Document:

Exhibit 10.27

 

MARKETING
PROFIT SHARING AGREEMENT

 

[IMA Implementing
Agreement]

 

 

                THIS MARKETING PROFIT SHARING AGREEMENT (this
“Agreement”) is entered into as of the 1st day of January, 2002, by and between
John Deere Construction and Forestry Equipment Company (“JDCFC”), a Delaware
corporation wholly-owned by Deere & Company (“Deere”) and Hitachi
Construction Machinery Holding U.S.A. Corporation (“HHUS”), a Delaware
corporation wholly-owned by Hitachi Construction Machinery Co., Ltd, (“HCM”).

 

                WHEREAS, on
October 16, 2001, Deere and HCM entered into an Integrated Marketing
Agreement (“IMA”) in which they agreed to engage in a joint venture which would
integrate their respective marketing organizations in North, Central and South
America (“Territory”) for the distribution of certain products as defined in
the IMA and ancillary supply agreements (collectively, the “Products”); and

 

                WHEREAS, the new
marketing joint venture will be an unincorporated joint undertaking and will be
in addition to the existing manufacturing joint venture established by Deere
and HCM in an Agreement dated May 16, 1988 (“1988 JV Agreement”); and

 

                WHEREAS JDCFC and
HHUS agree to work together to achieve, and take mutual responsibility for, the
cost reductions and distribution synergies that will result from the combined
marketing organizations; and

 

                WHEREAS, following
the integration the parties agreed that all marketing functions previously
performed separately by JDCFC, Hitachi Construction Machinery of America
(“HCMA”) and Hitachi Construction Machinery of Canada (“HCMC”), would be
assumed by JDCFC, utilizing the existing systems and facilities of JDCFC; and

 

 

160

 

                WHEREAS, the IMA
and ancillary supply agreements also provided, among other things, that upon
integration of the parties’ marketing organizations profits derived from
distribution of Products in the Territory by JDCFC would be shared as follows:
JDCFC—60%; HHUS—40%, such profits to be determined in accordance with United
States Generally Accepted Accounting Principles (“US GAAP”); and

 

                WHEREAS, the
parties desire to provide further definition with respect to their respective
rights and obligations in implementing the profit sharing terms of the IMA.

 

                NOW THEREFORE, the
parties hereto agree as follows:

 

                1.             In accordance with the terms of the
IMA, following integration JDCFC will assume sole responsibility for the
distribution of Products within the Territory.

 

                2.             The Parties anticipate that the
integration of their respective marketing organizations will result in
substantial cost reductions through, among other things, the sharing of common
marketing and product support systems, consolidation of facilities, as well as
realization of synergies through integration of their parts distribution
systems. It is also anticipated that these benefits will be accomplished by the
utilization of systems already in place, or to be put into place at JDCFC, and
through the discontinuance of separate systems and operations previously in
place at and utilized by HCMA and HCMC.

 

                3.             As JDCFC has agreed to assume
responsibility for the distribution of Products within the Territory, utilizing
its existing assets, facilities, systems, personnel and such Hitachi personnel
as may be required. No initial cash capital will be contributed by either party
in connection with carrying out the functions of the integrated marketing
organization. Accordingly, HHUS and its affiliates, including but not limited
to HCMA, HCMC, and Deere-Hitachi, shall not acquire any equity ownership in
JDCFC or interests in the tangible or intangible assets of

 

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JDCFC or its affiliates, and JDCFC and its affiliates shall not acquire
any equity ownership in HHUS or interests in the tangible or intangible assets
of HHUS or its affiliates, by virtue of the integration of their respective
marketing organizations. To provide further clarity, the parties agree that the
mutual benefits anticipated by the integration will be realized through, among
other things, improved efficiencies, and eliminating duplication and
redundancies within their respective organizations, all of which contribute to
the basis for the percentages agreed upon for the sharing of the profits
derived from the distribution of Products within the Territory.

 

                4.             Except as provided in paragraph 8
of this Agreement, the profits and losses derived from distributing Products
within the Territory for periods beginning on or after January 1, 2002,
shall be shared as follows: JDCFC—60%; HHUS—40%. The Parties acknowledge and
agree that the sharing of profits and losses in these percentages is based
upon, among other things, the cost reductions agreed upon in the IMA and the
synergies achieved from the integration as referred to in the IMA, as well as
in paragraph 2 of this Agreement. Accordingly, profit and loss sharing
provisions of this Agreement will become effective for Products distributed
after the execution of the IMA and at the time the cost reduction provisions
become effective, on January 1, 2002. In the event Euclid trucks are not
made available due to bankruptcy or other events not attributable to JDCFC or
any of its affiliates, the parties agree to increase Deere’s 60 percent split.
If the parties cannot agree on a mutually acceptable adjustment, the percentage
split shall be determined by arbitration pursuant to the 1988 JV Agreement,
section 10.10.

 

                5.             Profits and losses from the
distribution of Products shall be determined in accordance with US GAAP, and shall
take into account the following practices:

 

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                (i)            the standard profit by product accounting
methods and systems which have been heretofore utilized by Deere, provided that
Deere shall provide Hitachi with a description of such standard accounting
methods and systems in reasonable details and provided Deere shall have
discretionary authority to change such standard accounting methods and systems
so long as the new accounting methods and systems are applied consistently
within JDCFC and that detailed description of such new methods and systems
shall be provided to Hitachi annually; (ii) product or division specific
costs shall be directly assigned to such product or division; (iii) allocations
of indirect costs shall be in accordance with the standard allocation methods
which have heretofore been utilized by Deere provided that: (a) Deere
shall provide Hitachi with a description of such standard allocation methods in
reasonable detail, (b) such allocation methods use reasonably objective
allocation standards, and (c) Deere shall have discretionary authority to
change such allocation methods so long as the new allocation methods and
systems are applied consistently within Deere and that a detailed description
of such new methods and systems shall be provided to Hitachi annually; (iv) all
transactions between JDCFC and any of its affiliates shall be conducted on
terms and conditions no less favorable to JDCFC than those applicable to arms-length
transactions; (v) without limiting 5(i), any gain or loss of JDCFC,
Deere or any affiliate of JDCFC or Deere where such gain or loss is not within
the scope of the distribution joint venture which is the subject of this
Agreement shall not be allocated to the profits and losses subject to sharing
hereunder (without limiting the generality of this clause (v), profits and
losses attributable to Bell Equipment, Sun State, Deere-Hitachi, IJD, Nortrax,
Phoenix, Equipment Savers, Value Parts and Shanghai Leasing currently shall
have no impact or effect on the profits and losses subject to sharing
hereunder, but subject to inclusion if or when the business of such entity is
changed in such a manner that such entity shall become an integral part

 

 

 

163

 

of the distribution business contemplated by the IMA. The gain or loss
from the sale, disposition, restructuring or other corporate adjustment of any
of the above entities as currently structured shall not be included in the
allocation to the business hereunder provided future benefits are not derived
by the business hereunder); (vi) the parties acknowledge and agree that
profits and losses determined on a pretax basis may be different from the
profits and losses determined for purposes of satisfying the requirements of
applicable federal, state, or local tax laws and regulations.

 

                6.             Profits and losses, as the case may
be, as determined pursuant to paragraph 5 of this Agreement, will be
distributed to the parties on a pre-income-tax basis.  HHUS’s share of any profits as thus determined
will be distributed by a direct payment from JDCFC to HHUS, or such other
entity as directed by HHUS, provided that such entity is treated as a domestic
corporation for U.S. federal income tax purposes. Likewise, if losses are
determined to have occurred, HHUS or its designated entity will reimburse JDCFC
for HHUS’s share of such losses as thus determined. All such payments will be
made annually, prior to December 31, on a pre-income-tax basis. Notwithstanding
the foregoing, JDCFC shall distribute to the parties, at least five (5)
business days prior to the due date of each quarterly estimated tax payment, an
amount in cash at least sufficient to allow JDCFC and HHUS to pay any United
States federal, state and local income taxes required to be paid by each party
in respect of the profits allocated to such party pursuant to this Agreement,
taking into account payments previously made, and the cumulative amount of
profit or loss realized during the taxable year. The amount of such payments
shall be determined at the highest net applicable marginal rates applicable to
either party. Any such amounts paid shall be treated as an advance of amounts
otherwise payable pursuant to this Agreement. In no event shall distribution
result in a negative balance in the capital accounts as

 

164

 

defined by the Internal Revenue Code of 1986, as amended (the “Code”).
Each party shall be required to repay to JDCFC, within ten (10) business
days of receiving notice thereof, the amount of any such overpayments made
pursuant to this paragraph, as determined by JDCFC in good faith.

 

                7.             The parties acknowledge and agree
that it will be necessary to execute a separate agreement for purposes of
carrying out the terms of the IMA and this Agreement in Canada, and that such
agreement shall be consistent with and not change or otherwise alter the terms
of the IMA or this Agreement.

 

                8.             Notwithstanding the provisions of
paragraph 4 of this Agreement, the parties agree that pretax losses, if any,
associated with the distribution of excavators >100MT, shovels, rigid frame
haul trucks together with components, attachments and repair parts for such
excavators, shovels and haul trucks (“Mining Products”), net of all
profits/losses from the distribution of the Mining Products by John Deere
Limited in Canada, shall be separately determined as provided in paragraph 4
above, but will not be charged against the profits and/or losses for other
Products distributed by JDCFC under the IMA. The parties agree that all losses,
if any, from the distribution of Mining Products shall be charged to HHUS, or
an entity designated by HHUS, and not charged against the profits or losses
attributed to the distribution of other Products under the IMA in arriving at
the parties’ profit sharing under this Agreement. All such payments to JDCFC as
a result of such loss shall be made annually by December 31.

 

                9.             Income statements for Products
covered by the IMA and this Agreement, used in determining profits and losses
pursuant to this Agreement, will be provided by JDCFC to HHUS monthly. JDCFC
shall allow HHUS to have an on-line access to its monthly financial statements
to the extent such statements relate to the profits and losses subject to
sharing hereunder. JDCFC

 

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shall use reasonable efforts to respond to HHUS’s inquiries regarding
financial and accounting issues relating to such financial statements. Further,
HHUS shall have the right to retain KPMG or such other accounting firm which is
then the auditor for Hitachi to audit the financial statements and the profit
by product methodology, where the frequency of such audit shall not exceed once
per year. KPMG will be required to sign a confidentiality agreement prohibiting
the sharing of non-excavator/non-Mining Product Profit by Product financial
information with HCM, HHUS or any other parties.

 

                10.           The parties agree that beginning
January 1, 2002, and thereafter all Products (whole goods, components,
attachments and service parts), purchased by all Deere affiliated companies,
including Deere-Hitachi, from HHUS and its affiliated companies for
distribution within the Territory will be sold to such Deere affiliates at the
prices and in accordance with the terms of the IMA and pertinent supply
agreements, taking into account the cost reduction provisions of the IMA, and
also taking into account the currency risk sharing agreements then in effect
between the parties that will be applied to pricing of Products from HHUS and
its affiliates to Deere-Hitachi and from Deere-Hitachi to JDCFC.

 

                11.           This Agreement shall become effective
as of the date hereof and shall continue in full force and effect for an
indefinite terms hereafter unless terminated in accordance the provisions of
the IMA and the 1988 JV Agreement.

 

                12.           Each of JDCFC and HHUS shall have the
right to terminate this Agreement upon the happening of any of the events
enumerated in Section 9.2 of the 1988 JV Agreement provided, however, that
this Agreement may not be terminated unless the IMA is also terminated.

 

166

 

                13.           The parties to this Agreement and
each of their respective affiliates hereby agree to treat the profit-sharing
arrangements created by the IMA and this Agreement as a partnership for all U.S.
federal, state and local income tax purposes, except as otherwise required by
applicable law, and shall file all relevant tax returns, information returns
and other relevant filings in a manner consistent with such treatment. JDCFC
shall be the “Tax Matters Partner” of the partnership within the meaning of
Section 6231 (a)(7) of the Code, shall make all elections for the
partnership provided for in the Code, and shall act for and on behalf of the
partnership to the extent permitted by Code Sections 6221 through 6233.

 

                14.           This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

                15.           This Agreement supersedes all prior
understandings and agreements of the parties with respect to the matters
covered herein, and shall operate as additions to the IMA and, except as
modified by this Agreement, the IMA shall remain in full force and effect.

 

                16.           The parties hereto may amend, modify
and supplement this Agreement in such manner as may be agreed-upon by them in
writing.

 

                17.           This Agreement is executed in
English, which shall be the controlling text and this Agreement and all related
agreements (unless otherwise provided therein) shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed therein.

 

                18.           This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original.

 

                19.           If any term, restriction or covenant
of this Agreement is deemed illegal or unenforceable under the laws of the
State of Illinois (or any other law deemed by a court of

 

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competent jurisdiction to be controlling), or if any application of any
term, restriction or covenant of this Agreement to any person or circumstance
is deemed illegal or unenforceable, the parties shall in good faith negotiate
changes to the unenforceable term, restriction or covenant so that the original
intent of such term, restriction or covenant is preserved insofar as is permissible
by law.

 

                20.           Any notice, request, information or
other document given hereunder to any of the parties by any other party shall
be in writing and sent to those persons identified, and in accordance with the
terms of Section 10.8 of the 1988 JV Agreement.

 

                21.           Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, which is unresolved within
90 days (or such other period as may be established by mutual agreement of the
parties) of first written notification by either party, shall be settled by
binding arbitration in accordance with the terms of the 1988 JV Agreement.

 

                IN WITNESS WHEREOF,
the parties have executed this Agreement on the day and year first above
written.

 

168

 

	
  JOHN DEERE CONSTRUCTION

  AND FORESTRY COMPANY

  	
   

  	
  HITACHI CONSTRUCTION MACHINERY

  HOLDING U.S.A. CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Roger L. Bridges

  	
   

  	
  By:

  	
  /s/ Toru Sakai

  
	
  Name:

  	
  Roger L. Bridges

  	
   

  	
  Name:

  	
  Toru Sakai

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  President and CEO

  

 

169Exhibit 10.28

 

INTEGRATED MARKETING AGREEMENT

 

                THIS AGREEMENT (“Agreement”)
is entered into as of the 16th day of October, 2001, by and between Deere &
Company, a Delaware corporation (“Deere”), and Hitachi Construction Machinery
Co., Ltd., a Japan corporation (“Hitachi”).

 

RECITALS

 

                A.            On May 16, 1988, Deere and Hitachi
(collectively “the Parties”) entered into a Joint Venture Agreement (“J V
Agreement”) to establish a facility in North America for the manufacture and
distribution of excavators, mining equipment, attachments, components and
repair parts (the “Products”) of the types designed and manufactured by Deere
in the United States and by Hitachi in Japan.

 

                B.            Pursuant to the J V Agreement, the
Parties formed a close corporation under the General Corporation Law of
Delaware known as Deere-Hitachi Construction Machinery Corporation (“Deere-Hitachi”),
and since its formation Deere-Hitachi has carried on the business contemplated
by the J V Agreement.

 

                C.            The geographic territory for the
distribution of the Products produced under the JV Agreement was defined as:
North America, Central America and South America (the “Territory”).

 

                D.            Marketing of Deere-branded Products
produced under the J V Agreement has been and continues to be the
responsibility of Deere & Company or one of its subsidiaries (for purposes
of this Agreement, John Deere Construction and Forestry Company)(“JDCFC”);
marketing of Hitachi-branded Products has been and continues to be the
responsibility of Hitachi Construction Machinery (America) Corp. (“HCMA”) and
Hitachi Construction Machinery Canada Ltd. (“HCMC”), both subsidiaries of
Deere-Hitachi.

 

                E.             Deere and Hitachi are now desirous
of implementing operational efficiencies in the marketing of the Products
within the Territory which will address market share declines in both their
distribution channels, allow for greater flexibility in responding to economic
conditions, and enable the Parties to compete effectively with larger
integrated manufacturers of excavators, as well as certain mining equipment,
including mining excavators, shovels and trucks.

 

 

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COVENANTS

 

                IN CONSIDERATION
of the premises and the mutual covenants of the Parties set forth herein, the
Parties hereto agree as follows:

 

ARTICLE I

Reorganization of Product Marketing within the Territory

 

                1.1           Integration of Marketing
Organizations.  Deere and Hitachi
shall cause the integration of the marketing functions of HCMA, HCMC and JDCFC
into a single operating unit responsible for the distribution of products
within North America, Central America and South America. Integration shall
include the dissolution of HCMA and HCMC and the transfer of their assets to
Deere-Hitachi. The parties shall act in good faith and take such actions as are
necessary to effectuate the dissolution, transfer of assets and integration of
their marketing organizations.

 

                1.2           Operations following Integration.
 Following the integration of HCMA and
HCMC into Deere-Hitachi as provided in Section 1.1, JDCFC shall assume sole
responsibility for the distribution of Products within the Territory. It is the
intent of the Parties that JDCFC shall function as, and perform the types of
services following the Integration as HCMA, HCMC and JDCFC separately performed
prior to the Integration. The integration shall commence as soon as practicable
after the execution of this Agreement, but no later than 1 January 2002 and be
completed by 31 December 2002.

 

                1.3           Purposes.  The Parties agree that integration of their
respective marketing organizations will result in substantial cost reductions
through the sharing of common marketing and product support systems,
consolidation of facilities, as well as realize synergies through a common
parts distribution system. The purpose of this integration, therefore, is to
implement operational efficiencies in the distribution of the Products within
the Territory, to address market share declines in both their distribution
channels, achieve greater flexibility in responding to economic conditions, and
to enable the Parties to compete effectively with larger integrated
manufacturers of excavators, as well as mining equipment, including mining
excavators, shovels and trucks.

 

It is the mutual understanding between the Parties
that this Agreement will be accomplished by maintaining and expanding the total
business in the Territory.

 

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ARTICLE II

Consolidation of Facilities

 

                2.1           Houston, Toronto and Vancouver.
 The Houston, Toronto and Vancouver
facilities will be closed, and the activities conducted at such facilities
shall be assumed by JDCFC at facilities operated by JDCFC. The Parties agree
that upon closure of these operations Deere-Hitachi will take the necessary
steps to terminate the Toronto and Vancouver leases, and to close the Houston
facility.

 

                2.2           Staffing.  As the Houston, Toronto and Vancouver
operations are closed, the management of JDCFC will determine which of the
employees at these facilities will be retained as employees of the integrated
organization. The Parties also agree that Hitachi will designate a senior
manager who will be appointed to a position within the JDCFC marketing
organization, with responsibility for the Hitachi division of JDCFC, and
reporting to JDCFC’s Director of North American Operations. Hitachi will also
designate an additional senior manager to serve on the Quality Council of JDCFC
and reporting directly to the President of JDCFC. JDCFC shall have the right to
approve both senior managers designated by Hitachi, provided that such approval
is not unreasonably withheld. Additional Hitachi personnel will be assigned to
JDCFC to support the integrated excavator and mining business as determined by JDCFC
Management.

 

ARTICLE III

Expansion of Products

 

                3.1           Mining Equipment.  The Parties agree that mining equipment,
described as rigid frame haul trucks, shovels and excavators greater than 100
metric tons (MT), currently being distributed in the Territory by Deere-Hitachi
will be distributed by JDCFC pursuant to the terms of a separate Distribution
and Consignment Agreement substantially in the form attached hereto as Exhibit
A.

 

                3.2           Euclid Trucks.  Euclid-Hitachi Heavy Equipment, Ltd. (“Euclid-Hitachi
currently distributes a rigid frame haul truck for use in mining, under the
Euclid-Hitachi brand name. The Parties agree that this product will be
distributed by Deere-Hitachi and they shall cause Deere-Hitachi to enter into a
Distribution and Supply Agreement with Euclid-Hitachi for this purpose substantially
in the form attached hereto as Exhibit B. Deere -Hitachi will also supply the
Euclid-Hitachi brand rigid frame haul truck to JDCFC for distribution

 

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through the integrated distribution organization pursuant to a separate
Distribution and Consignment Agreement substantially in the form attached
hereto as Exhibit C.

 

                3.3           Growth Potential.  The Parties acknowledge the importance of supporting
the growth and profitability related to the distribution of mining products,
and will work toward maintaining and improving the distribution of that product
line by adding other complimentary products which may be necessary to grow the
business.

 

                3.4           Protection Against Marketing
Losses.  The Parties agree that operating
losses associated with the distribution of excavators > 100 MT, shovels,
rigid frame haul trucks together with components, attachments and repair parts
for such excavators, shovels and haul trucks (“Mining Products”) shall not be
charged against the Integrated Marketing Organization. Accordingly, any such
losses shall be charged to Hitachi, and not to the Integrated Marketing
Organization in arriving at the Parties’ profit sharing under this Agreement.

 

ARTICLE IV

Distribution of Product

 

                4.1           Dealer Network.  The Parties agree that to accomplish the
objectives of an integrated marketing organization it will be necessary to move
toward a single unified distribution system comprised of the best qualified
retail dealers from both organizations. This will be accomplished by appointing
the existing qualified Deere dealer or the qualified consolidating Hitachi
dealer to represent a unified product line (possible examples: Wajax, Burress,
Rudd, AIS, Formula, Ahern, CMI Alaska, Arnold, Elliot & Franz, Howell,
Peco, Romco, Trax GA, or Trax AL). JDCFC will consult with Hitachi in selecting
dealers, provided, however, that JDCFC shall have the right to make final
decisions in such dealer selections. Dealer selections will be made in a manner
that supports a long-term unified distribution channel.

 

                4.2           Timing.  Existing open areas will be rationalized
immediately following the execution of this Agreement. However, to allow for a
smooth transition, the evaluation and unification of the distribution channel
will be completed within a period of three (3) years from the date of this
Agreement.

 

                4.3           Business Plan.  The Parties recognize the importance of
proceeding expeditiously toward accomplishing the purposes of the integrated
marketing organization and agree to develop a 5-year business plan for the

 

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organization, and to use their best efforts in achieving the plan.

 

ARTICLE V

Litigation

 

                5.1           Product Litigation.  The procedures for resolving claims and conducting
the defense of litigation involving excavators below 100 MT distributed by the
integrated marketing organization, as well as the payment of the related costs,
shall be those set forth in the Product Liability Sharing Agreement
between the Parties dated August 16, 1993.

 

                5.2           Other Litigation.  The procedures for resolving claims and
conducting the defense of all litigation other than product litigation shall be
those set forth in the Product Liability Sharing
Agreement between the Parties dated August 16, 1993, provided,
however, that all the related costs of product claims and lawsuits involving or
related to excavators greater than 100 MT, mining shovels and mining trucks
shall be the sole responsibility of and paid by Hitachi. All other litigation costs
related to or arising out of implementing this Agreement, including the payment
of claims, lawsuits, attorneys and consultants’ and related fees, shall be
treated as integration expenses and shared by the Parties in the same
proportion as the sharing of profits and/or losses of the integrated marketing
organization.

 

ARTICLE VI

Sharing the Profits of Integration

 

                6.1           General Rule.  The profits derived from distributing Product
within the Territory for periods beginning on or after January 1, 2002, shall
be shared as follows: Deere 60%; Hitachi 40%. The Parties agree that profits
from the integrated of Products shall be determined in accordance with
Generally Accepted Accounting Principles (“GAPP”). The Parties further agree to
distribute such profits in accordance with a methodology preferred by Hitachi,
taking into account the method most beneficial to both Parties.

 

                6.2           Pricing.  The Parties agree that beginning January 1,
2002, all Products (whole goods, components, attachments and service parts), purchased
by all Deere affiliated companies, including Deere-Hitachi, from Hitachi for
distribution within the Territory will be sold to such Deere affiliates at the
prices and in accordance with the terms of the pertinent Supply Agreement

 

174

between Hitachi and the Deere affiliate, including, but not limited to
the Supply Agreement with Deere-Hitachi dated May 16, 1988, as amended; the
Component Supply Agreement with Industrias John Deere S.V. de C.V., dated April
28, 1995, as amended; and the Supply Agreement with Industrias John Deere S.A.
de C.V., dated May 1, 1996, as amended. The Parties further agree that all
agreements between Hitachi and Deere affiliates will be amended to carry into
effect the pricing provisions of this IMA.

 

                6.6           Cost Reduction.  The Parties agree that to maintain and improve
competitiveness in the Territory certain cost reduction initiatives must be
implemented for whole goods, components and attachments, and agree that
beginning January 1, 2002, Hitachi shall reduce the costs of whole goods,
components and attachments in accordance with the Supply Agreement between
Hitachi and Deere-Hitachi dated May 16, 1988, as amended.

 

ARTICLE VII

Organization Structure

 

                7.1           Corporate Governance.  HCMA and HCMC will cease their corporate
existence upon Integration of the Parties’ marketing organizations, and their
functions will be absorbed by JDCFC. The corporate structure and governance of
Deere-Hitachi will continue as set forth in the Parties’ J V Agreement dated
May 16, 1988, as amended. The corporate structure and governance of JDCFC will
not be affected by this Agreement except that Hitachi senior managers and
employees shall be appointed to support the integrated operations in accordance
with Section 2.2.

 

ARTICLE VIII

Branding of Products

 

                8.1           Both Deere-branded and
Hitachi-branded Products are currently being marketed through the distribution
channels of HCMA, HCMC and JDCFC. The Parties agree that during the transition
to a unified marketing organization, both brands will continue to be
distributed. However, after unification of their respective marketing
organizations, the Parties agree to evaluate the desirability of adopting a
common excavator product brand (possible example: Deere-Hitachi), except that
mining products will continue to be distributed under the Hitachi brand,
indefinitely.

 

175

ARTICLE IX

Term and Termination

 

                9.1           Term.  This Agreement shall become effective as of
the date hereof and shall continue in full force and effect for an indefinite
term hereafter unless terminated in accordance with the provisions of the
Parties’ J V Agreement dated May 16, 1988.

 

                9.2           Termination.  Each of Deere and Hitachi shall have the right
to terminate this Agreement upon the happening of any of the events enumerated
in Section 9.2 of the J V Agreement dated May 16, 1988, provided however,
that this Agreement may not be terminated unless the J V Agreement is also
terminated.

 

                9.3           Liquidation and Dissolution.  In the event that this Agreement is
terminated, the Parties agree that they shall take such action as is necessary
to cause the Board of Directors of Deere-Hitachi to adopt a plan of liquidation
and dissolution of the J V, including all operations contemplated under this
Agreement, all in accordance with the terms of Article IX of the J V Agreement.

 

ARTICLE X

Miscellaneous

 

                10.1         Binding Effect.  This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns.
Each party hereto shall use its best efforts to cause the members of the Board
of Directors of Deere-Hitachi to cause Deere-Hitachi to agree to be bound by
all of the terms and conditions of this Agreement, as well as any ancillary
agreements required to give it effect, as though it were a party hereto and
thereto.

 

                10.2         Entire Agreement.  This instrument and the exhibits attached
hereto supersede all prior understandings and agreements of the Parties with
respect thereto, and shall operate as additions to their J V Agreement dated
May 16, 1988.

 

                10.3         Amendment and Modification.  The Parties hereto may amend,

 

176

modify and supplement this Agreement in such manner as may be agreed
upon by them in writing.

 

                10.4         Governing Law.  This Agreement is executed in English, which
shall be the controlling text and this Agreement and all related agreements
(unless otherwise agreed) shall be governed by and construed in accordance with
the laws of the State of Illinois applicable to contracts made and to be
performed therein.

 

                10.5         Required Approvals.  The actions contemplated by this Agreement
will be implemented only after any and all necessary reviews, consents or
approvals are completed or obtained from the appropriate governmental
authorities, if any.

 

                10.6         Execution in Counterpart.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.

 

                10.7         Headings.  The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

 

                10.8         Severability.  If any term, restriction or covenant of this
Agreement is deemed illegal or unenforceable under the laws of the State of
Illinois (or any other law deemed by a court of competent jurisdiction to be
controlling), or if any application of any term, restriction or covenant of
this Agreement to any person or circumstance is deemed illegal or
unenforceable, the Parties shall in good faith negotiate changes to the
unenforceable term, restriction or covenant so that the original intent of such
term, restriction or covenant is preserved insofar as is permissible by law.

 

                10.9         Notices.  Any notice, request, information or other
document given hereunder to any of the parties by any other party shall be in
writing and sent to those persons identified, and in accordance with the terms
of Section 10.8 of the Parties J V Agreement dated as of May 16, 1988.

 

                10.10       Arbitration.  Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, which is unresolved within
90 days (or such other period as may be established by mutual agreement of the
Parties) of first written notification by either party, shall be settled by
binding arbitration in accordance with the terms of the Parties’ J V Agreement
dated as of May 16, 1988.

 

                10.11       Assignment.  Neither Hitachi nor Deere shall assign its
rights or obligations pursuant to this Agreement except with the prior written
consent of

 

177

the other party.

 

                10.12       Reaffirmation of J V Agreement.  The provisions of this Agreement shall
constitute additions to the Parties’ J V Agreement dated May 16, 1988, and
except as modified by this Agreement, the J V Agreement shall remain in full
force and effect.

 

                10.13       Amendments to Supply Agreements.  Amendment to the Supply Agreement between
Hitachi and Deere-Hitachi dated May 16, 1988, is attached hereto as Exhibit D,
and Amendment to the Supply Agreement between Deere and Deere-Hitachi dated May
16, 1988, is attached hereto as Exhibit E.

 

                IN WITNESS
WHEREOF, the Parties have executed this Agreement on the day and year first
above written.

 

	
  DEERE & COMPANY

  
	
   

  
	
  By:

  	
  /s/ Pierre E. Leroy

  	
   

  
	
   

  	
  Name: 

  	
  Pierre E. Leroy

  
	
   

  	
  Title:

  	
  President, Worldwide Construction Equipment

  
	
   

  	
   

  	
  Division & Deere Power Systems Group

  
	
   

  	
   

  
	
  HITACHI CONSTRUCTION MACHINERY CO., LTD

  
	
   

  
	
  By:

  	
  /s/ Ryuichi Seguchi

  	
   

  
	
   

  	
  Name:

  	
  Ryuichi Seguchi

  
	
   

  	
  Title:

  	
  President & CEO

  
				

 

 

178

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