consent of AUA.
Rules
and Procedures. The
parties hereby agree to the following terms and conditions regarding vehicles
used as collateral for an advance under this agreement:
1)
Any
vehicle that is “sold and delivered” will have the advance for which it serves
as a collateral repaid to Got Cars by AUA within five (5) business
days;
2)
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Any
vehicle that has an advance for which it serves as collateral must
have
that advance repaid to Got Cars by AUA within ninety (90) days of
AUA
having received the advance from Got Cars regardless of the status
or
condition of the vehicle;
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3)
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Got
Cars will have the right to inspect any vehicles used as collateral
for an
advance under this agreement at any time. In the event that a vehicle
is
used as collateral for an advance is not present for an inspection,
that
vehicle will be presented or the amount of the advance repaid within
five
(5) business days;
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4)
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In
the event that any drafts or checks presented as payment to either
Got
Cars or Post Oak bank are returned for any reason, AUA must provide
either
Got Cars or Post Oak bank with certified funds for the same amount
within
two (2) business days of being notified of the drafts or checks having
been returned unpaid, AUA agrees to reimburse Got Cars for any fees
or
penalties incurred due to returned drafts or
checks.
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5)
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All
incoming drafts are to be written through Auto Underwriters of America,
Inc. d/b/a Affordable Used Cars.
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6)
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Any
bank fees associated with the presentment or collection of drafts
written
through or to Auto Underwriters of America, Inc. d/b/a Affordable
Used
Cars will be paid by AUA.
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Eligible
Inventory.
The parties agree that the following will not constitute eligible inventory
under this agreement and may not be used as collateral for an advance under
the
terms of this Floor Plan Agreement;
1)
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Vehicles
with salvage titles;
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2)
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Vehicles
with reconditioned titles;
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3)
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“Demo”
vehicles or vehicles being used by AUA personnel;
and
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4)
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Under
no circumstances may any vehicle be used as collateral for an advance
for
an amount in excess of the trade-in value after the application of
additions to or reductions in value as determined by the NADA
Book.
|
In
addition, the following may constitute eligible inventory under this agreement
and may be used as collateral for an advance under the terms of this Floor
Plan
Agreement;
1)
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Repossessed
vehicles may be used as collateral for an advance provided that they
are
presented to Got Cars for inspection and approval. Approved repossessed
vehicles will be applied as collateral for an advance at eighty percent
(80%) of the loan value of the vehicle after the application of additions
to or reductions in value as determined by the NADA
Book.
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Fees
and Expenses and Interest. The
parties hereby agree that AUA shall pay the following fees and expenses
associated with this Floor Plan Agreement;
1)
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AUA
will pay Got Cars a one time fee of $100.00 (ONE HUNDERED DOLLARS
AND NO
CENTS), to be paid monthly by the 10th
day of each month, for each vehicle Auto Underwriters of America,
Inc.
d/b/a Affordable Cars and Trucks floors and receives an advance by
under
this agreement;
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2)
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Any
losses or expenses associated with the liquidation of vehicles used
as
collateral for advances by AUA due to the bank foreclosing the line
of
credit as a result of vehicle inventory purchased for AUA being “out of
trust” or any other condition of default occurring as a result of AUA’s
action or omission.
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3)
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AUA
will insure all vehicles purchased for AUA to sell and used as
collateral
for an advance under this agreement. Any policy or policies placed
by AUA
must provide for “full coverage” on any vehicles purchased for AUA to sell
and used as collateral for an advance and provide for Post Oak
Bank as a
“loss payee”.
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4)
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AUA
will pay Got Cars interest on the average balance amount of monies
advanced pursuant to this agreement. The average balance amount of
monies
advanced will be provided in the monthly bank statement Got Cars
receives
from Post Oak bank. Interest will be computed at the rate fifteen
percent
(15%). Interest will be paid to Got Cars by the 10th
day of each month.
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Default.
Each of the following shall constitute an event of default under the terms
of
this agreement;
1)
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AUA
fails to make any payment when due under this
agreement;
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2)
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AUA
fails to comply with or to perform any other term, obligation, covenant
or
condition contained in the agreement or in any of the related documents
or
to comply with or to perform any other term, obligation, covenant
or
condition contained in any other agreement with Got
Cars;
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3)
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In
the event any warranty, representation, or statement made or furnished
to
Got Cars by AUA, or on AUA’s behalf under this agreement or the related
documents which is false or misleading in any material respect, either
now
or at the time made or furnished or becomes false or misleading at
any
time thereafter; or
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4)
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AUA
becomes involved in creditor, forfeiture, or bankruptcy proceedings
which
may effect AUA’s ability to perform under the terms of this
agreement.
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In
any event of default, Got Cars has the right to immediately, and without further
notice to AUA, stop providing advances under this agreement until such time
as
AUA cures the default. Furthermore, Got Cars, at its sole discretion, may
terminate this agreement upon any event of default that is not cured within
14
days after providing written notice to AUA. In such an event, Got Cars has
the
right to have an agent on AUA’s premises to control vehicle inventory movement
and take control of any vehicle inventory used as collateral for an advance
under the terms of this agreement.
If
the line of credit acquired by Got Cars for AUA is called for any reason other
than an event of default on the part of AUA, AUA has thirty (30) days to
liquidate the vehicle inventory and secure other financing. In such an event,
Got Cars has the right to have an agent on AUA’s premises to control vehicle
inventory movement and take control of any vehicle inventory used as collateral
for an advance under the terms of this agreement.
Governing
Law and Venue.
This agreement will be governed by the laws of the State of Texas. Venue, in
the
event of a lawsuit, is proper in Xxxxxx County, Texas - the county in which
this
agreement was entered in to. AUA and Got Cars agree to submit to the
jurisdiction of Xxxxxx County, Texas.
Entered
into on this day, 19th of April, 2007
/s/
XXXXX X. XXXXX
Xxxxx
X. Xxxxx on behalf of Got Cars
000
Xxx Xxxxxx
XxXxxxxx,
Xxxxx 00000
/s/
XXXX XXXXXXX
Xxxx
Xxxxxxx on behalf of Auto Underwriters of America, Inc.
0000
X. Xxxxx Xx., Xxxxx 000
Xxx
Xxxx, Xxxxxxxxxx 00000