AGREEMENT CONCERNING LAWN & GROUNDS CARE RETAIL NOTES
Deere & Company, ("Sales Company"), its successors and assigns;
and
Xxxx Deere Capital Corporation ("Capital Corporation") its successors and
assigns;
agree as follows:
SECTION 1. RETAIL FINANCE
To stimulate retail sales of its Lawn & Grounds Care equipment and to induce
the Capital Corporation to provide a "Finance Plan" for retail purchases of
its Lawn & Grounds Care equipment, the Sales Company agrees to provide
financing to retail purchasers. The Capital Corporation agrees to provide and
administratively support a Finance Plan for the Sales Company. The Finance
Plan shall be made up of finance agreements between dealers and the Sales
Company (which the Sales Company hereby agrees to execute with dealers from
time to time as the Capital Corporation deems necessary), retail terms and
bulletins supplementary thereto, and retail finance manuals. The Capital
Corporation shall advise and assist the Sales Company in complying with all
applicable federal and state laws and regulations applicable to retail
financing. The Capital Corporation further agrees that it will purchase from
the Sales Company all retail installment sale and loan contracts
(collectively "Retail Notes") entered into by the Sales Company pursuant to
and in compliance with the Finance Plan. This Agreement shall apply to the
terms and conditions of the sale of Retail Notes from the Sales Company to
the Capital Corporation.
SECTION 2. SALES AND PURCHASES OF RETAIL NOTES
2.1 ACCEPTANCE. A sale of any Retail Notice shall not be completed
until the Retail Note is received and accepted by the Capital
Corporation at its office in Reno, Nevada, as evidenced by a credit
memorandum issued by the Capital Corporation to the Sales Company.
Sales of Retail Notes to the Capital Corporation need not be
evidenced by endorsements on the Retail Notes. If the Capital
Corporation shall so request, the Sales Company will endorse Retail
Notes and perform all other acts and execute all other instruments
which the Capital Corporation shall deem desirable or proper to
further evidence or perfect the sale. The sales of such Retail
Notes shall be without recourse against the Sales Company.
2.2 CONVEYANCE OF RETAIL NOTES. Each sales of Retail Notes shall
convey to the Capital Corporation all right, title and interest in
and to the Retail Notes sold (including the security interests
described therein) as well as the
Page 1
proceeds of collection thereof. Such conveyance shall be free and
clear of the claims of any and all third parties.
2.3 PURCHASE PRICE. The purchase price of any Retail Note
accepted by the Capital Corporation shall consist of an
"Immediately Due Portion" and a portion payable in installments
("Installment Portion"). (On an exception basis, the Sales Company
and the Capital Corporation may agree that the Installment Portion
will not be paid on certain Retail Notes.) The Immediately Due
Portion shall be the face amount of the Retail Note less both the
finance charge and any separately stated insurance premiums. The
Installment Portion, which is intended to compensate the Sales
Company for origination of receivables, shall be a percentage of
finance income earned on Retail Notes owned by the Capital
Corporation, pursuant to the following table:
BASE RATE* IN EFFECT ON THE PERCENTAGE OF FINANCE
FIRST DAY OF EACH CALENDAR MONTH INCOME EARNED
--------------------------------- -------------
7.5% or less 2.9%
7.6% to 8% 2.8%
8.1% to 8.5% 2.7%
8.6% to 9% 2.6%
9.1% to 9.5% 2.5%
9.6% to 10% 2.4%
10.1% to 10.5% 2.3%
10.6% to 11% 2.2%
11.1% to 11.5% 2.1%
11.6% to 12% 2.0%
12.1% to 12.5% 1.9%
12.6% to 13% 1.8%
13.1% to 13.5% 1.7%
13.6% to 14% 1.6%
14.1% to 14.5% 1.5%
14.6% and over 1.4%
*The "Base Rate" is the "Citibank base rate"
(the annual percentage rate of interest
announced publicly from time to time by
Citibank, N.A. in New York, New York as the
base rate it uses in determining the rate of
interest it charges on loans).
2.4 PAYMENT TO DEERE & COMPANY, CORPORATE. For their convenience,
the Sales Company and the Capital Corporation request and direct
that until further notice all monies payable by one party to
another pursuant to this Agreement shall be paid to, and all
non-cash adjustments and other
Page 2
transactions pursuant to this Agreement shall be reported to Deere
& Company, Corporate, to be recorded in the Deere & Company,
Corporate, net account for the account of the other party, subject
to monthly settlement pursuant to agreement between or among the
parties, and such payments and reports shall constitute fulfillment
of such party's obligation of payment or accounting. For purposes
of this Agreement, "Deere & Company, Corporate" shall mean Deere &
Company's corporate, administrative office as opposed to Deere &
Company's branch offices.
2.5 TIME OF PAYMENT. The Immediately Due Portion shall be payable
to the Sales Company upon acceptance by the Capital Corporation
under Section 2.1., and the Installment Portion shall be payable to
the Sales Company when it is earned by the Capital Corporation.
Both Portions shall be paid on a monthly basis.
SECTION 3. STANDARDS FOR RETAIL NOTES
In consideration of the Capital Corporation's agreement to purchase
all such Retail Notes, the Sales Company agrees to finance retail
purchases if each Retail Note complies with the following
requirements:
3.1 FINANCE PLAN TERMS. Each retail Note will comply with all
requirements prescribed by the Capital Corporation in the Finance
Plan which are in effect on the date of execution of the Retail
Note.
3.2 CREDIT STANDARDS. Each Retail buyer/borrower will meet the
credit standards prescribed by the Capital Corporation from time to
time.
3.3 FORMS. Each Retail Note will be on either a Retail Installment
Sale Contract or Loan Contract form approved by the Capital
Corporation and appropriate to the type and location of the
transaction.
3.4 SECURITY. Each Retail Note and all other documents needed to
perfect a lien or security interest in the equipment which is the
subject of a Retail Note will comply with the requirements as to
acknowledgement, affidavits, suitability for filing of record, and
any other requirements prescribed by the applicable state law. All
necessary steps will have been or will be taken to perfect a valid
purchase money security interest or, in certain circumstances, a
non-purchase money, first position security interest in the
equipment which is the subject of a Retail Note.
The Capital Corporation shall take all steps necessary to ensure that each
Retail Note complies with these requirements.
Page 3
If the Sales Company finances retail purchases on notes that do not comply
with the above requirements, the Capital Corporation shall not be obligated
to purchase those notes.
SECTION 4. COLLECTION
The Sales Company agrees to render assistance to the Capital Corporation when
needed in connection with litigation, repossession or other collection
activities. Such assistance shall include, but not be limited to, bringing
suit in the name of the Sales Company against any retail customer or dealer
when necessary. The costs of any such litigation shall be borne by the
Capital Corporation. The Capital Corporation may elect to assign a Retail
Note to the Sales Company if such assignment becomes necessary to collect the
balance of the Retail Note. If the Capital Corporation does elect to assign a
Retail Note for this purpose, the Sales Company agrees to accept the
assignment.
SECTION 5. RESERVES AND LOSSES
5.1 DEALERS' RESERVES AND CONTINGENT EARNINGS. The Finance Plan
may provide for the withholding by the Sales Company of certain
types of reserves for each dealer, such as the Dealer Reserve and
the Contingent Earnings (collectively, "Reserves") as described in
the Finance Plan. The Capital Corporation shall maintain the
Reserves and assume all the obligations to dealers on such Reserves
and other obligations pertaining thereto. The Sales Company hereby
assigns to the Capital Corporation its security interests in the
Reserves maintained pursuant to the Finance Plan. The Reserves
shall be used, as described in the Finance Plan, to offset losses
on Retail Notes and expenses incurred in collecting or attempting
to collect Retail Notes purchased by the Capital Corporation.
5.2 CLAIMS FOR BREACH OF WARRANTY. Independently of the other
provisions in this Section 5, the Sales Company will reimburse the
Capital Corporation for any losses which occur because Retail Notes
are compromised, reduced or written off as a result of meritorious
claims by debtors that the equipment for which the Retail Notes
were given was defective or in violation of applicable warranties.
SECTION 6. INSURANCE
The Capital Corporation is entitled to the benefit of any insurance proceeds
payable to the Sales Company in its capacity as creditor on any Retail Note.
The Sales Company agrees to assist the Capital Corporation in preparing
proofs of loss and settling claims with insurance carriers.
Page 4
SECTION 7. WAIVER OF FINANCE CHARGES
The Finance Plan may provide for the waiver of finance charges ("Waiver") or
a reduction of the normal rate ("Low Rate") on Retail Notes under certain
circumstances.
In consideration of the purchase of any Retail Notes by the Capital
Corporation, the Sales Company shall, upon the sale to the Capital
Corporation of a Retail Note as to which a Waiver or Low Rate is in effect,
pay the Capital Corporation an amount sufficient to reimburse the Capital
Corporation for its costs and provide the Capital Corporation a competitive
and agreed to rate of return on its investment in the Retail Note.
SECTION 8. DEFAULT
8.1 EVENTS OF DEFAULT-SALES COMPANY. The Sales Company shall be in
default hereunder if any of the following occurs: (a) the Sales
Company fails to comply with (i) any of the following obligations
for more than 10 days after receipt of written demand for
compliance: the execution of finance agreements with dealers in
Section 1; the assistance with the collection of Retail Notes in
Section 4; or the obligations with respect to insurance proceeds in
Section 6; (ii) any other obligation of the Sales Company under
this Agreement for 30 days after receipt of written demand for
compliance; (b) the Sales Company (or any affiliated company or
companies with which the Sales Company's accounts are consolidated
for purposes of an annual report to shareholders of such company or
affiliate, excluding affiliated companies whose assets represent
less than 5% of the total assets consolidated with those of Deere &
Company for purposes of such annual report) becomes insolvent,
makes an assignment for the benefit of creditors, institutes or has
instituted against it proceedings under any bankruptcy or
insolvency law, or has a significant portion of its stock in trade
or of its other assets levied upon or attached; (c) the Sales
Company sells or closes out its business or any significant part
thereof; (d) the Capital Corporation deems itself insecure in doing
business with the Sales Company; (e) the Sales Company breaches any
material agreement between it and the Capital Corporation relating
to this Agreement.
8.2 CAPITAL CORPORATION REMEDIES FOR DEFAULT. If the Sales Company
shall be in default hereunder at any time, the Capital Corporation
may, in addition to exercising the rights to which it is entitled
in the absence of default, charge the Sales Company with costs of
collection on the Retail Notes affected by the breach.
Page 5
8.3 EVENTS OF DEFAULT-CAPITAL CORPORATION. The Capital Corporation
shall be in default hereunder if any of the following occurs: (a)
the Capital Corporation fails to comply with (i) any of the
following obligations for more than 10 days after receipt of
written demand for compliance; the provision or support of a
Finance Plan in Section 1; the purchase from the Sales Company of
all retail installment sale and loan contracts in Section 1; the
payment to the Sales Company in Section 2; the assurance that each
Retail Note complies with the Standards for Retail Notes in Section
3; and (ii) any other obligation of the Capital Corporation under
this Agreement for 30 days after receipt of written demand for
compliance; (b) the Capital Corporation sells or closes out its
business or any significant part thereof; (c) the Sales Company
deems itself insecure in doing business with the Capital
Corporation; (d) the Capital Corporation breaches any material
agreement between it and the Sales Company relating to this
Agreement.
8.4 SALES COMPANY REMEDIES FOR DEFAULT. If the Capital Corporation
shall be in default hereunder at any time, the Sales Company may,
in addition to exercising the rights to which it is entitled in the
absence of default, charge the Capital Corporation with any of
their damages incurred and proximately caused by such breach.
SECTION 9. EFFECTIVE DATE AND SCOPE
This Agreement shall take effect upon execution by all the parties and shall
supersede all previous agreements between or among the parties concerning
sale of Retail Notes. The handling of Retail Notes purchased by the Capital
Corporation under such previous agreements shall be governed by the terms
hereof.
SECTION 10. TERMINATION
This Agreement may be terminated upon 30 days' notice by any party to the
others, but such termination shall not affect the duties of the parties with
respect to Retail Notes sold to the Capital Corporation before the effective
date of such termination.
SECTION 11. MAILING OF NOTICES
Without limitation of invalidation of any other method of giving notice, if
any notice hereunder be deposited in the United States Mail in an envelope
certified or registered with postage pre-paid and addressed to any party at
its principal place of business, such deposit shall be conclusively deemed to
constitute the giving of such notice.
Page 6
SECTION 12. JOINDER
One or more other subsidiaries of Deere & Company may become parties to this
Agreement and entitled to the rights and subject to the obligations of a Sales
Company under this Agreement upon the execution and delivery by each such
subsidiary and the Capital Corporation of a Joinder Agreement.
SECTION 13. GOVERNING LAW
This Agreement shall be interpreted and construed in accordance with the laws
of the State of Illinois.
SECTION 14. CONSTRUCTION
The parties mean for this Agreement to be construed broadly to give effect to
their intent.
Dated as of May 11, 1993.
XXXX DEERE CAPITAL CORPORATION
By: /s/ X.X. Xxx
--------------------------------
Title: President
------------------------------
DEERE & COMPANY
By: /s/ X.X. Xxxxxxx
--------------------------------
Title: Sr. Vice President
------------------------------
Page 7
AMENDMENT TO
AGREEMENT CONCERNING LAWN & GROUNDS CARE RETAIL NOTES
Deere & Company ("Sales Company"), its successors and assigns; and Xxxx Deere
Capital Corporation ("Capital Corporation") its successors and assigns;
agree as follows:
SECTION 1.
Section 2.3 of the AGREEMENT CONCERNING LAWN & GROUNDS CARE RETAIL NOTES
dated 11 May 1993, is hereby deleted and replaced by the following.
2.3 PURCHASE PRICE. The purchase price of any Retail Note accepted by the
Capital Corporation shall be the face amount of the Retail Note less both the
finance charge and any separately stated insurance premiums.
SECTION 2.
The parties mean for this Amendment to be construed broadly to give effect to
their intent.
SECTION 3.
This Amendment shall be effective as of 1 November 1994.
Dated as of __________________ ____, 1994.
DEERE & COMPANY XXXX DEERE CAPITAL CORPORATION
By: By:
----------------------------- -----------------------------
Title: Title:
--------------------------- --------------------------
