EXHIBIT 10.7
AGREEMENT
AGREEMENT dated as of October 15, 1996, by and between Deere & Company, a
Delaware corporation ("Deere") and Xxxx Deere Capital Corporation, a Delaware
corporation ("JDCC").
WITNESSETH:
WHEREAS, Deere owns all of the outstanding common stock of JDCC; and
WHEREAS, Deere and JDCC believe that it is their respective best interest
to demonstrate Deere's support for JDCC to debt holders and derivative
counterparties.
NOW, THEREFORE, in consideration of the foregoing, the mutual advantage and
benefit of the parties hereto and other good and valuable consideration, the
parties hereto hereby agree as follows:
1. FIXED CHARGES RATIO. Deere shall make income maintenance payments to
JDCC, constituting additions to the pre-tax income of JDCC, to the extent that
such payments are necessary to cause the ratio of Net Earnings Available for
Fixed Charges to Fixed Charges of JDCC and consolidated affiliates (determined
on a consolidated basis and in accordance with GAAP) to be not less than 1.05
for each JDCC fiscal quarter.
2. OWNERSHIP. Deere or one or more of its direct or indirect wholly-owned
subsidiaries or a combination thereof will continue to own at least fifty-one
percent (51%) of the shares of capital stock of JDCC having voting power for the
election of directors, PROVIDED, HOWEVER, that JDCC may merge or consolidate
with, or sell or convey substantially all of its assets, to Deere, if in
connection therewith, Deere shall expressly assume the due and punctual payment
of all of JDCC's rated debt.
3. MINIMUM NET WORTH. Deere shall cause JDCC to have as at the end of
any fiscal quarter a Consolidated Tangible Net Worth of at least $50,000,000.
4. NO GUARANTY. This Agreement is not, and nothing herein contained and
nothing done pursuant hereto by Deere shall be deemed to constitute, a guaranty
by Deere of the payment of any indebtedness, obligation or liability of any kind
or character whatsoever of JDCC or any of JDCC's direct or indirect
subsidiaries.
5. TERM. This Agreement may be modified, amended or terminated, at
Deere's election, upon thirty days prior written notice to JDCC and to Xxxxx'x
Investors Service, Inc. ("Moody's"), Standard & Poors Ratings Group ("S&P") and
Fitch Investors Service, Inc. ("Fitch") if (a) such modification, amendment or
termination would not result in a downgrade of JDCC's rated public debt ("Debt")
by Moody's, S&P or Fitch; or (b) the modification, amendment or notice of
termination provides that this Agreement will continue in effect with respect to
Debt outstanding on the effective date of the modification, amendment or
termination; or (c) JDCC has no
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outstanding rated public long-term Debt. For purposes hereof, no portion of any
Debt shall be considered "outstanding" if such Debt shall be defeased or
discharged in accordance with the indenture or other governing instrument
defining the rights of the holders of such Debt. Upon termination of this
Agreement, no further obligation on the part of Deere shall thereafter arise
hereunder.
6. DEFINED TERMS. Capitalized terms used herein, but not defined herein,
shall be as defined in the $3,500,000,000 Credit Agreement dated as of April 5,
1995, amended as of February 27, 1996 and among Deere and JDCC and The Chase
Manhattan Bank (formerly Chemical Bank) as Administrative Agent and as Auction
Agent, Deutsche Bank AG Chicago Branch as Syndication Agent, Bank of America
National Trust and Savings Association as Documentation Agent, and The
Toronto-Dominion Bank as Canadian Administrative Agent and various institutions
as Managing Agents and co-agents, as such credit agreement or any successor or
replacement agreement may be amended from time to time.
7. WAIVER. Deere hereby waives any failure or delay on the part of JDCC
in asserting or enforcing any of its rights or in making any claims or demands
hereunder.
8. RIGHTS OF LENDERS. The obligations of Deere to JDCC pursuant to this
Agreement are to JDCC only and do not run to, and are not enforceable directly
by, any creditor of JDCC; nor shall this Agreement cause Deere to be responsible
for the payment of any obligation of JDCC to any creditor thereof; PROVIDED,
HOWEVER that any Lender to JDCC shall have the right to demand that JDCC enforce
JDCC's rights under this Agreement and if JDCC fails or refuses to take timely
action to enforce such rights such Lender may proceed against JDCC to enforce
JDCC's rights under this Agreement. The term Lender in this paragraph 8 shall
mean any person, firm or corporation from whom JDCC is indebted for borrowed
money or that is a derivative counterparty to JDCC.
9. SUCCESSORS. The Agreements herein set forth shall be mutually binding
upon, and shall inure to the benefit of, Deere and JDCC and their respective
successors and assigns.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
DEERE & COMPANY
By: /s/ X. X. Xxxx
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XXXX DEERE CAPITAL CORPORATION
By: /s/ X. X. Xxx
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