EXHIBIT 10.2
XXXX DEERE
CONSTRUCTION EQUIPMENT
DEALER AGREEMENT
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XXXX DEERE
CONSTRUCTION EQUIPMENT COMPANY
AUTHORIZED CONSTRUCTION EQUIPMENT
DEALER AGREEMENT
The Dealer identified below hereby applies to JDCEC for appointment as a JDCEC
Dealer for the area of responsibility designated in Exhibit 1. Dealer agrees
that the relationship between Dealer and JDCEC will be governed by the Terms of
Appointment set forth in this Agreement. When it executes this Agreement, JDCEC
accepts the Dealer's application and also agrees to be bound by the Terms of
Appointment. This Agreement shall be effective upon execution by JDCEC and shall
as of that date supersede any prior Xxxx Deere Dealer Agreement between the
parties hereto (including without limitation any prior Xxxx Deere Industrial
Dealer Agreement between Dealer and Xxxx Deere Industrial Equipment Company).
Dealer (Firm Name): XXXX MACHINERY, INC.
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Address: 0000 XXXXXXXXX 00XX XXXXXX, XXXXX, XXXXXXX 00000
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X Corporation
X C
___ S
___ Limited Liability Company By: /S/ XXXXX X. XXXXXXXXXX
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___ Partnership
___ General Title: PRESIDENT
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___ Limited (Authorized officer, owner, or partner)
___ Proprietorship
___ Other: Date: MAY 6, 1998
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Signatures of Other _____________________________________________________________________________
Partners, Owners, or _____________________________________________________________________________
Shareholders: _____________________________________________________________________________
Signature of XXXXX MAS, JR. /S/ XXXXX MAS, JR.
Guarantors: -----------------------------------------------------------------------------
XXXX MAS /S/ XXXX MAS
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X.X. MAS /S/ X.X. MAS
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XXXX CORP. /S/ XXXXX X. XXXXXXXXXX
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Accepted: By: /S/ XXX X. XXXXX
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Xxxx Deere Construction Title: DIRECTOR, COMMERCIAL OPERATIONS
Equipment Company ---------------------------------------------------------------------
Xxxxxx, XX 00000 Date: MAY 6, 1998
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TERMS OF APPOINTMENT
PREAMBLE
JDCEC and Dealer acknowledge that the ultimate objective to which each
party will strive is the satisfaction of the customer. Satisfaction of customers
results from providing quality products and excellent product support and
otherwise exceeding customers' needs and expectations. JDCEC relies on Dealer to
promote aggressively the sale, lease, and rental of Goods in Dealer's AOR and to
provide a level of service and support of Goods that exceeds customers' needs
and expectations. The environment necessary for achieving the mutual objectives
of Dealer and JDCEC is enhanced by a relationship between JDCEC and Dealer that
is based on cooperation, mutual respect, and a commitment to continuous
improvement.
The Terms of Appointment set forth in this Agreement are necessary to
ensure that:
\bullet\ the Goods are actively and aggressively promoted by Dealer for
sale, lease, and rental to customers and prospective customers in
Dealer's AOR in order to achieve the Performance Standards;
\bullet\ the Goods are supported by Dealer in a prompt and effective
manner in order to achieve a high level of customer acceptance;
and
\bullet\ customers' needs are anticipated and met faster, better, and more
consistently by Dealer than they are by the competition.
Dealer and JDCEC agree as follows:
1. PROVISIONS OF APPOINTMENT. During the period of Dealer's
appointment as a JDCEC Dealer, the following provisions shall apply:
a) Dealer's AOR
In authorizing Dealer to distribute Goods, JDCEC is
relying on Dealer to effectively market Goods against
competing products in Dealer's AOR and to enhance the
reputation JDCEC and its dealer organization have
developed over many years. Achieving a high degree of
customer satisfaction in Dealer's AOR requires that
Dealer concentrate its efforts in Dealer's AOR.
i) Dealer is assigned Dealer's AOR for the
purpose of marketing, servicing, and
supporting Goods. Dealer's AOR is not an
exclusive territory. JDCEC and others may
market, service, and support Goods in
Dealer's AOR. Without limiting the
foregoing,
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JDCEC may sell, loan, lease, or
rent Goods, without restriction or
limitation, to any person or entity,
including without limitation:
a) federal, state, and local
governments;
b) accounts classified by JDCEC as
direct or national accounts;
c) purchasers for export;
d) educational institutions;
e) competitors of JDCEC;
f) equipment manufacturers; and
g) employees of JDCEC.
ii) JDCEC may assign all or any portion of
Dealer's AOR to other persons or entities
for the purpose of marketing, servicing, and
supporting products other than Goods. Such
an assignment may include Parts.
iii) Dealer will concentrate its efforts in
Dealer's AOR.
iv) JDCEC shall have no obligation to support,
through its programs or other forms of
dealer support, activities of Dealer outside
Dealer's AOR, and JDCEC may exclude
activities of Dealer outside Dealer's AOR
from JDCEC's programs and other forms of
dealer support.
v) Whenever a sale, lease, or rental of Whole
Goods by Dealer is subject to JDCEC's AOR
service fee policy, as in effect from time
to time, Dealer will pay a service fee in
accordance with the terms of JDCEC's service
fee bulletin in effect when the sale, lease,
or rental occurs.
b) Locations; Other Product Lines
The authorized Dealer locations specified in Exhibit 3 are
necessary to ensure (1) superior product support, (2)
aggressive sales, leasing, and rental coverage
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of Dealer's AOR, and (3) a high degree of customer
satisfaction. Locations may need to be added, relocated, or
discontinued in the future to meet changing market needs.
i) Dealer will maintain JDCEC dealership operations at
each location listed in Exhibit 3 for the purposes
specified in Exhibit 3. Dealer will not open any new
Dealer location, relocate or discontinue a Dealer
location, or change the purposes of a Dealer location
without obtaining JDCEC's prior written approval.
Dealer and Affiliates will not, either directly or
indirectly, establish, maintain, or operate at any
other location a place of business of any kind where
(or from which) any Goods are displayed, sold,
leased, rented, or serviced.
ii) Neither Dealer nor any Affiliate will sell, lease, or
rent parts or whole goods that compete with JDCEC's
products. Dealer will separate, in a manner
acceptable to JDCEC, other business activities and/or
product lines from Dealer's JDCEC dealership
operations if, in JDCEC's sole discretion, such
activities and/or product lines are likely to detract
from Dealer's representation of JDCEC's products.
Dealer and Affiliates will not open any new location
or relocate a location where Dealer or an Affiliate
engages in the sale, lease, rental, or servicing of
construction, utility, or forestry equipment (or
parts for such equipment) other than Goods, or in a
related business, without obtaining JDCEC's prior
written approval.
iii) To ensure compliance with this Section l.b., Dealer
and Affiliates will permit JDCEC to inspect, during
normal business hours, all locations of Dealer and
any Affiliate engaged in the sale, lease, rental, or
servicing of equipment or vehicles (or parts for
equipment or vehicles), or in a related business.
c) Dealer's Business Plans and Promotional Efforts; Achievement
of Meaningful Progress and the Performance Standards
The reputation and mutual success of JDCEC and JDCEC Dealers
depend to a large degree upon how effectively each JDCEC
Dealer conducts its operations.
i) Each year, by the date specified by JDCEC, Dealer
will submit and secure JDCEC's approval of a business
plan covering one or, if requested by JDCEC, more
years and containing, for each year covered by the
plan:
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a) an objective for each Performance Criterion
that represents, at a minimum, Meaningful
Progress for the Performance Criterion;
b) action plans designed to achieve the
Performance Criteria objectives specified in
the plan and, within a reasonable period of
time, performance at or above the
Performance Standards; and
c) such other elements as JDCEC may request of
JDCEC Dealers generally.
Dealer may base its business plan on the calendar
year or on Dealer's fiscal year, provided all periods
are covered by a Dealer business plan approved by
JDCEC.
ii) Dealer will actively and aggressively promote the
sale, lease, and rental of Whole Goods. Dealer's
compliance with this commitment will be evaluated
based on performance in Dealer's AOR and not on
performance outside Dealer's AOR.
Dealer will maintain:
a) highly qualified management and sales
personnel;
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b) sales training and personnel development
programs;
c) inventories of Whole Goods and related
attachments available for demonstration,
sale, lease, and rental; and
d) sales facilities
that in each case are sufficient to achieve the
Performance Criteria objectives contained in Dealer's
JDCEC-approved business plans and, within a
reasonable period of time, performance at or above
the Performance Standards.
iii) Dealer will actively and aggressively promote the
sale of Parts and services. Dealer's compliance with
this commitment will be evaluated based on
performance in Dealer's AOR and not on performance
outside Dealer's AOR.
Dealer will maintain:
a) highly qualified parts and service
personnel;
b) parts sales and service training and
personnel development programs;
c) inventories of Parts;
d) service equipment, field service vehicles,
and tools; and
e) parts and service facilities
that in each case are sufficient to achieve the
Performance Criteria objectives contained in Dealer's
JDCEC-approved business plans and, within a
reasonable period of time, performance at or above
the Performance Standards.
iv) Dealer will achieve Meaningful Progress with respect
to each Performance Criterion in each fiscal or
calendar year (whichever is used as the basis for
Dealer's JDCEC-approved business plans). In addition,
Dealer will, within a reasonable period of time,
achieve performance at or above the Performance
Standards. Dealer's compliance with these commitments
will be evaluated based on performance in Dealer's
AOR and not on performance outside Dealer's AOR.
d) Preparation of Goods, Warranty, and Post-Delivery Service
i) The Manual and/or bulletins issued from time to time
by JDCEC designate the JDCEC Warranties. In making
sales, leases, and rentals of Goods, Dealer will
follow instructions contained in the Manual and
JDCEC's bulletins and will complete with true and
accurate information the retail purchase orders,
delivery receipts, lease agreements, and other forms
specified therein. Dealer will be solely responsible
for any warranties given by Dealer that exceed the
applicable JDCEC Warranty, if any, and for any
liability in cases where Dealer has failed to use the
forms prescribed by JDCEC in the manner specified by
JDCEC.
ii) To ensure the proper operation of Goods, Dealer will
properly assemble and prepare all Goods sold, leased,
or rented by Dealer and will perform such
inspections, adjustments, and service prior to
delivery to users as are required in the Manual.
Dealer will instruct users in the proper use and
maintenance of Goods and will furnish each user with
the appropriate operator's manuals furnished by
JDCEC. Dealer will also perform the post-delivery
inspections and adjustments prescribed for Goods in
the Manual.
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iii) Dealer is authorized to and will perform prompt and
effective warranty service on Goods in Dealer's AOR
for which JDCEC becomes obligated pursuant to a JDCEC
Warranty, including without limitation Goods not
sold, leased, or rented by Dealer, if presented with
proper evidence that the Goods are entitled to
warranty service under a JDCEC Warranty.
iv) Dealer will perform prompt and effective non-warranty
service on Goods in Dealer's AOR, including without
limitation Goods not sold, leased, or rented by
Dealer.
v) Dealer will perform product improvement programs that
JDCEC may from time to time require for Goods in
Dealer's AOR, including without limitation Goods not
sold, leased, or rented by Dealer. Dealer will
complete such programs as expeditiously as possible
and, in any event, within the time frame specified by
JDCEC.
vi) Dealer will perform warranty service and product
improvement programs in the manner and for the
compensation specified in the Manual in effect at the
time the service or program is performed. Dealer will
notify JDCEC of all warranty and product improvement
program claims in accordance with the Manual.
e) Sales to Re-sellers
Dealer will not sell Goods to any person or entity that
re-sells or intends to re-sell such Goods, provided, however,
that this Section l.e. shall not prevent Dealer from:
i) selling Parts to a person or entity in Dealer's AOR
that uses such Parts in providing repair or
maintenance services in Dealer's AOR for products
owned by others;
ii) selling Used Goods to a person or entity that is
engaged in the business of selling used equipment;
iii) selling Goods to ERS;
iv) selling Goods to another JDCEC Dealer; or
v) selling Goods to a person or entity that is primarily
engaged in the business of renting equipment to end
users.
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f) Equity
i) Dealer will maintain its Equity at a level sufficient
to achieve Dealer's commitments under this Agreement,
which shall be not less than the Minimum Equity
Level.
ii) Dealer will not pay any dividends, effect any stock
repurchase, repay or otherwise discharge its
indebtedness for any loans from its owners, or make
any other distributions to owners if Dealer's Equity
is below the Equity Performance Standard or would
fall below the Equity Performance Standard as a
result of such action. If Dealer is a subchapter S
corporation or similar entity, Dealer may make a
distribution to a shareholder, without regard to the
preceding sentence, in an amount equal to the income
tax owed by the shareholder as a result of Dealer's
dealership operations.
iii) Dealer will not make any acquisitions or initiate new
business activities if Dealer's Equity is below the
Equity Performance Standard or would fall below the
Equity Performance Standard as a result of such
action.
If the financial statements of another entity or a combination of
entities are used for the purpose of calculating Dealer's Equity,
Section l.f.i. will apply to that entity or combination as well as to
Dealer.
g) JDCEC's Acceptance of Orders
JDCEC will accept orders placed by Dealer for Goods in JDCEC's
then-current product line, provided that JDCEC contemplates
the Goods will be shipped during the period of Dealer's
appointment as a JDCEC Dealer. JDCEC shall have no liability
for delay, failure, or refusal to accept Dealer's orders or to
ship Goods to Dealer if the delay, failure, or refusal results
from:
i) capacity constraints, demand in excess of available
supply, labor strikes or lockouts;
ii) a default under a security agreement between Dealer
and JDCEC;
iii) termination of Dealer's appointment;
iv) any cause beyond JDCEC's control; or
v) JDCEC's determination, in its sole discretion, that:
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a) Dealer's financial condition does not justify the
extension of additional credit or the addition of
inventory;
b) limitations in Dealer's market potential, marketing
capabilities, or product support capabilities for the
particular Goods involved are likely to lead to
customer dissatisfaction with the Goods or excessive
warranty expense;
c) Dealer has consistently failed to perform its
obligations under this Agreement;
d) Dealer's inventory of Goods is excessive or with
additional shipments would become excessive, or
shipment would result in larger JDCEC Dealer
inventories than JDCEC is willing to finance; or
e) shipment would result in larger JDCEC Dealer
inventories than warranted based on expected market
demand.
All orders, sales, and shipments will be governed by the Conditions of
Sale in effect at the time the order is placed.
h) Availability of JDCEC Programs
i) JDCEC will make available to Dealer finance plans,
lease plans, floor plans, and parts return programs
(and other similar financing or inventory management
plans or programs) comparable to such plans and
programs that JDCEC makes available to JDCEC Dealers
generally. Such plans and programs may contain
conditions for eligibility and are subject to credit
approval. Such plans and programs also may have
varying terms depending on certain dealer financial
or performance criteria or market conditions.
ii) JDCEC may make available to any JDCEC Dealer
marketing programs that JDCEC deems necessary to
compete in the AOR assigned to that JDCEC Dealer
without obligating JDCEC to make similar programs
available to any other JDCEC Dealer or to JDCEC
Dealers generally.
i) Changes in Dealer Ownership or Business Structure
Any change in the ownership, management, or business structure
of Dealer could have serious negative consequences for Dealer
and JDCEC. JDCEC considers the Key Persons to be particularly
vital to Dealer and to a successful working relationship
between JDCEC and Dealer.
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i) No change in the ownership or business structure of
Dealer or any Key Person will occur unless JDCEC has
given its prior written approval of such change. No
event that would eliminate or materially alter the
relationship to Dealer, or the role in Dealer's
affairs, of any Key Person will occur unless JDCEC
has given its prior written approval of such event.
ii) Dealer will execute such agreements or other
documents as JDCEC may deem necessary to preserve
JDCEC's rights under this Agreement or any other
agreement between Dealer and JDCEC in light of a
change or proposed change in Dealer's ownership,
management, or business structure.
iii) If Dealer wishes to sell its business or
substantially all of the assets of its business
(excluding Dealer's JDCEC Dealer appointment and this
Agreement, which are not transferable by Dealer),
Dealer will notify JDCEC before the beginning of any
discussions or negotiations pertaining to the
proposed sale. After giving such notice, Dealer may
enter into negotiations to sell its business or
assets (excluding Dealer's JDCEC Dealer appointment
and this Agreement) to a third party. JDCEC retains
at all times the right to decide, in its sole
discretion, whether to appoint any person or entity
as a JDCEC Dealer for Dealer's AOR, for any portion
thereof, or for any other area.
For purposes of this Agreement, a change in business structure
shall include, without limitation, a change in the legal form
of Dealer (e.g. from partnership to corporation); a change in
the legal form of any Key Person or of any entity that holds,
directly or indirectly, a 1 0% or greater ownership interest
in Dealer; a merger or consolidation involving Dealer; the
creation of a subsidiary, partnership, or other legal entity
by Dealer; and any other change that may affect any right or
obligation under this Agreement or any other agreement between
Dealer and JDCEC.
j) Financial Statements
Dealer will submit to JDCEC's Finance Department offices in
Moline, Illinois, annual financial statements for Dealer, for
any entity or combination of entities that JDCEC may designate
pursuant to the next paragraph, and for such Affiliates as
JDCEC may from time to time request within 1 00 days after
Dealer's fiscal year-end (or, for another entity or
combination of entities, or for an Affiliate, within 1 00 days
after such entity, combination, or Affiliate's fiscal
year-end). Such financial statements shall have been prepared
in accordance with generally
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accepted accounting principles and audited by an independent certified
public accountant approved by JDCEC, which approval shall not be
unreasonably withheld. Dealer also will submit to JDCEC's Finance
Department offices in Moline, Illinois, financial statements, prepared
in accordance with the Financial Information System, for each calendar
month by the end of the following month. Dealer also will provide such
other financial data of Dealer and Affiliates as JDCEC may from time to
time request.
JDCEC will, in its sole discretion:
i) designate, before the beginning of each of Dealer's
fiscal years, the particular entity or combination of
entities whose financial statements JDCEC will use to
determine Dealer's Equity for purposes of Sections
l.f. and 2.c.ii., provided, however, that JDCEC may
amend its designation for a particular fiscal year if
Dealer, the designated entity or combination, or an
Affiliate undergoes a change in ownership or business
structure prior to the end of that fiscal year; and
ii) describe in the Terms Schedule the adjustments to the
financial statement data that JDCEC may make in
determining Dealer's Equity. The adjustments JDCEC
may make in determining Equity from a particular
financial statement shall be those described in the
Terms Schedule in effect on the date that financial
statement is received in JDCEC's Finance Department
offices in Moline, Illinois.
2. TERMINATION OF DEALER'S APPOINTMENT.
a) Termination by Mutual Consent
Dealer's appointment may be terminated by the mutual
consent of Dealer and JDCEC, evidenced by a writing
signed by Dealer and JDCEC, with the effective date
of such termination to be as mutually agreed upon in
writing.
b) Termination by Dealer
Dealer may terminate its appointment for any reason
upon at least 180 days' prior written notice to
JDCEC.
c) Termination by JDCEC
i) JDCEC may terminate Dealer's appointment,
upon at least 180 days' prior written notice
to Dealer, in the event:
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a) Dealer fails to achieve Meaningful
Progress with respect to a
Performance Criterion in any fiscal
or calendar year (whichever is used
as the basis for Dealer's
JDCEC-approved business plans); or
b) Dealer or any Affiliate fails to
comply with any material provision
of this Agreement.
JDCEC may exercise its termination right under this
Section 2.c.i. with respect to all or any portion of
Dealer's AOR, and with respect to all or any portion
of the Goods, as JDCEC may determine in its sole
discretion.
JDCEC may exercise its termination right under this
Section 2.c.i. without regard to the performance of
other JDCEC Dealers or to the circumstances under
which JDCEC has terminated or refrained from
terminating the appointment of other JDCEC Dealers.
ii) JDCEC may terminate Dealer's appointment,
upon at least 120 days' prior written notice
to Dealer, if JDCEC determines that Dealer's
Equity is less than the Minimum Equity
Level. JDCEC will give Dealer written notice
of termination under this Section 2.c.ii.
within 45 days after the financial
statements on which JDCEC's determination is
based are received at JDCEC's Finance
Department offices in Moline, Illinois. If
Dealer provided the financial statements to
JDCEC within the time required by Section
x.x., Dealer will have the right to increase
its Equity to the Minimum Equity Level,
during the 120 day notice period, through
the addition of new capital in a form
acceptable to JDCEC; if Dealer does increase
its Equity to the Minimum Equity Level in
this manner within such 120-day period, the
notice of termination given under this
Section 2.c.ii. shall become null and void.
JDCEC's prior written approval will be
required if Dealer wishes to increase its
Equity to the Minimum Equity Level in whole
or in part by any other means, including
without limitation reducing its asset levels
or through earnings retained during the
120-day notice period. If Dealer did not
provide the financial statements involved to
JDCEC within the time required by Section
x.x., Dealer will be deemed to have waived
any right to increase its Equity to the
Minimum Equity Level.
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iii) JDCEC may terminate Dealer's appointment,
upon at least 365 days' prior written notice
to Dealer, if JDCEC determines, in JDCEC's
sole discretion, that Dealer's AOR does not
justify the continuation of a JDCEC Dealer
assigned only Dealer's AOR (regardless of
whether Dealer has been assigned another AOR
under another agreement with JDCEC). If
Dealer's appointment is terminated under
this Section 2.c.iii., Dealer shall have,
for a period of three years commencing with
the effective date of termination, a right
of first refusal to be re-appointed as a
JDCEC Dealer for Dealer's AOR if in that
period JDCEC determines that Dealer's AOR
does justify a JDCEC Dealer assigned only
Dealer's AOR. However, such right of first
refusal shall terminate upon a breach by
Dealer of any agreement with JDCEC or any of
JDCEC's Affiliates, or if Dealer would not
satisfy the Equity Performance Standard at
the time of reappointment.
iv) JDCEC may terminate Dealer's appointment,
effective immediately, by giving written
notice of termination to Dealer at any time
after the happening of any of the following:
a) the death, incapacity, or
dissolution of any Key Person;
b) a default under any security
agreement between Dealer and JDCEC;
c) any noncompliance with Section l.b.,
Section l.c.i., Section l.i.i.,
or Section x.x.;
d) Dealer defrauds anyone, including
without limitation JDCEC, or
misrepresents any material fact in
any communication with or submission
to JDCEC;
e) the cancellation, discontinuance, or
revocation of a guaranty or letter
of credit applicable to Dealer
indebtedness, or a failure to modify
the amount of such a guaranty or
letter of credit when and as
requested by JDCEC or Deere Credit,
Inc.;
f) Dealer substantially closes the
dealership business;
g) Dealer intentionally fails to comply
with any applicable federal, state,
or local law, regulation, or
ordinance relating to the operation
of the dealership; or
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h) Dealer attempts to assign its rights
or obligations under this Agreement.
3. EFFECT OF TERMINATION OF APPOINTMENT. Termination of Dealer's
appointment hereunder means that the obligations and duties of the parties under
Section 1 no longer apply, and that JDCEC may decline to fill accepted orders
placed before such termination. Orders from Dealer that JDCEC contemplates will
be shipped after the effective date of termination may be accepted in JDCEC's
sole discretion. Such orders will be subject to the Conditions of Sale in effect
at the time the order is placed or to such other conditions that JDCEC may
prescribe. Submission or acceptance of orders and shipment or acceptance of
Goods does not have the effect of renewing or reinstating the obligations of
Section 1 and shall not be construed as an extension or renewal of Dealer's
appointment or as a rescission of any notice of termination. If Dealer's
appointment is terminated, neither Dealer, Affiliates, or JDCEC shall be
entitled to any compensation or reimbursement for loss of prospective profits,
anticipated sales, or other losses occasioned by the termination, except as
provided in this Agreement.
4. REPURCHASE OF GOODS ON TERMINATION. Upon termination of Dealer's
appointment, JDCEC will buy and Dealer will sell (or, with respect to JDM
products, may sell subject to Section 4.c.), free and clear of all liens and
encumbrances, the following Goods, provided they were originally purchased by
Dealer from JDCEC (or from another JDCEC Dealer with the written approval of
JDCEC) and are listed in JDCEC's published price list in effect on the effective
date of termination of Dealer's appointment, according to the following terms:
a) All unsold current Whole Goods and attachments in Dealer's
possession that are new, unused, complete, and in good
condition. The prices to be paid for such items will be the
invoice prices (but not more than current JDCEC Dealer prices)
plus freight from the factory to Dealer's location, less any
discounts from invoice price that have been allowed, and less
any reduction in value that may be required due to
deterioration.
b) All unsold current Parts in Dealer's possession that are new,
unused, complete, in good condition, and re-salable as new
without repackaging or reconditioning. The prices to be paid
for such items will be JDCEC's then current wholesale price,
as listed in the Xxxx Deere Parts Price List in effect on the
effective date of termination, less a discount of:
i) 15% on items listed as returnable under JDCEC's
then-current parts return policy; and
ii) 50% on all other items.
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c) Such unsold current JDM products in Dealer's possession that
Dealer may elect to sell to JDCEC and that are new, unused,
complete, in good condition, and re-salable as new without
repackaging or reconditioning. JDCEC shall have no obligation
to repurchase such products unless Dealer furnishes JDCEC with
a list of the products that it wishes to sell to JDCEC within
thirty days after the effective date of the termination of
Dealer's appointment. The price to be paid for such products
will be the then-current wholesale price, as listed in the JDM
Price List in effect on the effective date of termination,
less a discount of:
i) 50% on products identified by an asterisk in the JDM
Price List;
ii) 15% on items listed as returnable under JDCEC's
then-current parts return policy; and
iii) 25% on all other JDM products.
At the written request of JDCEC, Dealer will, at Dealer's expense,
list, tag, pack, load, and transport all repurchased Goods to the nearest
location regularly maintained by JDCEC for the storage of such Goods (or to such
closer location as may be designated by JDCEC) or pay for the cost of
transportation to such location. The risk of loss shall be on Dealer until the
vehicle transporting such Goods reaches the designated destination. Should
Dealer fail to fulfill the above obligation within 60 days after JDCEC has
requested that it do so, JDCEC or its designee may enter Dealer's premises,
perform these duties, and charge Dealer's account for any expenses incurred in
so doing.
Amounts payable to Dealer under this Section 4 will not be paid until
Dealer has complied with all applicable laws governing bulk transfers of
inventory.
JDCEC shall be relieved of its obligations under this Section 4 if a
default occurs or has occurred under any security agreement between Dealer and
JDCEC, and JDCEC elects to exercise its rights under such security agreement to
take possession of the Goods.
JDCEC shall be relieved of its obligations under this Section 4 if
Dealer has defrauded JDCEC or if Dealer misrepresents a material fact pertaining
to the repurchase of Goods in any communication with or submission to JDCEC.
5. RESOLUTION OF DISPUTES. Although Dealer and JDCEC are entering into
this Agreement in a spirit of cooperation and mutual respect, it is possible
that Disputes may arise. Dealer, Affiliates (including without limitation
guarantors of Dealer), JDCEC, Deere Credit, Inc., and ERS agree that any Dispute
shall be finally resolved by binding arbitration pursuant to the terms set forth
in Exhibit 5. The duty to arbitrate shall extend to any officer, employee,
shareholder, principal, agent, partner, trustee (in bankruptcy or otherwise), or
subsidiary of Dealer or an Affiliate as to any Dispute that is subject to this
Section 5.
-16-
6. COMPUTER SYSTEMS
a) During the period of Dealer's appointment, Dealer
will, at Dealer's expense:
i) install and maintain in good working order
a computerized business system that
is compatible with, and in communication
with, the Xxxx Deere Network;
ii) maintain the hardware and software necessary
to supply electronically to JDCEC (a)
monthly trial balance information in
accordance with the Financial Information
System; (b) product delivery and warranty
claim information in accordance with the
Service Information System; and (c) such
other information as JDCEC may from time to
time request Dealer to submit
electronically;
iii) conform to any modifications made to the
Xxxx Deere Network (provided JDCEC gives
Dealer at least 60 days' prior notice of the
modification);
iv) input into the Xxxx Deere Network, in
accordance with JDCEC's instructions, such
information as Deere may from time to time
request, and furnish such computer files and
reports as JDCEC may from time to time
request; and
v) pay all costs associated with Dealer's use
of the Xxxx Deere Network, as well as all
costs incurred in obtaining and maintaining
Dealer's computerized business system and in
communicating with the Xxxx Deere Network.
b) Dealer will keep confidential any information
contained in the Xxxx Deere Network and not use such
information for purposes unrelated to Dealer's
dealership appointment hereunder.
c) JDCEC shall not be liable for any losses incurred by
Dealer in connection with Dealer's computerized
business system or the Xxxx Deere Network.
7. AMENDMENT OF AGREEMENT. This Agreement cannot be altered or amended,
or any of its provisions waived, on behalf of JDCEC except in a writing signed
by a duly authorized officer of JDCEC. Dealer and JDCEC recognize that this
Agreement does not have an expiration date. Because market and business
practices and conditions are likely to change with the passage
-17-
of time and such changes or other circumstances could necessitate a change in
this Agreement, JDCEC may amend these Terms of Appointment at any time, without
the consent of Dealer, if the same amendment is made to the Terms of Appointment
of all other JDCEC Dealers whose dealer agreements are in the form of this
Agreement and may be amended in this manner pursuant to applicable law. Any such
amendment shall be made by issuance of a JDCEC Dealer bulletin or other written
notice to such JDCEC Dealers and shall be effective on the date specified in the
bulletin or other written notice, which date shall be at least 120 days
following the date of such bulletin or other written notice.
8. USE OF TRADEMARKS, NAMES, AND SIGNS. JDCEC grants Dealer the
non-exclusive right to use the Trademarks (including without limitation the XXXX
DEERE trademark, the trademark comprising a leaping deer design within a frame,
and the trademark comprising the leaping deer design and XXXX DEERE within a
frame), during the period of Dealer's appointment, in connection with the
advertising and sale of Goods bearing one or more of the Trademarks, and in
connection with the providing of services by Dealer relating to the sale or
servicing of Goods identified by the Trademarks. Such use of the Trademarks
shall be in a manner and form approved by JDCEC. Dealer agrees not to use any of
the Trademarks as part of Dealer's corporate or business name and to cease all
use of the Trademarks if Dealer ceases to be a JDCEC Dealer, including without
limitation the removal from Dealer's premises and vehicles of all signs and
distinctive identification that might associate Dealer with JDCEC. Dealer also
agrees not to sell or distribute any goods bearing any of the Trademarks, unless
the goods originated from JDCEC, JDCEC's Affiliates, or licensees authorized to
use the Trademarks on the goods. Dealer also agrees not to use the Trademarks to
promote goods not originating from JDCEC, JDCEC's Affiliates, or their
licensees.
9. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of JDCEC and, to the extent the terms
hereof bind or benefit Deere Credit, Inc. or ERS, their respective successors
and assigns. Dealer's rights and obligations under this Agreement may not be
assigned or transferred. Any attempt by Dealer to assign its rights or
obligations under this Agreement shall be null and void.
10. CHANGES IN OR DISCONTINUANCE OF GOODS.
(a) JDCEC may, at any time and with out notice, make
changes in or discontinue any Goods without incurring
any liability.
(b) This Agreement extends only to Goods. JDCEC reserves
the right to offer any other products to selected
JDCEC Dealers or others under existing or separate
new agreements. As new products, other than those
designated by JDCEC as direct successors of Goods,
are developed, acquired, or marketed by JDCEC, they
may or may not be added to the Goods covered under
this Agreement.
-18-
11. DEALER GUARANTY. To the extent requested by JDCEC, Key Persons,
Affiliates, and other partners in, or owners of, Dealer have executed or
concurrently herewith will execute in favor of JDCEC one or more guaranties of
Dealer's indebtedness to JDCEC. Dealer will obtain, and Key Persons, Affiliates,
and other partners in, or owners of, Dealer will execute, such additional
guaranties and amendments and additions to guaranties as JDCEC may from time to
time request.
For purposes of this Section 11 and Section 12, JDCEC shall include
Deere Credit, Inc. in addition to Xxxx Deere Construction Equipment Company.
12. SECURITY IN GOODS. Dealer has executed or concurrently herewith
will execute in favor of JDCEC one or more security agreements covering Dealer's
inventory of Goods and certain other items. Dealer will execute such additional
security agreements and financing statements, and amendments and additions
thereto or to existing instruments, as JDCEC may from time to time request, in
order that JDCEC may have at all times a first lien on Goods and other
collateral securing Dealer's indebtedness to JDCEC.
13. RELATIONSHIP OF THE PARTIES.
a) Dealer acknowledges that it is an independent retail
merchant which purchases Goods for resale for the
principal benefit of Dealer. Dealer further
acknowledges and agrees that it is an independent
contractor. In performing service work Dealer assumes
full responsibility for such work. Dealer also
acknowledges and agrees that it is not an employee,
agent, representative, franchisee, partner, or joint
venturer of or with JDCEC, has not paid and will not
pay a franchise fee to JDCEC, and is free to operate
its business in accordance with its independent
business judgment, provided that such operation is in
accordance with this Agreement and any other
agreement between Dealer and JDCEC. Dealer has no
authority to bind JDCEC by representations,
statements, agreements, conduct, or in any manner
whatsoever. JDCEC shall not be liable for any debts,
accounts, obligations, or other liabilities of
Dealer, its agents, employees, or representatives. It
is expressly recognized that no fiduciary
relationship exists between the parties.
b) Except as provided in Sections 5, 9, and 17, this
Agreement is not enforceable by any third party and
is not intended to benefit, or convey any rights to,
anyone other than Dealer and JDCEC.
c) Dealer obtains no rights by virtue of this Agreement
or its dealership appointment to acquire additional
dealerships or to obtain additional dealership
appointments or AOR assignments from JDCEC.
-19-
14. USE OF PRICE LISTS, CATALOGS, AND MANUALS. The Manual and any
bulletins, price lists, catalogs, and service manual pages furnished to Dealer
by JDCEC must be kept in good condition and returned to JDCEC upon termination
of Dealer's appointment. If such items have been purchased by Dealer, JDCEC will
repurchase them for the price paid. Dealer will not disclose, directly or
indirectly, the contents of such Manual, bulletins, price lists, catalogs, and
service manual pages to a person or entity that is a competitor of JDCEC or a
JDCEC Dealer.
15. ADVERTISING MATERIAL; MAILING LISTS. During the period of Dealer's
appointment:
a) JDCEC will furnish to Dealer, in quantities deemed
appropriate by JDCEC for Dealer's AOR, promotional
materials and printed advertising matter that JDCEC
prepares for use by other JDCEC Dealers in connection
with the sale, lease, rental, or servicing of Goods
and that JDCEC deems appropriate for Dealer's AOR;
and
b) Dealer will (i) create, maintain, and keep current a
list of the names and addresses of all purchasers and
prospective purchasers of Goods in Dealer's AOR, (ii)
provide JDCEC with the current list, and (iii)
promptly notify JDCEC of all changes to the list.
The list contemplated by Section 15.b shall be the sole property of
JDCEC. JDCEC may use the list at any time for any purpose it deems appropriate,
provided, however, that JDCEC will advise Dealer in advance of any use it makes
of the list (other than for the purpose of sending Dealer's direct mail
solicitations to purchasers and prospective purchasers on the list) during the
period of Dealer's appointment. Dealer will reimburse JDCEC for handling and
postage expenses for all direct mailings made at Dealer's request to prospective
purchasers in Dealer's AOR.
16. NO WAIVER. The failure of JDCEC to take any action or require full
and strict compliance with any provision of this Agreement or any provision of
any agreement with other JDCEC Dealers shall not affect JDCEC's right to take
any action or require full and strict compliance at any time prior or subsequent
thereto and shall not constitute a waiver of a breach of the provision or
nullify the effectiveness of such provision.
17. LIMITATION ON DAMAGES; JURY WAIVER; TIME TO INITIATE
PROCEEDINGS.
(a) No party to a Dispute shall be entitled to an award
of multiple, punitive, or exemplary damages, or any
damages excluded by, or in excess of any damage
limitation expressed in, this Agreement.
(b) Dealer, Affiliates (including without limitation
guarantors of Dealer), JDCEC, Deere Credit, Inc., and
ERS each hereby knowingly, voluntarily,
-20-
and intentionally waive any right he, she, or it may
have to a trial by jury in respect of any litigation
pertaining to any Dispute, and each agrees not to
request a jury in any such litigation.
c) No party to a Dispute may commence litigation or
arbitration proceedings with respect to such Dispute
more than one year after that party's cause of action
accrues.
18. NOTICES. In addition to other available means of giving notice,
notices required or permitted under this Agreement (including without limitation
notices in connection with any arbitration under Section 5) may be given to the
person indicated on Exhibit 6, by personal delivery or by certified U.S. mail,
Federal Express or other reputable overnight delivery service, or facsimile to
the address or facsimile number indicated on Exhibit 6. Notices given by
personal delivery shall be deemed given when delivered. Notices given by
certified U.S. mail, reputable overnight delivery service, or facsimile shall be
deemed given when sent.
19. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the substantive laws of the State of Illinois without regard to
Illinois' conflict of laws rules.
20. SEVERABILITY. Any provision of this Agreement or portion thereof
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of the provision or the
remaining provisions of this Agreement and without affecting the validity or
enforceability of such provision in any other jurisdiction. Any provision herein
found to be prohibited or unenforceable in a jurisdiction shall, by agreement of
the parties hereto, be replaced for such jurisdiction by a provision that
ensures that the economic and/or business objectives of the prohibited or
unenforceable provision are preserved insofar as it is possible to do so under
the applicable law in such jurisdiction.
21. PAYMENTS ON TERMINATION. If Dealer's appointment hereunder is
terminated, all indebtedness of Dealer to JDCEC which does not become due prior
to the effective date of the termination will be due and payable as of the
effective date of the termination. JDCEC may pay any sums owing to Dealer on
termination (including without limitation any sums owing to Dealer for
repurchased Goods) in cash or by giving Dealer credit to be applied to any
indebtedness then owed by Dealer to JDCEC or to any of JDCEC's Affiliates,
regardless of whether such indebtedness is then due and payable.
22. SURVIVAL. The termination of Dealer's appointment shall not affect
any rights or obligations that have accrued hereunder as of the effective date
of such termination. Such termination also shall not affect any rights or
obligations, except those expressly limited to the period of Dealer's
appointment, under Sections 3, 4, 5, 6.b., 6.c., 7, 8, 9, 10, 11, 12, 13, 14,
15, 16, 17, 18, 19, 20, 21, 22, and 23, which rights and obligations, except
those expressly limited to the period of Dealer's appointment, shall survive
termination of Dealer's appointment.
-21-
23. ENTIRE AGREEMENT. This Agreement is and shall be deemed to be the
complete and final expression of the agreement between the parties as to the
subject matters contained herein. This Agreement supersedes all previous dealer
agreements and representations between the parties. It is acknowledged and
agreed by Dealer and JDCEC that no promise or representation not contained
herein (including without limitation Exhibit 7) was an inducement to either
party or was relied on by either party in entering into this Agreement. Any
prior or contemporaneous promises, agreements, or representations, whether oral,
written, or created through custom, usage, or course of dealing, except for
those listed on Exhibit 7, are also superseded by this Agreement. Dealer
understands that, except as provided in Section 7, no agent or employee of JDCEC
has authority to vary or add to the provisions of this Agreement, or to make any
representation altering or going beyond the terms of this Agreement.
-22-
EXHIBIT 1
DEALER'S AOR
Dealer's Area of Responsibility shall consist of the
following counties:
State of Florida
Counties:
Brevard
Broward
Xxxxxxxxx
Xxxxxxx
Dade
DeSoto
Glades
Xxxxxx
Xxxxxx
Hernando
Highlands
Hillsborough
Indian River
Xxx
Manatee
Xxxxxx
Xxxxxx
Okeechobee
Orange
Osceola
Palm Beach
Pasco
Pinellas
Polk
St. Lucie
Sarasota
Seminole
Volusia
and
Lake County, FL, South of Xx. 00
Xxxxxx Xxxxxx, Xx, Xxxxx xx Xx. 000
-23-
EXHIBIT 2
A. WHOLE GOODS
Backhoes Crawler 4WD Loaders Excavators Motor Graders
|X|300 |X|450 |X|244 |X|190 |X|570
|X|310 |X|455 |X|344 |X|290 |X|670
|X|315 |X|550 |X|444 |X|490 |X|672
|X|410 |X|555 |X|544 |X|590 |X|770
|X|510 |X|650 |X|624 |X|595 |X|772
|X|710 |X|750 |X|644 |X|200
|X|850 |X|744 |X|690
|X|790
|X|792
|X|892
|X|992
Skidders Xxxxxx Bunchers Scrapers Forklifts Landscape Loaders
|_|540 |_|643 |X|762 |X|485 |X|210
|_|548 |_|653 |X|862 |X|486
|_|640 |_|843 |X|488
|_|648
|_|740
|_|748
B. PARTS
COMPETITIVE PARTS
|X|Bucket Teeth |X|Engine Parts |X|Filters |X|Undercarriage Products
|X|Cutting Edges |X|All-Makes Parts |X|Oil |X|Re-manufactured Components
-24-
EXHIBIT 3
LOCATIONS
ADDRESS PURPOSE/STORE TYPE
WHOLE PARTS SERVICE OTHER
GOODS
0000 XXXXXXXXX 00XX XXXXXX - XXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXXXX XXXXXX - XXXX XXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXX XXXXX XXXXXXX - XXXXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXXXXXXXXXX XXXX - XXXXXXX XXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXXXXX XXXXXXX - X. XXXX XXXXX, XX 00000-0000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXXXXX XXXXX XX. - XXXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
0000 XXXXX 00XX XXXXXX - XXXXX, XX 00000 |X| |X| |X| |_|
-----------------------------------------------------
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
|_| |_| |_| |_|
-25-
EXHIBIT 4
KEY PERSONS
RELATIONSHIP TO DEALER/
NAME OWNERSHIP INTEREST ROLE IN DEALER'S AFFAIRS
--------------------------------------------------------------------------------------------------------
Xxxxx Mas, Jr. Shareholder of Xxxx Corp. Chairman/Guarantor
Xxxx Mas Shareholder of Xxxx Corp. Guarantor
X. X. Mas Shareholder of Xxxx Corp. Guarantor
Xxxx Corp. 100% Owner Parent
Xxxxxx Fund I, LP Shareholder of Xxxx Corp. Affiliate
Xxxxxx Capital Advisors, Owner of Stock Option Affiliate
Inc. to purchase Xxxx Corp.
Common Stock
-26-
EXHIBIT 5
DISPUTE RESOLUTION
1. If the parties to a Dispute agree, the Dispute will be submitted to
non-binding mediation.
2. If the parties to a Dispute do not agree to mediation of the Dispute, or if
mediation does not resolve the Dispute, the Dispute shall be finally resolved by
binding arbitration in accordance with the arbitration rules of JAMS/Endispute,
as amended by this Exhibit. The party seeking arbitration shall submit a written
notice of arbitration to the other party and to JAMS/Endispute. The arbitration
shall be held at such location as required by applicable law or, if no location
is required by applicable law, at Chicago, Illinois or such other city as the
parties to the Dispute may agree in writing. The arbitration shall be held
before a panel of three arbitrators each of whom is affiliated with
JAMS/Endispute and is part of the pool of arbitrators selected by JAMS/Endispute
as available to arbitrate Disputes. Each arbitrator in the pool shall:
a) be a current or former practicing attorney or former judge;
b) have at least fifteen years experience in litigation, arbitration,
and/or mediation of commercial disputes;
c) have prior experience as an arbitrator (through award) of at least
three manufacturer/dealer or franchisor/franchisee disputes; and
d) be recommended as a commercial arbitrator by at least two major
manufacturers or franchisors and at least two dealers or franchisees.
The arbitration panel shall consist of one arbitrator from the pool designated
by Dealer, one arbitrator from the pool designated by JDCEC, and a third
arbitrator from the pool designated by the two other arbitrators, which person
shall be the Chairperson of the arbitration panel. A decision and award joined
by at least two members of the arbitration panel shall constitute the award and
shall be binding on the parties. The arbitration panel shall provide written
reasons for their decision and award, which shall be final and binding and may
be entered by any court having jurisdiction thereof.
3. Except as provided herein, any action or decision joined by two arbitrators
from the arbitration panel shall constitute the action of the arbitration panel.
The arbitration panel may consider and grant dispositive motions, including
without limitation motions to dismiss or for summary judgment. In order to
prevent irreparable harm, the arbitration panel may consider and grant requests
for temporary or permanent injunctive relief or other equitable relief.
4. Unless contrary to applicable law, this Agreement shall be interpreted in
accordance with and the arbitration panel shall apply and be bound to follow the
substantive laws of the State of
-27-
Illinois. Where there is a conflict between the terms of this Agreement and the
laws of the State of Illinois, the terms of this Agreement shall control.
5. Each party shall bear its costs associated with the arbitration, including
its attorneys' fees, and the parties shall share equally the fees and expenses
of JAMS/Endispute and the arbitrators', provided, however, that if court
proceedings to stay litigation, compel arbitration, or enforce the award are
necessary, the party who unsuccessfully opposes such proceedings shall pay all
associated costs, expenses, and attorneys' fees that are reasonably incurred by
the other party.
6. The Chairperson of the arbitration panel shall decide all matters relating to
discovery as well as all procedural or nondispositive matters that shall come
before the arbitration panel. Subject to privileges recognized under applicable
law, the Chairperson shall require such discovery as is necessary for the
parties to be adequately prepared for the arbitration. Discovery may include the
exchange of documents, depositions, interrogatories, and the exchange of
exhibits, expert reports, and witness lists.
7. The parties, witnesses, and arbitrators shall not disclose the contents or
results of the arbitration without the prior written consent of all parties to
the Dispute, except to the extent necessary to enforce the award or as necessary
for financial and tax reporting purposes.
8. Notwithstanding anything to the contrary in this Exhibit 5 or Section 5, in
the event of an alleged violation of a party's intellectual property rights,
that party may seek temporary injunctive relief from any court of competent
jurisdiction pending appointment of the arbitration panel. The party requesting
such relief shall also promptly file a notice of arbitration and a request that
the arbitration panel provide temporary relief. Such actions shall not
constitute a waiver of the party's rights or a breach of the party's obligations
under this Exhibit 5 and Section 5. Any temporary injunctive relief entered by a
court shall continue in effect only until the arbitration panel has issued a
decision on temporary relief.
9. Notwithstanding anything to the contrary in this Exhibit 5 or Section 5,
JDCEC and Deere Credit, Inc. may seek judicial remedies, such as (but not
limited to) attachment, replevin, and garnishment, deemed necessary by JDCEC or
Deere Credit, Inc. in its sole discretion for the enforcement of JDCEC's or
Deere Credit, Inc.'s rights regarding any security for indebtedness of Dealer,
and such action by JDCEC or Deere Credit, Inc. shall not constitute a waiver of
JDCEC's or Deere Credit, Inc.'s rights or a breach of JDCEC's or Deere Credit,
Inc.'s obligations under this Exhibit 5 and Section 5.
-28-
EXHIBIT 6
NOTICES
To Dealer or Affiliates:
XXXX MACHINERY, INC.
0000 XXXXXXXXX 00XX XXX.
XXXXX, XX 00000
facsimile: 305/477-3207
To JDCEC, Deere Credit, Inc. or ERS:
0000 - 0XX XXX.
XXXXXX, XX 00000
facsimile: 309/748-0123
Dealer or JDCEC may amend the addressee, address, or facsimile number indicated
for its group on this Exhibit 6 BY giving written notice of such amendment to
the other party, provided, however, that no more than one addressee, address,
and facsimile number may be indicated at any given time.
-29-
EXHIBIT 7
PROMISES AND REPRESENTATIONS
Dealer and JDCEC agree that the following are the only promises, agreements, or
representations, oral, written, or created through custom, usage, or course of
dealing, not contained elsewhere in this Agreement and that were an inducement
to or relied upon by any party hereto in entering into this Agreement or that
were made prior to or contemporaneous with this Agreement and are not superseded
by this Agreement:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________ No promises, agreements or representations
_____________________________ ____________________
Dealer Signature JDCEC Signature
-30-
-34-
DEFINED TERMS
For purposes of this Agreement, the following terms shall be defined as follows:
ABSORPTION -The percentage of Dealer's fixed expenses and interest covered by
Dealer's parts and service department contribution margin. JDCEC will specify
the method used to measure Absorption in bulletins issued from time to time to
JDCEC Dealers.
AFFILIATES - (1) each of the Key Persons, (2) their spouses and children, (3)
each guarantor of Dealer, (4) any other person or entity that holds, directly or
indirectly, a 1 0% or greater ownership interest in Dealer, and (5) any entity
owned 1 0% or more, directly or indirectly, individually or in combination, by
(a) Dealer, (b) a Key Person, (c) their spouses or children, (d) a guarantor of
Dealer, or (e) any other person or entity that holds, directly or indirectly, a
1 0% or greater ownership interest in Dealer.
AGREEMENT - This agreement.
AOR - An area of responsibility assigned to a JDCEC Dealer under a JDCEC dealer
agreement.
CONDITIONS OF SALE - JDCEC's published U.S. Dealer Conditions of Sale, as in
effect from time to time.
CORE PRODUCT GROUP - Any group of products that JDCEC may designate from time to
time as a core product group.
CUSTOMER SATISFACTION - The extent to which Dealer fulfills the needs and
expectations of customers in Dealer's AOR. JDCEC will specify the method used to
measure Customer Satisfaction in bulletins issued from time to time to JDCEC
Dealers.
DEALER - The dealer identified in this Agreement.
DEALER'S AOR - The area of responsibility assigned to Dealer under this
Agreement.
DISPUTE - Any dispute, controversy, or claim between Dealer or an Affiliate and
JDCEC, Deere Credit, Inc., or ERS, whether based on contract, tort, statute, or
other legal theory.
EQUITY - The Dealer's equity to assets percentage, determined by JDCEC based
upon the most recent fiscal year-end audited financial statements designated by
JDCEC pursuant to Section x.x., with adjustments, if any, as provided in Section
x.x., and calculated as of the end of the fiscal year covered by such financial
statements.
EQUITY PERFORMANCE STANDARD - The equity to assets percentage Performance
Standard specified by JDCEC from time to time in JDCEC Dealer bulletins for
JDCEC Dealers generally.
-31-
ERS - Equipment Remarketing Services, a division of Deere Marketing Services,
Inc.
FINANCIAL INFORMATION SYSTEM - JDCEC's Financial Information System (or
successor system).
GOODS - Whole Goods and Parts, as well as those JDM products that JDCEC may
offer for sale to Dealer.
JDCEC - Xxxx Deere Construction Equipment Company.
JDCEC DEALER- An authorized JDCEC dealer.
JDCEC WARRANTIES - The JDCEC warranties (including, in some cases, extended
warranties) applicable to the sale and, in some cases, to the lease or rental of
various types of Goods.
JDCEC'S AFFILIATES - Deere & Company, its divisions, and its subsidiaries,
whether direct or indirect.
JDM - Xxxx Deere Merchandise.
XXXX DEERE NETWORK - The network of computers, communications equipment,
computer networking equipment, computer software, application software, and data
used by JDCEC for the purpose of gathering and communicating information and
conducting business.
KEY PERSONS - The persons and entities listed in Exhibit 4.
MANUAL - JDCEC's published Service Administration Manual (or successor
document), as in effect from time to time.
MARKET SHARE - The market penetration achieved for Goods, or a subset thereof
(e.g. Core Products, models, Parts), in Dealer's AOR during a specified time
period. JDCEC will specify the method used to measure Market Share in bulletins
issued from time to time to JDCEC Dealers.
MEANINGFUL PROGRESS - A level of performance for each Performance Criterion for
the first 12-month period covered by the Dealer's annual JDCEC-approved business
plan, which level of performance shall be as agreed upon between Dealer and
JDCEC each year in connection with the preparation of Dealer's annual business
plan. If for any such period Dealer and JDCEC do not reach agreement upon
Meaningful Progress with respect to a particular Performance Criterion, JDCEC
will determine in its sole discretion what will constitute Meaningful Progress
for that Performance Criterion for that period.
MINIMUM EQUITY LEVEL - The minimum equity to assets percentage level specified
by JDCEC from time to time in JDCEC Dealer bulletins for JDCEC Dealers
generally.
-32-
PARTS - (1) the products indicated by a check xxxx in Section B of Exhibit 2 and
(2) attachments and parts available from JDCEC for the Whole Goods.
PERFORMANCE CRITERIA - Market Share, Absorption, Customer Satisfaction, and
Equity, as well as other criteria specified by JDCEC from time to time in JDCEC
Dealer bulletins for JDCEC Dealers generally.
PERFORMANCE STANDARD - A level of performance (for a particular Performance
Criterion) specified by JDCEC from time to time in JDCEC Dealer bulletins for
JDCEC Dealers generally.
SERVICE INFORMATION SYSTEM - JDCEC's Service Information System (or successor
system).
TERMS SCHEDULE - JDCEC's published U.S. Dealer Terms Schedule, as in effect from
time to time.
TRADEMARKS - The trademarks owned by JDCEC or any of JDCEC's Affiliates.
USED GOODS Whole Goods that do not have any SECURE Standard Warranty remaining.
WHOLE GOODS - (1) the products indicated by a check xxxx in Section A of Exhibit
2, (2) their predecessors, and (3) their JDCEC-designated successors.
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