EXHIBIT 10a
AMENDED AND RESTATED FINANCE AGREEMENT
This AMENDED AND RESTATED FINANCE AGREEMENT, dated as
of February 17, 1998 (this "Agreement"), is made by and among Cavalier
Manufacturing, Inc., a Delaware corporation ("CMfg"), Cavalier Industries, Inc.,
a Delaware corporation ("CInd"), Belmont Homes, Inc., a Mississippi corporation
("BHom"), Delta Homes, Inc., a Mississippi corporation ("▇▇▇▇"), Spirit Homes,
Inc., an Arkansas corporation ("SHom"), and Bellcrest Homes, Inc., a Georgia
corporation ("XHom", and together with CMfg, CInd, BHom, ▇▇▇▇ and SHom,
collectively "CMI"), Quality Certified Insurance Services, Inc., an Alabama
corporation ("QCI"), Cavalier Acceptance Corporation, an Alabama corporation
("CAC", and together with CMI and QCI, "Cavalier"), on the one hand, and
Green Tree Financial Servicing Corporation, a Delaware corporation ("GTFSC"),
Green Tree Financial Corporation, a Delaware corporation ("GTC"), Green Tree
Credit Corp., a New York corporation ("GTCC"), Green Tree Consumer Discount
Company, a Pennsylvania corporation ("GTCDC"), and Green Tree Financial Corp.-
Alabama, an Alabama corporation ("GTFCA", and together with GTFSC, GTC, GTCC and
GTCDC, collectively "Green Tree"), on the other hand. It is understood and
agreed that, upon mutual agreement of the parties, Cavalier may, from time to
time, add one or more of its affiliates to this Agreement, which affiliate
manufactures and sells new manufactured homes, and in such event, the term "CMI"
shall be deemed to also refer to such affiliates.
R E C I T A L S:
CMI is a manufacturer of manufactured homes with sales
throughout a substantial portion of the United States. CMI markets its homes and
other services through independent dealers, some of whom sell only Cavalier
Product. CMI enters into agreements with each of its Dealers and provides
certain incentives to exclusive dealers and certain preferred dealers. The
incentives provided by CMI to its Dealers include, without limitation, floor
plan finance charge subsidies. CAC, an affiliate of Cavalier, is engaged in the
purchase of retail installment sales contracts. CAC acquires these contracts
with corporate funds and through borrowings from commercial banks. Green Tree is
a major purchaser of retail installment sales contracts secured by manufactured
homes. Green Tree also provides floor plan financing for manufactured home
dealers. Green Tree presently does business throughout the United States and
purchases retail installment sale contracts.
The parties hereto originally entered into this Agreement
as of February 17, 1998, and wish to amend in certain respects and restate the
Agreement as of May 1, 1998.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises contained herein, and for other good and valuable
consideration, the parties hereto, intending to be legally bound, do hereby
agree as follows:
ARTICLE I
DEFINED TERMS
Whenever used in this Agreement, the following words and
phrases, unless the context clearly requires otherwise, shall have the meanings
specified in this article.
"Acceptance Tolerance" shall have the meaning set forth in
Section 3.3.
"Acquisition Premium" shall have the meaning set forth in
Section 3.2.
"Ancillary Product" shall have the meaning set forth in
Section 3.6.
"Available CAC Loans" shall have the meaning set forth in
Section 3.9(a).
"Borrower" means the obligor or obligors under a Consumer
Loan.
"Cavalier Product" means new manufactured homes, together with
fixtures, equipment and options related thereto, manufactured and sold by CMI.
"CAC Loan" means a Consumer Loan made or acquired by CAC.
"Carved-Out CAC Loans" shall have the meaning set forth in
Section 5.1.
"Change in Control" means with respect to a person, (a) any
other person, entity or "group" (within the meaning of Rules 13d-1 through 13d-6
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (other
than any subsidiary or affiliate as of the date hereof of the person undergoing
the change in control or any employee benefit plan of such person or of a
subsidiary of such person) (i) has acquired or agreed to acquire beneficial
ownership of 20% or more of the voting and/or economic interest in the capital
stock, membership or partnership interests of such person, as the case may be,
or (ii) has obtained or agreed to obtain the power (whether or not exercised) to
elect a majority of the board of directors, general partners or trustees of a
person, (b) a majority of the board of directors, managers or other governing
body of the person shall consist at such time of individuals other than (x)
members of the board of directors or other governing body of such person on the
date hereof and (y) other members of such board of directors or other governing
body nominated, recommended, elected, or approved to succeed or become a
director or member of the governing body of such person by a majority of such
members referred to in clause (x) or a nominating committee elected or appointed
by such members referred to in clause (x) or by members so nominated,
recommended, elected, or approved; (c) the board of directors or other governing
body or, if applicable, the shareholders or equity owners of the person, shall
have approved the sale of all or substantially all the assets of such person;
(d) any transaction or event relating to the person occurs which is (or which
would be if the person had a class of equity securities registered under Section
12 of the Exchange Act) required to be described pursuant to the requirements of
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act.
"Chattel Paper Forms" shall have the meaning set forth in
Section 3.9(b).
"Chattel Paper Purchase Agreement" shall have the meaning set
forth in Section 3.10(a).
"Conforming Manufactured Housing Retail Finance Contract"
means (i) a Manufactured Housing Retail Finance Contract relating to a
conventional manufactured home - only (no real estate involved) which is
believed in good faith by CAC to comply with the general criteria for Conforming
Manufactured Housing Retail Finance Contracts set forth on the Underwriting
Guidelines, and (ii) any Special Contracts.
"Consumer Loan" means an extension of credit made under a
Manufactured Housing Retail Finance Contract.
"Conversion Date" shall have the meaning set forth in
Section 3.3.
"Credit Scoring" shall have the meaning set forth in
Section 3.3.
"Dealers" mean persons or entities engaged in the ordinary
course of business in the sale of manufactured homes, including Cavalier
Product.
"Effective Date" means February 28, 1998, or such later date
that all the conditions precedent to this Agreement are satisfied.
"Electronic Pipeline" shall have the meaning set forth in
Section 3.5.
"Exclusive Dealers" means those Dealers of Cavalier Product
which are listed on Exhibit B hereto, as such may be hereafter supplemented or
revised by CMI in writing.
"Existing Floor Plan Receivables" shall have the meaning set
forth in Section 2.2.
"First Loss Guaranty" shall have the meaning set forth in
Section 2.5.
"Floor Plan Agreement" shall have the meaning set forth in
Exhibit X hereto (item 16).
"Floor Plan Customers" shall have the meaning set forth in
Section 2.4.
"Floor Plan Loan" shall have the meaning ascribed to it in
Exhibit X hereto (item 16), and includes Existing Floor Plan Receivables, New
Inventory Floor Plan Financing and Used Inventory Floor Plan Financing.
"Floor Plan Program Terms" shall have the meaning set forth in
Exhibit X (item 1).
"FPL Seller" shall have the meaning set forth in Section 2.2.
"Green Tree Floor Plan Loans" means Existing Floor Plan
Receivables acquired by Green Tree and new commercial loans secured by Inventory
made by Green Tree to Exclusive Dealers and Preferred Dealers.
"Green Tree Loan" means a Consumer Loan made or acquired by
Green Tree, except Consumer Loans acquired from CAC.
"Guaranty" shall have the meaning set forth in Section 2.5.
"Initial Underwriting Guidelines" shall have the meaning set
forth in Section 3.3.
"Inventory" means manufactured homes, together with fixtures,
equipment and options related thereto, held by a Dealer for sale in the ordinary
course of business.
"Losses" shall be limited as provided in Section 2.2(c) and as
otherwise defined and limited in this Agreement with respect to the context in
which it is used.
"Manufactured Housing Retail Finance Contract" means an
agreement evidencing a retail installment sale to a consumer purchaser
principally relating to a manufactured home.
"MLPA" shall have the meaning set forth in Section 5.1.
"New Inventory Floor Plan Financing" shall have the meaning
set forth in Section 2.5.
"Non-Conforming Manufactured Housing Retail Finance Contracts"
means a Manufactured Housing Retail Finance Contract other than a Conforming
Manufactured Housing Retail Finance Contract.
"Origination Fee" shall have the meaning set forth
in Section 3.2.
"Par Rate" shall have the meaning set forth in Section 3.4.
"Pass Rate" shall have the meaning set forth in Section 3.3.
"Pre-Sold Financing" shall have the meaning set forth in
Section 2.4(b).
"Preferred Dealer" means the Dealers of Cavalier Product which
are listed on Exhibit B-1 hereto, as such may be hereafter supplemented or
revised by CMI in writing.
"Preferred Floor Plan Financing" means the Inventory finance
program for Exclusive Dealers and Preferred Dealers contemplated under Article
II of this Agreement.
"Prime Rate" means the prime rate published from time to time
in the Money Rates section of The Wall Street Journal (or its generally
recognized successor).
"Qualified Insurer" shall have the meaning set forth in
Section 3.6.
"Remittance Statement" shall have the meaning set forth in
Section 3.9(a).
"Repurchase Agreement" shall have the meaning set forth in
Section 2.2(d).
"Repurchase Price" shall have the meaning set forth in
Section 3.13.
"Special Contracts" shall have the meaning set forth in
Section 4.3 and shall consist of the Consumer Loans meeting the requirements
referenced therein.
"Trade-in Loans" shall have the meaning set forth in
Section 4.10.
"Transferred CAC Loan" shall have the meaning set forth in
Section 4.10.
"Underwriting Guidelines" mean the Initial Underwriting
Guidelines and, after the Conversion Date, the requisite elements necessary to
achieve a "pass" under the Credit Scoring, subject to Section 3.5.
"Yield Differential" shall have the meaning set forth in
Section 3.2.
"Used Inventory Floor Plan Financing" shall have the meaning
set forth in Section 2.4(a).
ARTICLE II
FLOOR PLAN FINANCE PROGRAM
Section 2.1. Attached as Exhibit F hereto is a description of
CMI's current and presently anticipated floor plan interest subsidy program for
Exclusive Dealers and Preferred Dealers. CMI and Green Tree agree to establish a
cooperative floor plan finance program on the terms set forth in Exhibit X (item
16).
Section 2.2. (a) As a condition precedent to the effectiveness
of this Agreement, (i) Green Tree shall have acquired not later than March
12, 1998, the existing Exclusive Dealer and Preferred Dealer Floor Plan Loans
related to new Cavalier Product Inventory (the "Existing Floor Plan
Receivables"), from the "FPL Seller" who is the party identified on Exhibit X
(item 10), on such terms and conditions as may be mutually acceptable to Green
Tree and FPL Seller; and (ii) FPL Seller shall have executed a consent and
release of Cavalier and Green Tree in a form mutually acceptable; provided that
any Existing Floor Plan Receivables acquired by Green Tree from FPL Seller shall
not be amended or refinanced, at least for a period of 90 days from the original
invoice date for the related Cavalier Product Inventory, to provide for a higher
rate of interest with respect to financing for new Cavalier Product Inventory.
Any new advances by Green Tree after the Effective Date to Dealers whose
Existing Floor Plan Receivables are acquired shall be subject to such terms as
Green Tree and the Dealer may agree. If such terms meet the requirements of this
Agreement (including consistency with the Floor Plan Program Terms), the new
advances shall be treated as a Floor Plan Loan under Section 2.1 and shall be
subject to the related provisions of this Agreement, including Section 2.6. CMI
hereby agrees to indemnify and hold Green Tree harmless from and against all
"losses" incurred by Green Tree relating to credit losses on the Existing Floor
Plan Receivables commencing on the date of acquisition by Green Tree from FPL
Seller and continuing for claims made by Green Tree in writing for
indemnification hereunder until the earlier of (i) the date of substantial
completion of the floor plan check of such related Dealer, or (ii) 60 calendar
days from the date of the first acquisition by Green Tree of an Existing Floor
Plan Receivable. In the event that any indemnification claims are made by Green
Tree, CMI may, at its sole option, in full and complete satisfaction of such
claim (i) acquire the related Floor Plan Loan (and collateral therefor) on a
servicing released basis, at a price equal to the par amount thereof plus
accrued but unpaid interest, (ii) reimburse Green Tree for reasonably expected
losses with respect thereto, or (iii) acquire the entire portfolio of Existing
Floor Plan Receivables, on a servicing released basis, at the par amount thereof
plus accrued but unpaid interest.
(b) For purposes of this Section, a "loss" shall be deemed
to occur only if and to the extent that (i) there exists and is continuing a
material event of default under the related floor plan agreement as of the date
of acquisition by Green Tree of the related Existing Floor Plan Receivables, and
(ii) it is reasonably anticipated by Green Tree, as certified to CMI, that as a
result of such default Green Tree is not likely to make recovery of principal
and all accrued but unpaid interest with respect thereto.
(c) The amount of a "loss" shall be strictly limited to the
reasonably anticipated amount of uncollected principal and uncollected accrued
but unpaid interest, after realization upon the collateral (taking into account
any applicable repurchase agreement), and shall not include costs of collection
or any other expenses or liabilities with respect thereto (except as otherwise
agreed in writing), and shall be net of any set-off or recoupment available to
Green Tree, including those in connection with amounts owed to Dealers for Green
Tree Loans purchased from such Dealers. To the extent of losses paid by CMI, CMI
shall be subrogated to any and all of the rights of Green Tree under its
agreement providing for the acquisition by Green Tree of the Existing Floor Plan
Receivables from FPL Seller and Green Tree shall not waive or relinquish any
rights it may have against FPL Seller under any such agreement relating to the
Existing Floor Plan Receivables.
(d) CMI agrees that Existing Floor Plan Receivables that
are secured by collateral that consists of Cavalier Product shall be subject to
the Inventory Repurchase Agreement, attached hereto as Exhibit E, between Green
Tree and Cavalier Homes, Inc., dated September 20, 1996, as amended June 18,
1997 (the "Repurchase Agreement"), with the invoice date being the original
invoice date with respect to the sale of such collateral; provided that in the
case of Cavalier Product Inventory which is more than 360 days old, such
Cavalier Product Inventory shall be treated, commencing on the date of
acquisition of the Existing Floor Plan Receivables by Green Tree, as being 360
days old on such date.
(e) It is understood and agreed that the provisions
contained herein and in the instruments and agreements referenced herein shall
constitute the sole and exclusive obligations of Cavalier with respect to Floor
Plan Loans and that Cavalier makes no representation or warranty whatsoever
regarding the collectibility of such loans, the enforceability or legality of
the documents relating thereto or the sufficiency of collateral therefor. Green
Tree acknowledges and agrees that Cavalier has no responsibility whatsoever with
respect to formulating any conclusions regarding the creditworthiness of any
Dealer under a Floor Plan Loan. Except as expressly provided herein, Cavalier
shall have no liability or obligation whatsoever with respect to Existing Floor
Plan Receivables after 60 days from the date of acquisition of Existing Floor
Plan Receivables by Green Tree, except as set out in Section , the Guaranty or
as is otherwise set forth herein or in instruments referenced herein.
Section 2.3 Cavalier agrees to use its reasonable efforts to
notify Exclusive Dealers and Preferred Dealers of the Preferred Floor Plan
Financing.
Section 2.4 As part of the Preferred Floor Plan Financing,
Green Tree agrees to offer each Exclusive Dealer and each Preferred Dealer who
obtains a Floor Plan Loan from Green Tree ("Floor Plan Customers"):
(a) A line of credit on commercially reasonable and market
competitive terms in an amount equal to that prescribed on Exhibit X (item 17)
for use in carrying used Inventory (the "Used Inventory Floor Plan Financing");
provided, however, that Green Tree shall not be required to finance any used
Inventory unless Green Tree has, in Green Tree's sole opinion, a first priority
perfected security interest in such used Inventory and Green Tree shall not be
required to finance any used Inventory that does not meet the requirements that
Green Tree may set out from time to time in its sole discretion. Green Tree
agrees that the Used Inventory Floor Plan financing shall not be subject to the
First Loss Guaranty, shall be billed by Green Tree directly to the Exclusive
Dealer or Preferred Dealer, as the case may be, and shall be treated as a
separate line of credit from the financing by Green Tree of new Cavalier Product
Inventory. The terms of the Used Inventory Floor Plan Financing shall initially
be at least as advantageous to the Dealer as those set forth on Exhibit G
hereto; provided that such terms may be revised from time to time by Green Tree
in its sole discretion upon sixty (60) days prior notice to Cavalier.
(b) No interest will be charged for the period set forth in
Exhibit X (Item 2) on new Cavalier Product Inventory that has been identified to
Green Tree as either "Green Tree Pre-Sold Inventory or "Cavalier Acceptance
Pre-Sold Inventory" (i.e., Cavalier Product sold by a Dealer and financed
pursuant to a CAC Loan or a Green Tree Loan) (such financing being referred to
as the "Pre-Sold Financing"); provided that in the case of Pre-Sold Financing
for Exclusive Dealers, the parties agree as set forth in Exhibit X (Item 3). The
amount of any Pre-Sold Financing will not be counted against the Floor Plan
Customer's Floor Plan Loan credit limits. After the Pre-Sold Financing expires,
the related Cavalier Product Inventory shall become subject to the terms of the
New Inventory Floor Plan Financing; provided that the applicable rate of
interest shall be that set forth in Exhibit X (item 4).
Section 2.5 CMI agrees that for each non-contiguous (separate
lot) location of an Exclusive Dealer or Preferred Dealer which is stocked with
new Inventory consisting exclusively of Cavalier Product and who is a Floor Plan
Customer, that CMI hereby guarantees up to the amount set forth on Exhibit X
(item 19). This First Loss Guaranty specifically excludes the matters set forth
on Exhibit X (item 20). The First Loss Guaranty applies solely with respect to
that portion of Floor Plan Loans advanced with respect to new Cavalier Product
Inventory (the "New Inventory Floor Plan Financing"). The Guaranty when
effective with respect to a Dealer will be given in amendment and substitution
to that certain First Amendment to Inventory Repurchase Agreement, dated June
18, 1997, with respect to such Dealer and is not in addition thereto. CMI shall
execute a Limited Guaranty in the form of Exhibit L attached hereto (the
"Guaranty").
Section 2.6 CMI agrees to act as paying agent for Floor Plan
Customers who are Exclusive Dealers or Preferred Dealers solely with respect to
interest due under the New Inventory Floor Plan Financing unless and until CMI
provides prior written notice to Green Tree that CMI elects to cease acting as
paying agent for one or more Floor Plan Customers. For each such Dealer for whom
CMI acts as paying agent, for so long as CMI acts as paying agent, CMI shall
remit to Green Tree 100% of the interest due with respect to New Inventory Floor
Plan Financing. CMI agrees that it will accept billing statements from Green
Tree with respect to interest (provided that the Dealer has authorized Green
Tree and CMI to do so) under the New Inventory Floor Plan Financing and timely
remit the same to Green Tree. Attached as Exhibit F hereto is a description of
CMI's current and anticipated floor plan interest subsidy programs for Exclusive
Dealers and Preferred Dealers. CMI may change the terms of its interest subsidy
program from time to time in its sole discretion, but will provide Green Tree
with 60 days prior notice of such change if such change materially alters
benefits provided to the Exclusive Dealers and Preferred Dealers. Green Tree
acknowledges that the payments remitted by CMI to Green Tree pursuant to this
provision are an administrative convenience to Green Tree's collection efforts
and are in lieu of CMI remitting such payments directly to the Dealer who would
then make direct payment to Green Tree. Accordingly, it is understood and agreed
by Green Tree that CMI has no obligation with respect to any New Inventory Floor
Plan Financing except as otherwise expressly provided in Section and pursuant to
the Repurchase Agreement and the Guaranty. If CMI shall pay any amount under
this Section to Green Tree in error, then Green Tree will promptly on demand by
CMI return such amount remitted by CMI to CMI; provided that Green Tree shall
have no obligation to return amounts that relate to shortfalls in actual
interest subsidies earned by Dealers that are subsequently discovered by CMI. If
and to the extent that CMI makes payments to Green Tree on behalf of a Dealer as
paying agent that exceed the amount of the interest subsidy owed to such Dealer
(i.e., there is a "shortfall"), CMI shall be subrogated to the rights of Green
Tree with respect to such payment but only after all Dealer obligations to Green
Tree have been paid in full and Green Tree has no effective Floor Plan Loan
arrangement with respect to such Dealer. Green Tree agrees that if Green Tree
shall have notice of the continuing existence of any 2.10. material monetary
default, 2.11. default relating to transfer or disposition of collateral under a
Floor Plan Agreement (i.e., sales out of trust), or 2.12. acceleration of the
maturity of any Floor Plan Loan, then in each case Green Tree shall notify CMI
promptly (not to exceed 5 business days) thereof, including the nature of such
event, condition or change, and the identity of the Floor Plan Customer;
provided that Green Tree's failure to give such notice shall not diminish any
rights Green Tree has against Cavalier under the Guaranty except to the extent
that Cavalier has suffered a loss as a direct consequence of Green Tree's
failure to give such notice. Notwithstanding anything else in this Agreement to
the contrary, it is understood and agreed that CMI shall have no obligation to
assist Green Tree in collecting, or attempting to collect, any payments from
Floor Plan Customers and its role under provisions of this section is purely
ministerial and is effected as an accommodation to Green Tree and the Floor Plan
Customers. CMI shall not, in the absence of bad faith, gross negligence,
recklessness or willful misconduct, be liable to Green Tree for any actions
under this provision.
ARTICLE III
RETAIL FINANCE PROGRAM
Section 3.1 Subject to the terms and conditions hereof,
including Section 5.4, CAC shall sell to Green Tree and Green Tree shall
purchase from CAC all Conforming Manufactured Housing Retail Finance Contracts
purchased or originated by CAC from and after the Effective Date at a price
equal to the outstanding principal balance thereof plus accrued but unpaid
interest thereon through the date of conveyance, plus the Acquisition Premium.
Nothing in this Agreement shall preclude CAC from selling Non-Conforming
Manufactured Housing Retail Finance Contracts to any other person.
Section 3.2 Green Tree agrees to pay an acquisition premium
(the "Acquisition Premium") to CAC in an amount equal to that set forth on
Exhibit X (item 5) hereto. Such amount shall be fully earned by CAC upon
conveyance of the related Manufactured Housing Retail Finance Contract by CAC to
Green Tree except as provided in Section 3.15. The amount of Acquisition Premium
shall be adjusted as provided in Exhibit X (item 11) (such adjustment being
referred to as the "Yield Differential"). Green Tree also agrees that a CAC loan
will constitute a conforming Manufactured Housing Retail Finance Contract not
withstanding that CAC may charge additional fees, including interest surcharge,
points or origination fees, in connection with the Available CAC Loan (the
"Origination Fee"), provided such fees do not exceed the amount set forth in
Exhibit X (item 12), subject to any limitations imposed by law, and CAC may
retain such additional fees upon sale of the Available CAC Loan to Green Tree.
In the event a Transferred CAC Loan is prepaid and, as a result, Green Tree
is liable under applicable law to rebate or refund any unearned prepaid finance
charges collected by CAC to the consumer, then CAC agrees to reimburse Green
Tree for such rebate. The aggregate net amount of the Yield Differential and
the Origination Fee paid to CAC shall not exceed the amount set forth in Exhibit
X (item 13).
Section 3.3 Green Tree and CAC agree that from the Effective
Date until the Electronic Pipeline contemplated by Section 3.5 is established
and fully functional (the "Conversion Date") and thereafter as provided by
Section 3.5, the underwriting guidelines applicable to CAC Loans shall be those
attached hereto as Exhibit A or such other guidelines as the parties hereto may
agree in writing (the "Initial Underwriting Guidelines"). From and after the
Conversion Date, Green Tree may establish such other underwriting guidelines
as it deems necessary or appropriate; provided that (i) such underwriting
guidelines shall be generally consistent with prevailing market terms; and (ii)
under the proprietary credit scoring systems ("Credit Scoring") contemplated to
be used by Green Tree, the minimum required score, i.e., "Pass Rate", for CAC
Loans shall not be more than the "Pass Rate" established for comparable Green
Tree Loans in the relevant geographic region (the "Acceptance Tolerance").
Green Tree agrees to promptly advise CAC of any change in the applicable Pass
Rate or composition thereof (including any changes in the system maximums and
minimums and a detailed description of the changes in components underlying such
change, even if the net effect of changes in such components do not affect the
aggregate "Pass Rate"); provided that Green Tree need not give notice of the
rotation of its existing scoring cards to the extent that such rotated scoring
card applies alike to Green Tree Loans in the relevant region. Green Tree shall
promptly advise CAC of the primary reasons for the rejection of any proposed
Consumer Loan under the Credit Scoring in such detail as to permit CAC to
fulfill its obligations under applicable law to provide credit denial notices to
a prospective borrower. CAC or Green Tree or both parties, as required by
applicable law, shall be responsible for completing and sending any credit
approval letters, conditional approval letters, credit denial letters and any
other consumer notices relating to the underwriting of a CAC Consumer Loan, to
the applicable consumer.
Section 3.4 Green Tree and Cavalier agree that for purposes
of this Agreement the "Par Rate" shall be determined in accordance with Exhibit
X (item 6).
Section 3.5 Green Tree agrees to use its reasonable efforts
to establish, prior to August 1, 1998, an electronic system by which prospective
CAC Loans submitted to Green Tree for approval shall be scored through the Green
Tree credit scoring system (the "Electronic Pipeline"). CAC agrees to cooperate
with Green Tree in developing mutually acceptable underwriting criteria relating
to use of credit scores in marginal situations, including credit approval as a
Conforming Manufactured Housing Retail Finance Contract of certain applicants
that receive a credit score of "fail," and credit denial as a Non-Conforming
Manufactured Housing Retail Finance Contract for certain applicants who
otherwise receive a credit score of "pass", and treatment of unscorable
applicants. Green Tree agrees to bear the out-of-pocket costs of establishing
such system and the necessary interface with the existing data processing system
of CAC. Green Tree warrants and covenants that the interface 3.8. will provide a
"pass" or "fail" credit score within ten (10) minutes of transmission by CAC to
Green Tree and, in each case where it does not, CAC shall be authorized to
approve such Consumer Loans as a Conforming Manufactured Housing Retail Finance
Contracts under the Initial Underwriting Guidelines, and 3.9. will accept data
as formatted by CAC's data processing system and return data to CAC in a form
fully compatible with CAC's data processing system.
Section 3.6 Green Tree agrees that a CAC Loan will constitute
a Conforming Manufactured Housing Retail Finance contract notwithstanding that
such a loan may include in its principal balance the financed premiums for
various Ancillary Products offered to borrowers by CAC or its affiliates,
including QCI; provided that the amount of such financed premiums do not exceed
the lesser of (i) ten percent (10%) of the entire principal balance of the
loan, or (ii) Three Thousand Five Hundred Dollars ($3,500.00). Green Tree and
Cavalier agree that the insurance underwriters for such products shall be
limited to those companies listed on Exhibit I hereto or which have an A.M.
Best's quality rating of A and size rating of V3, or such additional companies
as may otherwise be agreed by the parties (collectively, "Qualified Insurers").
Green Tree agrees that Cavalier and its affiliates shall have the exclusive
right to solicit Borrowers under Consumer Loans which were or are CAC Loans with
respect to insurance products, service contracts, extended warranty protection,
service contracts or other tangible or intangible products which relate to
manufactured home ownership (the "Ancillary Products") and Green Tree agrees
that it will not solicit, or permit others to utilize information contained in
the related Borrower loans files or Manufactured Housing Retail Finance
Contracts to solicit, such Borrowers with respect to Ancillary Products for the
duration of such Consumer Loan, notwithstanding any prior termination of this
Agreement; provided that the foregoing shall not restrict or impair the ability
or right of Green Tree to force-place collateral protection insurance in the
event that any Borrower fails to meet such Borrower's requirements under the
related Manufactured Housing Retail Finance Contract and applicable law; and
provided further that Green Tree may from time to time solicit any Borrower on
whom insurance was previously force-placed (and not later flat-canceled) for
other insurance products notwithstanding any provision in this section to the
contrary. If and to the extent that QCI does not have a relationship with a
Qualified Insurer with respect to a particular CAC Loan or Transferred CAC
Loan which permits QCI to place an insurance product with respect to such
Consumer Loan but Green Tree does, Green Tree agrees to appoint QCI as a sub-
agent or subproducer, to the extent QCI is licensed to act as such, and Green
Tree shall share any related commissions received by Green Tree from placement
of such insurance product with QCI in accordance with the commission schedule
set forth on Exhibit M hereto (in no event to exceed the compensation received
by Green Tree); provided that CAC may not, as a sub-agent or a subproducer,
write a greater amount of premiums in areas designated on Exhibit M (which
locations may be revised by Green Tree from time to time by written notice to
reflect changes in the requirements of insurers) as a percentage of all premiums
written by CAC as a sub-agent or subproducer than that which is permitted by the
relevant insurer to be written by Green Tree. Green Tree agrees that Cavalier
will own the book of business Cavalier generates with respect to Ancillary
Products, including renewal commissions, to that book of business, subject to
the terms of Exhibit M if applicable.
Section 3.7 [Reserved].
Section 3.8 Green Tree covenants and agrees that it will not
enter into or permit the continued operation of any agreement or understanding
with any Exclusive Dealer whereby Green Tree shall (i) be granted any exclusive
right to purchase, (ii) be granted any "first look" or similar right with
respect to, or (iii) be the beneficiary of any covenant or condition requiring
the offer or delivery (including any right of first refusal) to Green Tree or
its affiliates of, in each case, any Consumer Loans originated or held by the
Dealer.
Section 3.9 (a) Green Tree agrees to purchase each
Conforming Manufactured Housing Retail Finance Contract which constitutes a CAC
Loan purchased or originated by CAC from and after the Effective Date hereof,
subject to Section 5.4 (the "Available CAC Loans") pursuant to the terms set
forth herein. Green Tree agrees to purchase the Available CAC Loans from CAC on
a weekly basis. CAC agrees to package the Available CAC Loans for delivery to
the address specified by Green Tree, in writing by a reputable overnight courier
each Friday (or if not a business day, the next succeeding business day)
together with a remittance computation reflecting the outstanding principal
balance of such Available CAC Loans and the amount, including Acquisition
Premium, insurance commission, Origination Fee, Yield Differential and any other
relevant fees, to be remitted to CAC. Green Tree agrees to remit to CAC the
specified remittance amount by wire or ACH transfer in immediately available
funds to the account designated by CAC within one business day of receipt of the
package of Available CAC Loans and related "remittance statement" and any late
payment shall bear interest at the interest rates provided for in the respective
related Manufactured Housing Retail Installment Contracts. The "Remittance
Statement" shall set forth the outstanding principal balance of each loan, its
origination date, accrued but unpaid interest with respect thereto, any charges
or premiums relating to Ancillary Products and the related Acquisition Premium,
including as separate components thereof any Yield Differential and any
Origination Fee, and subtotals for each of the foregoing and a total amount to
be remitted by Green Tree to CAC. Each of CAC and Green Tree shall have a period
of sixty (60) days to confirm the accuracy of the remittance computations.
Thereafter, such remittance computations as provided by CAC and accepted without
written protest by Green Tree shall be presumed accurate in the absence of clear
and convincing evidence otherwise. To the extent that adjustments are necessary
in remittances, such adjustments, if made more than thirty (30) days after the
original transmission of funds shall bear interest from such date of
transmission of funds at the Prime Rate.
(b) Green Tree and CAC hereby agree that the Available CAC
Loans shall be evidenced by such documentation as may be specified by Green Tree
in its sole discretion in writing from time to time, which documentation shall
be generally consistent with the documentation used by Green Tree with respect
to Green Tree Loans (the "Chattel Paper Forms"). Green Tree and CAC further
agree that the security interest in collateral for Available CAC Loans shall be
timely perfected by CAC in its name pursuant to CAC's standard lien perfection
procedures relating to manufactured homes and shall be done in compliance with
applicable state law (including, without limitation, certificate of title law
and/or Uniform Commercial Code).
Section 3.10 CAC represents and warrants with respect to each
Available CAC Loan that, as of the date of transfer to Green Tree that:
(a) Such available CAC Loan was purchased by CAC pursuant to
the terms of a Qualifying Non-Recourse Manufactured Home Time Sales Agreement
("Chattel Paper Purchase Agreement"), attached hereto as Exhibit E, which within
a reasonable time upon the request of Green Tree shall contain substantially the
same terms as Green Tree's Manufactured Home Dealer Agreement, and in connection
therewith, CAC agrees to assign to Green Tree all of its rights and remedies
contained in the Chattel Paper Purchase Agreement with respect to such Available
CAC Loan;
(b) CAC purchased the Available CAC loan in the ordinary
course of business and is selling, transferring and otherwise assigning without
recourse all right, title and interest it has in such CAC Loan and in the
underlying manufactured home, including all Chattel Paper Forms and lien
perfection instruments (certificate of title or UCC-1), to Green Tree free and
clear of any lien, encumbrance or prior assignment, and CAC has good title to,
and full right, power and authority to transfer and assign the Available CAC
Loan and all relevant loan documents to Green Tree;
(c) The Chattel Paper Purchase Agreement, pursuant to
which CAC acquired the Available CAC Loan, has been duly executed and delivered
by the related Dealer and is in full force and effect and, subject to applicable
limitations on creditors rights generally and principles of equity and public
policy, is enforceable in accordance with its terms;
(d) CAC has not received any payment on the Available CAC
Loan except payments disclosed to Green Tree in writing at the time the
Available CAC Loan is transferred to Green Tree and any such payments are
accurately reflected in the remittance statement relating thereto;
(e) Up to the Conversion Date, to the knowledge of CAC,
the Available CAC Loan and the Borrower thereunder meet the Initial Underwriting
Guidelines or any alternative requirements for Special Contracts, as the case
may be, in effect on the date such Available CAC Loan was approved for purchase
by CAC from a Dealer;
(f) The Transferred CAC Loan is not and shall not in the
future be subject to all of the following: (i) a lien avoidance claim (based
upon a preferential transfer) by a bankruptcy trustee, (ii) bankruptcy petition
filed by the related Borrower within ninety (90) days after the origination of
such Transferred CAC Loan; and (iii) failure by CAC to timely perfect its
security interest pursuant to applicable bankruptcy law and state law in the
manufactured home serving as collateral for such Transferred CAC Loan;
(g) The Transferred CAC Loan (i) prior to the Conversion
Date, satisfies in all material respects the Initial Underwriting Guidelines, or
(ii) from and after the Conversion Date was not purchased based on information
input by CAC into the Credit Scoring profile which proves to be materially false
or misleading when made; provided that CAC shall have no liability or obligation
with respect to the foregoing representation and warranty to the extent that the
breach thereof is caused by any negligence, lack of due care, fraud, reckless
act or omission or intentional misconduct of the related Dealer, if CAC did not
have actual knowledge thereof; and provided further that this paragraph (g)
shall have no force or effect with respect to a particular Transferred CAC Loan
unless Green Tree provides CAC with notice in reasonable detail of a breach
under this paragraph (g) within a period of sixty (60) days from the date of
transfer of such Transferred CAC Loan;
(h) CAC has not been negligent such that (i) prior to the
Conversion Date, such Transferred CAC Loan fails to satisfy in all material
respects the Initial Underwriting Guidelines, or (ii) from and after the
Conversion Date such Transferred CAC Loan was purchased based on information
input by CAC into the Credit Scoring profile which proves to be materially false
or misleading when made; provided that CAC shall have no liability or obligation
with respect to the foregoing representation and warranty to the extent that the
breach thereof is caused by any negligence, lack of due care, fraud, reckless
act or omission or intentional misconduct of the related Dealer, if CAC did not
have actual knowledge thereof; and provided further that this paragraph (h)
shall have no force or effect with respect to a particular Transferred CAC Loan
unless Green Tree provides CAC with notice in reasonable detail of a breach
under this paragraph (h) within a period of one hundred eighty (180) days from
the date of transfer of such Transferred CAC Loan;
(i) CAC has not engaged in any fraud, grossly negligent
or reckless act or omission or intentional misconduct which materially and
adversely effects the value of an Available CAC Loan;
(j) No Conforming Manufactured Housing Retail Finance
Contract shall have a principal balance which exceeds $60,000 unless otherwise
approved by Green Tree in writing;
(k) All Available CAC Loans were originated and/or
purchased by CAC in compliance with applicable federal, state and local laws and
regulations;
(l) The Chattel Paper Forms utilized by CAC (to the
extent not provided in substance by Green Tree) comply with applicable federal,
state and local laws and regulations;
(m) In the event any Transferred CAC Loans include in
their principal balance the financed premiums for various Ancillary Products
offered by CAC or QCI to Borrowers, CAC or QCI shall notify the applicable
insurance carrier of the assignment of the Transferred CAC Loan to Green Tree
and shall request that Green Tree be named as beneficiary or loss payee, as
applicable; and
(n) CAC holds a valid and enforceable first priority lien
in the manufactured home and, further, CAC has properly perfected its security
interest in the home (in CAC's name) in compliance with applicable state law.
Section 3.11 Except as expressly set forth herein or in any
other agreement contemplated hereby, CAC makes no representations or warranties
whatsoever with respect to the Available CAC Loans and, upon purchase by Green
Tree, Green Tree shall bear all risk of loss with respect thereto.
Section 3.12 The transfer of the Available CAC Loans by CAC
to Green Tree shall be on a "servicing released" basis and CAC shall have no
further interest therein or obligation thereunder except as expressly provided
herein. CAC covenants and agrees that it shall direct any Borrower under a CAC
Loan acquired by Green Tree to make payment to Green Tree or such servicer as
may be designated by Green Tree at its address specified by Green Tree. CAC
hereby appoints Green Tree as attorney in fact to endorse payments made to CAC
which are payments under a CAC Loan transferred to Green Tree. CAC agrees to
promptly convey to Green Tree or its designated servicer any monies received by
CAC relative to any CAC Loan transferred to Green Tree.
Section 3.13 CAC agrees to repurchase any Transferred CAC
Loan which is in breach of any representation or warranty made by CAC under
Section 3.10 at a price equal to the sum of the outstanding principal balance,
Acquisition Premium (including Origination Fee and Yield Differential), accrued
but unpaid interest, and any other relevant fee, of such Transferred Loan (the
"Repurchase Price"); provided that CAC shall have thirty (30) days during which
it may cure such breach, if possible under the law, and to the reasonable
satisfaction of Green Tree. Green Tree and CAC agree that the sole remedy of
Green Tree with respect to a breach of any representation or warranty by CAC
under Section 3.10 is the repurchase of the related Consumer Loan by CAC at the
Repurchase Price; provided that if CAC does not repurchase a Transferred CAC
Loan within ten (10) business days of a written request from Green Tree to do so
that states in reasonable detail the basis for such request, CAC shall be liable
for any reasonable attorneys fees and related costs incurred by Green Tree in
connection with the related Transferred CAC Loan from and after the date of the
related repurchase request by Green Tree.
Section 3.14 [Reserved].
Section 3.15 CAC agrees that if a Transferred CAC Loan is
prepaid as a result of a refinancing by a lender other than Green Tree within
the period set forth in Exhibit X (item 14), CAC shall refund to Green Tree the
amount specified in Exhibit X (item 15).
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 It is understood and agreed that the obligations
of Cavalier under the Repurchase Agreement relate solely to the Dealer to whom
the Cavalier Product was originally invoiced and shall cease and be of no
further force and effect with respect to such Cavalier Product upon any sale or
other conveyance of the Cavalier Product, whether in the ordinary course of
business or in connection with any sale of all or substantially all of the
assets of such Dealer, the sole exception being the acquisition of such
collateral by Green Tree pursuant to foreclosure or other acquisition in
satisfaction of debts previously contracted.
Section 4.2 Green Tree and Cavalier agree to work and
negotiate in good faith for the development of a program for refurbishing by CMI
of repossessed manufactured homes held by Green Tree. This program shall only
apply to those repossessed homes in which Green Tree has completed its
foreclosure of the Borrower's rights.
Section 4.3 Green Tree agrees to work and negotiate in good
faith with CAC to develop products and programs pursuant to which CAC will
promote, and Green Tree will purchase, otherwise Non-Conforming Manufactured
Housing Retail Finance Contracts which in the good faith judgment of CAC meet,
or likely meet, the criteria mutually agreed to by Green Tree and CAC ("Special
Contracts"). Programs to be considered shall include, but not be limited to,
manufacturer rebate transactions and first time home buyer programs.
Section 4.4 Green Tree agrees to work and negotiate in good
faith with Cavalier to develop a private label, customized financing proposal
which will be made available only to Exclusive Dealers and Preferred Dealers
which meet Green Tree's standards of creditworthiness and upon terms
satisfactory to Green Tree in its sole discretion regarding the matters set
forth on Exhibit X (item 18). The terms of such financing must be satisfactory
to Green Tree in its sole discretion.
Section 4.5 The parties hereto covenant and agree not to
disclose any proprietary and/or confidential information contained in Exhibit X
to any person except (i) on an internal need to know basis where such person is
bound by this provision (including appropriate internal safeguards) or other
appropriate confidentiality agreements or ethical obligations, it being
understood that such disclosure may be made to certain relevant professionals,
persons purchasing or considering purchase of loan participations related to
Transferred CAC Loans, Green Tree Floor Plan Loans, or securities backed by such
loans, or to rating agencies or as otherwise required in connection with
securitization transactions or similar funding transactions, or (ii) as required
by law or pursuant to court order. Each party agrees to give the other prompt
written notice in the event that it is presented with a legal requirement to
disclose Exhibit X; provided that such notification is not prohibited by law.
Section 4.6 Green Tree hereby represents and warrants to
Cavalier, as of the date hereof, and as of all times up to and through the
termination of this Agreement, as follows:
(a) Green Tree has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization with the power and authority to own its properties and engage in
the transactions contemplated by this Agreement;
(b) The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by each of them and, at the time of execution, performance
or consummation, shall not constitute or result in any breach or violation of
any of the terms or provisions or conditions of or constitute default under, any
statute, law, regulation or ordinance of the United States, any state or
political subdivision thereof or any material contract, agreement, indenture or
trust to which such person is a party or by which it is bound or any order,
arbitration award, judgment, decree or ruling of any court or governmental
agency or body having jurisdiction over such party;
(c) There is not pending or, to the knowledge of Green
Tree, threatened, any action, suit or proceeding before or by any court,
governmental agency, arbitral authority, body or administrator to which Green
Tree is a party, or by which any of its property is subject, which might result
in a material adverse change in the condition, financial or otherwise, or
business prospects of Green Tree;
(d) This Agreement and each of the agreements referenced by
exhibit herein, constitutes the legal, valid and binding agreement of Green Tree
enforceable in accordance with its terms;
(e) The Credit Scoring performed shall comply in all
material respects with applicable federal, state and local law and regulation.
Section 4.7 Cavalier hereby represents and warrants to Green
Tree, as of the date hereof, and as of all times up to and through the
termination of this Agreement, as follows:
(a) Cavalier has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization with the power and authority to own its properties and engage in
the transactions contemplated by this Agreement;
(b) The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by each of them and, at the time of execution, performance
or consummation, shall not constitute or result in any breach or violation of
any of the terms or provisions or conditions of or constitute default under, any
statute, law, regulation or ordinance of the United States, any state or
political subdivision thereof or any material contract, agreement, indenture or
trust to which such person is a party or by which it is bound or any order,
arbitration award, judgment, decree or ruling of any court or governmental
agency or body having jurisdiction over such party;
(c) There is not pending or, to the knowledge of Cavalier,
threatened, any action, suit or proceeding before or by any court, governmental
agency, arbitral authority, body or administrator to which Cavalier is a party,
or by which any of its property is subject, which might result in a material
adverse change in the condition, financial or otherwise, or business prospects
of Cavalier;
(d) This Agreement and each of the agreements referenced by
exhibit herein, constitutes the legal, valid and binding agreement of Cavalier
enforceable in accordance with its terms.
Section 4.8 Green Tree agrees to indemnify and hold harmless
Cavalier from and against any and all losses, claims, damages, liabilities,
costs and expenses (including reasonable attorneys' and experts' fee and
expenses) to which CAC or any of its employees, directors, officers, accountants
and affiliates may become subject arising from any act or omission of Green Tree
in connection with its servicing of Transferred CAC Loans from and after the
date of the transfer of such CAC Loan.
Section 4.9 Green Tree agrees to offer the Preferred Floor
Plan Financing to all of the Exclusive Dealers and Preferred Dealers, whether
now or hereafter identified by CMI, provided that such Exclusive Dealer or
Preferred Dealer, as the case may be, meets the creditworthiness standards
established by Green Tree in its sole discretion.
Section 4.10 CAC agrees that it will not refinance any
Borrower under any CAC Loan transferred to Green Tree hereunder (a "Transferred
CAC Loan"); provided that the foregoing restrictions shall not be deemed to
apply with respect to the origination or purchase of a Consumer Loan by CAC from
a Borrower under a Transferred CAC Loan if the new Consumer Loan is secured by
different collateral (i.e., CAC may freely finance Borrowers trading in homes
for new Cavalier Product) ("Trade-in Loans"). Except with respect to Trade-in
Loans, CAC agrees that, notwithstanding anything else to the contrary contained
herein, the Acquisition Premium on any Available CAC Loan which results from the
refinancing of any Green Tree Loan shall be a zero percent (0%) of the
outstanding principal balance of the new CAC Loan related thereto.
Section 4.11 Green Tree and Cavalier agree to provide the
other with such reports and information most conveniently at the disposal of the
other, on a timely basis, as each shall reasonably request regarding Transferred
CAC Loans, including the amount and aging of Pre-Sold Financing, the Pass Rate,
the number and amount of Green Tree Loans acquired from Exclusive Dealers and
Preferred Dealers and the performance of Transferred CAC Loans, and the average
outstanding daily balance of Green Tree Floor Plan Loans to each of Exclusive
Dealers and Preferred Dealers. Each party shall obtain the consent from all
necessary parties in order to provide such information.
ARTICLE V
SALE OF PORTFOLIO LOANS
Section 5.1 Green Tree agrees to purchase, and CAC agrees to
sell, the amount set forth in Exhibit X (item 8) in Manufactured Housing Retail
Finance Contracts held by CAC, excluding (i) CAC Loans that are ninety (90) days
or more delinquent, (ii) CAC Loans which are presently the subject of a
bankruptcy proceeding or other legal action (including where the collateral has
been repossessed), or (iii) CAC Loans that are in process of repossession or for
which specific loss reserves have been established (items (i) through (iii)
being referred to as the "Carved-Out CAC Loans"), at a price equal to the amount
set forth in Exhibit X (item 9), plus accrued but unpaid interest, on customary
terms and conditions for the sale of consumer loans without recourse (but
recognizing repurchase remedies for certain warranty breaches will exist) on a
servicing-released basis, not inconsistent with the provisions of the
Manufactured Home Loan Purchase Agreement attached hereto as Exhibit K (the
"MLPA"), providing for an "all or none" sale except with respect to Carved-Out
CAC Loans, and providing for a payment to CAC and conveyance and delivery to
Green Tree not later than March 1, 1998, or such later date that Green Tree
using its reasonable efforts may assume the servicing of such. The CAC Loans
purchased by Green Tree shall be CAC Loans purchased and made in 1996, 1997 and
1998 (prior to the Effective Date) subject to the foregoing exclusions. The
parties acknowledge that the MLPA is subject to completion upon terms mutually
acceptable to the parties and expresses only the preliminary intent of the
parties, particularly with respect to administrative and transition provisions,
but shall not impose on CAC obligations for representations and warranties
beyond its direct control (i.e., actions taken by Dealers originating such
Consumer Loans) or provide remedies that are materially different than those set
forth in Section 3.13 of this Agreement.
Section 5.2 On a date to be selected by CAC and consented to
by Green Tree, which consent shall not be unreasonably withheld, within eighteen
(18) months of the date of this Agreement, Green Tree agrees to purchase the
balance of the CAC Loan portfolio acquired by CAC prior to 1996 on the same
terms and conditions set forth in the MLPA, excluding Carved-Out CAC Loans.
Section 5.3 [Reserved]
Section 5.4 Green Tree agrees that, notwithstanding anything
else to the contrary contained in this Agreement, CAC shall be permitted, at its
option, to keep and retain for its own account such amount of Conforming
Manufactured Housing Retail Finance Contracts, whether now existing or hereafter
arising, as it determines in its discretion; provided that, to the extent that
CAC retains CAC Loans arising after the Effective Date, such retained loans
shall be a representative sampling of all CAC Loans arising after the Effective
Date, where such sampling shall be determined by stratifying CAC Loans into 4
groups according to quality and ensuring that the percentage of CAC Loans
retained by CAC under this Section from each group is approximately the same
percentage as such group bears to the whole. CAC agrees that, for a period of
one year following any termination of this Agreement (other than pursuant to
Sections 6.2 (a) through (d), 6.2 (f) through (j) and 6.2 (l)), it will not sell
Conforming Manufactured Retail Finance contracts purchsed or originated by CAC
during the term of this Agreement in an aggregate amount in excess of $250,000
to any third party unless CAC shall have first given Green Tree the option to
purchase such loans on the same terms and conditions as Green Tree purchased
loans under Article III of this Agreement. Green Tree shall be required to
exercise such option within fifteen (15) days after receiving written notice
from CAC of its desire to sell such loans to a third party, and the sale to
Green Tree shall be consummated within thirty (30) days after Green Tree gives
written notice that it exercises such option. The option shall be inapplicable
and of no further force or effect following the expiration of one year after the
termination of this Agreement or in the event such termination occurs pursuant
to Sections 6.2 (a) through (d), 6.2 (f) through (j), or 6.2 (l).
ARTICLE VI
TERM AND TERMINATION
Section 6.1 Unless earlier terminated pursuant to the
provisions set forth below, the term of this Agreement shall commence on the
Effective Date hereof and shall expire three (3) years from the date thereof;
provided that this Agreement shall be automatically extended for successive one
(1) year periods unless either party hereto gives written notice to the other
parties at least ninety (90) days prior to the end of the then current term of
its intention not to extend this Agreement.
Section 6.2. This Agreement may be terminated by Cavalier upon
sixty (60) days prior written notice to Green Tree, except immediately in the
case of items (c), (d), (i) and (j), in the event that any of the following
shall occur:
(a) Green Tree ceases to be the servicer or subservicer, as
the case may be, of any material portion of the Transferred CAC Loans or any
Preferred Floor Plan Financing (except in the case where a special servicer may
be appointed under terms of a securitization document);
(b) Green Tree or any of its affiliates shall acquire, other
than in satisfaction of debts previously contracted, any Dealer;
(c) Green Tree shall undergo a Change in Control;
(d) Green Tree or any of its affiliates shall become the
subject of any voluntary or involuntary bankruptcy proceeding;
(e) The transaction contemplated by Section shall not have
been consummated by April 17, 1998;
(f) Green Tree acquires any material manufactured home
manufacturing operation;
(g) The financial condition of Green Tree or market
conditions reasonably appear likely to restrict the sale of CAC Loans to Green
Tree to less than $250,000,000.00 per annum;
(h) Green Tree's "Pass Rate" for Available CAC Loans which
are Conforming Manufactured Housing Retail Finance Contracts exceeds the
"Acceptance Tolerance";
(i) Green Tree fails to remit when due any of the payments
required under this Agreement or contemplated hereby or under any other
agreement with or for the benefit of Cavalier, after notice and ten (10) days
grace;
(j) Green Tree is in breach, default or violation of any of
its representations, warranties, covenants or agreements contained in this
Agreement or contemplated hereby or under any other agreement with or for the
benefit of Cavalier and such continues for thirty (30) days or more after notice
by Cavalier;
(k) CMI determines, in its reasonable and good faith
judgment, that continuation of this Agreement is materially adverse to the
continued development, maintenance or administration of its exclusive dealer
program or the sale of Cavalier Product to Dealers; or
(l) Green Tree, without the prior written consent of
Cavalier, modifies any of the Floor Plan Agreement, the Used Inventory Floor
Plan Financing terms or the Chattel Paper Forms in a manner which, in the
reasonable judgment of Cavalier, is adverse to the interests of Cavalier.
Section 6.3 This Agreement may be terminated by Green Tree
upon one hundred eighty (180) days prior written notice to Cavalier, except
immediately for items (b), (c), (d) and (h), in the event that any of the
following shall occur:
(a) After Green Tree determines that the loss ratio on CAC
Loans exceeds the loss ratio both on 6.5. Consumer Loans acquired directly by
Green Tree from Exclusive Dealers and Preferred Dealers, and 6.6. Consumer Loans
of a comparable type acquired by Green Tree from all sellers, in each case by
25% or more (e.g., the loss ratio for CAC Loans is 1.8% and the loss ratio for
Green Tree Loans is 1.5%, or a 0.3% difference, or 20%);
(b) Cavalier shall undergo a Change in Control;
(c) Cavalier or any of its affiliates shall become the
subject of any voluntary or involuntary bankruptcy proceeding;
(d) Cavalier breaches the Repurchase Agreement or the
Guaranty, after at least 15 days written notice and opportunity to cure;
(e) Fewer than 50% of the Exclusive Dealers and Preferred
Dealers to whom Preferred Floor Plan Financing is offered become Floor Plan
Customers;
(f) CMI has fewer than 75 Dealers who exclusively deal in new
Cavalier Product;
(g) The New Inventory Floor Plan Financing, taken as a
whole, has a loss ratio, determined on a rolling annual basis in accordance with
prudent and customary banking practices, equal to or greater than 1%;
(h) Cavalier is in breach, default or violation of any of
its representations, warranties, covenants or agreements contained in this
Agreement or contemplated hereby or under any other agreement with or for the
benefit of Green Tree and such continues for thirty (30) days or more after
notice by Green Tree; or
(i) Green Tree determines, in its good faith and reasonable
judgment, that (1) continued performance of this Agreement is materially adverse
to the financial and business interests of Green Tree, (2) Green Tree is not
obtaining the expected financial and business benefits reasonably expected to be
achieved under this Agreement, and (3) Green Tree is unlikely to obtain such
benefits in the foreseeable future.
Section 6.4 No party under this Agreement shall be entitled
to consequential, punitive or exemplary damages or damages for profits expected
to be obtained in connection with the performance of this Agreement. Each party
to this Agreement shall be entitled to the remedies of injunction and specific
performance to enforce the obligations of any other party with respect to this
Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Assignment. This Agreement or any interest
herein shall not be assigned by any party hereto without the prior written
consent of the other parties; provided that the foregoing shall not prohibit or
impair the ability of Green Tree to assign its rights and benefits (but Green
Tree may not delegate its obligations) hereunder with respect to Transferred CAC
Loans or Floor Plan Loans, in connection with a securitization transaction,
i.e., the conveyance of such Transferred CAC Loans or Floor Plan Loans the grant
of a participation interest therein or in connection with conveyance to a
special purpose vehicle which shall hold such Transferred CAC Loans for the
benefit of, or as collateral for, security holders of such special purpose
vehicle (a "Securitization") or a similar funding arrangement whereby
Transferred CAC Loans or Floor Plan Loans are pledged, transferred or assigned.
Section 7.2 Notices. Any notice or other communication
required or permitted hereunder will be in writing and will be deemed
sufficiently given only if delivered in person, by reputable overnight courier,
or by first class or certified mail, postage prepaid, or sent by facsimile or
telex and confirmed by mail, postage prepaid, addressed as follows:
If to CMfg, CInd, SHom, DHom, BHom or XHom:
Cavalier Manufacturing, Inc.
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
Addison, Alabama 35540
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
If to QCI:
Quality Certified Insurance Services, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
If to CAC:
Cavalier Acceptance Corporation
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
If to Green Tree:
Green Tree Financial Servicing Corporation
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
and to:
Green Tree Financial Servicing Corporation
1100 Landmark Towers
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Attn: General Counsel
or to such other address as the party may have specified in a notice duly given
to the other party as provided herein. Such notice or communication will be
deemed to have been given as of the date so delivered, so faxed, telexed or, if
mailed, on the date received.
Section 7.3 Waivers. No waiver by any party of any default
with respect to any provision, condition or requirement hereof shall be deemed
to be a waiver of any other provision, condition or requirement hereof; nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right accruing to it thereafter.
Section 7.4 Preservation of Intent. Should any provision of
this Agreement be determined by a court or arbitral authority having
jurisdiction over the subject matter hereof to be illegal or in conflict with
any applicable laws of any state or jurisdiction, the parties hereto agree that
such provision shall be modified to the extent legally possible so that the
intent of this Agreement may be legally carried out.
Section 7.5 Relationship of Parties. Nothing herein contained
shall constitute the parties members of any partnership,association, syndicate
or other entity. Nothing herein contained shall be deemed to confer on either of
them any express, implied or apparent authority to incur any obligation or
liability on behalf of the other except as expressly provided herein.
Section 7.6 Third Party Beneficiaries. The terms and
provisions of this Agreement are not intended to confer upon any person other
than the parties hereto and their respective permitted successors and assigns
any rights or remedies, and such terms and provisions will be enforceable only
by the parties hereto and their respective permitted successors and assigns.
Section 7.7 Entire Agreement. This Agreement and the other
written agreements referenced herein set forth the entire and only agreement or
understanding between the parties relating to the subject matter hereof and
supersedes and cancels all previous agreements, negotiations, commitments and
representations in respect thereof between them, and no party shall be bound by
any conditions, warranties, or representations with respect to the specific
subject matter of this Agreement except as provided in this Agreement.
Section 7.8 Amendment. This Agreement may not be amended in
any respect except by an instrument in writing signed by the parties hereto.
Section 7.9 Further Actions. At any time and from time to
time, each party shall, at its expense, take such actions and execute and
deliver such documents as may be reasonably necessary in the opinion of counsel
(which may be internal counsel) to the parties to effectuate the purposes of
this Agreement. Without limiting the generality of the foregoing, the parties
shall cooperate and use their reasonable efforts to obtain as promptly as
practicable any governmental approvals and to make promptly any filings which
are necessary for the consummation of any of the transactions contemplated by
this Agreement.
Section 7.10 Headings. The headings in this Agreement are
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement. Whenever used in this
Agreement, the singular number shall include the plural and the plural the
singular. Pronouns of one gender shall include all genders. The words "hereof",
"herein", and terms of similar import shall refer to this entire Agreement.
Unless the context clearly requires otherwise, the use of the terms "including",
"included", "such as", or terms of similar meaning, shall not be construed to
imply the exclusion of any other particular elements. The term "person" shall
mean all natural persons, entities, corporations, partnerships, companies and
governmental units of every nature whatsoever.
Section 7.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile transmission of an executed counterpart.
Section 7.12 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Georgia.
Section 7.13 Arbitration. The parties hereto, by entering
into this Agreement, hereby waive their right to trial by jury of disputes,
claims or controversies between themselves arising out of or relating to this
Agreement or any agreements or instruments relating to this Agreement or the
transactions and services contemplated hereby and the parties agree that all
such disputes, claims or controversies shall be settled exclusively by binding
arbitration in accordance with the Federal Arbitration Act and the Commercial
Financial Disputes Arbitration Rules of the American Arbitration Association.
Such arbitration shall be conducted in Atlanta, Georgia.
Section 7.14 Joint and Several. The obligations of CMI
specified herein shall be the joint and several obligations of CMfg, CInd, BHom,
SHom and XHom and any other Cavalier affiliates which are added by written
agreement of all the parties hereto, unless otherwise expressly provided. The
obligations of Cavalier specified herein shall be the joint and several
obligations of CMfg, CInd, BHom, DHom, SHom, XHom, QCI and CAC and any other
Cavalier affiliates which are added by written agreement of all the parties
hereto, unless otherwise expressly provided. The obligations of Green Tree
specified herein shall be the joint and several obligations of GTFCA, GTFSC,
GTC, GTCC and GTCDC and any other GTC affiliates which are added by written
agreement of all the parties hereto, unless otherwise expressly provided. If not
prohibited by law of the jurisdiction in which enforcement is sought, the losing
party shall pay court costs and reasonable attorney's fees of the prevailing
party in the event a party is required to enforce its rights hereunder through
legal proceedings.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized representatives to sign below as of the date first
above written.
CAVALIER MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Its: Secretary
_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
CAVALIER ACCEPTANCE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
_______________________________
Its: President
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
_______________________________
CAVALIER INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Its: Secretary
_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
QUALITY CERTIFIED INSURANCE
SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
_______________________________
Its: President
_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
_______________________________
DELTA HOMES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Its: Secretary
_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
BELMONT HOMES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Its: Secretary
________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
BELLCREST HOMES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Its: Secretary
________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
SPIRIT HOMES,INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Its: Secretary
_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
GREEN TREE FINANCIAL
SERVICING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________
Its: Senior Vice President
and Secretary
_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________
GREEN TREE FINANCIAL
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
Its: Sr. Vice President, General
Counsel and Secretary
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
GREEN TREE CREDIT CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
Its: Senior Vice President
and Secretary
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
GREEN TREE CONSUMER DISCOUNT
COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
Its: Senior Vice President
and Secretary
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
GREEN TREE FINANCIAL CORP.-
ALABAMA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
Its: Senior Vice President
and Secretary
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________