PART I-A. REPURCHASE OF FARM, INDUSTRIAL AND LAWN AND GARDEN EQUIPMENT BY WHOLESALER

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1 LOUISIANA Title 51. Trade and Commerce Chapter 2. Particular Goods PART I-A. REPURCHASE OF FARM, INDUSTRIAL AND LAWN AND GARDEN EQUIPMENT BY WHOLESALER 481. Applicability of Part A. The provisions of this Part shall apply to written contracts or oral agreements of definite or indefinite duration between any person, firm or corporation engaged in the business of selling, distributing or retailing farm, construction, heavy industrial material handling, utility and lawn and garden equipment, engines, implements, machinery, attachments and repair parts for such equipment and any wholesaler, manufacturer or distributor of such equipment and repair parts, whereby the retailer agrees with the wholesaler, manufacturer or distributor to maintain a stock of such parts, or complete equipment or machines, or attachments. Any successor in interest of the manufacturer, wholesaler, or distributor shall include any purchaser of assets or stock, any surviving corporation resulting from merger or liquidation, any receiver or assignee, or any trustee of the original equipment manufacturer, wholesaler or distributor. B. For the purposes of this Part, the following words and phrases shall have the following meanings: (1) "Farm equipment", "construction equipment", "heavy industrial equipment", "material handling equipment", "utility equipment" and "lawn and garden equipment" shall include every vehicle designed or adapted and used exclusively for agricultural, construction, industrial material handling, utility or lawn and garden operations, although incidentally operated or used upon the highways. (2) "Superseded parts" shall include any part that will provide the same function as a previously available part and can be purchased from the manufacturer, wholesaler, or distributor on the date of cancellation. (3) "Dealer" shall mean any farm dealer, heavy industrial equipment dealer, construction equipment dealer, material handling equipment dealer, utility equipment dealer, engines equipment dealer, lawn and garden equipment dealer or retail equipment distributor dealer. (4) "Agent" shall mean any manufacturer, wholesaler or wholesale distributor, any purchaser of assets or stock of any surviving corporation resulting from a merger or liquidation, any receiver or assignee, or any trustee of the original equipment manufacturer, wholesaler or distributor.

2 482. Terminations or cancellations A.(1) No agent, directly through an officer or an employee, may terminate, cancel, fail to renew, or substantially change the competitive circumstances of a dealership agreement or contract without good cause. (2) "Good cause" shall mean failure by a dealer to substantially comply with essential and reasonable requirements imposed upon the dealer by the dealership contract or agreement, if such requirements are not different from those imposed on other dealers similarly situated, either by its terms or the manner of enforcements. B. Good cause exists whenever: (1) An individual proprietor, partner, or major shareholder of the dealership has withdrawn. (2) There has been a substantial reduction in interest of a substantial partner or major stockholder. (3) The dealer has filed or had filed against it a petition in bankruptcy that has not been discharged within sixty days after the filing, has been sold a substantial part of the dealer's assets related to the equipment business, or has commenced dissolution or liquidation. (4) The dealer has changed its principal place of business without prior approval of the agent, which shall not be unreasonably withheld. (5) The equipment dealer has substantially defaulted under chattel mortgage or other security agreement between the dealer and the agent, or there has been a revocation or discontinuance of a guarantee of a present or future obligation to the agent. (6) The equipment dealer has failed to operate in the normal course of business for fourteen days. (7) The dealer has pleaded guilty to or has been convicted of a felony substantially affecting the relationship between the dealer and the agent. (8) The dealer has engaged in conduct which is substantially injurious or detrimental to the dealer's customers or to the public. (9) After receiving at least twelve months' notice from the agent of its specific and achievable requirements for reasonable market penetration based on the agent's contemporaneous experience in other comparable marketing areas, the dealer has consistently failed to meet the agent's reasonable market penetration requirements. C. Except as otherwise provided herein, an agent shall provide a dealer with at least ninety days' written notice of termination, cancellation, or nonrenewal of the dealership agreement. The notice shall state all reasons constituting good cause for

3 the action and shall provide that the dealer has sixty days in which to cure any claimed deficiency, specifying the action that must be taken in order to cure the deficiency. If the deficiency is rectified within sixty days, the notice is void. The notice and the right to cure provisions under this Subsection are not required if the reason for termination, cancellation, or nonrenewal is a violation under the provisions of R.S. 51:482(B)(1) through (8) Violations; civil remedies A. It shall be a violation of this Part for an agent to: (1) Coerce any dealers to accept delivery of equipment parts or accessories which the dealer has not ordered voluntarily. (2) Condition the sale of equipment on a dealer also purchasing other goods or services; except that an agent may require the dealer to purchase those parts reasonably necessary to maintain the quality of operation in the field of the equipment used in the trade area and to purchase and lease such telecommunication equipment as is substantially and reasonably necessary to communicate with the agent. (3) Coerce a dealer into refusing to purchase an agent's equipment manufactured by another agent. (4) Attempt or threaten to terminate, cancel or fail to renew or substantially change the competitive circumstances of the dealership agreement based on the result of a natural disaster, including a sustained drought or high unemployment in the dealership market area, labor dispute, or other similar circumstances beyond the dealer's control. B.(1) A dealer may bring an action for civil damages in a court of competent jurisdiction against any agent found violating the provisions of this Section, and may recover the damages sustained as a consequence of the agent's violations, together with all costs and attorney fees. (2) The dealer shall be entitled to injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances. In any action by the dealer for injunctive relief for a violation of this Section, irreparable harm shall be presumed. The remedies in this Section are in addition to any other remedies permitted by law Resale of implements, machinery and attachments Upon cancellation or discontinuance of a contract as described in R.S. 51:481(A) by the agent, dealer, wholesaler, manufacturer, or distributor, the agent shall pay to the dealer, or credit his account if he has outstanding any sums owing the agent, a sum equal to one hundred percent of the net cost of all new unused complete engines, implements, equipment, machinery, and attachments covered by this Part which have

4 been purchased from him by the dealer within the thirty-six months immediately preceding notification by the agent or dealer of intent to cancel or discontinue the contract, including transportation charges and excise taxes paid by the dealer or invoiced to his account by the agent. Nothing in this Section shall prohibit the dealer from electing to keep such merchandise if he has the contractual right to do so. Equipment used for demonstration with less than three hundred hours use will be considered new. Equipment that is demonstrated as a method of selling is returnable as new equipment Resale of repair parts A. Upon cancellation or discontinuance of a contract as described in R.S. 51:481(A) by the agent or dealer, the agent shall pay to the dealer, or credit to his account if he has outstanding any sums owing to the agent, a sum equal to one hundred percent of the current net prices on repair parts previously purchased from him by the dealer and held by the dealer on the date of the cancellation or discontinuance of the contract or thereafter received by the retailer from the wholesaler, manufacturer or distributor. This right of resale shall extend to superseded parts listed in current price lists or catalogs in use by the agent on the date of cancellation or discontinuance of the contract. Nothing in this Section shall prohibit the dealer from electing to keep such repair parts and superseded parts if he has the contractual right to do so. The agent shall buy back all specialized equipment that the agent required the dealer to purchase at fifty percent of the original price the dealer paid. B. The repurchase of a repair part shall not be required when the dealer has failed to return the part to the agent after being offered a reasonable opportunity to do so; provided the annual return program of the agent shall not be considered such reasonable opportunity to return within the meaning of this Section. Neither shall the agent be required to repurchase repair parts which have a limited storage life or which are otherwise subject to deterioration, such as rubber items, gaskets, single repair parts priced as a set of two or more items, and repair parts which because of their condition are not resellable as new parts. The dealer shall not be entitled to payment or credit for parts, equipment, implements, machinery, or attachments until the dealer furnishes evidence satisfactory to the company that such products are free and clear of all claims, liens, and encumbrances.

5 486. Passage of title; right of possession The payment required by the agent under this Part shall be due within sixty days after shipment of such items, and upon such payment or allowance of credit to the dealer's account of the sum required by R.S. 51:484 and 485, the title to the equipment, implements, machinery, attachments or repair parts shall pass to the agent making the payment or allowing the credit, and the agent shall be entitled to the possession of the engines, equipment, implements, machinery, attachments, or repair parts. However, this shall not in any way affect any mortgage or privilege which the agent may have on the inventory of the dealer. The date of cancellation or termination shall be the date the agent receives written notice from the dealer or the dealer receives written notice from the agent Resale of repair parts A. Upon cancellation or discontinuance of a contract as described in R.S. 51:481(A) by the agent or dealer, the agent shall pay to the dealer, or credit to his account if he has outstanding any sums owing to the agent, a sum equal to one hundred percent of the current net prices on repair parts previously purchased from him by the dealer and held by the dealer on the date of the cancellation or discontinuance of the contract or thereafter received by the retailer from the wholesaler, manufacturer or distributor. This right of resale shall extend to superseded parts listed in current price lists or catalogs in use by the agent on the date of cancellation or discontinuance of the contract. Nothing in this Section shall prohibit the dealer from electing to keep such repair parts and superseded parts if he has the contractual right to do so. The agent shall buy back all specialized equipment that the agent required the dealer to purchase at fifty percent of the original price the dealer paid. B. The repurchase of a repair part shall not be required when the dealer has failed to return the part to the agent after being offered a reasonable opportunity to do so; provided the annual return program of the agent shall not be considered such reasonable opportunity to return within the meaning of this Section. Neither shall the agent be required to repurchase repair parts which have a limited storage life or which are otherwise subject to deterioration, such as rubber items, gaskets, single repair parts priced as a set of two or more items, and repair parts which because of their condition are not resellable as new parts. The dealer shall not be entitled to payment or credit for parts, equipment, implements, machinery, or attachments until the dealer furnishes evidence satisfactory to the company that such products are free and clear of all claims, liens, and encumbrances.

6 486. Passage of title; right of possession The payment required by the agent under this Part shall be due within sixty days after shipment of such items, and upon such payment or allowance of credit to the dealer's account of the sum required by R.S. 51:484 and 485, the title to the equipment, implements, machinery, attachments or repair parts shall pass to the agent making the payment or allowing the credit, and the agent shall be entitled to the possession of the engines, equipment, implements, machinery, attachments, or repair parts. However, this shall not in any way affect any mortgage or privilege which the agent may have on the inventory of the dealer. The date of cancellation or termination shall be the date the agent receives written notice from the dealer or the dealer receives written notice from the agent Supplementary nature of provisions The provisions of R.S. 51:484 through 486 shall supplement any contract, as defined in R.S. 51:481, and the dealer may elect to pursue either his contract remedy or the remedy provided under this Part as to the engines, equipment, implements, machinery, attachments, or repair parts affected by the contract remedy. Notwithstanding anything contained herein, the right of the agent to deduct from the amount paid to the dealer or credited to his account any discount incident to the dealer's purchase of goods shall not be affected. Further, any repurchase under this Part shall not be subject to the provisions of the bulk sales law. After termination or cancellation, any debts remaining from a retail sale or lease contract shall not be reduced nor shall a dealer reserve account be debited by an agent or financial institution without prior approval of the dealer or his heirs. A former dealer or his heirs shall be given quarterly status reports on any remaining outstanding contracts. As the contracts are reduced any reserve account funds shall be returned to the dealer or his heirs in direct proportion to the liabilities outstanding Repurchase from heirs upon death of dealer Upon the death of the dealer, or the majority stockholder in a corporation operating a retail dealership under a contract as provided in R.S. 51:481, the heir or heirs of the dealer or stockholder shall have one year to exercise the options provided by this Part to the dealer, upon the same terms and conditions applicable to the dealer.

7 489. Liability for failure to repurchase In the event that the agent fails or refuses to make payment to the dealer or his heir or heirs as required by this Part within sixty days after shipment of returned items, he shall be liable to the retailer or his heir or heirs for damages in the following amounts: (1) One hundred percent of the net cost of the equipment, implements, machinery and attachments. (2) Transportation charges which have been paid by the dealer. (3) One hundred percent of the current net price of repair parts plus transportation cost. (4) Interest at the same rate as fixed by law for legal interest, accruing from sixty days after shipment of return items Reimbursement for handling costs A. The agent shall also pay the dealer or credit his account a sum equal to five percent of the current net price for all parts returned under the provisions of R.S. 51:485 for the handling, packing, and loading of such parts back to the agent. The five percent shall not be paid or credited to the dealer if the agent elects to perform the inventorying, packing, loading, and transportation of the parts itself. Transportation charges shall be paid by the agent. B. The dealer or agent shall furnish a representative to inspect all parts and certify their acceptability as they are being packed for shipment. Should a representative of the agent not be provided within forty-five days, the parish sheriff shall be appointed in the agent's capacity with the agent responsible for all cost of the appointment.