Exhibit 10.19
DEALER AGREEMENT
between
CONN APPLIANCES, INC.
and
VOYAGER SERVICE PROGRAMS, INC.
This Dealer Agreement is entered into effective as of January 1, 1998 by and
between Conn Appliances, Inc., Beaumont, Texas, a Texas corporation
(hereinafter, "Dealer"), and Voyager Service Programs, Inc., a Florida
corporation (hereinafter "Voyager").
WHEREAS, Dealer is engaged in the sale of certain merchandise (hereafter, the
"Covered Merchandise") to the general public in the States of Louisiana and
Texas; and
WHEREAS, Dealer desires to offer, sell, and administer Voyager's extended
service agreements in the States of Texas and Louisiana in the form(s) attached
hereto as Exhibit A (such agreements as amended from time to time by agreement
of the parties being referred to hereinafter as the "Service Contract(s)" to
provide repairs for the protection of certain of Dealer's merchandise, which
repairs will be in addition to the warranty protection offered by or enforceable
against the manufacturer of such merchandise; and
WHEREAS, Voyager desires to make its Service Contracts available to customers of
Dealer and to delegate to Dealer certain administrative and claims service
responsibilities.
In consideration of the foregoing premises and the mutual promises and covenants
contained herein, the parties agree as follows:
1. Scope of Agreement.
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1.1 Applicability. This Agreement shall cover all new Service Contracts
sold by Dealer issued in connection with the sale of Covered Merchandise since
January 1, 1998 and during the term of this Agreement in the States of Louisiana
and Texas and those service contracts covered under the Release, Transfer and
Indemnification Agreement attached hereto as Exhibit "B." Contemporaneous with
the execution hereof, the parties shall execute the Release, Transfer and
Indemnification Agreement or substantially similar agreement as attached hereto
as Exhibit B.
1.2 Voyager Exclusive. The parties agree that, effective as of the date of
this Agreement, Voyager shall be Dealer's exclusive provider of the Service
Contracts and related services performed by Voyager hereunder. With the
exception of renewal Service Contracts, the parties acknowledge that Dealer has
marketed and administered its own extended service agreements and which shall
hereafter be governed by this Agreement and the Release, Transfer and
Indemnification Agreement. Any renewals under any Service Contract before the
effective date of this Agreement shall not be covered by this Agreement.
2. Sale of Service Contracts.
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2.1 Eligible Merchandise. Dealer and Voyager shall agree, from time to
time, as to which types of merchandise sold by Dealer are eligible to be Covered
Merchandise of the type described in the Service Contract.
2.2 Contract Prices. Voyager shall provide Service Contracts to Dealer at
the prices contained in Schedule A attached hereto ("Contract Prices"). Dealer
shall, from time to time, establish the Contract Prices to be charged for the
Service Contracts subject to Voyager's approval and shall advise Voyager in
writing of such Contract Prices. Approval of the Contract Prices shall not be
unreasonably withheld. Dealer shall comply with all Federal, Texas and Louisiana
laws and regulations applicable to the pricing of the Service Contracts.
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3. Duties of Dealer.
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3.1 General. Dealer shall (i) sell and issue the Service Contracts to
purchasers; (ii) handle all inquiries from purchasers of Service Contracts
pertaining to the Service Contracts (each such original purchaser is a "Contract
Holder"); (iii) discuss all requests for repairs with Contract Holders,
determine to what extent repairs are necessary, and advise Contract Holders as
to the procedure for obtaining repairs or, if necessary, replacement of the
Covered Merchandise (such repair or replacement is hereinafter "Covered
Repair/Replacement"); (iv) arrange for the provision of service to Contract
Holders with repair facilities (a "Repair Facility"); (v) authorize the
appropriate Repair Facility to perform the Covered Repair/Replacement; (vi) pay
the Repair Facility (or Contract Holder, if circumstances warrant) for the
reasonable cost ("Service Contract Losses") of effecting the Covered
Repair/Replacement; (vii) provide to Voyager monthly Service Contract sale and
repair cost summaries, including such data and information as is reasonably
necessary for the parties to carry out the transactions contemplated by this
Agreement; and, (viii) perform such other services and duties as may reasonably
be required to offer, sell, and administer the Service Contracts that are
subject to this Agreement.
3.2 Materials. Dealer shall submit all printed contracts, any marketing
materials which contain a reference to Voyager or the Service Contracts, or
forms pertaining to the transactions contemplated by this Agreement to Voyager
for its approval prior to use. Such approval shall not be unreasonably withheld.
3.3 Books: Accounts: Records. Dealer shall keep accurate books, accounts,
and records relating to the Service Contracts that are subject to this
Agreement, including but not limited to, names and address of each Contract
Holder, and the dates, amounts and description and model numbers of all Covered
Merchandise, and Service Contract Losses which are submitted. Such books,
accounts, and records shall be maintained in accordance with commercially
reasonable standards for a period of at least five years after the date of
termination of this Agreement. Dealer agrees that its books, accounts, and
records pertaining to the Service Contracts may be audited twice annually by
Voyager or an authorized regulatory agency. Such audits shall be conducted upon
reasonable notice to Dealer during regular business hours. All information
obtained by Voyager or its affiliates shall be subject to the provisions of
Paragraph 12.
3.4 Compliance with Laws. Dealer understands that the offer, sale, and
administration of the Service Contracts may require Dealer to obtain certain
governmental licenses, and Dealer represents and warrants that in the event such
material licenses, permits and governmental approvals and authorizations are
necessary to lawfully offer, sell, and administer the Service Contracts. Dealer
shall comply with such regulations. Dealer further understands that applicable
laws impose certain limitations on the Dealer's ability to restrict implied
warranties on merchandise covered by a Service Contract. Dealer shall comply
with all applicable Federal, Texas and Louisiana laws and regulations relating
to the offer, sale, and administration of the Service Contracts which shall
include without limitation the Texas and Louisiana Deceptive Trade Practices
Acts and the Xxxxxxxx-Xxxx Warranty Act and any applicable Retail Installment
Sales Act as well as other Federal, Texas and Louisiana laws Dealer and Voyager
may advise the other party may be applicable to the Service Contracts written
hereunder.
3.5 Sales Taxes. In connection with the sale of the Service Contracts,
Dealer agrees to account, remit, process, file and pay to the appropriate
governmental authorities, pursuant to applicable law, any Federal, Texas,
Louisiana or local sales tax assessable with respect to the sale of the Service
Contracts.
3.6 Representations. In connection with offers and sales of the Service
Contracts, Dealer shall make no oral or written representation (i) pertaining to
the coverage provided under a Service Contract that misrepresents the scope of
the coverage actually provided under the terms thereof or (ii) to the effect
that the decision of Dealer or the Repair Facility is binding on the Contract
Holder in any dispute concerning the Service Contract.
3.7 Voyager Funds. Those portions of Contract Prices received for the
benefit of Voyager shall be held by Dealer in a fiduciary capacity. All such
Voyager funds shall be promptly remitted or credited to Voyager on a monthly
basis in the manner described in paragraph 5.5 below.
3.8 Relationship. Dealer's relationship with Voyager shall be that of an
independent contractor authorized to sell and service Voyager's Service
Contracts and nothing herein shall be construed as creating an employer-employee
relationship between Voyager and officers, employees or agents of Dealer, or the
relationship of a partnership or joint venture.
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3.9 Complaints. Dealer shall immediately refer all lawsuits, demands for
arbitration and regulatory complaints to Voyager for handling, together with
copies of all information in Dealer's files and a summary of the Dealer activity
regarding the litigated or disputed matter. Voyager agrees to promptly notify
Dealer of all consumer and insurance department complaints received regarding
the Service Contracts subject to this Agreement. Dealer shall maintain a log of
all written complaints, which shall be available for inspection by Voyager.
Dealer and Voyager shall cooperate in such matters so as to allow resolution
thereof to the benefit of both parties.
3.10 Liability Insurance. At the option of Voyager, Dealer agrees to obtain
and maintain, at its sole expense, blanket fidelity, and errors and omissions
insurance, insuring Dealer's responsibilities hereunder. Voyager shall be named
an additional insured on such insurance coverages and evidence thereof shall be
furnished to Voyager and in the event the addition of Voyager as a named insured
to any such insurance policy increases the cost or fee for such insurance,
Voyager shall bear the increased cost attributable to its addition as a named
insured.
3.11 Dealer Administrative Compensation. Dealer's compensation for the
administrative services performed by it under this Agreement shall be included
in the cost of the Service Contracts issued to Contract Holders and shall be
five percent (5%) of the Contract Prices as defined herein. Dealer is authorized
to deduct said fee reimbursements as stated in Paragraph 5.4. Voyager shall pay
Dealer interest on any reserves held for the Service Contracts at the annual
statement interest rate for Voyager Property & Casualty Insurance Company, on a
quarterly basis, at the time an Experience Refund is paid or would be payable
pursuant to Paragraph 5.5. Except as provided in paragraph 5.5 below, Voyager
shall not be responsible for any other remuneration to Dealer. Any liability for
any Service Contracts transferred pursuant to Exhibit B shall not be subject to
this paragraph.
4. Duties of Voyager.
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4.1 Dealer Assistance. Upon Dealer's reasonable request from time to time,
Voyager agrees to consult with Dealer and provide advice relating to procedural,
legal and other matters relevant to the conduct of the offer, sale, and
administration of the Service Contracts. Except as provided in this Paragraph 4,
Voyager shall have no duties with respect to the Service Contracts.
4.2 Forms. Voyager shall furnish to Dealer sample copies of all Service
Contracts which are authorized for sale by the Dealer, together with necessary
procedure manuals, reporting forms and claim forms. Upon ninety days (90) prior
written notice to Dealer, Voyager may, at its sole discretion, amend any Service
Contract or withdraw any Service Contract from the market, but Voyager shall
provide a replacement Service Contract acceptable to Dealer in the event of any
withdrawal at or before the date of its written notice to Dealer.
4.3 Contract Liability Policy. Voyager shall secure a Contractual Liability
Insurance Policy covering the resulting liability from the Service Contracts
issued hereunder from Voyager Property & Casualty Insurance Company (VP&C), a
company authorized to issue such coverage, which, as of the effective date, has
an A.M. Best rating of A-. In the event VP&C's A.M. Best rating falls below a B+
rating, Voyager shall immediately replace the VP&C Contractual Liability
Insurance Policy with such a policy issued by another insurance company with an
A.M. Best rating of B+ or higher. Both the VP&C Contractual Liability Insurance
Policy and any required replacement policy shall be substantially similar to the
policy attached hereto as Exhibit "C." Such policy shall cover all Service
Contracts described in Paragraph 1.1 of this Agreement. The termination of this
agreement shall not terminate the coverage under the policy, which coverage
shall continue until the Service Contract's expiration.
5. Fees: Reimbursement; Refunds.
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5.1 Voyager Fees. "Voyager Fee," as that phrase is used herein, shall mean
that amount equal to forty percent (40%) of the Contract Prices (net of sales
tax collected) of the Service Contracts sold by Dealer or delivered by Dealer in
connection with the sale of Covered Merchandise any renewals thereof.
5.2 Claims Reimbursement. Dealer shall prepare and submit to Voyager a
monthly invoice summarizing all claims and claims-related expenses under the
Service Contracts adjusted and paid during the previous month. "Claims-related
expenses" are defined as direct costs incurred in investigating and paying the
Service Contract Losses. Within twenty (20) days of the end of the month in
which any invoice is submitted, Voyager shall reimburse Dealer for any Service
Contract Losses incurred by Dealer during the relevant period, upon submission
to Voyager of Dealer's summary of Service Contract Losses.
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5.3 Contract Holder Refunds. If any Service Contract is cancelled, Dealer
shall pay the Contract Holder the appropriate refund owed to such Holder.
Voyager shall credit to Dealer the unearned pro-rata portion of the Voyager Fee
paid by Dealer to Voyager with respect to each Service Contract cancelled.
Dealer shall be authorized to deduct the amounts credited due to cancellations
from the amount due under Paragraph 5.1 hereof, in order to determine the net
Voyager Fee due for the relevant month.
5.4 Payments to Voyager. Within twenty (20) days after the end of each
month while this Agreement is in effect, Dealer shall send to Voyager the net
amount due (Voyager Fees described in Paragraph 5.1 less Dealer compensation as
provided in Paragraph 3.11, less the credit for cancellations referenced in
Paragraph 5.3) attributable to all Service Contracts sold or renewed in
connection with the sale of Covered Merchandise during the preceding month.
5.5 Experience Refund. Voyager shall prepare an Experience Refund (herein
so called) computation for each relevant Calculation Period in accordance with
the steps set forth on Exhibit D attached hereto. For purposes of the Experience
Refund Computation under Exhibit B, the amount transferred to Voyager for
Service Contracts pursuant to Exhibit B shall be considered "Voyager Fees," but
in the computation to be made under Exhibit D, no subtraction for premium taxes
nor Dealer Administrative Compensation shall be made, charged or paid on the
transferred amounts. The first "Calculation Period" hereunder shall end on June
30, 1998, and subsequent Calculation Periods shall consist of each calendar
quarter following the initial Calculation Period. If such calculations result in
a negative amount (i.e., a deficit), then no Experience Refund shall be paid.
The amount of such deficit shall be carried forward to subsequent Calculation
Periods and offset against the Experience Refunds that would otherwise be
payable for such Periods, until such negative amount is completely offset or
paid. If such calculations result in a positive amount, then Voyager shall
within thirty (30) days after the end of a Calculation Period remit such amount
to Dealer as an Experience Refund.
5.6 Following termination of this Agreement in accordance with Paragraph 7,
other than as provided under Paragraph 7.2(a), (b), (c), (d), or (e), Voyager
shall continue to calculate an Experience Refund at the end of each quarterly
period. If such calculations result in a positive amount, Voyager shall within
30 days after the end of the Calculation Period remit such amount to Dealer. If
such calculations result in a deficit, such deficit shall be carried forward to
subsequent Calculation Periods and offset in the same manner as described in
Paragraph 5.5, except that if positive amounts have been paid after termination,
Dealer shall be required to repay Voyager such positive amount(s) to reimburse
Voyager for such deficit.
5.7 Within 60 days after Dealer has certified to Voyager that all
liabilities under all Service Contracts covered by this Agreement have expired,
Voyager shall calculate a final Experience Refund, using the same procedure
described in Paragraph 5.5, 5.6 and Exhibit D.
5.8 In the event this Agreement is terminated pursuant to Paragraph 7.2(a),
(b), (c), or (d), or (e), no further Experience Refund will be payable hereunder
until all liability for the Service Contracts written under this Agreement has
expired. Without waiving the foregoing, in the event Voyager, at its sole
discretion, subject to Paragraph 11 herein, determines that its actual damages,
costs, expenses and attorney's fees resulting from such events of termination
are satisfied and reimbursed in their entirety, such amounts that would have
been payable as an Experience Refund shall be calculated and paid to Dealer
pursuant to Paragraph 5.6 contained herein and Voyager shall pay any positive
amounts under such calculation in excess of any amounts necessary to satisfy and
reimburse such actual damages, costs, expenses and attorney's fees.
6. Term. The term of this Agreement shall continue until terminated as
permitted in Paragraph 7.
7. Termination.
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7.1 Termination Without Cause. Either party may terminate this Agreement
upon one hundred twenty (120) days prior written notice to the other party;
provided, that such party is not then in material breach of this Agreement. This
Agreement shall also terminate on any date that is mutually agreed upon in
writing by the parties.
7.2 Termination With Cause by Voyager. Subject to the cure provisions
contained herein, Voyager may immediately terminate this agreement by written
notice to Dealer in the event of (a) Dealer's violation of any applicable law
relating to the offer, sale, or administration of the Service Contracts and the
violation continues for fifteen (15) days after Dealer has received notice of
the violation; (b) material breach of this Agreement by Voyager, which material
breach continues for 30 days after Voyager has received notice of the breach;
(c) gross neglect of duty, fraud, misappropriation, or embezzlement by Dealer or
its affiliates of funds owed to Voyager or any of its affiliates under this
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Agreement or any other agreement with Dealer or any of its affiliates; (d)
Dealer or any of its affiliates shall become the subject of any order or
injunction of any court or governmental body relating to the offer, sale, or
administration of the Service Contracts and such order or injunction is not
dismissed within thirty (30) days; or (e) Dealer's voluntary bankruptcy,
insolvency or assignment for the benefit of creditors. For purposes of this
Agreement, an "affiliate" of Voyager is defined as any company or entity that is
a member company of American Bankers Insurance Group and an "affiliate" of a
Dealer shall mean any subsidiary, parent or successor corporation of the Dealer.
7.3 Termination With Cause by Dealer. Subject to the cure provisions
contained herein, Dealer may immediately terminate this agreement by written
notice to Voyager in the event of (a) material breach of this Agreement by
Voyager, which material breach continues for 30 days after Voyager has received
notice of the breach; (b) gross neglect of duty, fraud, misappropriation, or
embezzlement by Voyager of funds owed Dealer under this Agreement; (c) Voyager
or its Affiliates becoming the subject of any order or injunction of any court
or governmental body relating to the sale or administration of the Service
Contracts and such order or injunction is not dismissed within thirty (30) days;
or (d) Voyager's insolvency.
7.4 Right to Cure. Both parties shall have the right to cure any event that
would provide either party the right to terminate this Agreement for cause
within thirty (30) days after written notice is received of the occurrence of
such event unless a shorter period of time to cure such occurrence is provided
by this Agreement. Such notice shall include a specific reference to the
provision or provisions of this Agreement which are alleged to have been
breached, a description of the event giving rise to the alleged violation, and
the action to be taken by the party alleged to have violated the Agreement.
During the cure period, neither party shall terminate the Agreement. Paragraph
7.2(c) and Paragraph 7.3(b) are hereby expressly excluded from this right to
cure.
8. Offset. The parties hereto agree that either party may offset, at any time,
any amounts alleged to be due from the other party against any amounts due to
the other. Written notice of the offset and the basis for the offset shall be
given to the other party by the party claiming the right of offset. If either
party is determined to have wrongfully asserted a right of offset, that party
shall be liable to the other party for the other party's reasonable attorney's
fees, costs, expenses incurred in challenging the offset and interest on the
offset funds at a rate of six percent (6%) per annum from the date the funds
were initially due.
9. Indemnity.
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9.1 By Dealer. Dealer hereby agrees to indemnify, defend, and hold harmless
Voyager, any affiliate of Voyager, and their respective directors, officers,
employees, agents, successors, and assigns (collectively, the "indemnified
parties" and individually an "indemnified party") from and against (i) any and
all losses, liabilities, costs, and damages (or actions or claims in respect
thereof) that any indemnified party may suffer or incur insofar as such losses,
liabilities, costs, or damages (or actions or claims in respect thereof) arise
out of or are based upon any claim arising out of or relating in any manner
whatsoever to (a) the transactions of Dealer contemplated by this Agreement (but
specifically excluding items for which Dealer is being indemnified under
Subparagraph 9.2 and the contractual liabilities payable under the terms and
conditions of the Service Contracts) including without limitation, the offer,
sale, or administration of the Service Contracts by Dealer or its agents and
employees, claims based upon misrepresentations or fraud by Dealer or its agents
and employees in connection with the offer or sale of the Service Contracts, the
violation of any law, statute, regulation, or order applicable to the
transactions contemplated by this Agreement by Dealer or its agents and
employees, or claims of Contract Holders relating to repairs performed by Dealer
or its agents and employees pursuant to Service Contracts, (b) any act or
omission of Dealer or the breach by Dealer of any covenant, representation, or
warranty of Dealer in this Agreement, or (c) claims of any taxing authority for
taxes owing or alleged to be owing with respect to the sale of the Service
Contracts by Dealer, including income taxes payable thereon, by Dealer other
than premium taxes that are the responsibility of and customarily paid by
insurance companies, and (ii) any and all reasonable legal and other expenses
incurred by any indemnified party in connection with investigating, defending,
or prosecuting any of the matters referred to in clause (i) above (or actions or
claims in respect thereof) that result in any loss, liability, cost, or damage
to the indemnified party.
9.2 By Voyager. Voyager hereby agrees to indemnify, defend, and hold
harmless Dealer, any affiliate of Dealer, and their respective directors,
officers, employees, agents, successors, and assigns (collectively, the
"indemnified parties" and individually an "indemnified party") from and against
(i) any and all losses, liabilities, costs, and damages (or actions or claims in
respect thereof) that any indemnified party may suffer or incur, insofar as such
losses, liabilities, costs, or damages (or actions or claims in respect thereof)
arise out of or are based upon any claim arising out of or relating in any
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manner whatsoever to the breach by Voyager of any covenant, representation, or
warranty of Voyager in this Agreement; the obligation of Voyager under the
Service Contracts; claims of any taxing authority for taxes owed or alleged to
be owed by Voyager with respect to the sale of Service Contracts or the purchase
of the contractual liability policy; and (ii) any and all reasonable legal and
other expenses incurred by any indemnified party in connection with
investigating, defending, or prosecuting any of the matters referred to in
clause (i) above (or actions or claims in respect thereof) that result in any
loss, liability, cost, or damage to the indemnified party.
10. Effect of Termination. If this Agreement is terminated by Voyager pursuant
to Paragraph 7.2, then Voyager, in its sole discretion, may elect to either (a)
permit Dealer to continue to perform the administrative duties of Dealer
specified in Paragraph 3 during the run-off of the Service Contracts that have
not yet expired (the "Unexpired Service Contracts"), or (b) have Voyager, one of
its affiliates, or a third party assume the administrative duties of Dealer
under Paragraph 3 with respect to the Unexpired Service Contracts. If Dealer is
removed as the administrator, then Dealer agrees to pay to the successor
administrator, whether it be Voyager, an affiliate, or a third party, the
unearned Dealer Administrative Compensation computed by the pro-rata method
based on the terms of the actual unexpired Service Contracts. Dealer agrees to
provide to Voyager or its designee such data regarding the Service Contracts,
and such other information as Voyager may reasonably require to enable the
successor administrator to service the business hereunder. If this Agreement is
terminated by Dealer pursuant to Paragraph 7.1 or 7.3, then Dealer may, in
Dealer's sole discretion, continue to perform the duties specified in Paragraph
3 during run-off. Whether this Agreement is terminated by Dealer or Voyager,
Dealer may, at Dealer's sole discretion, continue to act as a Repair Facility
under any applicable Repair Facility Agreement until the expiration of the
Service Contracts written hereunder unless Dealer materially breaches the Repair
Facilities Agreement or unless this Agreement has been terminated pursuant to
Paragraph 7.2(c).
If this Agreement is terminated pursuant to Paragraph 7.1 or 7.3 by Dealer,
Voyager agrees, upon termination of this Agreement and upon Dealer's election,
to transfer the unearned Voyager Fee less the Dealer Administrative Compensation
to any administrator authorized by Dealer and, if applicable, by law to receive
such fee in the state in which the administrator is domiciled. In the event the
Agreement is terminated pursuant to Paragraph 7.1 and Dealer elects to transfer
the unearned Voyager Fee to a substitute administrator, such transfer shall be
of the unearned Voyager Fee less the Dealer Administrative Compensation and less
Voyager's retention as defined in Exhibit D attached hereto. Upon Dealer's
election, all liability for subsequent claims, refunds or any other obligations
regardless of effective or incurred date, shall be transferred from Voyager to
an approved assuming insurer on the effective date of such assumption. In such
event, Voyager and its affiliates shall be indemnified and held harmless from
any further liability under this Agreement or the Contractual Liability
Insurance Policy.
11. Arbitration. Unless otherwise agreed to by Dealer and Voyager, any
controversy or claim arising out of or relating to this Agreement, or breach
hereof, shall be submitted to arbitration in Beaumont, Texas in accordance with
the Commercial Arbitration Rules of the American Arbitration Association.
Voyager and Dealer shall each appoint one arbitrator within fifteen (15) days of
the other party's request, and the two arbitrators so appointed shall appoint a
third arbitrator. If either party refuses or neglects to appoint an arbitrator
within thirty (30) days after the other party's request in writing, then the
other party may appoint two arbitrators who shall appoint the third. If the two
arbitrators fail to agree upon the selection of a third arbitrator within thirty
(30) days of their appointment, the third arbitrator shall be selected pursuant
to the American Arbitration Association rules. None of the arbitrators shall be
an employee, officer, or director of either Voyager or Dealer or any of their
affiliates. The decision rendered by the arbitrator(s) shall be binding.
Judgment upon the decision of the arbitrators may be entered in any court having
jurisdiction thereof. Each party shall pay the expenses incurred by it and the
one arbitrator selected by or for it, and shall equally bear the expenses of the
American Arbitration Association and the third arbitrator.
12. Confidentiality. All communications from Voyager to Dealer or any
affiliate, or from Dealer to Voyager or any affiliate, pursuant to this
Agreement and all information and other material supplied to or obtained by the
other party or affiliate under this Agreement (the "Protected Information") is,
by its nature, confidential, proprietary, material, or important information of
the applicable party or affiliate and is intended to be exclusively the
knowledge of Voyager, Dealer, or their respective affiliates, as applicable,
alone. From and after the date hereof, Voyager, Dealer, and their respective
affiliates, as applicable, shall not, directly or indirectly, in any individual
or representative capacity, reveal, divulge, disclose, or communicate in any
manner whatsoever to any individual or entity (other than their respective
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officers, directors, employees, or consultants who have a need to know) any
Protected Information of the other party or any affiliate, except as may be
required by law or in response to a subpoena issued by a court having
jurisdiction in the matter, or use any Protected Information of the other party
or any affiliate for its benefit or the benefit of any third person. The term
"Protected Information" includes any information of any kind, nature, or
description concerning any matter affecting or relating to the businesses of
Voyager or any of its affiliates or Dealer or any of its affiliates, as
applicable, including without limitation, (i) names of any customers, clients,
accounts, agents, or personnel, (ii) financial affairs, (iii) manner of
operation, (iv) strategies, advertising or marketing plans or plans of any other
nature, (v) information contained in any data bases, (vi) software programs,
(vii) trade secrets, (viii) confidential information, or (ix) methods of
distribution. Without regard to whether any of the foregoing would be deemed to
be material or important under applicable law, Dealer and Voyager each agrees
that the same are material and important and materially affect the effective
conduct of the business of Voyager and its affiliates and Dealer and its
affiliates, as applicable.
13. Notices. Any notice or communication pertaining to this Agreement must be
in writing and given by depositing the same in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with
return receipt requested, by prepaid overnight courier, or by delivering the
same in person. Such notice shall be deemed received on the date on which it is
hand-delivered or, if mailed, on the earlier of the date actually received or
(whether or not received) on the fifth business day following the date on which
it is so mailed. For purposes of notice, the addresses of the parties shall be:
If to Voyager: Voyager Service Programs, Inc.
000 X. 0xx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn: Xxx XxXxxx, First Senior Vice President
If to Dealer: Conn Appliances, Inc.
0000 Xxxxxxx
Xxxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx, Chairman and Chief Executive Officer
Any party may change its address for notice by written notice given to the other
parties in the manner prescribed in this Paragraph.
14. Survival. The provisions of this Agreement shall survive termination of
this Agreement for a period of four (4) years after all liabilities expire under
all Service Contracts covered by this Agreement.
15. General.
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15.1 Entire Contract. This Agreement and the Exhibits attached hereto
supersede all prior agreements and understandings relating to the subject matter
hereof. This Agreement (including the Exhibits attached hereto) may not be
amended other than by written agreement of the parties.
15.2 Choice of Laws. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed, and enforced in accordance with the
laws of the State of Texas (excluding its conflict of laws rules).
15.3 Non-Assignment. This Agreement may not be assigned by Dealer or
Voyager. Any attempted assignment in violation of this provision shall be
ineffective for all purposes.
15.4 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and, the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance herefrom. In
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part hereof a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal, valid, and
enforceable.
15.5 Captions. The titles appearing before each provision of this Agreement
are for informational purposes only and shall not be construed to limit or
modify such provisions.
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EXECUTED by the respective officers of the parties by authority of their
respective Boards of Directors, on the dates set forth below, to be effective as
of the date first set forth above.
VOYAGER SERVICE PROGRAMS, INC.
By: /s/ Xxxx Xxxxxx
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Its: Authorized Representative
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Date: 7-16-1998
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CONN APPLIANCES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Its: Chief Executive Officer
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Date: 7-16-1998
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In consideration of the mutual promises and covenants contained in the Dealer
Agreement, American Bankers Insurance Company hereby guarantees to Conn
Appliances, Inc., jointly and severally with its affiliate, Voyager Service
Programs, Inc. ("Voyager"), the performance by Voyager of all of Voyager's
obligations contained in the Dealer Agreement and any and all future amendments
thereto.
AMERICAN BANKERS INSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
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Its: Authorized Representative
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Date: 7-16-1998
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8
EXHIBIT A
Issued By: Voyager Service Programs, Inc. ("Voyager"), a subsidiary of
American Bankers Insurance Group
SERVICE AGREEMENT
In consideration of the amount paid on this invoice for this Service
Agreement ("Agreement"), and except as hereinafter provided, Voyager will make
all necessary repairs and replacement of parts for the appliance or product
identified on this invoice at the owner's address as identified on the invoice.
TERMS AND CONDITIONS
(1) Service shall be rendered during normal working hours and within the
territory normally serviced by Voyager retained and qualified service
administrators.
(2) This Agreement excludes (a) damages caused by spillage of liquids,
insect infestations or by other improper or negligent use of the
products; (b) damages caused by corrosion or rust; (c) theft or damage
caused by flood, fire, hurricane, tornado, or all other acts of God;
(d) consumable items such as knobs, cabinetry, trim, antennas,
software, disks, needles, cartridges, glass, bulbs, batteries, etc.;
(e) commercial use of the product; (f) routine cleaning of appliances,
such as air conditioners; (g) Special, consequential or indirect
damages, whether by contract, tort, or negligence; (h) repair or
replacement covered by the manufacturer's warranty; (i) verified food
loss damages in excess of $150 on refrigerators and $250 on freezers;
or (j) damages/repairs covered by owner's other insurance coverages.
(3) This Agreement may be canceled by Voyager for fraud, material
misrepresentation, or if any payment is not made when due. Voyager
shall calculate a prorata refund, less amounts paid for repairs made
on owner's behalf.
(4) Owner has the right to request in writing the cancellation of this
Agreement. Upon cancellation, owner will receive a refund of the
unearned prorata portion of eighty percent (80%) of the price of this
Service Agreement, less amounts paid for repairs.
(5) This Agreement is subject to review by seller before being considered
for renewal.
(6) Voyager's limit of liability is the replacement value of the product.
a. Should Voyager be unable to repair a product due to part
unavailability, or other circumstances, Voyager may choose, at
its option, to either replace it with a product of like value, a
refurbished product, or credit monies towards the purchase of a
new product.
b. If a product is replaced under the terms of this Agreement, the
customer may purchase a new Agreement at new product pricing.
(7) This Agreement is transferable upon Voyager or its service
administrator receiving a written request from the original owner.
This instrument sets forth the entire agreement between the parties
and no representation, promise or condition not contained herein shall
modify its terms. If services are required that are not included in this
Service Agreement, they will be provided at regular repair rates.
Voyager has retained Conn Appliances, Inc. ("Conn's") as its service
administrator. Conn's provides customer assistance at these locations and
telephone number:
Area Service Center Address Telephone
Orange-Port Xxxxxx-Xxxxxx Xxxx 0000 Xxxxxx Xxxxxxxx TX 000.000.0000
Beaumont 0000 Xxxxxx Xxxxxxxx XX 409.832.9938
Lake Xxxxxxx 0000 Xxxxxx Xxxxxxxx XX 800.634.7118
Houston Area 000 Xxxx Xxxx Xxxxxxx XX 281.591.6611
Houston 000 Xxxx Xxxx Xxxxxxx XX 713.xxx.xxxx
San Antonio 0000 X. Xxxxx Xxx Xxxxxxx XX 210.354.1000
Lafayette 0000 Xxxxxxxx Xx. Xxxxxxxxx XX 318.233.8427
EXHIBIT B
RELEASE, TRANSFER AND INDEMNIFICATION AGREEMENT
This Release, Transfer and Indemnification Agreement is effective this 1st
day of January, 1998 by Conn Appliances, Inc., ("Conn"), Voyager Service
Programs, Inc., ("Voyager") and Voyager Property and Casualty Insurance Company
("VPC").
WITNESSETH:
WHEREAS, Voyager Property and Casualty Insurance Company issued to Conn, a
Service Contract Reimbursement Policy ("Policy"), indemnifying Conn for
contractual liabilities incurred under Conn's Service Contracts with its
customers administered by Conn (collectively referred to with Voyager's service
agreements as the "Service Contacts"): and
WHEREAS, the parties have previously entered into a certain Dealer
Agreement for the sale of Voyager Service Contracts and a Deposit Agreement
dated October 19, 1992, and all amendments and modifications thereto
(collectively Agreement #1), by and among Conn, Voyager, VPC, American Bankers
Insurance Company and Chase Bank of Texas National Association (formerly known
as Texas Commerce Bank - Beaumont National Association) which established a
certain related trust account, (hereinafter, the "Trust Account").
WHEREAS, effective January 1, 1998, Conn and Voyager entered into a certain
new Dealer Agreement (Agremeent #2), whereby Voyager issues Voyager's Service
Contracts to customers of Conn; and
WHEREAS, pursuant to the terms and conditions of Agreement #2 and this
Agreement, Voyager agrees to assume liability for and administer existing
Service Contracts and to issue new Service Contracts, and to release, indemnify
and hold Conn and VPC harmless from any further obligations and liabilities
under the Deposit Agreement, the Policy and the previously issued Service
Contracts; and
WHEREAS Conn desires to release, indemnify and hold Voyager and VPC
harmless from any obligation under Agreement #1 and Policy.
NOW, THEREFORE, in consideration of the mutual consideration contained
herein, the receipt and sufficiency thereof being duly acknowledged, the parties
agree as follows:
(1) Voyager hereby assumes the liabilities under the Service Contracts,
except for any renewals thereof issued by Conn prior to the effective date of
Agreement #2. The duties and obligations of the parties regarding such Service
Contracts are hereby and hereinafter subject to the terms of Agreement #2
between Conn and Voyager dated January 1, 1998.
(2) In consideration of the assumption of such liability and duty of
administration, the parties to this Agreement do hereby agree to terminate the
Deposit Agreement and disburse the Trust Account balance in the amount of
$4,900,000 to Conn and the remainder to Voyager. The balance remitted to Voyager
shall be consider Voyager Fees and included in the calculation of the Experience
Refund under Agreement #2.
(3) Each party shall indemnify and hold the other party harmless from any
and all loss, penalties or costs incurred by it when it is made a party to any
regulatory action, lawsuit or threat of either because of any act or omission of
the other party resulting from or growing out of unauthorized, negligent,
fraudulent, or unfaithful acts or omissions by the other party in connection
with Agreement #1 or Policy. Costs shall include, but are not limited to,
attorney's fees, court costs, expenses, settlement costs, fines, judgments and
all damage awards whether actual, compensatory, punitive or otherwise.
(4) The parties further warranty that, by virtue of payment of the
foregoing consideration, neither party nor any of their successors and assigns
shall have any claim or right against the other or under or pursuant to said
Policy and Agreement #1 after the effective date of agreement #2 and expressly
agrees that the said Deposit Agreement and Policy is terminated as of the
effective date of this agreement and there is no liability for any claims on or
after the date of this agreement other than those as specified herein and
occurring after the effective date of Agreement #2.
(5) The parties acknowledge that they have read and understand this
Release, Transfer and Indemnification Agreement; that they have received
independent legal advise from their attorney in regard to its rights and
obligations regarding the matters released and parties indemnified herein; that
this Release, Transfer and Indemnification Agreement shall not be subject to any
claim of mistake of fact and that the consideration received with respect to
this Release, Transfer and Indemnification Agreement constitutes full
satisfaction of all obligations and liabilities.
(6) The Parties understand that this Release, Transfer and Indemnification
Agreement shall be interpreted and governed by the laws of the State of Texas,
that it shall inure to the benefit of and be binding upon Conn, VPC and their
successors and assigns.
(7) The parties represent that this Release, Transfer and Indemnification
Agreement does not violate articles of incorporation, by-laws or other
applicable regulations or resolutions, and that it has taken any and all action
as may be required to have the officers executing this instrument authorized to
execute it on behalf of the corporation.
IN WITNESS WHEREOF, the Parties have executed duplicate originals of this
Release, Transfer and Indemnification Agreement and affixed its respective
corporate seal as of the date stated below.
VOYAGER PROPERTY AND CASUALTY INSURANCE COMPANY
By:
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Its:
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Date:
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VOYAGER SERVICE PROGRAMS, INC.
By:
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Its:
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Date:
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CONN APPLIANCES, INC.
By:
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Its:
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Date:
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EXHIBIT C
Service Contract Reimbursement Insurance Policy issued to Voyager Service
Programs, Inc. by Voyager Property & Casualty Insurance Company effective April,
1, 1995 and Service Contract Reimbursement Insurance Policy issued from Voyager
Guaranty Insurance Company to Voyager Service Programs, Inc. effective January
1, 1991 until April 1, 1995 and reinsured from Voyager Guaranty Insurance
Company to Voyager Property & Casualty Insurance Company by Reinsurance
Agreement effective January 1, 1993, Conn Appliances, Inc. being an additional
named insured under both policies and the agreement by signature of authorized
representative below. Both policies are further amended and endorsed to provide
coverage for verified food loss damages in excess of $150 on refrigerators
and$250 on freezers.
/s/ Xxxx Xxxxxx
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Authorized Representative
EXHIBIT D
This Exhibit D attached to that certain Dealer Agreement by and between Voyager
Service Programs, Inc. and Conn Appliances, Inc., effective January 1, 1998.
EXPERIENCE REFUND COMPUTATION
Step 1. In accordance with Paragraph 5.5, Voyager shall calculate an Experience
Refund which shall be on a cumulative inception to date basis as follows:
(a) From the net written Voyager Fees, the unearned Voyager Fees as of the
end of the applicable Calculation Period shall be subtracted. The amount of the
"unearned Voyager Fees" shall be calculated using the pro rata method, over the
term of the individual Service Contracts beginning from the date of sale. The
resulting number is the earned Voyager Fees.
(b) From the earned Voyager Fees, the premium taxes, Voyager's retention
of 10% and the Dealer Administrative Compensation associated with the earned
Voyager Fees shall be subtracted. Provided, however, no premium taxes or Dealer
Administrative Compensation on the funds transferred to Voyager pursuant tot
Exhibit B shall be subtracted from the earned Voyager Fees for the purposes of
computing the Experience Refund.
(c) From the amount calculated in (b), the paid Service Contract Losses,
claims-related expenses and ending claims reserves shall be subtracted.
Step. 2. From the sum determined under Step 1, subtract any Experience Refunds
previously paid for prior Calculation Periods.
The positive or negative amount calculated in accordance with these steps is the
"Experience Refund" for the applicable Calculation Period to in Subparagraph
5.5.
