Agreement to act as dealer's guarantor of contracts relating to financing automobile sales, etc.

This agreement made and entered into on _________[Date], between _________, dealer, and _________, guarantor, both parties of _________ county, _________, states as follows:

Dealer is engaged in the automobile business, operating under the name and style of "_________ company," with its office in _________, and needs to have guarantor act as his [or her] guarantor on his [or her] floor plan contract with the _________ corporation, of _________, ordinarily called the "_________," corporation and plan; and also desires to have guarantor indorse paper for dealer at local banks in the city of _________, in amounts not to exceed $_____.

Guarantor has consented to act as indorser and guarantor.

Now, therefore, it is mutually agreed as follows:

I. Guarantor agrees to act and to become indorser in amounts not to exceed $_____ on paper of dealer at local money loaning institutions in the city of _________, _________, provided that dealer meets the obligations as and when due and pays the interest on same promptly and in all things conducts his [or her] business in a workmanlike manner, guarantor agreeing to act as a continuous indorser not exceeding the amount of $_____, or such part of it as may be necessary as long as dealer does conduct his [or her] business in a workmanlike manner and does meet his [or her] obligations as and when due and does pay interest promptly as and when due.

II. Guarantor further agrees to become indorser for dealer on the _________ plan with the _________ corporation of _________, on a basis of what is known as the "floor finance plan," for automobile dealers, agreeing to become such a guarantor in an amount not exceeding $_____ at any one time, it being understood by guarantor and the agreement between the parties here, that such guaranteeing on the _________ plan is on new cars alone purchased direct from the manufacturer and that at no time will dealer owe on the _________ plan more than _________ percent of the wholesale cost of the cars and that the cars so financed will at all times be held by the _________ corporation as security for such money so advanced.

III. Dealer agrees that as a consideration to guarantor for his [or her] indorsement and guarantee that guarantor will pay dealer _________ of the net profits derived from the conduct of the business known as _________ company, such profits to be paid once each year on the _________ day of _________ of such year; and dealer agrees that he [or she] will at all times keep the records of _________ company in such condition that daily balances can be secured and that guarantor shall have the privilege of access to such records at any and all times for the purpose of determining the condition of such business. Dealer also agrees to furnish to guarantor a complete statement in writing of the business at any time guarantor may request the same.

IV. Guarantor is not in any sense a partner in the business and compensation to guarantor is compensation because of the specific things which guarantor agrees to do; however, dealer does now give to guarantor the option of becoming a full partner in the business at any time within _________ year from the date of this agreement by guarantor paying into the business an amount equal to the actual cash which dealer has invested in the business. The investment to be determined as of the date when guarantor exercises his [or her] option, if he [or she] does so exercise same, to become such partner.

V. This contract shall be in force and effect for a period of _________ years from this date and no longer unless extended by endorsement by the respective parties here and providing that the contract may be terminated during the year should either party fail to carry out his [or her] part of the agreement, or by mutual consent.

VI. Dealer guarantees to guarantor that dealer will hold guarantor harmless as to any liability that he [or she] may incur by reason of his [or her] contract of guaranty and endorsement.