DEALER AGREEMENT THIS AGREEMENT entered into as of the day of, 2012, between Kemba Credit Union, Inc., an Ohio corporation (the Credit Union ), and, a/an corporation (the Dealer ). WHEREAS, one of the functions of the Credit Union is to make automobile loans available to its members and eligible new members, to permit its members and eligible new members, to finance the acquisition of new and previously owned automobiles; and WHEREAS, the Dealer operates facilities for the sale of new and previously owned automobiles; and WHEREAS, the Credit Union is desirous of making automobile loans to the purchasers of automobiles from the Dealer who are also members of the Credit Union and eligible new members ( Member Purchasers ); and WHEREAS, the Dealer is desirous of making Credit Union loans available to Member Purchasers directly, at its sales facilities. NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: 1. Dealer Responsibilities. a. Program Operation. Dealer will use its best efforts to identify potential Member Purchasers. Once a Member Purchaser has made a decision to purchase an automobile from Dealer, Dealer shall offer to the Member Purchaser the opportunity to have the purchase financed by the Credit Union at the interest rate and upon the terms in effect at the Credit Union at the time of the loan application, subject to loan approval and acceptance by the Credit Union. If Dealer has knowledge that a potential Member Purchaser is a sub-prime borrower, Dealer shall nevertheless offer the Credit Union as a potential lender for that Member, before referring that Member to a sub-prime lender or any other potential lender. b. Advertisements. Before the Dealer runs any advertisement, in any medium, including but not limited to print, radio, television, Internet, or e-mail, to promote its relationship with the Credit Union or to assist in its efforts to identify potential Member Purchasers, Dealer shall first submit the advertising material to the Credit Union for its written approval. The Credit Union may disapprove the entire advertisement or delete or omit any part of such advertisement. The Credit Union s right of approval shall be exercised at its sole discretion as to any matter it deems objectionable for any reason whatsoever. c. Loan Qualifications. After a Member Purchaser has decided to apply for financing with the Credit Union through the Dealer, the Dealer shall proceed to take such Member Purchaser s loan application and then transmit a copy of the application by
electronic media or facsimile to the Credit Union for approval. The Credit Union shall then proceed to secure a credit bureau of the Member Purchaser, and either approve or disapprove the Member Purchaser s loan application based upon the Member Purchaser s credit worthiness as determined by the Credit Union in its sole discretion. The Credit Union shall notify the dealer by electronic media or facsimile of the approval or disapproval of each loan application received during normal business hours. If approved, such loan approval shall be valid for a period not to exceed fourteen (14) days from the date of the original approval. Loan applications transmitted to the Credit Union during its non-business hours shall be approved or disapproved by the Credit Union the following business day. The Credit Union shall be under no obligation to accept a loan processed by the Dealer, which has not been approved by the Credit Union in accordance with this paragraph. With each Member Purchaser, Dealer shall be responsible for quoting the interest rate approved by the Credit Union to the Member Purchaser accurately. If Dealer quotes an inaccurate rate for a member purchaser and then proceeds to complete the loan with the inaccurate rate, Dealer shall cancel that loan and assume full responsibility for funding it. In no event shall the Credit Union be required to make an exception to any rate quoted by the Credit Union in accordance with this paragraph. d. Loan Documentation. Following the Credit Union s approval of a loan application, the Dealer may proceed to prepare the loan documents in the name of the Credit Union on forms approved by the Credit Union, and close the loan transaction with the Member Purchaser. Following the closing of a loan transaction with a Member Purchaser, within seven (7) business days, Dealer shall deliver the Credit Union all the original loan documents generated in the transaction, including but not limited to, the loan application, the note and loan agreement, the security agreement, any credit life and/or health insurance documents, Truth-in-Lending disclosures and membership agreement form. The Dealer shall also provide a copy of the Dealer s invoice for the financed automobile and copies of all purchase documents and warranties provided by the Dealer to the Member Purchaser. As soon as practicable following the closing of a loan transaction, but in any event no later than twenty-one (21) days thereafter, the Dealer shall provide the Credit Union with the original certificate of title or electronic title of the financed automobile. e. New Membership Eligibility. Currently, anyone who lives, works, worships or attends school in Butler, Clermont, Hamilton or Warren Counties. Current employees of The Kroger Company, Cincinnati Firefighters and over 300 other select employee groups and their family members are eligible for membership. In no event shall the Credit Union be required to make an exception to any person who is not qualified for Credit Union membership. f. Gap Insurance. If a Member Purchaser has decided to apply for financing with the Credit Union through the Dealer, Dealer agrees that if such Member Purchaser is desirous of obtaining optional Guaranteed Auto Protection (GAP) insurance, they may do so at a one time charge to the Member Purchaser of not more than (Six Hundred Ninety-nine Dollars ($699.00). 2
g. Theft Deterrents, Dealer may use or install theft protection devices to Member s automobiles at the Members request. All anti-theft devices will be considered a back end product with a maximum cost of Two Hundred Forty-nine Dollars ($249.00). h. Return of Loan Proceeds. If the Credit Union has funded a loan and forwarded the loan proceeds to the Dealer in accordance with paragraph 3. a., infra, and the Dealer fails for any reason to forward the original certificate of title or electronic title of the financed automobile to the Credit Union in accordance with the provisions of d. of this paragraph, the Dealer shall immediately return to the Credit Union the full amount of the loan proceeds forwarded by the Credit Union. i. Bankruptcy. In the event the Credit Union funds a loan in which one or more obligors was a debtor in an open bankruptcy case who had not received a discharge, and, if at any time after the date such case is filed and prior to such debtor s first scheduled meeting of creditors pursuant to 11 U.S.C. 341 such debtor executes a Contract or other document for the purchase of a motor vehicle, takes delivery of a motor vehicle that the debtor intends to subsequently purchase, or makes a deposit with the Dealer for the subsequent purchase of a motor vehicle, then the Credit Union may, in its discretion, demand that Dealer purchase such loan from the Credit Union by paying the Credit Union the amount that Credit Union would otherwise be owed on the loan. j. Sales and Use Tax. In addition to the other obligations and warranties expressed herein or implied by applicable law, the Dealer specifically warrants to the Credit Union that all sales and use taxes applicable to the sale and purchase of the motor vehicle covered by a Contract have been paid in full, and that there are no outstanding federal, state or municipal taxes, assessments, charges or liens pertaining to any motor vehicle which is sold by the Dealer to a Member Purchaser. 2. Dealer Compensation. For the services to be provided by the Dealer hereunder, Dealer shall be compensated as follows: a. For loan transactions of current members of the Credit Union, which are originated and closed by the Dealer, an amount equal to one percent (1%) of the total amount financed will be paid. b. For loan transactions of persons who are not members of the Credit Union, but become members in order to qualify for the loan, which are originated and closed by the Dealer, two percent (2%) of the total amount financed will be paid. c. Dealer who fund twelve (12) or more loans with credit scores of 670 or better in any one month, an additional one half (1/2%) retro to deal one will be compensated to the dealer for that funding month. Any compensation earned by the Dealer in accordance with the provisions of this paragraph shall be due and payable to the Dealer upon the Credit Union s disbursement of loan proceeds. 3
The payments made hereunder shall be non-refundable regardless of loan performance. All loans must be approved and accepted by the Credit Union as provided in paragraph 1(c) hereof in order for the Dealer to be entitled to compensation under this paragraph. The Credit Union s determination as to the level of compensation to be received by the Dealer for each loan transaction shall be final. 3. Credit Union Responsibilities. a. Payment of Loan Proceeds. Subject to any amounts retained pursuant to paragraph 2(a) or (b), hereof, the Credit Union shall be responsible for fully funding each loan accepted by it upon receipt of the original loan documents from the Dealer and forwarding the loan proceeds to the Dealer. If the loan documents for any loan are deficient or defective in any material way, the Credit Union shall be under no obligation to fund such loan until such time that the Dealer corrects the deficiencies or defects. If the Dealer is unable to correct any such deficiencies or defects, the loan transaction shall be canceled. b. Promotion of Dealer. In further consideration of the Dealer s efforts to originate Credit Union loans for Member Purchasers hereunder, the Credit Union agrees to promote the Dealer to its members as a preferred dealer. The method of promoting the Dealer and the frequency of such promotion shall be subject to the sole discretion of the Credit Union. Credit Union s obligation to promote the Dealer hereunder ends immediately upon termination of this agreement by either party. 4. Charge Back to Dealer. The Dealer agrees to payback to the Credit Union the amount equal to the participation fee paid to the dealer, on any loan that pays out for any reason, within the first sixty (60) days of the contract date 5. Dealer Representations. The Dealer represents and warrants that it will have clear and unencumbered title to each automobile financed hereunder and that it will have full power and authority to sell each such automobile to the member Purchasers. The Dealer further warrants that the security interest taken by the Credit Union in connection with loan transactions shall give the Credit Union a first and best lien on each automobile financed pursuant to this Agreement. 6. Term of Agreement. This Agreement shall commence on the signing hereof and continue for an indefinite period unless terminated earlier by either party. Either party may terminate this Agreement by giving the other party thirty (30) days written notice of such party s intent to terminate. Such notice shall be deemed effective when received and may be delivered personally or by certified mail. 7. Mutual Indemnification. The Dealer shall indemnify and hold the Credit Union, its directors, officers, agents and employees harmless from and against any and all claims, actions, suits, proceedings, losses, damages, costs and expenses, including reasonable attorneys fees, arising out of, or relating in any way to the Dealer s actual or alleged negligence or other wrongful conduct associated with the following: any advertisements run or sponsored by the Dealer to promote its relationship with the Credit Union or to identify potential Member Purchasers, the making of the automobile purchase contract, including but not limited to a violation of, or failure to comply properly with any consumer protection laws, failure to service the automobile, breach of warranty relating to the automobile, the Dealer s negligence in preparing the loan documents associated with 4
the transaction, the failure of the Dealer to provide the Credit Union with the original certificate of title of the financed automobile in accordance with paragraph 3. d. or the failure of the Dealer to return to the Credit Union the loan proceeds in accordance with paragraph 3. f. This provision shall apply to all allegations or claims of negligence and/or misconduct against the Dealer, whether or not substantiated or proven. The Credit Union shall indemnify and hold the Dealer, its directors, officers, agents and employees harmless, from and against any and all claims, actions, suits, proceedings, losses, damages, costs and expenses, including reasonable attorney s fees, which arise out of or relate in any way to the Credit Union s negligent or wrongful conduct associated with the loan transactions. Legal actions or claims in which the Credit Union is named or joined as a secondarily or derivatively liable party based upon the alleged negligence and/or misconduct of the Dealer shall not constitute negligence or wrongful conduct by the Credit Union for purposes of this provision. 8. Miscellaneous. This Agreement is intended to be binding upon and inure to the benefit of the parties and their respective successors and assigns and shall be governed by, construed and interpreted in accordance with the laws of the State of Ohio. Notwithstanding anything to the contrary which is contained herein, the venue for any action brought hereunder shall be proper in the state or federal courts in which the Dealer or the Credit Union has its principle place of business. In the event of litigation arising out of or related to this Agreement, the prevailing party in such litigation shall be entitled to recover from the losing party its reasonable attorneys fees and court costs, including costs through any appeals and as allowed in bankruptcy proceedings. The failure of any party to require and/or enforce strict compliance with any provision of this Agreement shall not be construed as a waiver of any rights herein or prevent a party from enforcing any or all provisions of the Agreement at a later time. If any provision of this Agreement shall under any circumstances be deemed invalid or inoperative, this Agreement shall be construed with the invalid or inoperative provision deleted and the rights and obligations of the parties shall be construed and enforced accordingly. This Agreement is effective as of the day and date first given above, and it represents the entire agreement between the parties, superseding all previous agreements on the subject of this Agreement, written or oral, provided, however, that all subject loans made by the Credit Union to Member Purchasers prior to the date of this Agreement shall be governed by the agreement in force at the time of such loan. This Agreement may be modified or amended only in a writing signed by the parties. IN WITNESS WHEREOF, the parties, intending to be legally bound, have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. Kemba Credit Union, Inc.: (Dealer): By: Stephen Behler, President and CEO By: (Type name and title below) 5