RETAIL FINANCE AGREEMENT BETWEEN
LULL INDUSTRIES, INC. ("LULL") AND
DEERE CREDIT, INC. ("DEERE")
GENERAL PROVISIONS
Deere hereby agrees to finance the retail purchase of industrial equipment
manufactured by Lull pursuant to the following terms and conditions. Lull
accepts the terms and conditions set out below as to all loans or retail
installment contracts (collectively, "Contracts", or singularly, "Contract")
which its distributors ("Distributors" or, singularly, "Distributor") send
Deere after the effective date of this Agreement.
Deere will make its Lull equipment retail finance program available to each
Lull Distributor which meets certain minimum financial requirements set by
Deere. Lull will assist Deere in obtaining annual financial information from
each of Lull's Distributors.
TRAINING
Prior to the announcement of this program, Deere agrees to provide Lull sales
personnel with appropriate training regarding the fundamentals of the finance
programs. Lull agrees to make its sales personnel reasonably available for
such training. Each party will pay its own expenses for this training
program, but Deere will pay for the training materials.
Lull agrees that, after initial training by Deere, Lull will train each of
its Distributors to use Deere's finance program. Deere will assist Lull with
training support intermittently as needed. Lull will also provide ongoing
support for the program during the course of this Agreement.
ACCEPTANCE
Deere may accept or reject at its discretion any Contracts submitted by
Distributors, or may discontinue further acceptances from any Distributor at
any time.
Lull hereby agrees to provide to Deere, on a confidential basis, up to date
and accurate information regarding the suggested retail price and the
Distributor invoice or Lull's cost of equipment sold. Lull also agrees to
disclose to Deere any reduction in the Distributor invoice caused by any
incentive program(s) offered by Lull.
FINANCE INCENTIVE PROGRAMS
Deere will charge Lull monthly for any amounts Lull is obligated to pay Deere
under any finance incentive program offered by Lull to its customers. Lull
shall pay these amounts to Deere net 15 days from the date of Deere's
invoice. When a distributor contributes to the
finance incentive program, the amount of the distributor's contribution will
be deducted from the note proceeds.
RENTAL FLEET FINANCE ("RFF") PLAN
Deere agrees, subject to Deere's normal credit criteria, to finance for
Lull's Distributors the Distributors' purchases of Lull equipment to be used
by the Distributors as rental inventory. Such RFF's will be installment
contracts the last installment of which is a balloon payment in an amount, or
percentage of the original Distributor invoice amount, as agreed to by Lull
and Deere. Upon retail sale or other disposition of the equipment by the
Distributor, any balance remaining on the contract will be immediately due
and payable.
If the Distributor does not elect to pay or refinance the balloon payment,
Lull agrees to pay to Deere the amount of the balloon payment as originally
disclosed on the RFF contract. Such payment will be made by Lull upon
request by Deere. Lull further agrees to pay Deere the entire unpaid balance
of the RFF contract if, for whatever reason, the subject equipment is no
longer in the Distributor's inventory and the Distributor has not paid such
balance to Deere. However, Lull shall not be responsible for paying Deere
for events covered by insurance the proceeds of which are paid to Deere.
If the Distributor defaults on an RFF contract prior to the due date of the
balloon payment, Deere may, but is not obligated to, offer to sell the RFF
contract to Lull at a price equal to the total outstanding balance on the
contract. Lull may or may not accept such offer.
ADVERTISING AND PROMOTION
Each November, Deere will pay Lull one tenth of one percent (.1%) of the
aggregate original Principal Balances of funded notes and RFFs during Deere's
past fiscal year. Deere's fiscal year starts on 1 November and ends 31
October. A Xxxx Deere Credit "tag line" will be used in all Lull
advertisements, literature, brochures and other promotional materials. Lull
agrees to submit to Deere for approval copies of all such advertising, etc.,
before they are printed.
RIGHT OF FIRST REFUSAL
Lull agrees that during the course of this Agreement Lull will endorse for
use by Lull's Distributors and retail customers Deere's finance program. If
Lull should offer any finance incentives to its customers during the term of
this Agreement, the incentives shall be available through the use of Deere's
finance products and will be available through other finance companies'
finance programs only if Deere declines to offer the customers credit.
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COLLECTIONS AND REPOSSESSIONS
Deere will take any collection or repossession action on defaulted contracts
as it, in its sole discretion, deems necessary and proper under the
circumstances. Lull hereby agrees to render friendly assistance without
charge to Deere in collection or repossession of these contracts or the
collateral securing them.
WARRANTIES
Lull warrants to Deere that Goods which are the subject of a Contract comply
with all state, federal and local laws and regulations in the jurisdictions
in which such Goods are to be offered for sale by its Distributors.
In the event of breach by Lull of any warranties or other representations
contained anywhere in this Agreement (except for in the two paragraphs that
immediately follow), upon demand by Deere, Lull will pay Deere on the
Contract(s) directly or indirectly affected by such breach, an amount equal
to the total unpaid balance of the Contract, (including unpaid finance
charges) plus all costs and expenses (including attorney's fees) reasonably
incurred by Deere as a result of the breach.
If any retail purchaser alleges that Lull has breached any warranty, whether
express, implied or constructive, and ceases to make payments to Deere
because of such breach, Deere will take whatever action it deems necessary
and proper in collecting such retail purchaser's account. If the equipment
is repossessed in such an instance, and if Lull determines that a warranty
has been breached, Lull will repair the equipment to remedy the breach.
Further, upon request by Deere, Lull will provide the purchaser at a
repossession sale with a written statement that either (1) there was no
breach; or (2) the alleged breach has been cured.
Moreover, if any court holds that Lull has, in fact, breached any warranty,
whether express, implied or constructive, to any retail purchaser, Lull shall
hold Deere harmless from any and all losses it incurs on that retail
purchaser's Contract.
Notwithstanding any other provision in this Agreement, Lull's failure to
fulfill its obligations outlined in the two preceding paragraphs shall
entitle Deere to terminate this Agreement upon ten (10) days written notice.
HOLD HARMLESS
Lull agrees to defend, indemnify, and hold harmless Deere, its affiliated
corporations, and their respective directors, officers, employees, and agents
against and from any and all claims, demands, suits, fines, and penalties,
and any expense pertaining thereto, which are brought by any person or entity
as a result of any death, personal injury, or property
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damage, whether direct or consequential, arising out of the use, possession,
or transportation of any Lull product.
VOLUME
The parties acknowledge that for this program to be successful, a minimum
volume (dollars financed) level must be reached.
1994 $ 2,000,000
1995 $ 9,000,000
1996 $12,000,000
ANNUAL REVIEW
This program will be reviewed annually to determine whether volume targets
have been or will be met and to consider changes to the program to make it
more beneficial to both Lull and Deere.
FINANCIAL INFORMATION
On a semi-annual basis, Lull will send to Deere financial information
consisting of a complete balance sheet and income statement. At least once
annually, such statements shall be audited by outside, certified public
accountants.
TERMINATION
This Agreement may be terminated by either party upon 365 days' written
notice to the other party. Upon breach of this Agreement by one party, the
other party may, at its option, terminate this Agreement after giving the
breaching party written notice that it has ten (10) days in which to begin
curing the breach and thirty (30) days within which to complete the cure.
Termination shall not affect each parties rights and obligations with respect
to Contracts accepted before the effective date of such termination.
CONTROLLING LAW
The construction and validity of this Agreement shall be governed by the law
of Iowa.
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EFFECTIVE DATE
The effective date of this Agreement shall be the 14th day of July, 1994.
LULL INDUSTRIES, INC. DEERE CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxxx Xx. By: /s/ Xxxxxx X. Xxxxxx
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Title: CFO Title: Senior Vice President
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Date: 7-14-94 Date: 7-22-94
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