{"id":42633,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/operating-agreement-fleetwood-retail-corp-fleetwood.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"operating-agreement-fleetwood-retail-corp-fleetwood","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/operating-agreement-fleetwood-retail-corp-fleetwood.html","title":{"rendered":"Operating Agreement &#8211; Fleetwood Retail Corp., Fleetwood Enterprises Inc. and Associated Dealers Inc."},"content":{"rendered":"<pre>                               OPERATING AGREEMENT\n                               -------------------\n\n         This Operating Service Agreement (the \"Agreement\") is made as of\nJanuary __, 2001, by and between Fleetwood Retail Corp. and Fleetwood\nEnterprises, Inc., (collectively \"FRC\") and Associated Dealers, Inc. and its\naffiliated corporations (collectively \"ADI\").\n          \n                                    RECITALS\n                                    --------\n\n         FRC desires to engage ADI as a management and consulting service to\nlocate and train qualified, independent Operators (\"DEALER\" or \"DEALERS\") to run\nthe ordinary course of business operations for a minimum of fifty (50) of FRC's\nsales centers identified on Schedule \"A\" (\"SALES CENTER\", \"CENTER\" or\ncollectively, the \"CENTERS\"). Centers may be added to, or taken from Schedule\n\"A\" at any time, upon mutual agreement. The Parties understand and agree that\nthe Sales Centers will carry exclusively Fleetwood inventory during the term of\nthis Agreement, and the identity of the Sales Centers on Schedule \"A\" is\nstrictly confidential. ADI will locate and train Dealers for the Centers. In\nconsideration of the promises, mutual covenants and the agreements set forth\nherein, the parties, intending to be legally bound, agree as follows:\n          \n         Section 1. ENGAGEMENT . FRC engages ADI and ADI accepts the engagement\non the terms and conditions described in this Agreement.\n          \n         Section 2. TERM . Subject to prior termination as provided in Section\n9, the term of this Agreement shall begin on the date of execution and shall\ncontinue until December 31, 2005, unless notice as specified in Section 9 shall\nhave been given.\n          \n         Section 3. ADI'S OBLIGATIONS.\n\n              a. SCOPE AND PROCEDURE. During the term of this Agreement, ADI\nshall identify and retain a Dealer for each of the Centers. The date of ADI's\nplacement of a Dealer at a particular location will be termed the \"Assumption\nDate.\" ADI will confidentially notify FRC that it has located a Dealer two (2)\nweeks in advance of the Assumption Date, on a Center by Center basis. By the\nAssumption Date, ADI is required to purchase the existing inventory at the\ninvoice price, under eighteen months old, by arranging its own financing for the\ninventory at any particular Center. ADI will use due diligence to place\nqualified, independent Dealers in the Sales Centers identified on Schedule \"A\".\nIn no event shall the entire process of locating and assigning fifty (50)\nDealers to operate the identified Sales Centers take longer than twelve (12)\nmonths from the date of this Agreement.\n\nThe rights of the Dealer shall not exceed the rights of ADI, and the Dealer\nshall be subject to the same termination and term provisions contained in this\nAgreement. The Dealer shall be required by ADI to fulfill all aspects and\nresponsibilities of a Dealer of manufactured housing. ADI shall monitor each\nDealer in the ordinary course of business operations in the Centers and, at\nleast one time per month, verify financing on sold homes, authorize deliveries\nin writing, document the location of each home in the Dealer inventory and\nreport \n\n\n\n                                                                     Page 2 of 7\n\nall liquidations to FRC at the end of each month with existing inventory levels\nand aging reports. ADI will assist Dealer as needed by consulting on all aspects\nof operating a retail manufactured housing dealership.\n\nADI shall monitor each dealer in the ordinary course of business operations of\nthe Centers and shall make its best effort to verify and assure that the Dealer\nis properly licensed and has sufficient financial capability to carry out its\nobligations to FRC and the general public, to be responsible for normal dealer\nservice, set-up of homes, sales and installation of appurtenances and optional\nequipment. ADI shall make its best effort to verify and assure that the Dealer\nwill indemnify FRC, including attorney's fees, with respect to any liability\nhaving to do with any Dealer operations, specifically with respect to Dealer's\n(or Dealer's employees) own negligence, fraud, misrepresentation or harassment,\nand that the Dealer will carry appropriate liability insurance, with minimum\ncoverage in the amount of one million dollars ($1,000,000.00) per occurrence,\nwith FRC and its parent company, Fleetwood Enterprises, Inc. named as an\nadditional insured. ADI shall also use its best efforts to assure that the\nDealer shall provide a certificate of insurance to FRC documenting liability\ncoverage.\n\n              b. LOCATION. ADI shall perform its activities at its home office,\nat each of the Centers and at such other locations as shall be mutually\nacceptable to FRC and ADI.\n\n              c. ADI shall, on a regular basis, but at least monthly, report to\nFRC any material condition, circumstance, or event occurring with respect to the\nCenters, which may, in the reasonable judgment of ADI, require FRC's attention.\n\n              d. DEALERS. ADI shall investigate, contract with, train, promote\nand maintain capable Dealers to enable each of the Centers to operate in a\nproficient manner.\n\n              e. INDEMNIFICATION BY ADI FOR CENTER OPERATIONS. ADI shall\nindemnify, defend and hold harmless FRC with respect to any loss to FRC\nresulting from ADI's own fraud, negligence or willful failure in the performance\nof ADI's obligations hereunder.\n\n              f. ADI LIMITS OF LIABILITY. ADI shall not be responsible for any\nliability insurance, dealer indebtedness to factories for parts or service,\ncustomer service, set-up, sales center improvements, lot expenses or customer\nrelations.\n\n              g. RIGHT OF ENTRY. ADI shall have the right to the use of the\nCenters to the same extent as if ADI were the lessee during the term of this\nAgreement or the term of the lease, whichever is shorter, and therefore, would\nhave the right to contract with a Dealer during that time period.\n\n              h. FLOORPLAN FINANCING AND INSURANCE. ADI shall be responsible to\nobtain floorplan financing from its own sources to acquire the existing FRC\ninventory under eighteen (18) months old by the time of the Assumption Date and\nfor additional inventory, to be purchased exclusively from FRC, for resale at\nthe Centers. During the term of this Agreement, ADI shall be responsible for\ninsuring against property damage to the inventory (open lot insurance). FRC will\nreimburse ADI on a monthly basis for the cost of this insurance. ADI shall not\nbe required to furnish liability insurance.\n\n\n\n                                                                     Page 3 of 7\n\n              i. INVENTORY COMMITMENT AND LIMITATIONS ON FLOORPLAN. ADI will\nmake its best effort to have each Center maintain an inventory consisting of a\nthree (3) month supply based on each Center's monthly sales calculated on a six\nmonth rolling average. (For example, if a Sales Center's six month rolling sales\naverage equals eighteen houses, the monthly average is three houses, and a three\nmonth supply equals nine houses. Nine houses is the target inventory for that\nSales Center). Any Sales Center that fails to achieve the above formula can be\nterminated by FRC from this Agreement without affecting the intent or entirety\nof this Agreement.\n\n              j. SOLD AND UNPAID UNITS. ADI accepts full responsibility for any\nhomes that are sold and unpaid (SAU).\n\n         Section 4. FRC'S OBLIGATIONS.\n\n              a. LEASES AND LEASEHOLD IMPROVEMENTS. During the term of this\nAgreement, FRC shall be responsible for lease payments for the Centers. Sales\nCenter offices are and will remain the property of FRC. ADI and Dealer agree\nthat the signage will remain on the property and the \"Fleetwood\" name on the\nsignage will not change. The parties understand and agree that the use of the\nsign does not constitute a license to use the Fleetwood name for any other\npurpose or application. Leasehold improvements, furniture, fixtures, equipment\nand decorator kits not on invoices, are and will remain the property of FRC and\nmay be disposed of by FRC as it sees fit.\n\n              b. INVENTORY, FLOORPLAN FINANCING, CURTAILMENTS AND INSURANCE.\nDuring the term of this agreement and until all inventory floored by ADI is paid\nin full, FRC shall, monthly, pay ADI for the actual cost of floorplan interest\nand inventory insurance. ADI will use all commercially reasonable efforts to\nensure the best insurance and interest rates for FRC. FRC will waive all\ncurtailments for a maximum of eighteen (18) months from the original invoice\ndate to ADI. However, if the wholesale lender demands curtailments or a payoff,\nFRC will reimburse ADI for the amount of the curtailment or payoff. Such amounts\nwill then be reimbursed to FRC when the unit is sold at retail. In the event of\na full payoff by FRC, the title to the unit shall be transferred to FRC. Unit\nsales in process as of the assumption date will be completed by FRC and any\nprofit related thereto shall belong to FRC.\n                                  \n         Section 5.  COMPENSATION AND EXPENSES.\n \n              a. FEES AND COMPENSATION. As full compensation to ADI under this\nAgreement, FRC shall pay, or cause to be paid, to ADI during the term of this\nagreement a fee equal to eight percent (8%) of the base price and installed\noptions on the manufacturer's invoice of inventory purchased by ADI for resale\nat the Centers. The fee will be computed on a Center-by-Center basis and paid\nmonthly within ten (10) days after receiving a detailed list from ADI of\ncompleted retail sales of new homes. FRC's contingent liability for flooring and\nflooring interest charges for these sold units shall cease as of the closing\ndate of the retail sale as indicated on ADI's monthly listing. If FRC pays any\namount that is subsequently determined to be incorrect, then FRC shall have the\nright to recover such amounts from ADI directly or through an offset against\nother amounts owed by FRC to ADI.\n\n\n\n                                                                     Page 4 of 7\n\nFor units at the Sales Center that are assumed by ADI, FRC shall cause the\nmanufacturer to reinvoice ADI and\/or Dealer at the original invoice amount,\nexcluding furniture charges and any other line items that are specific to FRC,\nbut including a flooring assistance charge of $700.00 per floor, which will be\npaid by manufacturer to FRC. FRC will not participate in the sale of trade-ins\nor repo sales commissions. ADI shall be permitted to receive a fee from the\nDealer on each home sold by the Dealer and to participate in finance awards from\nretail lenders which are paid to the Dealer.\n\n              b. EXPENSES. Except as expressly contained in this Agreement, FRC\nshall not be responsible for any of the expenses, including any ordinary or\nnormal costs of business operations of the Centers, incurred by ADI or the\nDealer in connection with the operations of the Centers or in the course of\nfulfilling this Agreement. ADI shall charge the Dealer with the responsibility\nfor the maintenance, upkeep and professional appearance of the Center.\n \n         Section 6. ADI AS INDEPENDENT CONTRACTOR. FRC and ADI expressly\nacknowledge that (a) ADI is and shall serve as an independent contractor to FRC\nunder this Agreement; (b) neither this Agreement nor any action taken pursuant\nto this Agreement shall constitute or be evidence of any agreement or\nunderstanding, express or implied, that ADI or any of its employees is an\nemployee of FRC; (c) as an independent contractor, ADI shall not be managed or\ndirected by FRC, its Board of Directors or officers; and (d) ADI has no\nauthority, and shall not exercise any authority, to manage and direct any\naffairs of FRC.\n  \n         Section 7. DEALERS AS INDEPENDENT CONTRACTORS. ADI expressly \nacknowledges and agrees that it will take all steps necessary to assure that\neach Dealer, at all times, is and shall be an independent contractor to ADI.\nFurther, ADI shall take all steps necessary to assure that no employee of a\nDealer will be deemed to be an employee of FRC or have any rights as an employee\nof FRC. ADI will make its best effort to assure that all on-site employees shall\nbe employees of the Dealer, that the Dealer shall be responsible for all wages\nand other compensation paid to such employees and that each Dealer shall have\nthe obligation to execute and file all tax returns and other instruments,\nmaintain worker's compensation insurance and perform all acts required of an\nemployer with respect to the Centers. Dealers shall not be managed by FRC, its\nBoard of Directors or its officers.\n  \n\n         Section 8. FINANCIAL REPORTING AND RECORD KEEPING.\n \n              a. BOOKS OF ACCOUNT. ADI, in the conduct of its responsibilities\nfor FRC, shall maintain complete, accurate, adequate and separate books and\nrecords for the Centers, the entries to which shall be supported by true and\ncorrect documentation to ascertain that such entries are properly and accurately\nrecorded for performance under this Agreement. ADI shall maintain such books and\nrecords at ADI's corporate headquarters or at such other location as FRC or ADI\nmay mutually agree upon in writing.\n\n              b. FINANCIAL REPORTS. ADI shall furnish monthly and annual reports\nof inventory purchases and dispositions with respect to the Centers. FRC shall\nreceive these reports not later than the 10th day of the succeeding calendar\nmonth and the 30th day of the succeeding calendar year, respectively.\n\n              c. FRC'S RIGHT TO AUDIT. ADI shall cooperate with FRC and shall\nfrom time \n\n\n\n                                                                     Page 5 of 7\n\nto time upon reasonable notice provide FRC with such information as is or may be\nreasonably required to audit the Centers' operations and prepare such reports as\nmay be reasonably requested or required by FRC. Any such audits shall be\nconducted at the sole expense of FRC.\n\n\n\n         Section 9. TERMINATION OF ENGAGEMENT.\n \n              a. TERMINATION BY EITHER PARTY. Either party may terminate this\nAgreement at any time by giving written notice of such termination not less than\n120 days in advance of the date of termination. Individual Sales Centers may\nonly be terminated by mutual agreement of the parties without affecting the\nintent or entirety of this Agreement.\n\n              b. COMPENSATION IN CASE OF TERMINATION. If this Agreement, or the\nAgreement as to any particular Center is terminated, FRC shall repurchase the\nthen outstanding inventory and payoff ADI's flooring lender at or before the\neffective date of the termination. FRC shall also pay all fees specified in\nSection 5 hereof that are earned and incurred but not yet paid to ADI through\nthe effective date of the termination. Neither FRC nor ADI shall have any\nfurther liability or obligation to the other under this Agreement; PROVIDED,\nHOWEVER, that the obligations set forth in Sections 10 and 11 of this Agreement\nshall continue in full force and effect notwithstanding termination of this\nAgreement.\n \n              c. OBLIGATIONS OF ADI UPON TERMINATION. Upon termination of this\nAgreement for any reason, ADI shall immediately deliver to FRC the following:\n\n              (i) All records of inventory, purchase orders issued, delivery\n       authorizations and records of sales in progress, all keys in ADI's\n       possession and any records and financial statements pertaining to the\n       Centers.\n\n              (ii) All property constituting part of the Centers, including the\n       improvements, landscaping, plumbing, heating, air conditioning,\n       electrical systems, parking areas and roofs, but excluding trade-ins,\n       inventory, offices, fixtures, furniture and equipment brought to the\n       Center by and owned by the Dealer or ADI.\n                   \n         Section 10. INDEMNIFICATION. Each party shall indemnify, defend and \nhold the other harmless from and against any loss, expense, claims, damages,\nactions, causes of action as a result of such party's breach of any of the\nterms, conditions or provisions of this Agreement. The provisions of this\nSection 10 shall inure to the benefit of Fleetwood Enterprises Inc. and shall\nsurvive the termination of this Agreement for any reason.\n                   \n         Section 11. CONFIDENTIALITY AND NON-SOLICITATION. ADI agrees not to\nsolicit FRC's current associates from any FRC location, other than those\nlocations on Schedule \"A\" or with the exception of additional Sales Centers\nunder consideration for transfer to ADI. FRC agrees not to implement its\n\"Partners Program\" during the term of this Agreement. The parties acknowledge\nthat ADI brings into this arrangement certain intellectual property from long\nexperience with systems and programs that ADI has developed. FRC agrees that\nthey will not divulge or use any of the systems shared by ADI on any other sales\ncenters whether or not in competition with ADI or for any other purpose\nwhatsoever.\n\n\n\n                                                                     Page 6 of 7\n\n       Information which falls into any of the following categories shall not be\nconsidered Confidential Information:\n\n               (i)    Information known to FRC at the time of disclosure, as\n              evidenced by written records in the possession of FRC;\n\n              (ii)   Information already in the public domain or which is, or\n              becomes, publicly available without the fault of FRC;\n\n              (iii)  Information disclosed to FRC by a third-party not under a\n              confidentiality obligation to ADI;\n\n              (iv)   Information independently developed by an associate of FRC\n              who did not have access to any of the Confidential Information.\n\n  The provisions in this Section eleven (11) shall survive the termination of\nthis Agreement for any reason.\n\n         Section 12. MISCELLANEOUS.\n                   \n              a. NOTICES. All formal notices, requests, demands and other\ncommunications to any party or given hereunder shall be in writing and shall be\ndelivered by certified mail, return receipt requested to the address for such\nparty set forth on the signature pages to this Agreement (with a copy addressed\nto the General Counsel for Fleetwood Enterprises, Inc.) or at such other address\nas shall be specified by a party with written notice given at least five days\nprior thereto. All notices shall be deemed delivered when actually received.\n\n              b. COUNTERPARTS. This Agreement may be executed simultaneously in\none or more counterparts and by different parties hereto in separate\ncounterparts, each of which when executed shall be deemed an original, but all\nof which taken together shall constitute the same instrument.\n\n              c. INTEGRATION. This Agreement constitutes the entire agreement of\nthe parties with respect to the subject matter hereof and supersedes all prior\nnegotiations, agreements and understandings, whether written or oral, of the\nparties hereto.\n\n              d. AMENDMENT OF AGREEMENT. This Agreement may not be amended\nexcept by instrument in writing signed on behalf of each of the parties hereto.\n\n              e. NO ASSIGNMENT. This Agreement and all rights hereunder may not\nbe assigned unless agreed to by both parties. In the event of an assignment,\neach and every provision hereof shall be binding upon and inure to the benefit\nof the successors and assigns of the respective parties hereto.\n\n              f. GOVERNING LAW. This Agreement shall be governed by and\nconstrued and interpreted according to the internal laws of the State of Nevada.\n\n              g. ADI NOT TO ACT FOR FRC. ADI agrees that it is not entitled to,\nand will not, \n\n\n\n                                                                     Page 7 of 7\n\nexercise any rights of FRC under this Agreement to act for or on behalf of FRC\nunder this Agreement, except as expressly set forth under the terms of this\nAgreement.\n\n              h. FAILURE TO ENFORCE NOT A WAIVER. The failure of FRC or ADI to\nenforce at any time any provision of this Agreement shall in no way be construed\nto be a waiver of such provisions or any other provision hereof.\n\n              i. HEADINGS. The headings of the sections herein are inserted for\nconvenience of reference only and shall not be considered to constitute a part\nof the Agreement or to affect the meaning.\n\n       IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly\nauthorized, have executed and delivered this Agreement as of the date first\nabove written.\n \nFLEETWOOD RETAIL CORP.                      ASSOCIATED DEALERS, INC.\nFLEETWOOD ENTERPRISES, INC.      And Its Affiliated Corporations\n\nBy:                                        By: \n   ----------------------------               ----------------------------------\n Its:                                 Its: \n     --------------------------            --------------------------------\n\nAddress for Notices:                                  Address for Notices:\nFleetwood Retail Corp.                               Associated Dealers, Inc.\n3125 Myers Street                              8632 E. Apache Trail\nRiverside, CA 92503                                  Mesa, AZ 85207\nAttention: Charles Wilkinson                   Attention:  Brad Nikolaus\nTelephone: 909 351 3399                          Telephone: 480 984 5100\nFacsimile: 909 351-3373                          Facsimile:  480 984-0043\n\n\nFleetwood Enterprises, Inc.\n3125 Myers Street\nRiverside, CA 92503\nAttention: General Counsel\nTelephone: 909 351 3500\nFacsimile: 909 351-3776\n\nFleetwood Retail Corp.\nAttention: Barry Blanton\n2150 W. 18th St., Suite 300\nHouston, TX 77008\nTelephone: 713-331-2226\nFacsimile: 713-331-2201\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7546],"corporate_contracts_industries":[9391],"corporate_contracts_types":[9613,9620],"class_list":["post-42633","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-fleetwood-enterprises-inc","corporate_contracts_industries-autos__rvs","corporate_contracts_types-operations","corporate_contracts_types-operations__services"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42633"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42633"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42633"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}