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EXHIBIT 10.26
PRE-SOLD FLOORPLAN FINANCING AGREEMENT
THIS AGREEMENT, dated the 10th day of February, 1994, is by and between
Bellcrest Homes, Inc. (hereinafter referred to as "Manufacturer") and Green Tree
Financial Corporation and its subsidiaries (hereinafter referred to as "Green
Tree").
WHEREAS, Manufacturer is engaged in the manufacturing of manufactured homes
and modular homes which are sold to a network of Manufacturer's dealers
throughout the United States and which manufactured homes and modular homes are
resold to retail customers by dealers; and
WHEREAS, Manufacturer recognizes and acknowledges the value to Manufacturer
of its dealers obtaining an additional source of floorplan financing for the
purchase of Manufacturer's products; and
WHEREAS, Green Tree is in the business of providing floorplan financing for
manufactured home and modular home dealers including the taking and processing
of credit applications, credit qualification procedures and the supervision of
the extension of floorplan credit in the manufactured housing industry;
NOW, THEREFORE, Manufacturer and Green Tree hereby agree as follows:
1. DEFINITIONS. As used herein:
1.1 "Commitment" shall mean any agreement, oral or written, made by
Green Tree's authorized employees to Manufacturer's employees to
reserve and hold for Manufacturer's specific account, for a
specified period of time, a stated amount of funds from the
Dealer's floorplan line to be paid for a given Pre-Sold Unit upon
presentation of Manufacturer's Statement of Origin ("MSO") and
original invoice.
1.2 "Dealer(s)" shall mean manufactured home and modular home dealers
who are customers of Manufacturer to whom funds are loaned by
Green Tree under a Floorplan Financing and Security Agreement
between dealer and Green Tree.
1.3 "Floorplan Finance Transaction" shall mean the debt of any Dealer
to Green Tree incurred for the financing of the purchase of a
Pre-Sold Unit from Manufacturer, together with any security
instrument in the form of a security agreement, chattel mortgage,
trust receipt,
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conditional sale agreement, or other similar document securing
such debt.
1.4 "Pre-Sold Unit(s)" shall mean only those new manufactured homes
or modular homes (including the contents of said homes)
manufactured by Manufacturer and sold to Dealer for which Green
Tree has received (from Dealer) and approved an application for
credit submitted by a retail customer of Dealer, and said
customer has ordered a particular manufactured home or modular
home for which Dealer seeks floorplan financing.
1.5 "Repurchase Price" of a Pre-Sold Unit, unless defined differently
in subsequent amendments to this Agreement, shall mean the lesser
of: (a) the unpaid principal balance owned by Dealer to Green
Tree, or (b) the amount paid by Green Tree to Manufacturer on
behalf of Dealer, less curtailments due to Green Tree under
paragraph 6.1 below (unless such curtailments have been waived by
Manufacturer in writing).
2. SCOPE OF AGREEMENT.
Any Commitment by Green Tree to finance Dealer's floorplan under this
Agreement shall be strictly limited to Pre-Sold Units.
3. COMMITMENTS.
Manufacturer shall secure from Green Tree a Commitment for each
Pre-Sold Unit to be financed by Green Tree before it is shipped. Green
Tree may, but shall be under no obligation to, finance any Pre-Sold
Unit shipped to Dealer without Manufacturer first obtaining such
Commitment. Manufacturer shall not seek a Commitment for, nor deliver
to Dealer, any Pre-Sold Unit for which it does not have a bona fide
order from a representative of Dealer. Manufacturer shall not forward
to Green Tree its invoice and MSO for payment unless it has received a
Commitment from Green Tree and until the Pre-Sold Unit has been
shipped.
4. PAYMENT OF INVOICE PRICE.
Payments for Pre-Sold Units financed by Green Tree for Dealer under
the terms of this Agreement shall be mailed by Green Tree on the tenth
(10th) calendar day after shipment date of Pre-Sold Unit as indicated
on Manufacturer's invoice. Green Tree
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must have received and approved Manufacturer's invoice and MSO before
payment shall be due.
5. QUALIFICATION OF DEALERS BY GREEN TREE.
5.1 Dealer shall make application to Green Tree by executing a
Floorplan Financing and Security Agreement and necessary
financing statements.
5.2 Green Tree shall have complete and sole discretion in its
decisions as between itself and Dealer to either extend or
terminate floorplan financing.
5.3 In the event that Manufacturer requests that Green Tree accept a
Dealer that it has previously rejected, Manufacturer (by separate
letter agreement) shall provide Green Tree with an unlimited
guaranty of that Dealer's obligations to Green Tree.
6. TERMS AND COSTS TO DEALER OF AGREEMENT FOR FLOORPLAN FINANCING.
6.1 Curtailments are a part of this Agreement and Green Tree shall
make a reasonable effort to collect same from Dealer in
accordance with the following payment schedule:
Billing Period (Month) % of Original Invoice
--------------------- Price per month
---------------------
1-3 0%
4-6 3%
7-9 5%
10-11 10%
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Green Tree shall be allowed an administrative processing period
of thirty (30) days beyond the periods set forth above (for
mailing of billing statements, collecting funds from Dealer and
processing thereof).
(a) A "Billing Period" shall mean any calendar month.
(b) "Paid in Full" shall mean payment by Dealer to Green Tree of
the entire amount remaining unpaid on any Pre-Sold Unit so
that 100% of the invoice price has been paid.
(c) Curtailments shall be billed by Green Tree to Dealer in
accordance with the
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foregoing payment schedule on a per Pre-Sold Unit basis
commencing on the first day of the month following the
receipt by Green Tree of the original invoice and MSO.
(d) The foregoing payment schedule shall prevail until modified
by Green Tree (to allow for seasonal sales fluctuations or
special programs) with Manufacturer's prior written
authorization.
6.2 Interest and a documentation, handling and inspection ("DHI") fee
per Pre-Sold Unit shall be paid monthly by Dealer.
7. REPURCHASE UPON DEFAULT.
Green Tree shall exercise due diligence in attempting to collect all
amounts due it from Dealers when and as due for all Pre-Sold Units
sold by Manufacturer. In the event Dealer is unable or unwilling to
pay any amount due Green Tree on a given Floorplan Finance
Transaction, such action shall constitute prima facie default on all
Floorplan Finance Transactions between Green Tree and Dealer. If Green
Tree, as a consequence of such default, lawfully repossess Pre-Sold
Units financed by it for the Dealer, Manufacturer will, upon written
demand from Green Tree, repurchase any Pre-Sold Unit covered by this
Agreement when surrendered to Manufacturer by Green Tree at any point
within the continental United States, and will pay Green Tree the
Repurchase Price therefor under the following conditions:
7.1 Manufacturer agrees to take possession of any Pre-Sold Unit
covered by this Agreement within fourteen (14) days after receipt
of Green Tree's written repurchase demand and shall pay the
Repurchase Price to Green Tree on or before the twentieth (20th)
calendar day after receipt of the written demand to repurchase.
If payment is not so made, Manufacturer shall pay all interest
and DHI fees accruing after the twentieth (20th) day at Green
Tree's standard floorplan rate. Green Tree's obligation to
collect curtailments from Dealer shall be fully satisfied at the
time Green Tree demands repurchase hereunder.
7.2 Responsibility for the safety of the Pre-Sold Unit and it
contents shall remain with Green Tree until physical possession
of the Pre-Sold Unit is delivered to Manufacturer or a maximum
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of fourteen (14) days after repurchase notification, whichever
occurs first.
7.3 Subject to limitations in paragraph 7.1 above, Manufacturer may
inspect Pre-Sold Units prior to repurchase. (Reasonable wear
incidental to displaying the Pre-Sold Unit for sale shall not
affect its condition). Green Tree may participate in that
inspection if desired.
7.4 The intent of the inspection referred to in paragraph 7.3 above
shall be to determine any damage to the Pre-Sold Unit or
shortages of any standard or optional items supplied by
Manufacturer. If any standard item(s) supplied by Manufacturer
with such Pre-Sold Unit or any specifically identified optional
accessory item(s) listed in the Manufacturer's invoice and
supplied by Manufacturer with such Pre-Sold Unit is missing, the
Repurchase Price shall be reduced by the cost of replacement of
such item(s).
7.5 Green Tree may demand repurchase for the reason that any Pre-Sold
Unit is not marketable or otherwise salable due to manufacturing
defects or noncompliance with applicable state or federal codes.
Manufacturer shall be allowed a reasonable time to correct any
such defect(s).
7.6 Green Tree may also demand repurchase in the event of breach of
any of the warranties described in paragraph 10.3 herein.
7.7 Upon repurchasing any repossessed Pre-Sold Unit under the terms
of this Agreement, Manufacturer shall be subrogated to a
corresponding portion of the rights of Green Tree against the
Dealer with respect to such repossessed Pre-Sold Units and the
related Floorplan Finance Transaction. Green Tree agrees to
execute and deliver assignment of all such related instruments to
Manufacturer upon request.
7.8 If a Pre-Sold Unit is lawfully repossessed by Green Tree and
Manufacturer is unable or unwilling to take possession of said
Pre-Sold Unit or otherwise to pay the Repurchase Price to Green
Tree upon the appropriate written demand, then Manufacturer
agrees that Green Tree may, at its option, setoff any amount due
and payable by Green Tree to Manufacturer under this Agreement
against Green Tree's
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right to receive money from Manufacturer pursuant to
Manufacturer's repurchase obligation described herein.
8. COSTS OF REPOSSESSION.
In connection with any repossession covered in paragraph 7 hereof,
Manufacturer shall reimburse Green Tree for all reasonable costs of
transportation, security and storage incurred as a result of
Manufacturer's failure to take possession of Pre-Sold Units under
paragraph 7.1 above. Green Tree shall furnish Manufacturer with
receipts supporting any claim for reimbursement.
9. TERMINATION OF MANUFACTURER'S OBLIGATION.
Manufacturer's obligation under this Agreement to repurchase any
Pre-Sold Unit shall terminate as of the 366th day after the date of
delivery of the Pre-Sold Unit by Manufacturer; provided, however, that
Green Tree shall be allowed an additional thirty (30) day period for
administrative processing. During such administrative period,
Manufacturer's repurchase obligation which immediately precedes such
period shall continue in full force and effect. If Green Tree is
unable to obtain possession of any Pre-Sold Unit prior to the
expiration of said 365 days because of pending legal or governmental
proceedings, Manufacturer shall be obligated to repurchase the
Pre-Sold Unit(s) within fifteen (15) days after Green Tree has
obtained legal possession thereof.
10. INDEMNIFICATION AND WARRANTY.
10.1 Green Tree hereby agrees that it will indemnify and hold harmless
Manufacturer, its agents, employees, successors and assigns, and
all other persons, firms or corporations liable or claimed to be
liable through Manufacturer because of any failure by Green Tree
to comply with any state or federal laws.
10.2 Green Tree warrants that:
(a) All requests for floorplan Commitments shall be processed
through and recommended by Manufacturer's various plants.
(b) Reporting of Dealer activity shall be provided by Green Tree
upon written request by Manufacturer, but not more
frequently than every sixty (60) days.
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(c) Original invoices and MSO's shall be held by Green Tree,
unless otherwise provided by law.
(d) Green Tree shall inspect Manufacturer's Pre-Sold Units held
by Dealers at 30-45 day intervals.
10.3 Manufacturer warrants, with respect to each Pre-Sold Unit
shipped, that:
(a) Its invoice represents a bona fide order by Dealer.
(b) The Pre-Sold Unit has been delivered to Dealer.
(c) Title to each Pre-Sold Unit is free and clear of all liens
and encumbrances.
(d) Its invoice is true and accurate and does not include items
not sold with Pre-Sold Unit.
(e) Its invoice complies with the Truth in Invoicing Practices
Statement.
(f) Its invoice compliance with all applicable state and federal
laws.
10.4 Manufacturer and Green Tree hereby mutually agree to notify the
other party immediately of any material problem and/or
sold-out-of-trust situations of which it is aware with respect to
any of Manufacturer's Dealers.
11. TERMINATION.
This Agreement shall continue in full force and effect from the
effective date until terminated by either party by thirty (30) days
written notice sent by registered or certified mail to the address
shown herein. Such termination shall not affect the rights and
obligations of the parties as to any transaction with Dealers or among
the parties entered into prior to the receipt of such notice of
termination.
12. PARTIES BOUND.
This Agreement shall inure to the benefit of and bind the parties
hereto, their agents, employees and successors, but it is not
assignable without the prior written consent of the parties hereto.
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13. ENTIRE AGREEMENT.
This Agreement supersedes any prior agreements between the parties
with respect to floorplan financing provided by Green Tree to Dealers
and constitutes the entire agreement and may not be modified or
amended in any manner, except in writing signed by the parties.
14. HOW NOTICES SENT.
14.1 To Manufacturer at: Bellcrest Homes, Inc.
000 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000
14.2 To Green Tree at: Green Tree Financial
Corporation and its
subsidiaries
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Floorplan
Department Manager
15. GOVERNING LAW.
This Agreement is to be governed by and construed according to the
laws of the State of Minnesota. If any provision of this Agreement is
held to be invalid or to be contrary to the laws of Minnesota or
constituted authority which may apply to this Agreement, such
provision shall be regarded as severable and not deemed to be a part
of this Agreement.
_______________________ GREEN TREE FINANCIAL
(Manufacturer) CORPORATION and its
subsidiaries
BELLCREST HOMES, INC.
By:_______________ By:___________________
Its: President Its:__________________
And:_______________ And:__________________
Its: Vice President Finance Its:__________________
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