AGREEMENT CONCERNING AGRICULTURAL RETAIL NOTES
Deere & Company, ("Sales Company"), its successors and assigns;
and
▇▇▇▇ Deere Capital Corporation ("Capital Corporation") its successors and
assigns;
agree as follows:
SECTION 1. RETAIL FINANCE
To stimulate retail sales of its agricultural equipment and to induce the
Capital Corporation to provide a "Finance Plan" for retail purchases of its
agricultural 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 sales of any Retail Note 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 sale 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
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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
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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 acknowledgment, 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.
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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 an 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. RESERVE AND LOSSES
5.1 DEALERS' RESERVES AND CONTINGENT EARNINGS. The Finance Plan may
provide for 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.
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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 such 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.
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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 or 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.
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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.
▇▇▇▇ DEERE CAPITAL CORPORATION
By: /s/ ▇. ▇. ▇▇▇
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Title: President
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DEERE & COMPANY
By: /s/ ▇▇ ▇▇▇▇▇▇▇
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Title: Sr. Vice President
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AMENDMENT TO
AGREEMENT CONCERNING AGRICULTURAL RETAIL NOTES
Deere & Company ("Sales Company"), its successors and assigns; and ▇▇▇▇ Deere
Capital Corporation ("Capital Corporation") its successors and assigns;
agree as follows:
SECTION 1.
Section 2.3 of the AGREEMENT CONCERNING AGRICULTURAL RETAIL NOTES dated 11
May 1993, is hereby deleted and replaced by the following.
2.3 PURCHASE PRICE AND ORIGINATION FEE. 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. An additional payment, which is intended to compensate the Sales
Company for origination of receivables, shall be paid to the Sales Company on
a monthly basis. The amount of this payment shall be based on a mutually
agreeable percentage of the aggregate purchase prices of the Retail Notes
accepted during the preceding month (initially .328%), but that amount shall
be reduced by any amount paid by the Capital Corporation to the Sales Company
for staff support furnished and joint lines of credit available during the
preceding month.
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 ▇▇▇▇ DEERE CAPITAL CORPORATION
By: By:
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Title: Title:
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