THE AUCTION FINANCE AUCTION OPTION PLUS AGREEMENT
WITH AUTO NETWORK USA
This Agreement ("Agreement") made as of the 20 day of AUGUST, 1998
("the Effective Date"), is between "Auto Network USA" and its affiliate Pinnacle
Dealers Services, Inc., collectively referred to as "AUTONET", whose address is
0000 XXXX XXXXXXXX, XXXXX 0, XXXXXXXXXX, XX 00000 , and the Auction Finance
Program ("TAFP") a Delaware corporation whose address is 000 Xxxxxxxxxx Xxxxxx,
0xx xxxxx, Xxxxx Xxxxx, Xxxxxxx 00000. TAFP is a wholly-owned subsidiary of the
Auction Finance Group, Inc.
RECITALS
A. Auto Network USA is an independent auto dealer that provides a means
through which individuals, companies and automobile dealers may purchase used
vehicles.
B. TAFP is in the business of providing licensed automobile dealers
(Dealers) with Credit Lines and making loans to them to purchase vehicles from
Auto Network USA.
C. TAFP desires Auto Network USA to assist it in extending Credit Lines
and making loans to their dealer customers for inventory purchased from them.
D. Auto Network USA believes that its vehicle sales would be enhanced
through the provision of Credit Lines by TAFP to Dealers that purchase vehicles
from Auto Network USA. Credit lines will be marketed by TAFP through Pinnacle
Dealer Services, Inc.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
TERMS
1. OBLIGATION OF AUTO NETWORK USA. During the term of this Agreement, Auto
Network USA hereby grants to TAFP an exclusive license to provide third
party loans and extensions of Credit Lines to Dealers at Auto Network
USA's facilities who use the Auction Option Plus Program, and Auto Network
USA hereby agrees that it shall enter into no other agreement nor shall it
engage in any other activities to promote or encourage its registered
Dealers to enter into any agreements with any company or companies
competing with TAFP in extending credit lines or short term loans to
Dealers. In the event a dealer is declined a credit line or short term
loan through TAFP; Auto Network USA is authorized to offer additional
outside sources of financial assistance for the purpose of extending
credit lines or short term loans to its dealers. In the event a dealer is
declined a credit line or short term loan through TAFP, Auto Network USA
is authorized to offer additional outside sources of financial assistance
for the purpose of extending credit lines or short term loans to its
dealers.
1.1 CONFIDENTIALITY. Auto Network USA shall maintain strict
confidentiality with respect to any proprietary information
which it obtains from TAFP concerning its organization,
operations, and business.
1.2 SUPPORT SERVICES. Auto Network USA shall provide such other
services and support as reasonably required by TAFP in order
to conduct its business at Auto Network USA.
1.3
ACCESS TO FACILITY. Auto Network USA shall provide TAFP's
employees and representatives with reasonable access to Auto
Network USA's management and its facilities during normal
business hours.
1.4 INFORMATION REGARDING DEALERS. Auto Network USA shall provide
to TAFP ------------------------------ information reasonably
requested by TAFP that is known by Auto Network USA and
related to events occurring within 12 months from the date of
the request, which may include the following information about
Dealers who have applied for Credit Lines, as well as other
information regarding the business practices and/or
creditworthiness of those Dealers: (i) whether Dealer has
defaulted in any of its obligations to Auto Network USA, (ii)
whether Dealer has passed a bad check to Auto Network USA,
(iii) whether Dealer has materially failed to comply with Auto
Network USA's policies and procedures, and (iv) whether Dealer
has consistently or frequently misrepresented the condition of
title or of vehicles consigned for sale or sold to Auto
Network USA.
1.5 MARKETING. Auto Network USA and TAFP will jointly distribute
marketing and promotional materials regarding the availability
of TAFP's services.
1.6 AUTO NETWORK USA'S EMPLOYEES, AGENTS AND REPRESENTATIVES. In
the event any of Auto Network USA's employees, agents or
representatives perform services for TAFP, Auto Network USA
shall use its good faith effort to correct any mistakes and
minimize any loss or damage to TAFP from the negligence or
other conduct of Auto Network USA's employees, agents or
representatives.
1.7 AVERAGE PURCHASE PRICE. Auto Network USA agrees to renegotiate
a lower incentive rate than the established amount ($15.00)
for each vehicle purchased through TAFP, if the average
purchase price is below $10,000.
2. OBLIGATIONS OF TAFP. TAFP shall extend Credit Lines to qualified
registered Dealers of Auto Network USA for the purchase of vehicles.
2.1 AVAILABLE FUNDING. TAFP will maintain adequate cash reserves
or credit lines to service approved Dealer credit lines based
upon historical utilization rates.
2.2 CONFIDENTIALITY. TAFP shall maintain strict confidentiality
with respect to any information which it obtains about Auto
Network USA or Auto Network USA's customers, or the
organization, operations, or business of any of the foregoing.
2.3 COMPLIANCE WITH LAW. TAFP shall at all times, take all
necessary and appropriate measures to comply with all laws or
regulations applicable to the conduct of its business.
2.4 ADVERTISING AND PROMOTION. TAFP may display signs and other
identifying materials at Auto Network USA premises to inform
Dealers of TAFP's services at Auto Network USA. TAFP agrees to
provide credit applications exclusively using Pinnacle Dealer
Services, Inc. logo.
2.5 PAYMENT TO AUTO NETWORK USA. TAFP shall remit on the 15th day
after month end $15.00 for each vehicle purchased through TAFP
providing that the average purchase price is above $10,000 and
the average floor plan term is six weeks.
3. TERM AND TERMINATION. This Agreement shall remain in effect for ten years
from the effective date and shall automatically renew for successive ten
year periods unless terminated. This Agreement may be terminated earlier
as follows:
3.1 By either party upon 90 days prior written notice prior to the
end of each ten year term of this Agreement.
3.2 By the non-breaching party upon a material breach or violation
of any or all of the covenants, agreements or obligations set
forth in this Agreement of the breaching party, if the
breaching party has failed to cure such default within 30 days
after notice from the non-breaching party.
3.3 By either party after120 days of the commencement of any
involuntary or voluntary petition, case, proceeding or other
action against a party under the Bankruptcy Code or seeking
reorganization, arrangement, readjustment of its debts, the
appointment of a receiver or conservator, or any other relief
under any existing or future law of any jurisdiction, relating
to bankruptcy, insolvency, reorganization of relief of debtors
generally; provided that such proceeding has not been vacated,
discharged, stayed, bonded or dismissed within 30 days of the
institution of such proceeding.
4. NO JOINT VENTURE. The parties understand and agree that this Agreement
does not create an agency relationship between the parties nor are the
parties joint venturers, partners, co- ventures to the extent Auto Network
USA's employees, agents or representatives provide services for TAFP, they
are independent contractors, and nothing contained in this Agreement is
intended to make either party a general or specific agent, legal
representative, subsidiary, joint venturer, partner, employee or servant
of the other. The parties agree that neither party will make any excerpted
or implied agreements, warranties or representations for other party or
represent that their relationship is anything other than that of
independent business enterprises. Each party has separate business
operations and conducts separate business activities and shall maintain
their separate business interests and operations and shall act
independently of each other. Nothing contained in this Agreement shall be
deemed in fact or law to make either party an employee, agent, partner,
Auto Network USA or joint venturer of the other. All payments to be made
by TAFP to Auto Network USA under this Agreement shall be made without
deduction for taxes, withholding or any other charges. Auto Network USA
shall be responsible for the payment of any and all taxes with respect to
such compensation, and the payment of its employees, agents and
representatives salaries and compensation.
5. INDEMNIFICATION.
5.1 INDEMNIFICATION BY TAFP. TAFP shall indemnify, defend and hold
Auto Network USA and its successors and assigns harmless
against any loss, claim, damage, cost, obligation, liability,
penalty and expense, including all legal and other expenses
reasonably incurred in connection with defending against any
such loss, claim, damage, liability or action (herein
collectively referred to as "Damages") in respect of,
occasioned by, arising out of or resulting from any breach or
default of any obligation of TAFP contained in this Agreement,
or which occurs through the actions or omissions of TAFP's
employees, agents, representatives.
5.2 INDEMNIFICATION BY AUTO NETWORK USA. Auto Network USA shall
indemnify, defend and hold TAFP and its successors and assigns
harmless against any Damages in respect of, occasioned by,
arising out of or resulting from any breach or default or
obligation of Auto Network USA contained in this Agreement, or
which occurs through the actions or omissions of Auto Network
USA's employees, agent or representatives for conduct that is
willful, grossly negligent or criminal.
6. COOPERATION. If the joint consent, reasonable consent, or mutual consent
of a party or the parties is required under the terms of this Agreement,
then each party or such party shall in good faith attempt to reach a
consensus or its consent, and no party shall unreasonably withhold its
consent to any requested approval.
6.1 ARBITRATION. If the parties cannot resolve any dispute which
may arise between them within 30 days after the dispute
arises, the matter may be submitted by either party to
arbitration in Dade County, Florida, for resolution. The
arbitration board shall consist of one person mutually
acceptable to the parties. Subject to the provisions of
Section 6.3, the parties shall equally share the reasonable
costs, fees and expenses for the arbitrator selected and for
all costs incurred to conduct the arbitration, and shall be
responsible for paying its own fees, costs and expenses,
including without limitation, its attorneys' fees and costs
and any travel related expenses. The arbitration proceeding
will be governed by the Commercial Rules of Arbitration
adopted by the American Arbitration Association and by Florida
law. In the absence of fraud, bad faith, or an error of law
appearing on the face of the ruling of the arbitrator, the
parties to the arbitration shall be bound by the ruling of the
arbitrator.
6.2 GOVERNING LAW. This Agreement and the interpretation of its
terms shall be governed by the laws of the State of Florida,
without application of conflicts of law principles subject to
the provisions of Section 7, the parties acknowledge and agree
that the Circuit Courts of Dade County, Florida and/or the
Federal District Court for Florida shall be the venue and
exclusive and proper forum in which to adjudicate any case or
controversy arising directly or indirectly under, or in
connection with this Agreement, they will not contest or
challenge the jurisdiction or venue of such courts. Auto
Network USA hereby submits to the personal jurisdiction of
such courts, notwithstanding any provision of any United
States or state law to the contrary.
6.3 ATTORNEYS' FEES AND EXPENSES. In the event of a dispute
arising out of this Agreement, the prevailing party shall be
entitled to its reasonable attorneys' fees and expenses and
costs reasonably incurred in any such proceedings. In such
event and wherever provision is otherwise made in this
Agreement for payment for attorneys' or counsels' fees or
expenses incurred by such party, such provision shall include,
but not be limited to, attorneys' or counsels' (including
paralegal' and similar persons') fees and expenses,
accountant's fees and expenses, and all expenses and costs
incurred in any and all judicial, bankruptcy, reorganization,
administrative, arbitration, or other proceedings, including
appellate proceedings, and any
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proceeding instituted to collect or enforce any judgment or
other relief granted or awarded whether such fees or expenses
arise before proceedings are commenced or after entry of a
final judgment.
7. MISCELLANEOUS.
7.1 NOTICES. All notices, demands or requests provided for or
permitted to be given pursuant to this Agreement must be in
writing and shall be either: (i) delivered by hand, (ii) sent
by nationally recognized overnight courier service next
Business Day delivery, or (iii) sent by telecopier and
confirmed by U.S. mail, to the party at the address set forth
in the preamble to this Agreement or to such other address as
a party may hereafter by notice designate to the other party.
7.2 ENTIRE AGREEMENT. This Agreement and the Procedures Manual
contain the sole and entire agreement among the parties with
respect to its subject matter and supersedes any and all other
prior written or oral agreements between them with respect to
such subject matter.
7.3 AMENDMENT. No amendment or modification of this Agreement
shall be valid unless in writing and duly executed by all
parties to this Agreement.
7.4 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors
and assigns.
7.5 WAIVER. Waiver by any party of any breach of any provision of
this Agreement shall not be considered as or constitute a
continuing waiver of a waiver of any other breach of the same
or any other provision of this Agreement.
7.6 CAPTIONS. The captions contained in this Agreement are
inserted only as a matter of convenience of reference and in
no way define, limit, extend or describe the scope of this
Agreement or the intent of any of its provision.
7.7 CONSTRUCTION. In the construction of this Agreement, whether
or not so expressed, words used in the singular or in the
plural, respectively, include both the plural and the singular
and the masculine, feminine and neuter genders include all
other genders.
7.8 SECTION REFERENCES. All references to Sections contained in
this Agreement shall be deemed to be reference of Sections of
this Agreement, except to the extent that any such reference
specifically refers to another documents. All references to
Sections shall be deemed to also refer to all subsections of
such Sections, if any.
7.9 SEVERABILITY. In the event that any portion of this Agreement
is determined by a court of competent jurisdiction to be
illegal or unenforceable, it shall affect no other provisions
of this Agreement and the remainder of this agreement shall be
valid and enforceable in accordance with its terms.
7.10. ASSIGNMENT. This Agreement may not be assigned without the
written consent of all parties, which consent shall not
unreasonably be withheld.
7.11 SUCCESSORS, OFFICERS AND DIRECTORS. The provisions of this
Agreement with respect to exclusivity, non-competition, and
confidentiality shall be binding upon the successors in
interest to the parties hereto, and to their officers and
directors. Each party shall cause its officers and directors
to enter into an agreement binding them to such provisions for
the terms provided in this Agreement.
7.12 OTHER DOCUMENTS. The parties shall take all such actions and
execute all such documents which may be necessary to carry out
the purposes of this Agreement, whether or not specifically
provided for in this Agreement.
7.13 COUNTERPARTS. This Agreement may be executed and delivered in
two or more counterparts, each of which shall be deemed to be
an original and all of which, taken together, shall be deemed
to be one agreement.
THIS AGREEMENT has been duly executed as of the Effective Date.
AUTO NETWORK USA
By: /S/XXXX XXXXXXXXXXX
Name: XXXX XXXXXXXXXXX
Title: SECRETARY
THE AUCTION FINANCE PROGRAM
By: /S/XXXXX XXXXX
Xxxxx Xxxxx, C.E.O.
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