EXHIBIT 10.1
AGREEMENT
This Agreement is made this ____ day of September, 1996 by and between Xxxxxx
X. Xxxxxx (Xxxxxx), an individual; RDO Equipment Co. (RDOEC), a corporation
duly organized and existing under the laws of the State of North Dakota; Xxxx
Deere Company - A Division of Deere & Company (XX-Xx), a corporation duly
organized and existing under the laws of the State of Delaware; and Xxxx
Deere Industrial Equipment Company (JDIEC), a corporation duly organized and
existing under the laws of the State of Delaware. XX-Xx and JDIEC are
collectively referred to herein as "Deere."
Whereas RDOEC has acquired the JDIEC dealership assets of Mega Equipment Co.
and desires to obtain an appointment as a JDIEC dealer for the area of
responsibility formerly assigned to Mega Equipment Co.; and
Whereas RDOEC and Xxxxxx desire to conduct a public offering of RDOEC common
stock, which requires the prior approval of Deere under dealer agreements now
in effect between RDOEC and Deere; and
Whereas the size and geographic diversity of RDOEC's Deere dealership
operations as presently constituted make them unlike Deere's other North
American dealers; and
Whereas addition of the Mega Equipment Co. area of responsibility to RDOEC's
dealership operations, a public offering of RDOEC stock, or both would make
RDOEC's Deere dealership operations even more unlike any of Deere's other
North American dealers, and would expose Deere to additional and unique
business risks; and
Whereas the uniqueness of RDOEC's circumstances and the additional risks
involved for Deere warrant the application, to RDOEC, of performance
requirements beyond those imposed on other Deere dealers, as well as certain
modifications to the dealer agreements now in effect between RDOEC and Deere;
and
Whereas Deere is willing to appoint RDOEC an industrial dealer for the Mega
Equipment Co. area of responsibility, and to approve a public offering of
RDOEC stock for the benefit of RDOEC and its shareholders, both upon
agreement of the parties to the terms hereof; and
Whereas RDOEC and Xxxxxx are willing to agree to and be bound by the terms
hereof, regardless of whether a public offering of RDOEC stock occurs, in
order to obtain an appointment as a JDIEC dealer for the Mega Equipment Co.
area of responsibility;
Now Therefore, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. Restrictions on Equity:
a. RDOEC will have an equity to assets ratio of 30% or greater:
(1) no later than 31 January 1997 if a public offering of RDOEC stock
does not occur on or before that date;
(2) within 120 days following any public offering of RDOEC stock; and
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(3) immediately following any further expansion of RDOEC's industrial
or agricultural area of responsibility.
The balance sheet effect of any distribution to shareholders occurring
or to occur in connection with a public offering of RDOEC stock shall
be included in the calculation of RDOEC's equity to assets ratio for
the purposes of section 1.a(2) above.
b. RDOEC will not pay any dividends, effect any stock repurchase, or make
any other distributions to shareholders (excluding, for purposes of
this section 1.b only, the distribution of tax-paid Subchapter S
earnings planned to occur in connection with the contemplated initial
public offering of RDOEC common stock) if:
(1) RDOEC's equity to assets ratio is below 30%; or
(2) RDOEC's equity to assets ratio would fall below 30% as a result
of such dividend, repurchase, or distribution.
c. Unless specifically approved in advance in writing by Deere, RDOEC
will not make any acquisitions or initiate new business activities if:
(1) RDOEC's equity to assets ratio is below 30%; or
(2) RDOEC's equity to assets ratio would fall below 30% as a result
of such actions.
d. Any business operation that RDOEC desires to capitalize at less than a
30% equity to assets ratio will be
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contained in a corporation separate from RDOEC. RDOEC will remain the
Deere dealership corporation.
e. RDOEC will not guarantee or otherwise be liable for any debt or other
obligation of any affiliated company, provided, however, that this
sentence shall not apply to financing arrangements arising from the
procurement, from RDOEC's dealerships by a company affiliated with RDOEC,
of goods and services offered to the public by RDOEC in the ordinary
course of RDOEC's business. All intercompany transactions between RDOEC
and affiliated companies will be conducted on an arms-length basis, on
reasonable commercial terms. RDOEC will maintain its assets, bank
accounts, and credit facilities separately from the assets, bank
accounts, and credit facilities of affiliated companies, and RDOEC's
assets and funds (and records relating thereto) will not be commingled
with those of any affiliated company.
f. For the purposes of this Agreement (whether with reference to JDIEC,
XX-Xx, or otherwise), RDOEC's equity to assets ratio will be
calculated in accordance with JDIEC's Industrial Dealer Terms Schedule
(as in effect from time to time) and with such adjustments to equity
or assets as Deere deems appropriate in its sole discretion, including
without limitation the subtraction of assets and equity associated
with any subsidiaries of RDOEC (whether wholly or partially owned).
2. Restrictions on Share Ownership:
x. Xxxxxx will own or control in excess of 50% of the outstanding voting
power of RDOEC (or whatever greater percentage is required to control
corporate actions that require a shareholder vote). In addition,
Xxxxxx will own RDOEC common stock representing at least 35% of RDOEC's
shareholders' equity.
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b. RDOEC will advise Deere whenever RDOEC becomes aware that a
shareholder owns or controls 5% or more of the outstanding shares of
any class of stock of RDOEC.
x. Xxxxxx will not privately sell any RDOEC shares to a person or entity
not approved by Deere. However, Xxxxxx may:
(1) sell any of his shares in RDOEC in broker's transactions, to
market makers as contemplated by SEC Rule 144, or in an
underwritten public offering; or
(2) permit the exercise of RDOEC stock options granted by Xxxxxx to
Xxxx X. Xxxx and Xxxxx X. Xxxxx prior to the date of this
Agreement
as long as Xxxxxx continues to satisfy the requirements set forth in
section 2.a above following the sale or exercise of options.
d. RDOEC will not privately sell any RDOEC shares to a person or entity
not approved by Deere. However, RDOEC may sell any RDOEC shares in an
underwritten public offering or in connection with stock options for
employees of RDOEC, as long as Xxxxxx continues to satisfy the
requirements set forth in section 2.a above following the sale.
e. Deere will have the right to terminate RDOEC's dealer appointments,
effective immediately, in the event Xxxxxx ceases to comply with either
requirement set forth in section 2.a above, provided, however, that
section 5 below will govern Deere's right of termination on the death of
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Xxxxxx. Termination under this section 2.e may be executed, at Deere's
sole discretion, on an overall basis or by individual area of
responsibility.
3. XX-Xx Performance Criteria:
a. XX-Xx will have the right to terminate RDOEC's agricultural dealer
appointments if RDOEC's equity to assets ratio, based on RDOEC's
fiscal year-end audit, is less than 25%. Such termination will require
one year advance written notice, and at JD-Ag's sole discretion may be
executed on an overall basis or by individual area of responsibility.
Should XX-Xx give notice of termination under this section 0.x, XXXXX
will have the right to cure its equity to assets ratio deficiency
through the injection of fresh capital, in the amount deemed necessary
by XX-Xx to raise the year-end percentage to 25%, within 180 days
following RDOEC's fiscal year end; however, JD-Ag's approval will be
required if RDOEC wishes to cure its equity to assets ratio deficiency
by any other means, including without limitation reducing its asset
levels or through earnings retained during the cure period.
b. Annually, by a deadline specified by XX-Xx, RDOEC will submit and
secure JD-Ag's approval of a comprehensive business plan (for each
individual area of responsibility) containing:
(1) specific objectives for market share (whole goods and parts),
Customer Satisfaction Index (CSI), and equity (as well as any
other metric criteria which XX-Xx may prescribe for dealers
generally) for the plan year which, in each instance, represent
at a minimum meaningful
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progress toward the metric level specified by XX-Xx for each
criterion;
(2) specific action plans designed to achieve the metric criteria
objectives specified in the plan and, within a reasonable period
of time, the metric levels specified by XX-Xx; and
(3) such other elements or metrics as are set forth in JD-Ag's
then-effective Signature Program, or which XX-Xx may elect to
require in dealer business plans generally.
c. Failure by RDOEC to submit acceptable business plans or failure to
make meaningful progress toward the objectives in the plans, as
determined by XX-Xx in its sole discretion, will constitute grounds for
termination of RDOEC's agricultural dealer appointments for the area
of responsibility involved. Termination pursuant to this provision will
require one year advance written notice. XX-Xx will have no obligation
to rescind a notice of termination given under this section 3.c even
if RDOEC cures the failure(s) in the area of responsibility involved
during the year after the notice is given.
d. The termination rights provided for XX-Xx in sections 3.a and 3.c
above and elsewhere in this Agreement are in addition to, and shall in
no way affect or limit, the termination rights of XX-Xx under RDOEC's
agricultural dealer agreements or any other agreement between RDOEC
and XX-Xx. Nothing in sections 3.a and 3.c above shall preclude
immediate termination, or termination on less than one year advance
notice, of RDOEC's agricultural dealer appointments in any
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situation in which another provision in this Agreement or any other
agreement affords XX-Xx a right to terminate immediately or on less
than one year advance notice.
4. Termination of JDIEC Dealer Appointments:
a. In lieu of its existing right of termination under section 3(b) of
RDOEC's industrial dealer agreements, JDIEC may terminate RDOEC's
industrial dealer appointments as follows:
(1) Overall Market Share
(a) For each of its assigned areas of responsibility, RDOEC will
maintain, on a monthly basis, rolling 12-month overall
"Deere share" market share at a level greater than the level
corresponding to the 50th percentile of all of JDIEC's U.S.
dealers. Market share will be determined based upon the
criteria and methodology then in use by JDIEC and evaluated
monthly as information becomes available. The areas of
responsibility assigned to RDOEC will be excluded from the
calculations for the purpose of determining the 50th
percentile of JDIEC's U.S. dealers.
(b) JDIEC will have the right to terminate RDOEC's dealer
appointments for a given area of responsibility upon the
third instance (or any subsequent instance) in which RDOEC
fails, in that area of responsibility, to satisfy the
performance
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requirement set forth in section 4.a(1)(a) above, whether
the instances occur in consecutive months or otherwise. Such
termination will require one year advance written notice.
JDIEC will have no obligation to rescind a notice of
termination given under this section 4.a(1)(b) even if RDOEC
satisfies the performance requirement set forth in section
4.a(1)(a) above in the area of responsibility involved
during the year after the notice is given.
(c) If in a given area of responsibility RDOEC did not satisfy
the performance requirement set forth in section 4.a(1)(a)
above for any of the 12-month periods ending May, June, or
July 1996, a failure by RDOEC to satisfy that performance
requirement in such area of responsibility for any rolling
12-month period ending July 1999 or earlier will not be
counted for the purpose of JDIEC's right of termination
under section 4.a(1)(b) above. Should RDOEC acquire a
dealership which, for any of the 12-month periods ending
with the month of acquisition or with one of the two months
immediately preceding the month of acquisition, did not
satisfy the performance requirement set forth in section
4.a(1)(a) above, a failure by RDOEC to satisfy that
performance requirement, in the area of responsibility
previously assigned to such acquired dealership, for any
rolling 12-month
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period ending within the first three years of RDOEC's
operations there will not be counted for the purpose of
JDIEC's right of termination under section 4.a(1)(b) above.
(2) Total Core Product Market Share
(a) For each of its assigned areas of responsibility, RDOEC will
maintain, on a monthly basis, rolling 12-month total core
product "Deere share" market share at a level greater than
the level corresponding to the 50th percentile of all of
JDIEC's U.S. dealers. Market share will be determined based
upon the criteria and methodology then in use by JDIEC and
evaluated monthly as information becomes available. The
areas of responsibility assigned to RDOEC will be excluded
from the calculations for the purpose of determining the
50th percentile of JDIEC's U.S. dealers.
(b) JDIEC will have the right to terminate RDOEC's dealer
appointments for a given area of responsibility upon the
third instance (or any subsequent instance) in which RDOEC
fails, in that area of responsibility, to satisfy the
performance requirement set forth in section 4.a(2)(a)
above, whether the instances occur in consecutive months or
otherwise. Such termination will require one year advance
written notice. JDIEC will have no
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obligation to rescind a notice of termination given under
this section 4.a(2)(b) even if RDOEC satisfies the
performance requirement set forth in section 4.a(2)(a) above
in the area of responsibility involved during the year after
the notice is given.
(c) If in a given area of responsibility RDOEC did not satisfy
the performance requirement set forth in section 4.a(2)(a)
above for any of the 12-month periods ending May, June, or
July 1996, a failure by RDOEC to satisfy that performance
requirement in such area of responsibility for any rolling
12-month period ending July 1999 or earlier will not be
counted for the purpose of JDIEC's right of termination under
section 4.a(2)(b) above. Should RDOEC acquire a dealership
which, for any of the 12-month periods ending with the month
of acquisition or with one of the two months immediately
preceding the month of acquisition, did not satisfy the
performance requirement set forth in section 4.a(2)(a) above,
a failure by RDOEC to satisfy that performance requirement,
in the area of responsibility previously assigned to such
acquired dealership, for any rolling 12-month period ending
within the first three years of RDOEC's operations there will
not be counted for the purpose of JDIEC's right of termination
under section 4.a(2)(b) above.
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(3) Absorption
(a) For each of its assigned areas of responsibility, RDOEC will
maintain, on a monthly basis, a rolling 12-month product
support absorption percentage at a level greater than the
level corresponding to the 50th percentile of all of JDIEC's
U.S. dealers. Product support absorption percentage will be
determined based upon the criteria and methodology then in
use by JDIEC and evaluated monthly as information becomes
available. The areas of responsibility assigned to RDOEC
will be excluded from the calculations for the purpose of
determining the 50th percentile of JDIEC's U.S. dealers.
(b) JDIEC will have the right to terminate RDOEC's dealer
appointments for a given area of responsibility upon the
third instance (or any subsequent instance) in which RDOEC
fails, in that area of responsibility, to satisfy the
performance requirement set forth in section 4.a(3)(a)
above, whether the instances occur in consecutive months or
otherwise. Such termination will require one year advance
written notice. JDIEC will have no obligation to rescind a
notice of termination given under this section 4.a(3)(b)
even if RDOEC satisfies the performance requirement set
forth in section 4.a(3)(a) above in the area of
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responsibility involved during the year after the notice is
given.
(c) If in a given area of responsibility RDOEC did not satisfy
the performance requirement set forth in section 4.a(3)(a)
above for any of the 12-month periods ending May, June, or
July 1996, a failure by RDOEC to satisfy that performance
requirement in such area of responsibility for any rolling
12-month period ending July 1999 or earlier will not be
counted for the purpose of JDIEC's right of termination
under section 4.a(3)(b) above. Should RDOEC acquire a
dealership which, for any of the 12-month periods ending
with the month of acquisition or with one of the two months
immediately preceding the month of acquisition, did not
satisfy the performance requirement set forth in section
4.a(3)(a) above, a failure by RDOEC to satisfy that
performance requirement, in the area of responsibility
previously assigned to such acquired dealership, for any
rolling 12-month period ending within the first three years
of RDOEC's operations there will not be counted for the
purpose of JDIEC's right of termination under section
4.a(3)(b) above.
(4) Equity to Assets Ratio:
JDIEC will have the right to terminate RDOEC's dealer
appointments if RDOEC's equity to assets
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ratio, based on RDOEC's fiscal year-end audit, is less than 25%.
Such termination will require one year advance written notice,
and at JDIEC's sole discretion may be executed on an overall
basis or by individual area of responsibility. Should JDIEC give
notice of termination under this section 4.a(4), RDOEC will have
the right to cure its equity to assets ratio deficiency through
the injection of fresh capital, in the amount deemed necessary by
JDIEC to raise the year-end percentage to 25%, within 180 days
following RDOEC's fiscal year end; however, JDIEC's approval will
be required if RDOEC wishes to cure its equity to assets ratio
deficiency by any other means, including without limitation
reducing its asset levels or through earnings retained during the
cure period.
(5) Business Plans and Progress Toward JDIEC Metrics:
(a) RDOEC's stated goal is to be recognized as the premier Deere
dealer group, and both RDOEC and Deere reasonably expect
RDOEC to perform consistently at the level of Deere's
highest performing dealers. RDOEC therefore commits to
strive toward and, ultimately, achieve and maintain market
shares, absorption, and equity at the metric levels
specified by JDIEC and prescribed for JDIEC dealers
generally. Toward that end, RDOEC agrees to the following
specific requirements:
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(i) Annually, by the deadline specified by JDIEC for
submission of dealer business plans, RDOEC will submit
and secure JDIEC's approval of a comprehensive annual
business plan (for each individual area of
responsibility) containing (1) specific objectives for
market share (overall and by core product group),
absorption, and equity (as well as any other metric
criteria which JDIEC may prescribe for dealers
generally) for the plan year which, in each instance,
represent at a minimum meaningful progress toward the
metric level specified by JDIEC for each criterion; (2)
specific action plans designed to achieve the metric
criteria objectives specified in the plan and, within a
reasonable period of time, the metric levels specified
by JDIEC; and (3) such other elements or metrics as are
set forth in JDIEC's then-effective Xxxx of Excellence
Program Guide, or which JDIEC may elect to require of
dealers generally.
(ii) RDOEC will substantially accomplish each material action
plan contained in each business plan approved by XXXXX.
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(xxx) RDOEC will, at a minimum, make meaningful progress
each year toward JDIEC's metrics, including without
limitation those related to market share (overall and
each core product group), absorption, and equity.
(b) Failure by RDOEC to satisfy any of the specific requirements
set forth in section 4.a(5)(a) above, as determined by JDIEC
in its sole discretion, will constitute grounds for
termination, with one year advance written notice, of
RDOEC's dealer appointments for the area of responsibility
involved. JDIEC will have no obligation to rescind a notice
of termination given under this section 4.a(5)(b) even if
RDOEC satisfies the specific requirements set forth in
section 4.a(5)(a) above in the area of responsibility
involved during the year after the notice is given. With
respect to the requirement in section 4.a(5)(a)(iii) above,
in determining whether RDOEC has failed to make meaningful
progress toward JDIEC's market share metrics in a particular
year, JDIEC will take into account actions directly
attributable to JDIEC to the extent such actions cause a
loss of market share in that year by RDOEC, provided the
connection between JDIEC's actions and RDOEC's loss of
market share is evidenced by a substantial loss of market
share in
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that year by JDIEC's U.S. dealers generally.
(6) Breach of Agreement
JDIEC will have the right to terminate RDOEC's dealer
appointments, effective immediately, in the event of a not
inconsequential breach by RDOEC or Xxxxxx of this Agreement,
RDOEC's industrial dealer agreements, or any other agreement
between RDOEC or Xxxxxx and JDIEC, provided, however, that
termination for noncompliance with the requirements of sections
4.a(1)(a), 4.a(2)(a), 4.a(3)(a), and 4.a(5)(a)(i)-(iii) above
will be governed by sections 4.a(1)(b), 4.a(2)(b), 4.a(3)(b), and
4.a(5)(b) above, respectively. Such termination may, at JDIEC's
sole discretion, be executed on an overall basis or by individual
area of responsibility.
b. Nothing in sections 4.a(1) through 4.a(6) of this Agreement shall
preclude immediate termination of RDOEC's dealer appointments in any
situation in which another provision in this Agreement or any other
agreement affords JDIEC a right of immediate termination. By way of
illustration (and not limitation), nothing in section 4.a(6) of this
Agreement shall require that a particular breach of agreement by RDOEC
or Xxxxxx be "not inconsequential" if some other provision of this
Agreement or another agreement affords JDIEC a right of termination
following the breach without requiring that the breach be not
inconsequential.
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c. The termination rights provided for JDIEC in section 4.a above and
elsewhere in this Agreement are in addition to, and shall in no way
affect or limit, the termination rights of JDIEC under RDOEC's
industrial dealer agreements (other than the termination right
provided for JDIEC in section 3(b) of those dealer agreements).
d. In lieu of RDOEC's existing right of termination under section 3(b) of
its industrial dealer agreements, RDOEC may terminate its JDIEC dealer
appointments by giving one year advance written notice to XXXXX.
0. Termination on Death of Xxxxxx:
a. Deere will not exercise its right, under section 2(b) of the dealer
agreements in effect between RDOEC and Deere, to terminate RDOEC's
dealer appointments, effective immediately, upon the death of Xxxxxx
if the following conditions are satisfied at the time of Xxxxxx'x
death:
(1) RDOEC has in place an ownership succession plan that has been
approved in writing by XX-Xx and JDIEC.
(2) RDOEC, XX-Xx, and JDIEC have entered into a written agreement
which:
(a) identifies events which, from Xxxxxx'x death forward, will
constitute changes in the control of RDOEC; and
(b) provides XX-Xx and JDIEC an additional right to terminate
RDOEC's dealer
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appointments, effective immediately, if such an event occurs
without the prior written approval of XX-Xx and JDIEC.
(3) Neither RDOEC nor Xxxxxx has breached any obligation under
RDOEC's dealer agreements, this Agreement, or any other agreement
with XX-Xx or JDIEC, and no grounds for termination of an RDOEC
dealer appointment exist under any agreement between RDOEC and
and XX-Xx or JDIEC.
(4) RDOEC and each of its locations are under the management of
personnel who have demonstrated performance capabilities, are
acceptable to Deere in its sole discretion, and who will continue
to manage RDOEC and its locations after the death of Xxxxxx.
(5) Each area of responsibility assigned to RDOEC under its dealer
agreements justifies, in Deere's sole discretion, the
continuation of a Deere dealership assigned only that area.
Should Deere determine that a particular area of responsibility
does not justify the continuation of a dealership, RDOEC shall
retain, for a period of three years following the death of
Xxxxxx, a right of first refusal to locate a dealership in the
affected area of responsibility if in that period Deere rescinds
its decision, provided, however, that such right of first refusal
shall terminate if RDOEC breaches an agreement with XX-Xx or
JDIEC, or if grounds arise for termination of any of RDOEC's dealer
appointments.
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(6) Xxxxxx is in compliance with the requirements set forth in
section 2.a above.
b. Deere may at its sole discretion evaluate compliance with the
conditions set forth in this section 5 and take action, if any, on an
overall basis or by individual area of responsibility.
6. Arbitration:
a. Any controversy or claim, whether based on contract, tort, statute,
common law, or other legal theory, between RDOEC or Xxxxxx and XX-Xx,
XXXXX, or Deere Credit, Inc. shall be resolved by binding arbitration
pursuant to this section 6 and the then-current Commercial Rules and
supervision of the American Arbitration Association. The duty to
arbitrate shall extend to any officer, employee, shareholder,
principal, agent, trustee in bankruptcy or otherwise, affiliate,
subsidiary, third-party beneficiary, or guarantor of a party hereto
making or defending any claim which would otherwise be arbitrable
hereunder.
b. The arbitration shall be held in Chicago before a panel of three
arbitrators who are knowledgeable regarding, and have experience as
arbitrators of, commercial disputes. The decision and award of a
majority of the panel shall be final and binding, and judgment thereon
may be entered in any court having jurisdiction thereof. The panel
shall not have the power to award punitive or exemplary damages, or
any damages excluded
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by, or in excess of any damage limitations expressed in, any agreement
between the parties to the dispute.
c. Each party to the dispute shall bear its own attorney's fees
associated with the arbitration, and other costs and expenses of the
arbitration shall be borne as provided by the rules of the American
Arbitration Association.
d. If court proceedings to stay litigation or compel arbitration are
necessary, the party who unsuccessfully opposes such proceedings shall
pay all associated costs, expenses, and attorney's fees which are
reasonably incurred by the other party.
e. Neither a party to the dispute, a witness, or the panel may disclose
the contents or results of any arbitration hereunder without the prior
written consent of all parties to the dispute, unless and then only to
the extent required to enforce or challenge the award, as required by
law (including without limitation applicable securities laws and
regulations) or as a result of legal process, or as necessary for
financial and tax reports and audits.
f. Deere may seek judicial remedies, such as (but not limited to)
attachment, replevin, and garnishment, deemed necessary by Deere in
its sole discretion for the enforcement of Deere's rights regarding
any security for the indebtedness of RDOEC, and such action by Deere
shall not constitute a waiver of Deere's rights or a breach of Deere's
obligations under this section 6. For the purposes of this section 6.f
only, "Deere" shall include Deere Credit, Inc. in addition to XX-Xx
and XXXXX.
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x. If any part of this section 6 is held to be unenforceable, its
unenforceability shall not affect the duty to arbitrate hereunder or
any other part of this section 6.
7. Letters of Credit:
a. Deere will accept letters of credit as a substitute or partial
substitute for Xxxxxx'x personal guaranties of the indebtedness of
RDOEC (including without limitation wholesale obligations and
obligations under any retail finance or leasing agreement) if the
letters are issued by a bank acceptable to Deere in favor of Deere and
such other beneficiaries as Deere may direct, the form of the letters
is acceptable to Deere, the amount of the letters as issued meets
Deere's guidelines in effect at the time of issuance, and the amount
of the letters is adjusted when and as requested by Deere. Deere may
request an adjustment of the letters' amount whenever such an
adjustment is necessary to meet Deere's guidelines (as in effect from
time to time), or if in Deere's sole discretion an adjustment is
warranted in light of circumstances deemed by Deere to be unusual.
b. Cancellation or nonrenewal of any letter of credit issued in Deere's
favor, or a failure to adjust the amount of such a letter when and as
required by Deere, shall be grounds for immediate termination of
RDOEC's dealer appointments. Termination under this section 7.b may be
executed, at Deere's sole discretion, on an overall basis or by
individual area of responsibility.
8. General Provisions:
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a. As used in this Agreement, the term "area of responsibility" means:
(1) with regard to RDOEC's XX-Xx dealerships, an individual
dealership location; and
(2) with regard to RDOEC's JDIEC dealerships, a geographic region now
or hereafter treated by JDIEC as a separate dealership trade area
in its dealer agreements with RDOEC.
b. In the event JDIEC gives its approval for a rent-to-rent business
operated by or affiliated with RDOEC or Xxxxxx at a location outside
the areas of responsibility assigned to RDOEC by JDIEC, such
rent-to-rent business will not utilize any Xxxx Deere industrial
equipment at that location other than such Xxxx Deere industrial
equipment as it may acquire from the JDIEC dealer whose assigned area of
responsibility includes such location.
c. Deere shall have input into the selection and removal of all RDOEC
management personnel down to and including the managers of RDOEC's
individual locations.
d. RDOEC shall obtain written approval from Deere prior to discussing
(directly or indirectly) with any dealer a possible purchase of a
dealership that would add to RDOEC's area of responsibility. Deere
shall have the right to reject such a request or to disapprove
additions to RDOEC's area of responsibility in its sole discretion.
e. With respect to its JDIEC dealerships, RDOEC will not carry
competitive products (whole goods or parts),
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including without limitation products which do not compete with a
JDIEC product as of the date of this Agreement but which become
competitive in the future due to the offering of new products by JDIEC
(whether as a result of new product development, acquisition, or
otherwise). This commitment shall also bind any subsidiary of RDOEC
(whether wholly or partially owned), as well as any other entity in
which Xxxxxx owns or controls a 25% or greater interest. However, this
commitment shall not preclude the distribution in Minnesota, through a
business separated from RDOEC's JDIEC dealership in accordance with
JDIEC's competitive lines policy, of the Vermeer product line carried
by RDOEC in Minnesota on the date of this Agreement, if in the future
JDIEC offers a product which competes with a Vermeer product carried by
RDOEC in Minnesota on the date of this Agreement.
f. Any grounds for termination of RDOEC's dealer appointments under this
Agreement, RDOEC's dealer agreements (as modified by this Agreement),
or any other agreement between RDOEC and XX-Xx or JDIEC will be
sufficient grounds for termination for the purposes of any applicable
law requiring grounds (or certain grounds) for termination, regardless
of the terminology used in such law to describe the grounds required
thereunder.
g. If any of RDOEC's dealer appointments are terminated, all of RDOEC's
indebtedness to Deere in connection with the terminated appointments
which is not due and payable prior to the effective date of
termination shall be due and payable as of the effective date of
termination.
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h. RDOEC, Xxxxxx, and Deere will maintain the confidentiality of one
another's confidential information, unless and then only to the extent
disclosure is required by law (including without limitation applicable
securities laws and regulations) or as a result of legal process.
Nothing in this section 8.h or in section 6.e above shall prohibit
the exchange of information between RDOEC and Xxxxxx, or the exchange
of information within the Deere & Company organization.
i. Nothing contained in this Agreement shall be construed as a waiver or
modification of any terms, conditions, or rights contained in any
existing agreement between XX-Xx or JDIEC and RDOEC or Xxxxxx except
to the extent such terms, conditions, or rights are in conflict with
this Agreement, in which event this Agreement shall supersede the
existing agreements, but only to the extent of the conflict.
j. Each party to this Agreement represents and warrants that it has taken
all action required to authorize it to enter into this Agreement, and
each party further represents that it has neither relied upon nor been
induced by any representation, statement, or disclosure of the other
party, but has relied upon its own knowledge and judgment in entering
into the Agreement.
k. This Agreement shall be effective and binding regardless of whether a
public offering of RDOEC stock occurs. Because of RDOEC's unique position
within Deere's dealer organizations, each provision hereof shall be given
full effect in accordance with its terms regardless of how or whether
Deere addresses the provision's subject matter with other Deere dealers.
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l. This Agreement cannot be modified, nor any party's rights hereunder
waived, except in writing, and no waiver of any provision hereof shall
preclude enforcement of any other provision hereof, or subsequent
enforcement of the provision waived. This Agreement cannot be assigned
without the prior written consent of the parties, which consent may be
withheld with or without cause.
m. Reincorporation of RDOEC in Delaware or another jurisdiction shall not
affect its rights and obligations under this Agreement.
XXXX DEERE COMPANY - A DIVISION OF DEERE & COMPANY
By:
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Title:
-----------------------------------------------
XXXX DEERE INDUSTRIAL EQUIPMENT COMPANY
By:
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Title:
-----------------------------------------------
RDO EQUIPMENT CO.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------------
Title: President
-----------------------------------------------
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
XXXXXX X. XXXXXX, INDIVIDUALLY
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