EXHIBIT 10.43
Amended and Restated Operating Agreement
between
GREAT DANE FINANCE COMPANY
and
GREAT DANE TRAILERS, INC.
dated as of August 31, 1988.
AMENDED AND RESTATED OPERATING AGREEMENT
Agreement dated as of August 31, 1988 between Great Dane Trailers,
Inc., ("Great Dane") a Georgia corporation and Great Dane Finance Company (the
"Company"), a Delaware corporation.
WHEREAS, pursuant to that certain letter agreement dated as of March
1, 1977 (referred to hereafter as the "Prior Agreement"), the Company has
purchased retail installment contracts, promissory notes, security agreements
and other forms of chattel paper from Great Dane or any Affiliate, as such term
is defined in the Stock Purchase Agreement dated as of August 15, 1988 between
Great Dane and Associates Corporation of North America (the "Stock Purchase
Agreement"), and
WHEREAS, the Company and Great Dane desire to provide for both (i)
the purchase of chattel paper by the Company from Great Dane or any Affiliate
thereof which sells trailers and semi-trailers manufactured and/or distributed
by Great Dane (Great Dane together with all of such Affiliates are referred to
collectively hereafter as "Affiliate Dealers"), and (ii) the extension of
wholesale financing by the Company to independent, franchised sellers of
trailers and semi-trailers manufactured and/or distributed by Great Dane
(referred to collectively hereafter as "Independent Dealers") (Affiliate Dealers
and Independent Dealers shall be referred to collectively hereafter as
"Dealers") on and
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after the Closing Date, as defined in the Stock Purchase Agreement, (the
"Effective Date"), and
WHEREAS, Great Dane and the Company mutually desire to amend and
restate the Prior Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants of the
parties, it is mutually agreed by and between the parties hereto as follows:
ARTICLE I
WHOLESALE FINANCING FOR INDEPENDENT DEALERS
Section 1.1. AVAILABILITY OF WHOLESALE FINANCING. Subject to the
terms and conditions of this Agreement, the Company shall directly or indirectly
provide wholesale financing to Eligible Independent Dealers, as defined in
Section 1.2, in order to enable such Eligible Independent Dealers to acquire an
inventory of new trailers and semi-trailers manufactured and/or distributed by
Great Dane (referred to individually and collectively hereafter, as appropriate,
as "Inventory").
Section 1.2. ELIGIBLE INDEPENDENT DEALERS. Great Dane shall
identify in writing those Independent Dealers which are eligible for wholesale
financing accommodations by the Company hereunder. From time to time, Great
Dane may also give the Company either written or telephonic notice that one or
more of such Independent Dealers are no longer eligible for any subsequent
wholesale financing accommodations hereunder; provided however, such notice
shall not affect Great Dane's obligations under this
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Agreement with respect to any outstanding Advance, as defined in Section 1.4, or
commitment by the Company to make an Advance on behalf of such Independent
Dealer. The Company shall determine the acceptability of any such Independent
Dealer, the limitations of the wholesale financing the Company may extend to any
such Independent Dealer and the form and content of all documentation the
Company will require to evidence and secure the obligations incurred by any
Independent Dealer to the Company. Upon receipt from an acceptable Independent
Dealer of documentation acceptable to the Company, the Company may in its sole
discretion offer to extend wholesale financing to such Independent Dealer in
such dollar amounts as are from time to time agreed upon by the Independent
Dealer and the Company. All Independent Dealers which are identified in writing
by Great Dane and approved by the Company for wholesale financing under this
Article I shall become eligible to receive wholesale financing accommodations
from the Company hereunder and are referred to hereafter as "Eligible
Independent Dealers." The Company shall give Great Dane either written or
telephonic notice if an Eligible Independent Dealer is no longer approved by the
Company hereunder. Upon receipt of such notice by Great Dane, the Company shall
have no obligation under this Article I to make any further Advances or
commitments to make such Advances on behalf of such Independent Dealer.
Section 1.3. ELIGIBLE INVENTORY. The wholesale financing
extended by the Company subject to this Agreement shall be used by Eligible
Independent Dealers to acquire and maintain
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Inventory which Eligible Independent Dealers may purchase from either Great Dane
or, with the consent of Great Dane, any Dealers.
Section 1.4. ADVANCES. Subject to the following conditions, the
Company may issue a commitment to advance funds to Great Dane on behalf of an
Eligible Independent Dealer in payment of the purchase price for an item of
Inventory immediately prior to the production of such Inventory. Provided that
all of the following conditions are satisfied, the Company shall advance such
funds to Great Dane on behalf of an Eligible Independent Dealer one (1) Business
Day, as hereinafter defined, after receipt by the Company of the related invoice
(referred to hereafter individually as an "Advance," collectively as "Advances"
and as the "Advance Date"): (a) the Company shall receive written notification
from Great Dane that the production of the related item of Inventory has been
completed and that such item of Inventory is available for shipment by Great
Dane to the related Eligible Independent Dealer, (b) the Company shall receive a
copy of Great Dane's invoice to the Eligible Independent Dealer for such item of
Inventory which shall include the serial number and amount due and owing to
Great Dane from such Eligible Independent Dealer in payment of the purchase
price for such item of Inventory, and (c) the related invoice shall be dated not
more than fifteen (15) days prior to the date of receipt of same by the
For purposes of this Agreement, "Business Day" means any day that is not a
Saturday, Sunday or other day in which banking institutions in Chicago, Illinois
generally are authorized or required by law or executive order to
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close. The date upon which the Company issues its commitment to advance funds
in payment of the purchase price for an item of Inventory shall be referred to
hereafter as the "Commitment Date" for such item of Inventory. Each Advance
shall be made by means of wire transfer or, at the option of the Company,
through a depository transfer check or electronic funds transfer credit to an
account established by Great Dane. Unless otherwise advised by the Company,
Great Dane will mail the related statement or certificate of origin and a copy
of the invoice to the branch office of the Company or its Affiliate designated
by the Company and the original invoice to the related Eligible Independent
Dealer. Each Eligible Independent Dealer shall execute such schedules,
financing statements, security agreements and other documentation as may be
required by the Company to evidence and secure each Advance. Each Advance may
not exceed Great Dane's invoice price for the related item of Inventory (or any
supplemental invoice price proviDed that any price increase included therein
arises in the normal course of Great Dane's business and does not exceed three
percent (3%) of Great Dane's original invoice price for the related item of
Inventory) excluding freight and/or other transportation costs. Any discount or
rebate of the purchase price which Great Dane may issue to an Eligible
Independent Dealer regarding the purchase price of an item of Inventory against
which the Company has made an Advance shall, with the concurrence of such
Independent Dealer, be remitted to the Company and applied to the related
Advance. If after the Commitment Date the related Independent Dealer ceases to
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be an Eligible Independent Dealer or becomes in default under any obligations
with the Company, then Great Dane shall upon the request of the Company (i)
suspend shipment of the related items of Inventory if such shipment has not yet
begun, (ii) use its best efforts to stop shipment in transit and notify the
Company of the location of such Inventory if such shipment had been initiated
but not completed, or (iii) use any lawful rights and remedies available to
Great Dane to reclaim such Inventory from such Eligible Independent Dealer and
the Company shall indemnify Great Dane for any resulting reasonable reclamation
expenses. In the event the Company declines to make an Advance with respect to
a particular item(s) of Inventory and Great Dane, with the consent of the
Company, elects to loan the related Eligible Independent Dealer the funds
required to enable such Independent Dealer to acquire such item(s) of Inventory,
then, with respect to only such specific item(s) of Inventory in which the
Company declined to make an Advance, the Company shall agree to subordinate any
security interest it may have in such item(s) of Inventory to the security, if
any, acquired by Great Dane in such item(s) of Inventory.
Section 1.5. WHOLESALE CHARGES. The Company's charges to an
Eligible Independent Dealer for extending wholesale financing shall be in such
amount as the Company and the Eligible Independent Dealer may from time to time
agree upon and such charges shall be billed to and payable by the Eligible
Independent Dealer on a monthly basis. The Company may, from time to time,
increase or decrease the wholesale charges to any Eligible Independent Dealer
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and such increase or decrease shall not affect the liability of Great Dane under
this Agreement.
Section 1.6. TERM. Any Advance by the Company hereunder shall be
scheduled to be repaid by the related Eligible Independent Dealer not more than
three hundred sixty (360) days following the related Advance Date. An amount
equal to at least ten percent (10%) of the original Advance shall be payable by
the Eligible Independent Dealer not more than one hundred eighty (180) days
following the related Advance Date. In the event an Eligible Independent Dealer
does not pay the Company all or any portion of an Advance as such amount shall
become due, such failure shall not be deemed a default under this Agreement by
the Company and will not affect Great Dane's liability hereunder.
Section 1.7. GREAT DANE PURCHASE OBLIGATION. (a) In the event an
Eligible Independent Dealer fails to pay the Company any Advance as and when due
or otherwise defaults under any wholesale financing agreement with the Company,
the Company may take such action as the Company deems necessary and advisable to
collect such indebtedness, including but not limited to the retaking or
repossessing of any or all of such Eligible Independent Dealer's Inventory or
the institution of appropriate legal action. Following such retaking or
repossession, the Company shall take such actions as the Company deems necessary
and advisable to foreclose upon and sell such Inventory free and clear of the
Eligible Independent Dealer's interest therein. If the Company becomes the
purchaser of such Inventory following the foreclosure
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sale or if the Company otherwise becomes the owner of such Inventory, the
Company shall so advise Great Dane and transport such Inventory to a location
which Great Dane shall reasonably designate in writing to the Company and Great
Dane shall indemnify the Company for the resulting transportation expenses, if
any, arising after the first one hundred (100) miles of such transportation.
(b) Following delivery of the Inventory to the location designated
by Great Dane, Great Dane shall purchase such new Inventory (or portion thereof
which is new) which has not been damaged from the Company for an amount equal to
Great Dane's original invoice price together with any increases therein
reflected on any supplemental invoices for such item of Inventory (which amount
shall be referred to hereafter as the "Inventory Repurchase Price"); provided
that such sale by the Company to Great Dane will convey title to such Inventory
free and clear of all claims, liens or encumbrances of any party claiming by,
through or under the Company or the related Eligible Independent Dealer. For
the purposes of this Section 1.7(b), Inventory may be placed in service by Great
Dane during the delivery to the related Eligible Independent Dealer or to such
other location designated by such Eligible Independent Dealer and such Inventory
shall be deemed to be new Inventory hereunder.
(c) Following Great Dane's payment to the Company of the Inventory
Repurchase Price, the Company shall deliver the appropriate bill of sale to
Great Dane at the existing location of
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such Inventory. The sale of any Inventory to Great Dane by the Company shall be
on an "AS IS - WHERE IS" BASIS WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, AS TO QUALITY, WORKMANSHIP, DESIGN, MERCHANTABILITY,
SUITABILITY, OR FITNESS OF THE INVENTORY FOR A PARTICULAR PURPOSE OR ANY PURPOSE
OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF ANY KIND. Great
Dane acknowledges that any deficiency due from the Eligible Independent Dealer
and/or surplus due to the Eligible Independent Dealer shall be computed in
accordance with applicable state and federal laws, regulations and decisions and
that any such surplus shall be payable in accordance therewith.
Section 1.8. DELAYED DELIVERY OF INVENTORY. Notwithstanding
anything to the contrary included in this Agreement, if any Inventory sold by
Great Dane to an Eligible Independent Dealer is not delivered to such Eligible
Independent Dealer's premises or such other location acceptable to the Company
which has been designated by such Eligible Independent Dealer on or before
forty-five (45) days after the related invoice date (except with respect to
those Eligible Independent Dealers located in California, Washington and Oregon;
in which case such delivery period shall be extended by ten (10) additional
days), then Great Dane shall, immediately upon demand by the Company, pay the
Company an amount equal to (i) the related outstanding Advance together with any
accrued and unpaid interest thereon, and (ii) all other amounts which are due
and owing to the Company under the related security agreement with the Eligible
Independent Dealer regarding
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such item of Inventory. Great Dane's liability under this Section 1.8 shall be
unconditional and the Company shall not be required to take possession of,
foreclose upon or tender delivery to Great Dane of the related item of
Inventory. The Company rights under this Section 1.8 shall be in addition to
any other rights of the Company under this Agreement, provided however, the
Company may elect to extend the aforementioned delivery periods in lieu of the
immediate exercise of the Company's rights hereunder.
ARTICLE II
RETAIL FINANCING FOR INDEPENDENT DEALERS AND AFFILIATE DEALERS
Section 2.1. AVAILABILITY OF RETAIL FINANCING. The Company,
directly or indirectly, may provide financing to persons and entities in the
United States desiring to purchase, lease or otherwise acquire from any Dealer
new or used trailers, semi-trailers and related equipment manufactured and/or
distributed by Great Dane (hereinafter referred to singularly and collectively
as the "Great Dane Customers" and the "Property," respectively) pursuant to
secured loans, installment sale contracts, sales-type leases which include
either nominal purchase options or no meaningful residual value in the Property
at the expiration of the lease term (referred to hereafter as "Sales Lease") or
other financing devices entered into between such Dealer and the Great Dane
Customer (referred to collectively hereafter as the "Contracts") in accordance
with this Agreement. Great Dane shall cause each Affiliate Dealer to fully
perform in a timely manner
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each and every duty or obligation attributable to such Affiliate Dealer under
this Agreement. Great Dane may also delegate to any Affiliate Dealer the
authority to perform any of Great Dane's obligations and duties hereunder,
provided however, such delegation shall not release Great Dane from any of Great
Dane's obligations and duties hereunder. Each Affiliate Dealer shall also
execute documentation acceptable to the Company which further evidences the
duties and obligations of such Affiliate Dealer hereunder.
Section 2.2. ELIGIBLE DEALERS. Great Dane shall identify in
writing those independent Dealers which are eligible for retail financing
accommodations by the Company hereunder. All Affiliate Dealers shall be deemed
eligible for retail financing accommodations by the Company hereunder and such
financing shall be without recourse to such Affiliate Dealer with respect to the
financial ability of the Great Dane Customer to pay except in those cases in
which Great Dane is performing hereunder as an Affiliate Dealer; in which case
Great Dane's obligations under this Agreement with respect to any related
Contract and the Property subject thereto shall continue in full force and
effect. The Company shall determine (i) the acceptability of any Independent
Dealer, (ii) the limitations of the financing it will extend to each Independent
Dealer, (iii) the form and content of all documentation the Company will require
to evidence and secure the obligations incurred by any Dealer which shall
include but not be limited to the retail financing agreement between such
Independent Dealer and the Company, an example of which is attached hereto as
Exhibit A
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("Retail Financing Agreement"), as may be amended from time to time, (iv) the
form and content of the Contract and any notes, guaranties and all other
documents (herein, together with the Contract, called "Documents") which
evidence and secure the obligations of the Great Dane Customer under each
Contract, and (v) the form and content of the Independent Dealer's assignments,
endorsements and warranties regarding the sale and transfer of the Documents to
the Company. The Company may, in its sole discretion, offer to extend retail
financing to Independent Dealers in such dollar amounts as are from time to time
agreed upon by such Independent Dealers and the Company. The Company shall give
written or telephonic notice to Great Dane if an Independent Dealer is no longer
approved by the Company hereunder. The purchase of Documents from any Dealer by
the Company shall be at such rate of discount as the Company and the Dealer may
from time to time agree upon and shall be referred to hereafter as the "Company
Rate."
Section 2.3. AFFILIATE DEALER TRANSACTIONS. The Company shall
approve or reject the credit on any transaction originating from an Affiliate
Dealer (i) within five (5) Business Days after the Company has received all the
credit and other information and details concerning the transaction deemed
necessary by the Company to render a decision either approving or rejecting such
transaction (hereinafter referred to singularly and collectively as the
"Contract Information"), if, after giving effect to such proposed transaction,
the aggregate outstanding amount owing to the Company and its Affiliates by the
Great Dane Customer who will be a party
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to such transaction and its Affiliates is equal to or less than $3,750,000, and
(ii) within ten (10) Business Days after the Company has received the Contract
Information if, after giving effect to such proposed transaction, the aggregate
amount owing to the Company and its Affiliates by such Great Dane Customer and
its Affiliates is more than $3,750,000. The failure of the Company to accept or
reject the credit on a transaction within the time period described above shall
be deemed a rejection of such transaction for purposes of this Agreement. If
the Company approves the credit on any transaction and the process of
negotiating the terms of Financing, as defined in the Stock Purchase Agreement,
is successfully concluded, then such approval shall constitute a commitment to
purchase the related Documents for the transaction within three (3) Business
Days after the respective Affiliate Dealer tenders to the Company such Documents
if (i) the Documents for such transaction are in the form specified by, and in
substance satisfactory to, the Company and (ii) the Documents are submitted to
the Company for purchase within ninety (90) days of the date of such approval or
within such other time period as is designated in such approval.
Section 2.4. DOCUMENT PURCHASE FROM AFFILIATE DEALERS. (a)
Affiliate Dealers shall sell to the Company and the Company shall purchase from
such Affiliate Dealers each Contract between such Affiliate Dealers and a Great
Dane Customer which the Company elects to purchase pursuant to Section 2.3.
Unless the parties agree to the contrary, the purchase price of each Contract
shall be
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an amount equal to the Principal Balance, as defined herein, less the cost of
any insurance included within the Contract unless Great Dane with the approval
of the Company pays the insurer such amount; in which case the purchase price
for the Contract shall include such amount. The purchase of the Documents shall
occur upon delivery to the Company of duly executed Documents for such
transaction together with instruments of assignment and transfer ("Assignment")
thereof duly executed by the respective Affiliate Dealer. Pursuant to the
Assignment, such Affiliate Dealer shall sell, transfer and assign to the Company
all of such Affiliate Dealer's right, title and interest in and to such
Documents, all amounts due or to become due under the Documents, the Property in
which such Affiliate Dealer has been granted a security interest and all of such
Affiliate Dealer's rights and remedies under or in connection with the
Documents. In addition, with regard to Property owned by such Affiliate Dealer
which is subject to a Sales Lease, such Assignment shall also provide for either
(i) the pledge, grant and/or assignment, as appropriate, by such Affiliate
Dealer to the Company of a security interest in such Property to secure the
performance by the Great Dane Customers of all their obligations under the
related Contract, or (ii) the sale and assignment by such Affiliate Dealer to
the Company of all of such Affiliate Dealer's right, title and interest in such
Property. The aforementioned Assignment will not constitute an assignment of
such Affiliate Dealer's obligations as seller or lessor under any
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Contract or under any purchase order executed in conjunction with any Contract.
Upon the acceptance by the Company of the Documents and Assignment
for a transaction, the Company shall pay the respective Affiliate Dealer or its
designee the purchase price of the related Contract.
Section 2.5. CONTRACT DEFINITIONS. The terms set forth below
shall be defined herein as follows:
(i) "Down Payment" shall mean the total amount of all cash and
property (at the value stated in the Contract) taken as partial consideration
for the sale of the Property.
(ii) "Principal Balance" for any Property shall mean the Unpaid
Cash Price, as defined herein, of such Property plus insurance and other charges
not included in the Cash Selling Price which are included in the related
Contract attributable to such Property excluding the related Finance Charges, as
defined herein.
(iii) "Unpaid Time Balance" with respect to any Contract at any
time shall mean the Principal Balance for any Property plus the related Finance
Charges and any other amounts owing under such Contract less all payments made
thereunder other than the Down Payment.
(iv) "Cash Selling Price" shall mean the full cash price that the
Great Dane Customer agreed to pay the Dealer for any Property including sales
taxes, license fees, title fees and registration fees, but excluding insurance
costs and the Finance Charges.
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(v) "Finance Charges" shall mean the amount charged the Great Dane
Customers by the Dealer for the privilege of purchasing Property on a time sale
basis.
(vi) "Unpaid Cash Price" for any Property shall mean the Cash
Selling Price of such Property less the related Down Payment.
(vii) "Net Unpaid Time Balance" shall mean the remaining Unpaid
Time Balance under any Contract (which shall not include any interest, late
charge or fee assessed against the Great Dane Customer under a Contract arising
from such Great Dane Customer's default in the payment of any installment
thereunder when due; provided however, such amount shall include the continued
accrual of interest after such default at the same rate of Finance Charges
included in such Contract prior to any default) less the unearned portion of the
Finance Charges, if any, calculated pursuant to the Rule of 78's or the
actuarial method; whichever method provides the greater rebate of unearned
Finance Charges, or as otherwise required by law as of the date of determination
or, if a foreclosure sale has occurred, immediately prior to such foreclosure
sale, and less the unearned portion, if any, of any insurance premium included
in such Contract.
(viii) "Independent Dealer's Property Cost" shall mean the sum of
Great Dane's invoice price for such Property, including freight or other
transportation charges, plus any Federal Excise Tax, plus the cost of locally
installed equipment not to exceed thirty percent (30%) of Great Dane's invoice
price for the related Property (except in the case of refrigeration equipment;
in which
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case the cost therefor may not exceed the actual price paid by the Great Dane
Customer therefor plus any installation expenses), plus the cost of any
insurance referred to in Section 2.6(v) of this Agreement if such expense is
included in the Principal Balance under the Contract.
Section 2.6. CONTRACT ELIGIBILITY. (a) All Contracts
purchased by the Company from any Affiliate Dealer shall be subject to this
Agreement.
(b) Those Contracts purchased by the Company from an Independent
Dealer which meet the following requirements together with those direct loans
described in Section 2.7 shall also be subject to this Agreement:
(i) The Contract shall represent the installment sale at
retail of new Property together with all equipment attached thereto, of any
model year which has not been titled and which was sold by Great Dane to the
respective Independent Dealer.
(ii) The Great Dane Customer shall have made a Down Payment
of not less than ten percent (10%) of the Cash Selling Price.
(iii) The Unpaid Time Balance under the Contract shall be
payable over a term not to exceed seventy-two (72) months.
(iv) The portion of the purchase price paid to the
Independent Dealer in cash by the Company at the time of purchase of the
Contract will not exceed one hundred and five percent (105%) of the Independent
Dealer's Property Cost.
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(v) The Property subject to a Contract on the date thereof
shall be insured for not less than the actual cash value thereof covering fire,
theft, and collision with a deductible amount of not more than two thousand five
hundred dollars ($2,500.00).
(vi) The Contract if acquired by the Company will not cause
the aggregate outstanding Unpaid Time Balances due to the Company under any
existing Contracts held by the Company with the respective Great Dane Customer
to exceed $500,000.00.
With the prior approval of Great Dane, Contracts which do not meet one or more
of the requirements set forth above shall also be subject to this Agreement.
Section 2.7. DIRECT LOAN ELIGIBILITY. Notwithstanding any terms
to the contrary in this Agreement, for all purposes hereunder except Section
2.8, any direct loan agreement (whether in the form of a security agreement,
chattel mortgage or other lien instrument) which the Company may enter into with
a Great Dane Customer to enable such Great Dane Customer to acquire new Property
from a Dealer which reserves a security interest or lien in such Property shall
be deemed to be a Contract which the Company purchased from such Dealer under
this Agreement and shall be subject to and eligible hereunder provided that:
(i) The direct loan shall satisfy, as appropriate, the eligibility
requirements set forth in Sections 2.6(i) and (v) of this Agreement, and
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(ii) On the date of the purchase of the Property by the Great Dane
Customer, the seller of such Property is either an Independent Dealer or an
Affiliate Dealer, and
(iii) The original principal balance of the direct loan shall not be
greater than ninety percent (90%) of the Cash Selling Price of the Property and
the term of such direct loan shall not exceed seventy-two (72) months.
(iv) If the seller of the Property is an Independent Dealer, the
original principal balance of the direct loan shall not exceed one hundred and
five percent (105%) of the Independent Dealer's Property Cost.
Any direct loan which satisfies the conditions set forth in Section
2.7 of this Agreement shall be referred to hereafter as a "Direct Loan." The
obligor under each Direct Loan shall be deemed to be a Great Dane Customer as
defined in this Agreement. With regard to any Direct Loan, any reference to the
Principal Balance, the Finance Charges and Unpaid Time Balance in this Agreement
shall be deemed to be a respective reference to the principal balance, interest
charges and the sum thereof included in the Direct Loan. Notwithstanding the
terms set forth in the first sentence of Section 2.8 of this Agreement, the
Company and the respective Independent Dealer shall agree upon the amount, if
any, which the Company may credit from the interest charges collected under any
Direct Loan and apply to the reserve account established for such Independent
Dealer.
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Section 2.8. INDEPENDENT DEALER RESERVE ACCOUNT. The difference,
if any, between the Finance Charges included in a Contract and the finance
charges arising from the Company Rate may be retained by the Company in a
reserve account established for each Independent Dealer or paid directly to such
Independent Dealer. The Company may release such retained amounts to an
Independent Dealer from time to time as the Company in its sole discretion deems
advisable. Notwithstanding the foregoing, the Company may charge amounts
against such reserve account or cancel portions of the reserve account in
accordance with the Company's agreement with each Independent Dealer.
Section 2.9. DOCUMENT REPRESENTATIONS AND WARRANTIES OF GREAT
DANE. With respect to any Document purchased by the Company under this
Agreement from any Affiliate Dealer, Great Dane represents and warrants that:
the Document will be genuine, in all respects what it purports to be and, except
to the extent of any impairment caused by the acts or omissions of the Company
or its Affiliates, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency or other similar laws affecting creditor's rights generally and the
Contract will constitute the entire agreement between the Affiliate Dealer and
the Great Dane Customer thereunder relating to the Property covered thereby; all
signatures, names, addresses, amounts and other statements and facts contained
in each Document will be true and correct as of the date the Company purchases
such Document; if the Contract evidences
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a sale, the Property will have been sold to the Great Dane Customer in a bona
fide time sale transaction and the respective Affiliate Dealer will have held
all appropriate licenses to enter into such sale and to assign the resulting
Contract to the Company; if the Contract evidences a lease, it will represent a
valid and lawful deferred payment obligation of a lessee except to the extent of
any impairment caused by the acts or omissions of the Company or its Affiliates,
and will constitute the only lease or rental agreement relating to the Property,
and Great Dane and the respective Affiliate Dealer will not have given any party
any purchase or renewal options in or to the Contract or the Property except as
stated in the Contract; the Great Dane Customer will have paid the Down Payment,
advance rentals or deposit in cash or as otherwise stated in the Contract and no
part thereof will have been loaned directly or indirectly by Great Dane or any
Affiliate Dealer; no rentals or other monies due under the Contract will have
been prepaid and no deposit will have been paid by the Great Dane Customer
thereunder except as stated in the Contract; the Property will have been
delivered in satisfactory condition to the Great Dane Customers and will have
been accepted by the Great Dane Customers; all parties to the Documents will
have the capacity to contract and none of such parties will have been a minor at
the time of the execution thereof; at the time of purchase of any Contract by
the Company from an Affiliate Dealer hereunder, the Great Dane Customers will
not then be in default under such Contract; Great Dane will have caused the
appropriate Affiliate
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Dealer to take such actions to be taken as are specified in instructions issued
from time to time by the Company to Great Dane to ensure that the security
interest, lien or reservation of title evidenced by the Documents and/or granted
to the Company by an Affiliate Dealer thereunder will be perfected, valid,
first, prior to all others and effective against all persons; each Affiliate
Dealer will have the full title and right to sell and assign the Documents and
such assignment will convey the Documents to the Company free and clear of all
liens, encumbrances and other interest of any kind; the Documents are and will
continue to be free from defenses, counterclaims and set-offs except those which
may arise from the acts or omissions, if any, of the Company or its Affiliates;
the Company shall have been designated as loss payee under such insurance
policies as the Company may reasonably require from time to time; after the date
of the assignment of the Documents, Great Dane together with the Affiliate
Dealers shall have no authority and will not without the prior written consent
of the Company accept collections, repossess, substitute or consent to the
return of the Property or modify the terms of the Documents. The Company shall
be relying upon the aforementioned representations and warranties with regard to
each Contract purchased hereunder and the knowledge of the Company of any breach
of such representations and warranties at the time of its purchase of any
Documents or thereafter shall not impair or constitute any waiver of any of such
representations and warranties or of Great Dane's obligations with respect to
such Documents. The Company
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shall use its best efforts to notify Great Dane of any breach of any of the
foregoing representations and warranties but shall not be obligated to cure or
remedy any defects in the Documents. If any of the preceding representations
and warranties are untrue in any material respect and cause a Loss, as
hereinafter defined, to arise, then Great Dane shall immediately upon demand by
the Company repurchase the related Documents from the Company for a amount equal
to the Net Unpaid Time Balance thereunder, plus any expenses of collection,
repossession, transportation, storage and reasonable attorneys' fees and court
costs incurred by the Company in enforcing such Documents and such amount shall
be referred to hereafter as the "Document Repurchase Price." Any sale of
Documents by the Company to Great Dane under this Section 2.9 shall be without
recourse or warranty of any kind except that such assignment will convey the
Documents free and clear of any rights of persons claiming by, through or under
the Company. Any amount paid by Great Dane to the Company upon the repurchase
by Great Dane of any Documents pursuant to this Section 2.9 shall not constitute
a Repossession Loss as defined in Section 2.14. For the purposes of this
Agreement a "Loss" shall mean any losses, damages, liabilities, claims, demands,
deficiencies, judgments, assessments, penalties, settlement costs and expenses
of any nature whatsoever (including reasonable attorneys' fees and court costs)
arising from the breach of any of the preceding representations or warranties
provided the Company has sought to enforce the related Documents against the
Great Dane Customer in the appropriate trial court and
24
obtained any form of determination, ruling or decision from such trial court
with respect to the Company's complaint to enforce the related Contract which
may include, without limitation, a dismissal of the proceeding instituted by the
Company. Great Dane shall indemnify the Company for all related court costs and
reasonable attorneys' fees incurred by the Company. Notwithstanding anything to
the contrary contained in this Section 2.9, any of the representations and
warranties contained in this Section 2.9 shall be deemed not to have been
breached if such representations and warranties shall be untrue as a result of
(i) the form of any Document being defective if the form is supplied or prepared
by the Company for use in the jurisdiction in which used, (ii) the Finance
Charges included in a Contract are in violation of applicable law but only if
the Company Rate quoted by the Company in the applicable jurisdiction at such
time is also in violation of such applicable law, or (iii) any action or
omission by the Company or its Affiliates or any action or omission by Great
Dane or the respective Affiliate Dealer which is taken at the written direction
or, in the case of only directions by the Company or its Affiliates with respect
to insurance coverage for the Property, telephonic direction of the Company or
its Affiliates. Except with respect to the representations and warranties
included in the Affiliate Dealer Agreement between the Company and each
Affiliate Dealer, an example of which is attached as Exhibit B hereto, the
representations and warranties set forth in this Section 2.9 shall supersede any
representations and warranties contained in any assignments of
25
Documents purchased by the Company from any Affiliate Dealer under this
Agreement and any representations and warranties of Great Dane or the respective
Affiliate Dealer included in such assignments shall be of no force and effect.
Any assignment of Documents by an Affiliate Dealer to the Company shall be
subject to this Agreement unless the Company, Great Dane and such Affiliate
Dealer otherwise agree. Any representation, warranty, obligation and/or
liability of any party (other than Great Dane or an Affiliate Dealer) under the
Documents shall be assigned to and enforceable by the Company even though Great
Dane or an Affiliate Dealer has not made a similar representation or warranty or
incurred a similar obligation or liability to the Company.
Section 2.10. ACCOUNT MANAGEMENT. (a) Each Affiliate Dealer
shall notify the Great Dane Customers under all Contracts assigned to the
Company by such Affiliate Dealer on or after the Effective Date to make all
future payments directly to the Company at such address as the Company shall
specify. With the exception of monies received by Great Dane or an Affiliate
Dealer from the Great Dane Customers which are received by Great Dane or an
Affiliate Dealer prior to the assignment to the Company of the Documents and
(including the Down Payment) which have been applied as a reduction of the
Unpaid Time Balance due under the related Contract, all monies and other forms
of payment received by Great Dane or an Affiliate Dealer from any Great Dane
Customer or other obligor under the Documents assigned to the Company shall be
held by Great Dane or such Affiliate Dealer in trust for the Company.
26
If any such payment is in the form of a check, money order or other instrument
made payable to Great Dane or an Affiliate Dealer, then Great Dane or such
Affiliate Dealer shall immediately endorse and/or assign such instrument to the
Company and any such payment, regardless of form, shall be promptly, without
demand, forwarded to the Company.
(b) The Company may collect monies due under the Documents and
otherwise enforce such Documents in accordance with the reasonable business
judgment of the Company, without notice to Great Dane or any Affiliate Dealer
and without affecting Great Dane's obligations under this Agreement, provided
that unless a Default (as defined in Section 4.2) by Great Dane shall have
occurred and be continuing:
(i) The Company shall obtain Great Dane's prior consent for
the extension of the term of any Contract if (1) the term of such Contract has
already been extended by three (3) months or, (2) as a result of any proposed
extension, the term of such Contract will be extended by more than three (3)
months;
(ii) The Company shall obtain Great Dane's prior consent for
any extension of the term of a Contract or refinance of a Contract if at such
time the Contract is three (3) or more monthly installments past due; and
(iii) The Company shall obtain Great Dane's prior consent for
any transfer, with the approval of the Company, of a Contract from the Great
Dane Customer to another party, and
27
(iv) The Company shall, with respect to only those Contracts
with a remaining Unpaid Time Balance in excess of $25,000 obtain Great Dane's
prior consent before releasing (1) any security interest in the Property prior
to the payment in full of the related Great Dane Customer's obligations
thereunder, or (2) any guarantor of the obligations of a Great Dane Customer
prior to the payment in full of the related Great Dane Customer's obligations
thereunder. With respect to any Contract with a remaining Unpaid Time Balance
equal to or less than $25,000 the Company shall use its best efforts to obtain
the prior consent of Great Dane for the actions described in subsections (1) and
(2) of the preceding sentence.
The Company shall also notify Great Dane of any written extension,
reschedule or other modification to any Contract which does not require the
prior consent of Great Dane as set forth in Section 2.10(b) (i), (ii), (iii) and
(iv) above. The requirements to obtain Great Dane's consent as set forth in
Section 2.10(b)(i), (ii), (iii) and (iv) above shall not apply to any extension,
refinancing, transfer of obligation, release of Property or guarantor, or
substitution of collateral resulting from any law, ruling, regulation, court
order, automatic stay in a bankruptcy proceeding or action of any governmental
agency. If Great Dane does not respond to a request by the Company for Great
Dane's consent to any action described in Section 2.10(b)(i), (ii), (iii), or
(iv) above within two (2) Business Days of such request, then Great Dane shall
be deemed to have given the Company the
28
appropriate consent. If the Company takes any action described in Section
2.10(b) (i), (ii), (iii), or (iv) above without the prior consent of Great Dane,
then Great Dane shall continue to be liable hereunder with respect to such
Contract except to the extent of any diminution in value of such Contract which
may arise from such action by the Company.
(c) Great Dane and the Affiliate Dealers shall make appropriate
entries upon their books and records which reflect the sale to the Company of
such Documents as may be purchased by the Company and, upon ten (10) days' prior
notice to Great Dane, the Company may examine such related books and records at
any time during regular business hours. If Great Dane or the respective
Affiliate Dealer retains an interest of any kind in the Property, or to the
extent that any court deems Great Dane or the respective Affiliate Dealer to
have an interest of any kind therein, Great Dane and the respective Affiliate
Dealer shall grant to the Company a security interest in such Property to secure
all obligations of the Great Dane Customers under the related Documents. Great
Dane and the Affiliate Dealers, upon the reasonable request of the Company,
shall execute such other documents as the Company may reasonably require to
evidence and/or give notice of the rights of the Company in and to the Documents
and/or the Property, which shall include but not be limited to the execution of
security agreements and financing statements which describe Great Dane and the
Affiliate Dealers, as appropriate, as a debtor and describe the Property as
collateral and are senior to any other financing
29
statements executed by Great Dane and the Affiliate Dealers as debtors with
respect to such Property.
Section 2.11. GREAT DANE CUSTOMER DEFAULT. In the event a Great
Dane Customer defaults in the performance of its obligations under a Contract
purchased by the Company from any Dealer, the Company may take such action as
the Company deems necessary and advisable, including but not limited to the
institution of a replevin action or similar proceeding, to take possession of
the Property subject to such Contract and/or to collect the indebtedness due
thereunder. If the Company fails to repossess an item of Property within one
hundred eighty (180) days of the due date of the earliest installment remaining
substantially in default under the Contract (such 180-day period, as it may be
extended pursuant to Section 5.13 hereof, being hereinafter referred to as the
"Repurchase Period"), Great Dane shall have no further obligation to the Company
for such Property under this Article II. The preceding sentence shall not apply
to any Contract in which Great Dane or the respective Affiliate Dealer has
breached any warranty or representation to the Company if a Loss arises from
such breach or if such breach in any way impairs the Company's ability to
repossess the Property within the Repurchase Period. In the event of such a
breach, Great Dane's obligations and liabilities hereunder with respect to such
Contract and the related Property shall remain in full force and effect without
regard to the Repurchase Period and any action by the Company to repossess or
foreclose upon such Property and/or pursue the Company's rights
30
under such Contract shall not waive the Company's rights under Section 2.9;
provided however, Great Dane's obligations under such Section 2.9 shall continue
to be conditioned upon the existence of a Loss arising from such breach. For
the purposes of this Article II, an installment shall be substantially in
default when the portion of such installment which is unpaid exceeds fifty
percent (50%) of the scheduled installment provided for in the Contract. With
respect to only those Contracts with the same Great Dane Customer which (i) are
over sixty (60) days past due, and (ii) include an aggregate outstanding Unpaid
Time Balance in excess of $250,000.00, Great Dane shall have the option to
repurchase the related Documents from the Company for an amount equal to the
Document Repurchase Price. Any sale of Documents by the Company to Great Dane
under this Section 2.11 shall be without recourse or warranty of any kind except
that such assignment will convey the Documents free and clear of any rights of
persons claiming by, through, or under the Company. Such option to repurchase
Documents by Great Dane shall not affect in any manner the respective Repurchase
Period.
Section 2.12. REPOSSESSION. In the event the Company repossesses
any Property within the Repurchase Period or, if there is no default in payment,
at any time after the Company elects to repossess any Property following a
default by the Great Dane Customer in the performance of its other obligations
under the Contract, the Company shall then take such action as the Company deems
necessary and advisable to foreclose upon and sell such
31
Property free and clear of the Great Dane Customer's interest therein. If the
Company forecloses its security interest in such Property at a public
foreclosure sale, the Company shall:
(i) Give Great Dane and the related Dealer the same prior written
notice of such foreclosure sale as is given to the Great Dane Customer.
(ii) Bid up to or, at the Company's option, in excess of the
appraised value of the Property, but in no event shall the Company be obligated
to bid in excess of the amount of the Net Unpaid Time Balance under the
Contract. Should the Company's bid be higher than any other bid entered, the
Company shall purchase such Property at its bid price. Should any other person
or persons enter a cash bid equal to or higher than the bid of the Company, the
Company shall sell the Property to the maker of the highest bid and such sale
shall be deemed to be a "Resale" under Section 2.13 and the net amount received
by the Company at such sale shall be deemed to be the "Resale Amount" under
Section 2.14. In the event Great Dane and the Company shall so agree, the
Property may be sold to a third party at a public or private foreclosure sale
for an amount less than the Net Unpaid Time Balance and such sale shall be
deemed to be a "Resale" under Section 2.13 and the net amount received by the
Company at such sale shall be deemed to be the "Resale Amount" under Section
2.14.
(iii) If the Company is the purchaser at a foreclosure sale
referenced in Section 2.12 (ii) above or otherwise becomes the owner of the
Property, the Company shall give Great Dane and the
32
Dealer verbal notice of the impending delivery of such Property if such Property
is not then in the possession or control of Great Dane or the Dealer, as
appropriate.
(iv) With respect to Property subject to a Contract assigned to the
Company by an Affiliate Dealer and unless prevented from doing so because of the
occurrence of an Impediment described in Section 5.13, the Company shall deliver
such Property to the nearest Affiliate Dealer or at another location designated
by Great Dane which is not more than fifty (50) miles from such nearest
Affiliate Dealer. The Company may deliver the Property to a location not
described in the preceding sentence if the Company and Great Dane agree upon
such location and the manner in which the resulting transportation expenses are
to be paid. If the Company requests Great Dane to move the Property and Great
Dane is of the opinion that the Property requires repairs before it can be
moved, Great Dane shall obtain the prior approval of the Company for any such
repairs unless the cost thereof is $250 or less. Other than as provided herein
as a prerequisite to the exercise of the Company's rights, nothing herein shall
be construed as requiring the Company to deliver and/or to sell any Property to
Great Dane. Great Dane shall store and protect the Property in a manner
consistent with Great Dane's standard practice to store and protect its own
inventory and shall allow the Company to conduct a foreclosure sale of the
Property on the Affiliate Dealer's premises and to post signs concerning such
sale on such premises, all without charge to the Company. Any Property
voluntarily
33
surrendered or abandoned to Great Dane or any Affiliate Dealer shall be deemed
to have been delivered to Great Dane pursuant to this Section 2.12 on the date
of such surrender or abandonment and Great Dane shall immediately thereafter
notify the Company of such surrender or abandonment. If space is available at
the Affiliate Dealer to which the Property is delivered, Great Dane shall at all
times provide such space to the Company for storage of the Property without
charge. If space is not available at the Affiliate Dealer, Great Dane shall
arrange to store the Property on space rented by Great Dane and shall charge to
the Company its pro rata portion of the rent for such space.
(v) Following the repossession by the Company of any Property
subject to a Contract assigned to the Company by an Independent Dealer, the
Company shall proceed to foreclose upon such Property as set forth in this
Section 2.12 and return such Property to the Independent Dealer which assigned
the related Contract to the Company.
Section 2.13. GREAT DANE RESALE RESPONSIBILITY. (a) Upon
delivery of any Property subject to a Contract assigned to the Company by an
Affiliate Dealer to Great Dane pursuant to Section 2.12, the responsibility for
selling such Property shall be upon Great Dane. Promptly after such delivery,
Great Dane shall furnish to the Company a written estimate of the cost of the
refurbishment and repairs recommended by Great Dane prior to resale of such
Property. The Company shall pay Great Dane for any reasonable refurbishment and
repairs necessary for resale within thirty (30)
34
days of submission of Great Dane's invoice provided that (i) such expenses are
charged at the same rate for parts and labor as the appropriate Affiliate Dealer
charges its best fleet customers, and (ii) Great Dane shall have obtained the
prior approval of the Company for such expense. Except as otherwise provided
below, Great Dane shall resell such Property at a price acceptable to the
Company and Great Dane within ninety (90) days after the related foreclosure
sale and such resale shall be referred to hereinafter as "Resale". Great Dane
shall use its best efforts to effect the Resale of any Property in a manner
consistent with that used by Great Dane in the disposition of Great Dane's other
items of inventory which are similar in age and condition to such Property.
Great Dane and the Company may agree to extend the aforementioned ninety (90)
day period one (1) time for an additional sixty (60) days. If Great Dane has
not effected the Resale within the time period set forth herein, Great Dane and
the Company shall each obtain within thirty (30) days thereafter, at least one
(1) bona fide bid for the Property to submit to each other and the Property
shall be sold within thirty (30) days thereafter to the highest bidder and such
sale shall be deemed to be a Resale and the net amount received by Great Dane at
such sale shall be deemed to be the Resale Amount (as hereinafter defined).
Great Dane shall purchase such Property for cash from the Company immediately
prior to any Resale for an amount equal to the purchase price to be paid to
Great Dane at the Resale (referred to hereafter as the "Resale Amount"). Any
sale of foreclosed Property by the Company to Great
35
Dane hereunder shall be on an "AS IS - WHERE IS" BASIS, WITHOUT REPRESENTATIONS
OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, AS TO QUALITY, WORKMANSHIP,
DESIGN, MERCHANTABILITY, SUITABILITY, OR FITNESS OF THE PROPERTY FOR A
PARTICULAR PURPOSE OR ANY PURPOSE OR ANY OTHER WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, OF ANY KIND.
(b) Upon delivery to an Independent Dealer of any Property subject
to a Contract assigned to the Company by such Independent Dealer, the
responsibility for selling such Property shall be upon such Independent Dealer;
provided however, the sale price for such Property shall be subject to the
concurrence of both Great Dane and the Company. Such sale shall be conducted
pursuant to the respective terms and conditions set forth in the Retail
Financing Agreement. The sale of the Property by the Independent Dealer and the
amount paid to such Independent Dealer at such sale shall be deemed to be a
Resale and the related Resale Amount, respectively.
Section 2.14. REPOSSESSION LOSSES. (a) For the purposes of this
Agreement, a "Repossession Loss" shall mean the Net Unpaid Time Balance owing
under a Contract with respect to Property which has been foreclosed upon by the
Company, plus all expenses incurred by the Company in the transportation, repair
and storage of the Property, plus all sales commissions payable by the Company
under Section 2.19(c), plus, in the case of only those Contracts assigned to the
Company by an Affiliate Dealer, interest on the Net Unpaid Time Balance computed
at the Formula Rate, as defined herein, from
36
the date sixty (60) days after such Property is delivered and available to Great
Dane for Resale to the date Great Dane purchases such Property from the Company
as set forth in Section 2.14(a), less the Resale Amount.
(b) The "Formula Rate" shall consist of the lesser of (i) the
greater of the per annum lending rates publicly announced from time to time by
Morgan Guaranty Trust Company of New York, Citibank, N.A. or The Chase Manhattan
Bank, N.A. as its prime rate, base rate or reference rate for unsecured loans of
the shortest maturity to corporate borrowers (the "Prime Rate") plus 1.0% per
annum; PROVIDED, HOWEVER, that such rate shall not be changed unless at
least two of such banks have announced a change in such publicly announced
rates, or (ii) the highest rate that Great Dane can legally obligate itself to
pay and/or the Company can legally collect.
Section 2.15. GREAT DANE REPOSSESSION LOSS LIABILITY. Provided
that the AIC Account includes a like or greater amount, the Company shall be
paid from the AIC Account, as defined in Section 2.17, an amount equal to:
(i) one hundred percent (100%) of the Repossession Loss arising
under any Contract purchased by the Company from an Affiliate Dealer, and
(ii) the difference, if any, between (x) the Repossession Loss
arising under any Contract purchased by the Company from an Independent Dealer
for the sale of five (5) or more items of Property consisting of new trailers or
semi-trailers to
37
the same Great Dane Customer which had been the subject of a single order to
Great Dane by such Independent Dealer, minus (y) ten percent (10.0%) of the Net
Unpaid Time Balance for such Property remaining under such Contract at the time
of repossession of such Property, and
(iii) the difference, if any, between (x) the Repossession Loss
arising under any other contract purchased by the Company from an Independent
Dealer which is not described in Section 2.15(ii) above, minus (y) fifteen
percent (15.0%) of the Net Unpaid Time Balance for such Property remaining under
such Contract at the time of repossession of such Property.
Great Dane agrees that the Company may so charge the AIC Account
those amounts referenced in the preceding sentence. In the event a Repossession
Loss arises which exceeds the amount, if any, remaining in the AIC Account
(after the return of any amounts by Great Dane pursuant to Section 2.17(c)),
Great Dane shall, subject to Section 2.16, pay the Company in cash immediately
upon demand an amount equal to fifty percent (50%) of the difference between
such Repossession Loss and such amount, if any, remaining in the AIC Account.
Section 2.16. GREAT DANE REPOSSESSION LOSS LIABILITY LIMITS.
Notwithstanding anything to the contrary in Section 2.15, during any single
Calendar Year, as defined herein, Great Dane shall have no further liability for
Repossession Losses if, during such Calendar Year, Great Dane has paid the
Company, pursuant to Section 2.15 from sources other than the AIC Account,
amounts in
38
excess of the greater of (i) two-tenths of one percent (0.2%) of the aggregate
outstanding Unpaid Time Balance for all outstanding Contracts existing on
December 31st of the prior Calendar Year up to a maximum of $1,250,000, or (ii)
$360,000. "Calendar Year" shall mean the period from the Effective Date until
December 31st of that same year and each consecutive twelve-month period
thereafter (or portion thereof in the event this Agreement is terminated during
any such twelve-month period).
Section 2.17. AIC ACCOUNT. (a) The Company shall credit to a
reserve account to be created and maintained on the books and records of the
Company (referred to herein as the "AIC Account"), the sum of three-eighths of
one percent (.375%) of the original Unpaid Cash Price included in each Contract
subject to this Agreement regarding new Property and the sum of one-half of one
percent (.50%) of the original Unpaid Cash Price included in each Contract
purchased by the Company from an Affiliate Dealer subject to this Agreement
regarding used Property. If for any reason the Company rebates any Finance
Charges included in a Contract to the Great Dane Customer, then the Company
shall debit from the AIC Account an amount which, in relation to the original
amount credited to the AIC Account for such Contract, is in the same ratio as
the amount such rebate bears to the original Finance Charges included in such
Contract. Except as set forth in Section 2.15 and Section 2.17(b), the Company
shall hold all amounts in the AIC Account until such time as all Contracts
subject to this Agreement
39
have been paid in full and at such time these amounts shall become the property
of and disbursed to Great Dane.
(b) Provided that a Default by Great Dane shall not have occurred
and be continuing, commencing on the fourth anniversary of the Effective Date,
the Company shall disburse to Great Dane from the AIC Account the difference, if
any, between the balance remaining in the AIC Account minus the greater of (i)
$2,500,000 or (ii) one-half of one percent (0.5%) of the aggregate outstanding
Unpaid Time Balances for all Contracts as of December 31st of the prior Calendar
Year.
(c) In the event the Company makes disbursements to Great Dane
pursuant to Section 2.17(b) and a Repossession Loss subsequently arises which
exceeds the balance then remaining in the AIC Account, Great Dane shall,
immediately upon demand by the Company, remit to the Company in cash an amount
(not to exceed the aggregate amount of all disbursements made by the Company to
Great Dane pursuant to Section 2.17(b)) equal to the difference between such
Repossession Loss minus the balance, if any, remaining in the AIC Account and
such amount shall be credited to the AIC Account by the Company and immediately
thereafter paid to the Company in accordance with Section 2.15. All amounts
remitted to the Company pursuant to the preceding sentence and so credited to
the AIC Account shall not, for the purposes of Section 2.16, constitute a
payment to the Company from a source other than the AIC Account. Immediately
following (i) the termination or expiration of this Agreement, or (ii) any
Default by Great Dane under this Agreement,
40
Great Dane shall remit to the Company in cash the aggregate amount, if any,
disbursed to Great Dane by the Company from the AIC Account pursuant to Section
2.17(b), less any amount previously remitted by Great Dane to the Company
pursuant to this Section 2.17(c).
Section 2.18. DEFICIENCY COLLECTION. The Company shall use
reasonable efforts to collect the remaining Net Unpaid Time Balance due under
any Contract from which a Repossession Loss shall arise. Any net amounts so
collected shall be applied by the Company: (i) first, to reimburse the Company
for all other amounts which may be due and owing to the Company under such
Contract, including without limitation any unpaid expenses of collection,
repossession, transportation, storage, attorneys' fees, and court costs incurred
by the Company in the enforcement of the related Contract which had not
previously been taken into account in calculating the Repossession Loss with
respect to such Contract; (ii) second, to reimburse the Company for any portion
of the Repossession Losses suffered by the Company under all Contracts
previously foreclosed upon which were not shared by Great Dane pursuant to the
last sentence of Section 2.15; (iii) third, in equal amounts to Great Dane and
the Company for any portion of the Repossession Losses shared by Great Dane and
the Company pursuant to the last sentence of Section 2.15; (iv) fourth, to the
AIC Account; and (v) fifth, in the case of a Contract purchased by the Company
from an Independent Dealer, to reimburse such Independent Dealer for any loss
incurred by such Independent Dealer with respect to the related Contract. The
amount set forth in either
41
subsection (i) or subsection (ii) of Section 2.16 shall be increased during any
Calendar Year by the amounts, if any, paid to Great Dane pursuant to subsection
(iii) of the preceding sentence.
Section 2.19. ORIGINATION FEES/COMMISSIONS/COMPANY - CONTRACT
RATE DIFFERENTIAL. (a) Until the establishment of the volume guidelines
described in Section 2.19(b) below and unless otherwise agreed by Great Dane and
the Company, with respect to each sales order placed with an Affiliate Dealer
which describes Property included within one or more Contracts purchased by the
Company from an Affiliate Dealer hereunder, the Company shall pay Great Dane an
origination fee equal to $25 multiplied by the number of trailers or
semi-trailers described in such sales order; PROVIDED, HOWEVER, that the
aggregate amount payable pursuant to this Section 2.19 with respect to any such
sales order shall not exceed $250.
(b) Within ten (10) Business Days after the Effective Date, Great
Dane shall provide the Company with information concerning the dollar volume of
sales for each Affiliate Dealer during 1986 and 1987. As promptly as
practicable following the delivery of such information, Great Dane and the
Company shall negotiate in good faith to establish for each Affiliate Dealer
volume guidelines for the percentage of finance sales which are to be generated
from the total sales by each Affiliate Dealer (based upon the historic levels of
such percentages, the mix of business at each Affiliate Dealer and other
relevant factors), and to establish a schedule for the payment or origination
fees based upon
42
the performance of each Affiliate Dealer with regard to the respective volume
guidelines. The schedule of origination fees set forth on Exhibit C hereto is
expected to be representative of the fee structure for each Affiliate Dealer.
The origination fees set forth in Section 2.19(a) shall be in the alternative
and not in addition to the origination fees contemplated in Section 2.19(b), and
shall have no further force and effect after the quotas contemplated by this
Section 2.19(b) have been established and implemented.
(c) With respect to any Property sold by Great Dane or an
Affiliate Dealer to a person which is not an Affiliate of Great Dane pursuant to
Section 2.13(a) (other than pursuant to the seventh sentence of such Section),
the Company shall pay Great Dane a commission equal to ten percent (10%) of that
portion of the Cash Selling Price of such Property, less any sales taxes,
license fees, title fees and registration fees, which is not in excess of
$10,000, plus, if such Cash Selling Price, as so adjusted, exceeds $10,000, five
percent (5%) of such excess amount.
(d) In the event that the rate of Finance Charges included in (1)
any Contract assigned to the Company by an Affiliate Dealer, or (2) any Direct
Loan in which the seller of the Property is an Affiliate Dealer, exceeds the
Company Rate applicable thereto or which is in effect upon the date thereof for
like Property to a substantially similar Great Dane Customer over the same term,
each Affiliate Dealer or its designee shall be entitled to receive the following
amounts:
43
(i) in the case of an outstanding Contract assigned to the
Company by such Affiliate Dealer relating to new Property, 100% of the first 1%
annual percentage rate of such excess and 50% of any excess over such 1% annual
percentage rate; and
(ii) in the case of an outstanding Contract assigned to the
Company by such Affiliate Dealer relating to used Property, 100% of the first 2%
annual percentage rate of such excess and 50% of any excess over such 2% annual
percentage rate.
Fifty percent (50%) of such amounts shall be payable quarterly by the Company to
Great Dane. The remaining portion of such amounts shall be held by the Company
until such time as the aggregate amount of such funds held by the Company
exceeds one percent (1.0%) of the aggregate outstanding Unpaid Time Balance for
all Contracts. On a monthly basis the excess, if any, of such amounts shall be
payable by the Company to Great Dane.
ARTICLE III
PRIOR AGREEMENT SUPERSEDED
Section 3.1. SUPERSEDE PRIOR AGREEMENT. This Agreement shall
supersede all the terms and conditions included in the Prior Agreement. Only
those Contracts purchased by the Company from a Dealer hereunder on or after the
Effective Date shall be subject to this Agreement. All Contracts purchased by
the Company from a Dealer prior to the Effective Date shall be subject to the
terms and provisions of the Stock Purchase Agreement.
44
ARTICLE IV
TERM
Section 4.1. TERM. The term of this Agreement shall commence on
the Effective Date and shall continue for a period of eight (8) years
thereafter, unless earlier terminated pursuant to Section 4.2, Section 4.3, or
Section 5.5.
Section 4.2. TERMINATION UPON OCCURRENCE OF SPECIFIC EVENTS.
This Agreement may be terminated by either of the parties hereto by written
notice to the other party if any of the following events shall occur and each
such event shall constitute a "Default" hereunder:
(i) the other party shall default in the performance of any of its
obligations to pay money arising hereunder or under any of the Ancillary
Agreements (as defined in the Stock Purchase Agreement) other than this
Agreement ("Related Agreements") and such default shall continue for a period of
thirty (30) days after delivery of written notice of such default by the
non-defaulting party; or
(ii) the other party shall default in any material respect in the
performance of any of its obligations (other than the obligations referred to in
(i) above) arising under any provision of this Agreement or any of the Related
Agreements, and such default shall continue for a period of sixty (60) days
after delivery of written notice of such default by the non-defaulting party; or
(iii) the other party shall make a general assignment
45
for the benefit of creditors; or any proceeding shall be instituted by or
against the other party seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for such party or for any substantial part of its property,
and, in the case of any such proceeding instituted against such party (but not
instituted by it), either such proceeding shall remain undismissed and unstayed
for a period of ninety (90) days or any actions sought in such proceeding
(including, without limitation. the entry of an order for relief against such
party or the appointment of a receiver, trustee, custodian or other similar
official for such party or for any substantial part of its property) shall
occur; or the other party shall take any corporate action to authorize any of
the actions set forth above in this subsection (iii).
Section 4.3. TERMINATION UPON FAILURE OF THE COMPANY TO
PERFORM. (a) Provided that Great Dane is not then in Default hereunder, in
the event that Great Dane is of the opinion, at any time subsequent to the
second anniversary of the Effective Date, that, based upon the Performance
Factors (as hereinafter defined), there has been a material failure by the
Company in the performance of its services as contemplated hereby, then Great
Dane shall deliver to the Company written notice of its opinion of such
46
failure, specifying in reasonable detail the areas of such failure. If in Great
Dane's opinion such failure has not been corrected within sixty (60) days
following delivery to the Company of such notice of failure, Great Dane shall
deliver written notice (the "Second Notice") of its opinion of such continued
failure to the Company. If the Company disputes Great Dane's opinion of such
continued failure referred to in a Second Notice, then the Company shall deliver
to Great Dane written notice (the "Dispute Notice") of such dispute. If the
Company shall not deliver to Great Dane a Dispute Notice within fifteen (15)
Business Days after receipt of a Second Notice, then Great Dane shall be
entitled to terminate this Agreement.
(b) If the Company shall give a Dispute Notice as provided above,
then such dispute as to the performance by the Company shall be determined by
binding arbitration before a panel of three arbitrators in New York, New York in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association as then in effect. Such arbitration shall be conclusive upon the
parties as to all matters decided and shall be enforceable in any court of law
of competent jurisdiction. The parties further agree that no lawsuit shall be
filed by any party with respect to any matters subject to arbitration under
Section 4.3(a) either before or during any arbitration of such matter, except as
necessary to enforce the provisions of Section 4.3(a). Great Dane and the
Company will submit the dispute to the three-member arbitration panel within
thirty (30) days after Great Dane's
47
receipt of the Company's Dispute Notice. Great Dane and the Company shall each
select one arbitrator within ten (10) days after the Dispute Notice is given to
serve on the panel and such arbitrators shall select a third arbitrator within
twenty (20) days after the Dispute Notice is given. If the two arbitrators
shall be unable to agree upon a third arbitrator within the time period set
forth above, then the third arbitrator shall be selected by the American
Arbitration Association no later than thirty (30) days after the Dispute Notice
is given.
In resolving the dispute, the arbitrators shall consider and give weight to all
of the Performance Factors, as hereinafter defined. The cost of arbitration
shall be paid by the party against whom the arbitration is decided, or as
otherwise determined by the arbitrators.
(c) For purposes of this Section 4.3, the "Performance Factors"
which will be used to determine whether there has been a material failure by the
Company to perform its services as contemplated hereby or whether external
factors beyond the control of the Company are the cause of Great Dane's
dissatisfaction shall be (i) the percentage of the aggregate sales volume of the
Property financed pursuant to this Agreement, taking into account, among other
things, then current economic and market conditions, acts or omissions of Great
Dane (including, without limitation, its performance of its obligations
hereunder and under Section 9.11 of the Stock Purchase Agreement), and the
composition of Great Dane's customer base (excluding therefrom those Great Dane
Customers who
48
do not finance Property through independent finance companies), (ii) the level
of service provided to Great Dane and the Great Dane Customers pursuant to this
Agreement compared to the service provided by Affiliates of the Company and
other independent finance companies to other manufacturers of over-the-road
trailers and tractors and their comparable customers, and (iii) the financing
terms (considering the Company Rate and not the rate quoted by the Affiliate
Dealers to the Great Dane Customers) provided by the Company to Great Dane
Customers pursuant to this Agreement compared to the terms provided to
comparable customers by Affiliates of the Company and other independent finance
companies in connection with financings similar to those contemplated by this
Agreement.
(d) The sole question to be decided by the arbitration panel
shall be whether, based on the Performance Factors, there has been a material
failure by the Company in the performance of its obligations hereunder or
whether external factors beyond the control of the Company are the cause of
Great Dane's dissatisfaction. Great Dane shall have the burden of proving that
such a material failure by the Company did not result from external factors
beyond the control of the Company. If the arbitration panel shall determine by
a majority vote that there has been such a material failure by the Company which
was not caused by external factors beyond the control of the Company, then this
Agreement may be terminated at Great Dane's option upon not less than ten (10)
Business Days' notice to the Company delivered at any time within six (6) months
after such determination by the arbitration panel.
49
Section 4.4. EFFECT OF EXPIRATION OR TERMINATION. Following the
expiration or termination of this Agreement, except with respect to any
outstanding commitment by the Company to make an Advance pursuant to Article I
or commitment by the Company to purchase a Contract pursuant to Article II, the
Company shall have no further obligation to make Advances under Article I or to
purchase Contracts under Article II; provided however, this Agreement shall
remain in full force and effect with respect to any outstanding Advances or
Contracts (or outstanding commitments by the Company to make an Advance or to
purchase a Contract) or related obligations of the parties hereto to each other
hereunder which have not been satisfied in full.
Section 4.5. RESERVATION OF REMEDIES. Termination of this
Agreement shall not constitute a waiver by either party of its rights to be
compensated for any damages arising from any breach of this Agreement by the
other party; PROVIDED, HOWEVER, except for the remedies set forth in Section
9.11(F) of the Stock Purchase Agreement with respect to the termination of this
Agreement, that in no event, whether prior to or after the termination of this
Agreement, shall either party be liable for consequential or incidental damages,
including, but not limited to, loss of production or profits.
ARTICLE V
MISCELLANEOUS
Section 5.1. GENERAL. No failure or delay on the part
50
of either party in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof. nor shall any single or partial exercise of
any such power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy. The repurchase by Great
Dane of any Contract from the Company pursuant to this Agreement shall not
constitute a default under Section 9.11 of the Stock Purchase Agreement. Each
party hereto shall have an express, contractual right of offset against the
other party for any amounts which are or may become due and owing to such party
under this Agreement or any other agreement. The party owed such amounts may
withhold a like amount or portion thereof from any payment otherwise due to the
other party under this Agreement in full or partial satisfaction of the amount
owed by such party to the other party.
Section 5.2. AMENDMENTS. This Agreement may be modified,
amended, supplemented, or waived only by a written instrument executed by each
of the parties.
Section 5.3. FURTHER ASSURANCES. Each party shall take such
further actions, including, without limitation, execution of documents, as is
necessary to ensure the proper performance by such party of the provisions of
this Agreement.
Section 5.4. SEVERABILITY. All provisions of this Agreement
shall be severable for purposes of enforcement. If any provision of this
Agreement is invalid, ruled illegal by any court of competent jurisdiction, or
unenforceable under present or future laws effective during the term hereof,
then, and in that event, it
51
is the intention of the parties hereto that the remainder of this Agreement
shall not be affected thereby.
Section 5.5. SUCCESSORS AND ASSIGNS. All of the terms and
conditions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns; PROVIDED, HOWEVER, that this Agreement may not be assigned by
either party without the prior written consent of the other. Notwithstanding
any terms to the contrary herein, the Company (which for the purposes of this
Section 5.5 shall include its successors and assigns) may assign this Agreement
without the prior written consent of Great Dane if (i) at the time of such
assignment one hundred percent (100%) of the common stock of the Company's
assignee is owned, directly or indirectly, by a corporation which is the direct
or indirect beneficial owner of one hundred percent (100%) of the common stock
of the Company, (ii) such assignment is pursuant to the sale of substantially
all the assets of the Transportation Division of Associates Commercial
Corporation ("Associates"), or (iii) such assignment is pursuant to a sale of
chattel paper by the Company in which the Company shall service such chattel
paper for the benefit of the purchaser thereof; PROVIDED, HOWEVER, the
rights of an assignee of this Agreement pursuant to subsection (iii) above may
be terminated, at the election of Great Dane if the Company does not continue to
service such chattel paper for such assignee. In the event of an assignment of
this Agreement by the Company pursuant to subsection (ii) of the preceding
sentence or the
52
transfer of any of the shares of common stock of the Company to any person not
specified in subsection (i) of the immediately preceding sentence (other than as
a result of a merger of the Company into Associates or as a result of the
transfer of the shares of capital stock of Associates), Great Dane shall have
the right to terminate the Agreement upon thirty (30) days prior written notice
to the assignee hereof. In the event of an assignment of this Agreement by the
Company pursuant to subsection (iii) of this Section 5.5, the aggregate
outstanding Unpaid Time Balance for all Contracts assigned pursuant thereto plus
the aggregate outstanding Unpaid Time Balance for all Contracts covered hereby
and not so assigned shall be added together for the purposes of subsection (i)
of Section 2.16. In the event substantially all the assets of Great Dane are
sold with the consent of Associates Corporation of North America pursuant to
Section 10.1(B) of the Stock Purchase Agreement, Great Dane may assign its
rights and obligations under this Agreement to the party which purchases such
assets, provided that such party fully assumes all of Great Dane's existing and
hereafter arising obligations hereunder.
Section 5.6. NOTICES. Except as otherwise specifically provided
herein, any notices or other communications required under this Agreement shall
be in writing (including telecopy communications), and shall be sent by mail,
telecopier or courier as follows:
53
(a) If to Great Dane, with respect to all notices and
communications pursuant Article IV or Section 5.5 of this Agreement, addressed
to:
International Controls Corp.
Two Executive Drive, 4th Floor
Somerset, New Jersey 08873
Attention: Arthur M. Goldberg
Telecopier: (201) 469-9151
with a copy to Frank L. Stifelman
Orloff, Lowenbach, Stifelman & Siegel
101 Eisenhower Parkway
Roseland, New Jersey 07068-1082
(b) If to Great Dane, with respect to all other notices and
communications pursuant to this Agreement, addressed to:
Great Dane Trailers, Inc.
East Lathrop Avenue
Savannah, Georgia 31402-0067
Attention: James C. Rossiter
Telecopier: (912) 236-0647
(c) If to the Company, addressed to:
Associates Commercial Corporation
150 North Michigan Avenue
Chicago, Illinois 60601
Attention: General Counsel, with a copy to
Controller
Telecopier: (312) 781-5974
and
Associates Corporation of North America
250 E. Carpenter Freeway
P. 0. Box 660237
Dallas, Texas 75266-0237
Attention: President
Telecopier: (214) 659-4004
Telex: 791566
54
Either party hereto shall be entitled to specify a different address by giving
written notice as aforesaid to the other party. All notices shall be deemed to
have been duly given or made when delivered by courier or upon return of receipt
requested card and when telecopied, receipt acknowledged.
Section 5.7. CONFIDENTIALITY. (a) The Company and Associates
Corporation of North America shall adopt as policy the guidelines set forth in
Section 5.7(b) and will use its best efforts to ensure substantial compliance
with such policy; PROVIDED, HOWEVER, that Great Dane recognizes that there
can be no assurances that the Company's employees will in every case comply with
such policy. A failure by any of the Company's employees to substantially
comply with the policy set forth in Section 5.7(b) shall not constitute a
material default by the Company under this Agreement unless Great Dane shall
have delivered to the Company written notice specifying in reasonable detail the
circumstances of such non-compliance and such non-compliance by such employees
shall not cease within sixty (60) days after delivery of such notice by Great
Dane.
(b) The Company and Associates Corporation of North America shall
keep confidential information provided to the Company by Great Dane and the
Affiliate Dealers concerning the identity of each prospective Great Dane
Customer, the Property which may be purchased or leased by such Great Dane
Customer and the price and other sale terms which may be incorporated in any
prospective sale of Property by Great Dane to such Great Dane Customer (the
55
"Customer Information"); PROVIDED, HOWEVER, after such prospective Great
Dane Customer purchases such Property from Great Dane or comparable equipment
from a person other than Great Dane, the Company may disclose (1) the terms of
any financing extended by the Company to such Great Dane Customer to any other
person who indicates to the Company that such information will be used in the
consideration of other financing for such Great Dane Customer, and (2) Customer
Information which does not identify the terms of transactions with any
particular Great Dane Customer or under any Contract. Customer Information
shall not include any information that is or becomes available to the Company
through sources other than Great Dane or that is or becomes in the public
domain.
Section 5.8. ENTIRE AGREEMENT. This Agreement and the exhibits
and other documents referred to herein set forth the entire understanding of the
parties with respect to the subject matter hereof, and all prior understandings,
written or oral, with respect to such subject matter are superseded by this
Agreement.
Section 5.9. HEADINGS. The Article and Section headings in this
Agreement are for reference purposes only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
Section 5.10. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
Section 5.11. COUNTERPARTS. This Agreement may be executed in
separate counterparts, each of which shall be deemed an
56
original but both of which, taken together, shall constitute one and the same
instrument.
Section 5.12. REPORTS. (a) The Company agrees to furnish Great
Dane with the following written reports:
(i) a monthly report of the outstanding Unpaid Time Balance
and aging for each outstanding Contract computed as of the end of the previous
month.
(ii) a monthly report of each outstanding Contract,
identified by the originating Dealer which is over sixty (60) days past due as
of the end of the previous month.
(iii) a monthly report of Property repossessed and held by
the Company during the previous month which identifies the respective Contract,
originating Dealer and the reasonably current location of the Property.
(iv) a quarterly report on the activity and balances of the
AIC Account.
(b) Great Dane agrees to furnish the Company with the following
written reports:
(i) a monthly report setting forth the aggregate dollar
volume of sales and leases of Property and the number of new and used items of
Property sold and leased by each Affiliate Dealer during the preceding month.
(ii) a weekly report of all Property or Inventory purchase or
sale orders placed with Great Dane and the Affiliate Dealers during the
preceding week.
57
(c) The Company shall use its best efforts to give Great Dane
prior notice of any legal action instituted by the Company against a Great Dane
Customer under any Contract for payment of more than $500,000.
(d) While the Company and Great Dane each will use its best
efforts to provide each other with the notices, reports and information set
forth in Section 5.12(a), (b), and (c), the Company and Great Dane agree that
the failure of either party to furnish the other with such notices, reports or
information in a timely manner will not constitute a Default by either the
Company or Great Dane under this Agreement for any purpose and shall not affect
the obligations or liabilities of either the Company or Great Dane under this
Agreement.
Section 5.13. IMPEDIMENTS. If the Company is prevented from
repossessing any Property within the period of time specified in Article II of
this Agreement or is prevented from foreclosing upon any Property or delivering
any Property or presenting good title thereto or from taking any other act
whatsoever due to any law, rule, regulation, court order, litigation (which
shall include but not be limited to the pendency of any replevin action or
similar proceeding instituted by the Company to recover possession of any
Property), bankruptcy proceeding, riot, labor dispute, natural disaster, Act of
God, action of any government agency, or if an item of Property must be kept for
a definite period to permit redemption (each of which events is herein called an
"Impediment"), then the period of time, if any, in which the Company shall be
58
required to proceed hereunder shall stop running during such time as an
Impediment shall exist and shall begin running again forty-five (45) days after
such Impediment ceases to exist. Subject to the Company's reasonable business
and legal judgment, the Company shall use reasonable efforts to cause an
Impediment to cease to exist in those cases in which the cessation of such
Impediment is an appropriate course of action under all the facts and
circumstances existing at the time.
Section 5.14. SECURITY INTEREST. If Great Dane retains an
interest of any kind in any Inventory or Property or to the extent any court
deems Great Dane to have an interest of any kind in any Inventory or Property or
in any credits at any time appearing on the books of the Company or in any
monies from time to time in the possession and/or control of the Company, which
shall include but not be limited to the AIC Account, Great Dane hereby grants to
the Company a first priority, perfected security interest therein to secure all
obligations of Great Dane to the Company, whether realized or contingent, and
whether arising under this Agreement or any other agreement between Great Dane
and the Company and/or any Affiliate of the Company. Great Dane will execute
any appropriate financing statements and take any other actions reasonably
requested by the Company to ensure that the security interest granted herein is
and continues to be a first priority, perfected security interest in the related
property.
59
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their respective officers as of the date and year first above
written.
GREAT DANE TRAILERS, INC.
BY:____________________________
TITLE:
GREAT DANE FINANCE COMPANY
BY:____________________________
TITLE:
60
EXHIBIT A
THE
ASSOCIATES
A GULF + WESTERN
COMPANY
GREAT DANE DEALER
LIMITED LIABILITY AGREEMENT
61
Dated:_________________________________
Associates Commercial Corporation
________________________________
________________________________
________________________________
(hereinafter called "Associates")
Gentlemen:
We desire from time to time to offer to sell to Associates, upon the
terms and conditions set forth in this Agreement, security agreements,
conditional sale contracts, retail installment sale contracts, leases, chattel
mortgages or other title retention or lien instruments (herein individually
referred to as a "Contract" and collectively referred to as "Contracts")
acceptable to Associates which evidence the time sale at retail or the lease of
the machinery, equipment, and/or vehicles described therein (the "Property") by
us in the ordinary course of our business to our commercial customers (herein
called "Debtors").
1. ASSIGNMENT. Upon the acceptance by Associates of any such
Contract, we will sell, transfer and assign to Associates all of our
right, title and interest in and to the Contract and in any notes,
guarantees and other documents executed in connection with the Contract
(herein, together with the Contract, called "Documents"), all amounts due
or to become due under the Documents, the Property, and all of our rights
and remedies under or in connection with the Documents. Such assignment
will not constitute an assignment of our obligations as seller or lessor
under any such Contract or under any purchase order executed in
conjunction with any such Contract.
2. PURCHASE PRICE. The purchase price which Associates will pay
us for each Contract shall be an amount equal to the then unpaid face
amount thereof less the charges of Associates (herein called the "Purchase
Price"). At the time of purchase of a Contract, Associates will pay us an
amount equal to the Purchase Price for such Contract less any amount
withheld by Associates pursuant to Paragraph 3 of this Agreement. Any
portion of the Purchase Price evidenced by a Dealer Certificate delivered
to us by Associates shall be payable as provided in such Certificate.
3. DEALER RESERVE. A. The excess, if any, of the charges
included by us in each Contract over the charges of
62
Associates therefor, or any portion thereof, may at Associates' election
be withheld by Associates and credited to an account on the books of
Associates and designated as our Dealer Reserve or paid directly to us by
Associates. A portion of the Dealer Reserve shall be paid to us from time
to time to the extent that the balance in such Dealer Reserve exceeds
_____% of the then total unpaid balances of all Contracts acquired by
Associates from us. We understand and agree that although all or a
portion of the Dealer Reserve on Contracts sold to Associates is paid to
us by Associates from time to time, the portion of the Dealer Reserve
attributable to a Contract shall not be earned by or due us until such
Contract is paid in full by the Debtor. Therefore, we hereby agree:
(a) In the event of the repossession or retaking of any of
the Property which is the subject of a Contract sold to Associates
or if a loss is sustained by Associates on any such Contract, the
portion of the Dealer Reserve relating to such Contract will be
cancelled and the amount of such Dealer Reserve will be charged
against our reserve account on the books of Associates.
(b) If, in the event of prepayment by the Debtor, any part
of the difference between the cash price and the unpaid face amount
of the Contract is refunded to the Debtor, the same percentage of
the Dealer Reserve attributable to such Contract as the refund bears
to the amount on which it was computed will be cancelled and a like
amount will be charged against our reserve account on the books of
Associates.
(c) In the event the charges of Associates for the purchase
of a Contract are reduced because any insurance coverage included in
such Contract is cancelled prior to their maturity, the same
percentage of the Dealer Reserve relating to the Contract as the
reduction bears to the amount on which it was computed will be
cancelled and the amount thereof will be charged against our reserve
account on the books of Associates.
In the event our Dealer Reserve from the sale of Contracts to Associates
is insufficient to satisfy the charges enumerated above, we shall from
time to time promptly, upon demand, pay to Associates the amount of such
charges.
3.B. If, for any reason, Associates discontinues buying Contracts
from us or if we are indebted to Associates either hereunder or otherwise,
or if any of the events described in Paragraph 8 hereof has occurred which
obligates us to
63
repurchase Documents assigned to us by Associates hereunder, or if we are
no longer doing business as a going concern, or if there is then any
existing breach of any representation, warranty or agreement on our part,
then notwithstanding any other provision herein. Associates may hold all
amounts in our Dealer Reserve until all Contracts purchased by Associates
from us and all of our outstanding obligations to Associates, whether
under this Agreement or otherwise, have been fully paid, and at the option
of Associates, Associates may charge any of our obligations against our
reserve account on the books of Associates. We hereby grant Associates a
security interest in the Dealer Reserve and any other credits at any time
appearing on the books of Associates as security for all of our realized
or contingent obligations to Associates, whether arising under this
Agreement or otherwise. Neither the transfer to us from time to time of
any portion of the Dealer Reserve, nor the institution of any bankruptcy,
insolvency, receivership or liquidation proceeding by or against us shall
affect the rights of Associates under this Agreement. Unless Associates
expressly agrees otherwise in writing, no amount held in our Dealer
Reserve, or otherwise, or evidenced by a Dealer Certificate, or any sum
due us from Associates, whether earned or unearned, shall bear interest or
otherwise accrue profits.
4. REPRESENTATIONS AND WARRANTIES. With respect to all
Documents purchased pursuant to this Agreement, we represent and warrant
that at the time of purchase and at all times thereafter: the Documents
will be genuine, enforceable, in all respects what they purport to be, and
the Contract will constitute the entire agreement between us and the
Debtor(s) relating to the Property; all signatures, names, addresses,
amounts and other statements and facts contained in the Documents will be
true and correct; if the Contract evidences a sale, the Property will have
been sold to the Debtor(s) in a bona fide time sale transaction; if the
Contract evidences a lease, it will represent a valid, lawful deferred
payment obligation of a bona fide lessee, will constitute the only lease
or rental agreement relating to the Property and we will not have given
any party any purchase or renewal options in or to the Contract or the
Property except as stated in the Contract, the Debtor(s) will have paid
the downpayment, advance rentals or deposit in cash or as otherwise stated
in the Contract and no part thereof will have been loaned directly or
indirectly by us; no rentals or other monies due under the Contract will
have been prepaid and no deposit will have been paid by the Debtor(s)
except as stated in the Contract; the Property will have been delivered in
satisfactory condition to the Debtor(s), will have been properly installed
if required, and will have been accepted by the Debtor(s); any notice of
insurance or certificate or
64
policy thereof will be or will have been delivered to the Debtor(s) within
the time required by law; all parties to the Documents will have the
capacity to contract and none of such parties will be a minor; the
Debtor(s) will not then be in default under the Contract; the security
interest, lien or reservation of title evidenced by the Documents and/or
granted by us to Associates hereunder will be valid, first, prior to all
others and effective against all persons; we will have caused such actions
to be taken or initiated as are required or permitted by statute or
regulation to perfect and disclose the interest of Associates in the
Property; we will have full title and the right to sell and assign the
Documents and such assignment will convey the same free and clear of all
liens and encumbrances whatsoever; the Documents will be and will continue
to be free from defenses, counterclaims, cross-claims and set-offs; and
Associates shall have been designated as loss payee under an insurance
policy acceptable to Associates in the form of Fire Insurance with
Extended Coverage or Combined Additional Coverage and Collision, Theft
and/or Vandalism and Malicious Mischief Coverage, when appropriate,
insuring the Property for not less than its actual cash value and having a
deductible collision provision in an amount acceptable to Associates and
such other insurance as Associates may from time to time reasonably
require. We further represent and warrant that, from and after the date
of assignment of the Documents, we shall have no authority and will not,
without the written prior consent of Associates, accept collection,
repossess, substitute or consent to the return of the Property, or modify
the terms of the Documents. In purchasing any Contract under this
Agreement, Associates shall be relying upon our warranties as to such
Contract, and the knowledge of Associates of any breach of any such
warranties at the time of its purchase of any Contract shall not impair or
constitute any waiver of any such warranties or of any of our obligations
with respect to such Contract. Associates shall have no obligation to
notify us of any breach of any of such warranties which may come to its
attention or to undertake any cure or remedy of any defects in any
Documents.
5. NOTIFICATIONS, WAIVERS AND BOOKS AND RECORDS. We shall notify
the Debtors under all Contracts assigned to Associates to make all future
payments directly to Associates at such address as Associates shall
specify. We hereby agree that, with the exception of monies received by
us from the Debtor which are specified as having been received in the
Documents and installment payments received by us prior to our assignment
to Associates of the Documents which are applied by us as a reduction of
the unpaid face amount of the Contract, all monies and other forms of
payment received by us from any obligor under Documents assigned to
Associates will be held by
65
us in trust for Associates. If any such payment is in the form of a
check, money order or other instrument made payable to us, we shall
immediately endorse and/or assign such instrument to Associates and any
such payment, regardless of its form, shall be promptly, without demand,
forwarded to Associates. If we fail, for any reason, to give the notice
referred to above or to complete the endorsement and/or assignment
specified above, Associates or its representative is hereby authorized and
empowered to do so in our name and as our agent. We give express
permission to Associates to release, on terms satisfactory to Associates
or by operation of law or otherwise, or to compromise or adjust any and
all rights against, and grant extensions of time of payment to, the
Debtor(s) or any other persons obligated on the Documents, or to agree to
a transfer of any Property or a substitution of a Debtor and to otherwise
handle the making of collections in accordance with the business judgment
of Associates, without notice to us and without affecting our obligations
to Associates under this Agreement. We shall make suitable and proper
entries on our books and records showing the absolute sale to Associates
of such Documents as may be purchased by Associates and Associates or its
authorized representative may examine our books and records relating to
such Documents at any time during regular business hours. If we retain an
interest of any kind in the Property, or to the extent that any Court
deems us to have an interest of any kind in the Property, we hereby grant
Associates a security interest in the Property to secure all obligations
under this Agreement and under the Documents. We will, upon request from
Associates, execute such other documentation as Associates may reasonably
require to evidence and/or give notification of the rights of Associates
in and to the Documents and/or the Property. If the rights or obligations
under any Document are modified by order of any court or other
governmental agency, such modification shall not relieve us of our
obligations to Associates hereunder.
6. INSURANCE. Any amounts advanced by Associates at any time
after its purchase of a related Document, plus the charges of Associates
thereon, relating to insurance on Property covered by the Documents, shall
be deemed added to the amount then remaining unpaid under the related
Documents for the purpose of computing our obligations to Associates under
this Agreement and any related assignment or endorsement.
7. WITHOUT RECOURSE ASSIGNMENT. A. Unless otherwise agreed, all
Documents shall be assigned to Associates without recourse as to the
financial ability of the Debtor to pay, but subject to the warranties and
representations contained in such assignment and in this Agreement, and
subject to the
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terms and conditions hereof. In the event of a default under the terms of
Documents so assigned, Associates shall take such action as Associates may
deem necessary and advisable to collect the unpaid balance due thereunder,
including but not limited to the retaking, repossessing or recapturing of
any or all of the Property covered by the Documents or the institution of
legal action to affect such retaking, repossession or recapturing.
7.B. In the event that Associates repossesses or recovers
possession of any Property subject to a Contract during the Repurchase
Period, as defined herein, Associates shall take such action as Associates
deems necessary and advisable to foreclose upon and sell such Property
free and clear of the Debtor's interest therein. If Associates takes
possession of any Property within the Repurchase Period and becomes the
purchaser of such Property at the aforementioned foreclosure sale (which
may be conducted following the close of the Repurchase Period), we will,
promptly upon demand by Associates and subject to the terms of this
Paragraph, purchase such Property from Associates. The "Repurchase
Period" shall begin upon the maturity date of the earliest installment due
under the Contract which is more than 50% unpaid and shall end 180 days
thereafter, provided however, such period: (a) shall not include any days
during which an Impediment, as defined herein, shall exist, and (b) shall
be extended by 45 additional days after any Impediment shall cease to
exist. Any law, rule, regulation, court order, litigation (which shall
include but not be limited to the pendency of any replevin action or
similar proceeding instituted by Associates to recover possession of any
Property), bankruptcy proceeding, riot, labor dispute, natural disaster,
Act of God, action of any governmental agency or statutory redemption
period which, in whole or in part, impairs Associates' ability to
repossess or recover possession of any Property during the Repurchase
Period or to otherwise perform as contemplated under this Agreement shall
constitute an "Impediment."
7.C. Following the purchase of the Property by Associates,
Associates shall give us notice of this fact and that Associates intends
to deliver the Property to us. Associates shall deliver the Property to
us at our place of business, or at such other location as we will
designate. If the point of delivery is more than 250 miles from the point
of repossession, we will pay all delivery charges incurred after the first
250 miles. Upon delivery of the Property, we will place the Property for
sale and will, with the approval of Associates, sell the Property within
90 days of delivery. With the consent of Associates, this approved sale
period may be extended for an additional 60 day period. If we have not
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sold the Property within the approved period of time we and Associates
shall, within 30 days thereafter, each obtain two bona fide bids and
thereafter the Property shall be sold to the highest bidder. Any Resale
of Property shall be a sale by us as the seller to the purchaser. A sale
under this Subparagraph 7.C., whether the purchaser is located by us or by
Associates, shall constitute a "Resale" for purposes of this Agreement.
7.D. We hereby acknowledge and agree that any Property delivered to
us by Associates pursuant to Paragraph hereof shall be held by us for the
benefit of Associates, that we shall merely be a bailee of the Property
for Associates until the Resale, and that Associates will be transferring
no rights to us in the Property by such delivery other than those
specified herein. We agree to safely store the Property without cost to
Associates; to redeliver the Property to Associates upon demand, and
authorize Associates to secure comprehensive insurance coverage upon the
Property for the term of our possession at our cost. We will mark our
books and records to designate the ownership rights of Associates and
shall, upon request from Associates, execute such other documentation as
Associates may reasonably require to evidence and/or give notification of
our relative rights in the Property. To the extent that any Court of Law
deems us to have an interest of any kind in the Property, we hereby grant
Associates a security interest in the Property to secure our obligations
under this Agreement.
7.E. We agree to purchase the Property from Associates immediately
prior to the Resale of the Property and Associates agrees to deliver good
unencumbered title to the Property to us (which title will be evidenced by
a properly endorsed certificate of title or repossession certificate of
title or by a bill of sale, whichever is applicable). The purchase price
for the Property shall be payable by us to Associates immediately upon the
Resale of the Property and shall be an amount equal to the proceeds
received by us from the Resale, plus interest upon the unpaid principal
balance due under the related Contract from the date of repossession of
the related Property to the date of our payment to Associates computed at
the lesser of the lawful maximum rate of interest which we may pay and
Associates may collect or Associates current published used wholesale
rate, and plus any sums payable to Associates by us under Subparagraph
7.F. The sale of the Property to us by Associates shall be on an "AS IS -
WHERE IS" BASIS WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS
OR IMPLIED, AS TO QUALITY, WORKMANSHIP, DESIGN, MERCHANTABILITY,
SUITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED.
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7.F. If the proceeds of the Resale of the Property are insufficient
to fully reimburse Associates with respect to the related Contract, we
agree to immediately pay Associates the lesser of (a) the amount necessary
to reimburse Associates in full, or (b) (i) _____% of the unpaid time
balance remaining at the time of repossession of the related Property less
any customary refund by Associates of unearned finance charges. For
purposes of this Paragraph 7, Associates shall be considered fully
reimbursed when Associates has received the amount of the then unpaid face
amount of the related Contract, plus approved expenses of repossession,
less any customary refund by Associates of unearned finance charges, less
any insurance premium refund payable directly), to Associates, less any
insurance proceeds received by Associates which are not used by Associates
to restore or repair the Property, less any costs in excess of $1,000 of
restoring or repairing the Property incurred due to loss or damage that
would have been covered by physical damage insurance, less the amount of
all installments due under the related Contract which were at the time of
repossession, in default in excess of 120 days, except those installments
due under the related contract, which were at the time of repossession, in
default in excess of 120 days, except these installments becoming in
default during the existence of an Impediment, and less the proceeds of
the Resale of the Property. In all cases, the following expenses shall be
considered approved expenses of repossession: actual out-of-pocket
expenses incurred by Associates in repossessing, transporting and storing
the Property, including reasonable attorney's fees and court costs; the
payment of mechanic's and/or garageman's liens not in excess of $1,000;
the cost of emergency repairs not in excess of $500; and necessary
reconditioning expenses not in excess of $1,000. Our prior approval will
be required for any other expenses. We agree that any deficiency
remaining due from the Debtor and/or surplus due to the Debtor shall be
computed in accordance with applicable state and federal laws, regulations
and decisions and that any such surplus shall be payable in accordance
therewith.
8. WAIVER, REASSIGNMENT AND BREACH OF WARRANTY. We hereby waive
presentment, demand, notice and protest as to all Contracts. If any of
the representations and warranties contained in Paragraph 4 hereof or any
representation or warranty made by us to Associates in any other agreement
relating to Documents is untrue, we hereby unconditionally agree to
promptly repurchase the affected Documents on demand from Associates for
the remaining unpaid balance thereof, plus any expenses of collection,
repossession, transportation and storage, and reasonable attorney's fees
and court costs incurred by Associates in enforcing the rights of
Associates under the Documents against the Debtor or enforcing the rights
69
of Associates hereunder against us, less any customary refund by
Associates of unearned finance charges. If we default in any of our
obligations to Associates, become insolvent, cease doing business as a
going concern, make an assignment for the benefit of creditors, or if a
petition for a receiver or in bankruptcy is filed by or against us, we
hereby unconditionally agree to promptly repurchase all Documents assigned
to Associates by us hereunder at the purchase price set out above. We
shall continue to be liable hereunder, notwithstanding a waiver of or
failure to enforce any of the terms, covenants or conditions contained in
the Documents on the part of Associates or any release of, or failure on
the part of Associates to realize upon or protect the Property or the lien
thereon. ANY REASSIGNMENT OF THE DOCUMENTS BY ASSOCIATES, WHETHER UNDER
THIS PARAGRAPH OR OTHERWISE, SHALL BE WITHOUT RECOURSE OR WARRANTY OF ANY
KIND.
9. ADDITIONAL REPRESENTATIONS AND WARRANTIES. We represent,
covenant and warrant to Associates that: (a) If we have represented
ourselves to be a corporation or execute this Agreement as a corporation,
we are duly organized, validly existing and in good standing under the
laws of the State of our Incorporation; we are duly qualified as a foreign
corporation to do business in each State in which the nature of our
business requires such qualification; the execution and delivery of this
Agreement and the performance thereof by us are not in violation of any of
the provisions of our Certificate of Incorporation or By-laws; we have
taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement; and, Associates is authorized to rely
upon any certificate or other writing executed and delivered to Associates
on our behalf by our Secretary or any Assistant Secretary with respect to
the persons authorized and designated to sell, assign and deliver
Contracts to Associates, and to execute any customary assignments and
other documents and endorsements in furtherance thereof; (b) If we have
represented ourselves as a partnership, whether general or limited, or
execute this Agreement as a partnership, either all general partners have
executed this Agreement or the signatory on this Agreement has the full
right and authority to execute this Agreement on behalf of and to bind the
partnership and, unless otherwise specified in writing, Associates is
authorized to accept the signature of any partner and of any person
authorized and designated by any partner as binding upon the partnership
with relation to the sale, assignment and delivery of Contracts under this
Agreement, and the execution of assignments and other documents and
endorsements in furtherance thereof; and (c) The execution, delivery and
performance of this Agreement is not in violation of any indenture,
mortgage, or other agreement to which we are a party or under which we may
be
70
bound. We shall furnish to Associates (i) as soon as practicable after
the close of each fiscal year a copy of our audited financial statements
for each such fiscal year, and (ii) such other information respecting our
business, operation and financial condition as Associates may from time to
time reasonably request.
10. MODIFICATION, WAIVER AND ASSIGNMENT. No modification or
waiver of any provision of this Agreement shall be effective unless such
modification or waiver shall be in writing and signed by our duly
authorized officer or agent and by a duly authorized officer of Associates
and any such modification or waiver shall then be effective only for the
period, on the conditions, and for the specific instances and purposes in
such writing. Associates may from time to time at its sole discretion
sell certain Documents and continue to enforce such Documents for the
benefit of the purchasers thereof pursuant to a collection agreement or
other service arrangement with such purchasers. Following such a sale,
our obligations and liabilities hereunder with regard to such Documents
and the Property subject thereto shall remain in full force and effect and
shall inure to the benefit of such purchasers. In the event Associates
repurchases such Documents from the purchasers thereof, our obligations
and liabilities hereunder with regard to such Documents and the Property
subject thereto shall remain in full force and effect and shall inure to
the benefit of Associates as if such sale and repurchase of such Documents
by Associates had not transpired. Associates may assign its related
rights under this Agreement to the purchasers of such Documents and our
related obligations and liabilities hereunder shall inure to the benefit
of such purchasers. We may not assign any of our rights and obligations
hereunder without the prior written consent of Associates.
11. NOTICES. All notices, offers, demands or replies by either
party to this Agreement shall be in writing and shall be sent by first
class mail, postage prepaid, and addressed, if to Associates, to the
address of Associates shown above, marked "Attention: Branch Manager", and
if to us, to the following address, marked to the attention of the person
whose signature appears below, or to such other person or address as
either party shall from time to time designate to the other in
writing:_____________________________________________________
_____________________________________________________________.
Upon the acceptance of Associates, the terms and provisions hereof
shall constitute an agreement between us which shall inure to and bind us and
our respective assigns. Any such termination will not affect our respective
rights or obligations as the Documents which Associates has purchased or made a
binding
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commitment to purchase prior to the effective date of termination. This
Agreement may be referred to as the Great Dane Dealer Limited Liability
Agreement.
DEALER___________________________________
WITNESS: By:____________________________________
_____________________________ Title:_________________________________
Accepted and agreed to at __________________________________, on
_________________________
(Date)
ASSOCIATES COMMERCIAL CORPORATION
By:___________________________________
Title:_____________________________
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AMENDMENT
This Amendment is by and between Associates Commercial Corporation
("Associates") and _____________________ (the "Dealer") and shall become a part
of and specifically incorporated in that certain Great Dane Dealer Limited
Liability Agreement (the "Agreement") dated on the same date hereof between the
parties hereto.
Associates and the Dealer agree that the Agreement shall be amended as follows:
1. The first sentence in Paragraph 7.F. of the Agreement shall be deleted in
its entirety and the following sentence shall be added to the Agreement as a
substitute in the place thereof:
If the proceeds of the Resale of the Property are insufficient to fully
reimburse Associates with respect to the related Contract, we agree to
immediately pay Associates the lesser of (a) the amount necessary to
reimburse Associates in full, or (b)(i) 10% of the unpaid time balance
remaining at the time of repossession of the related Property less any
customary refund by Associates of unearned finance charges computed as of
such date regarding any Contract(s) which evidences the time sale to the
same Debtor of Property consisting of five (5) or more new trailers and/or
semi-trailers manufactured and/or distributed by Great Dane Trailers, Inc.
("Great Dane") which were purchased by us from Great Dane pursuant to a
single order, provided that we furnish Associates, at the time such
Contract(s) is tendered, documentation acceptable to Associates reflecting
the satisfaction of such condition, or (b)(ii) 15% of the unpaid time
balance remaining at the time of repossession of the related Property less
any customary refund by Associates of unearned finance charges computed as
of such date regarding any other Contract.
2. Except as expressly modified herein, all the terms and conditions included
in the Agreement shall remain in full force and effect.
Dated: ___________________________
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ASSOCIATES COMMERCIAL CORPORATION
By: ______________________________
Title: ___________________________
DEALER: __________________________
By: ______________________________
Title:
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EXHIBIT B
AFFILIATE DEALER AGREEMENT
This Agreement is by and between Great Dane Finance Company (the "Company") and
__________________________ ("the Affiliate Dealer").
WHEREAS, the Company has entered into that certain Amended and Restated
Operating Agreement dated as of August 31, 1988 with Great Dane Trailers, Inc.
("Great Dane"), referred to hereafter as the "Operating Agreement", and
WHEREAS, the Affiliate Dealer desires to sell the Company Documents arising from
the sale of Property, as such terms are defined in the Operating Agreement, by
the Affiliate Dealer to Great Dane Customers, as defined in the Operating
Agreement, pursuant to the terms and conditions set forth in the Operating
Agreement, and
WHEREAS, the Company desires to purchase such Documents from the Affiliate
Dealer pursuant to the terms and conditions set forth in the Operating
Agreement.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS HEREBY ACKNOWLEDGED, the Company and the Affiliate Dealer agree as
follows:
1. With respect to any Documents assigned to the Company by the Affiliate
Dealer pursuant to the Operating Agreement, the Affiliate Dealer will assume and
perform in a timely manner each and every duty and obligation attributable to an
Affiliate Dealer, as such term is defined in the Operating Agreement, under
Article II of the Operating Agreement with respect to such Documents and the
Property, as defined in the Operating Agreement, subject thereto.
2. With respect to any Documents assigned to the Company by the Affiliate
Dealer subject to the Operating Agreement, the Affiliate Dealer represents and
warrants to the Company that each and every representation and warranty of Great
Dane under Section 2.9 of the Operating Agreement will be true and correct and,
for the purposes of this Agreement, such representations and warranties shall
also be deemed to have been made to the Company by the Affiliate Dealer.
3. The Affiliate Dealer additionally represents and warrants to the Company
that: it is duly qualified to do business in each state in which the nature of
its business requires such qualification; the execution and delivery of this
Agreement and the performance hereof by the Affiliate Dealer are not in
violation of any of the provisions of the Affiliate Dealer's Certificate of
Incorporation or By-laws; it has taken all necessary corporate action to
authorize the execution, delivery and performance of this
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PAGE 2
Agreement; the Company is authorized to rely upon any certificate or other
writing executed and delivered to the Company on behalf of the Affiliate Dealer
by its Secretary or any Assistant Secretary with respect to the persons
authorized and designated to sell, assign and deliver Documents to the Company
and to execute any assignments and other documents in furtherance of the
Operating Agreement: and that it has and will continue to hold all licenses and
other qualifications necessary to the conduct of its business which shall
include, without limitation, any license to enter into and assign retail
installment sale contracts regarding the sale of vehicles.
4. This Agreement shall remain in full force and effect during the term of
the Operating Agreement and may only be assigned by the Company or the Affiliate
Dealer consistent with the terms and conditions set forth in Section 5.6 of the
Operating Agreement with respect to an assignment thereof by the Company or
Great Dane, respectively.
Dated: ________________________
GREAT DANE FINANCE COMPANY
By: ___________________________
Title: ________________________
________________________________
AFFILIATE DEALER
By: ___________________________
Title: ________________________
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EXHIBIT C
SCHEDULE OF ORIGINATION FEES
To be agreed upon by the parties hereto prior to the Closing Date.
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