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Exhibit 10.18
1998 MNA DISTRIBUTOR AGREEMENT
1998 MICHELIN NORTH AMERICA, INC.
DISTRIBUTOR AGREEMENT
This Agreement is entered into this 1st day of January, 1998, by and
between MICHELIN NORTH AMERICA, INC. ("MNA"), a corporation having a place of
business at One Parkway South, Greenville, South Carolina 29615, acting through
its sales division, Michelin Americas Small Tires ("MAST"), and
The J.H. Heafner Company, Inc.
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(NAME)
Heafner Tires & Products
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(d/b/a)
814 E. Main Street
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(NUMBER AND STREET)
Lincolnton, NC 28092
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(CITY AND STATE AND ZIP CODE)
hereinafter referred to as ("Distributor").
1. EFFECTIVENESS AND PURPOSE - This Agreement shall be effective on
January 1, 1998, provided that a 1998 MNA Authorized Dealer Agreement
("Dealer Agreement") has been signed by Distributor and MAST. This
Agreement is a supplement to the Dealer Agreement signed by the
parties. It shall be read and construed to be in harmony with the
Dealer Agreement to the maximum extent possible. In the event of any
conflict, this Agreement shall prevail over the Dealer Agreement only
with respect to specific matters covered herein insofar as they may
apply to Distributor and the Michelin, BFGoodrich and/or Uniroyal brand
tire products.
For this Agreement to remain effective, Distributor must remain in
compliance with its signed Dealer Agreement for Michelin, BFGoodrich
and/or Uniroyal passenger and light truck tires and tubes.
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1998 MNA DISTRIBUTOR AGREEMENT
MAST hereby appoints Distributor, and Distributor agrees to act, as a
non-exclusive Distributor of Michelin, BFGoodrich and/or Uniroyal
passenger and light truck tires and tubes identified in Exhibit 1
("Products") to an approved associate dealer network serviced by
Distributor through a weekly scheduled route delivery truck ("Trade
Area") under the terms and conditions set forth below. This Agreement
authorizes Distributor to distribute Products in the Trade Area to
retail accounts approved by MNA ("Associate Dealers"), subject to the
terms and conditions set forth below.
2. PURCHASE OBJECTIVES AND DEVELOPMENT OF TRADE AREA - Distributor agrees
to represent MAST aggressively in the marketing and distribution of the
Products in the Trade Area.
This Program is intended to enhance distribution of the Products to
retail accounts. The benefits of this Agreement are being provided to
Distributor for providing functional distribution services to Associate
Dealers. The Program therefore will not apply to sales of Products to
(i) tire brokers or (ii) large volume retailers, including warehouse
clubs, that are served directly by MAST.
Distributor must purchase Products in quantities sufficient to meet the
quarterly and annual objectives set out in Exhibit 1. Distributor's
purchases also must be reasonably distributed among the various types
of tires set forth in Exhibit 1. The objectives set out in Exhibit 1
represent reasonable objectives for Distributor in the Trade Area. To
improve mutual distribution capabilities, Distributor's minimum monthly
purchases must be at least six and one-half (6.5%) percent of its
annual objectives.
A quarterly volume bonus will be paid if Distributor achieves its
quarterly purchase objectives set forth in Exhibit 1.
3. DISTRIBUTOR FACILITIES AND ACTIVITIES - In order to fulfill its
obligations under this Agreement, Distributor agrees to:
A. Provide and maintain physical facilities to ensure that it can
meet the objectives set forth in Exhibit 1 and the service
needs set forth in this Agreement.
B. Maintain financial strength, working capital, net worth, and
credit worthiness sufficient to enable it to fulfill properly
its responsibilities and duties under this Agreement.
C. Engage, train and maintain sales, service and accounting
capabilities sufficient to fulfill properly its
responsibilities and duties under this Agreement.
D. Attend MAST-conducted product, sales and service meetings and
utilize training materials and programs which may be offered
by MNA from time to time.
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1998 MNA DISTRIBUTOR AGREEMENT
E. Maintain sufficient computer capability for tracking and
reporting the following information to MAST:
1. The identity of each Associate Dealer served by
Distributor and each Associate Dealer's monthly unit
purchases of each Product by MSPN/SKU, in accordance
with instructions from MAST; and
2. Quarterly cooperative advertising information about
each Associate Dealer, provided in accordance with
instructions from MAST.
4. ESTABLISHMENT AND SERVICING OF ASSOCIATE DEALERS - In order to fulfill
its obligations under this Agreement, Distributor agrees to:
A. Nominate dealers for MAST approval as Associate Dealers, who
in turn shall promote, market, sell and service Products to
ultimate consumers.
B. Deliver Products to Associate Dealers at least weekly by route
truck, provided that orders have been received.
C. Administer a cooperative advertising program for Associate
Dealers.
D. Promote and administer retail promotional programs when made
available by MAST.
E. Provide retail point-of-purchase materials and literature to
each Associate Dealer.
F. Provide warranties and forms relating to MAST Products to each
Associate Dealer, administer MAST's warranty policy for
Associate Dealers, and ensure that the Associate Dealer
properly honors and administers those warranties in accordance
with MAST policy.
G. Encourage Associate Dealers to participate in MAST National
Account, Government, Military Exchange, Public Utility, and
Car Dealer Sales Programs.
H. Hold regular meetings with Associate Dealers.
I. Determine prices, terms and conditions for its sales to
Associate Dealers.
J. Track and report to MAST, on a monthly basis, each Associate
Dealer's unit purchases of Products by MSPN/SKU, and permit
those records to be reviewed by MAST.
K. Maintain adequate inventory of Products to serve its Associate
Dealers.
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1998 MNA DISTRIBUTOR AGREEMENT
L. Maintain full and accurate records regarding administration of
and compliance with this Program and permit those records to
be reviewed by MAST.
5. APPROVAL OF ASSOCIATE DEALERS
A. Distributor must obtain prior approval from MAST before
approaching a prospective Associate Dealer and must obtain
final approval in writing from MAST before an Associate Dealer
is included in this Program. MAST may revoke that approval
upon thirty (30) days notice to Distributor.
B. Associate Dealer and Distributor must execute a 1998 MNA
Associate Dealer/Distributor Agreement. At MAST's request,
Distributor must obtain an executed Sign Lease Agreement from
the Associate Dealer, which Distributor must forward to MAST
for MAST's signature. MAST will not consider a sign for any
Associate Dealer that does not commit to MAST Product
purchases of at least 500 units per year, which shall be
subject to verification by MAST. Distributor shall cooperate
in the removal and return of signs form Associate Dealers as
directed by MAST.
C. Distributor acknowledges that MAST's approval of Associate
Dealers is in MAST's sole discretion.
D. MAST reserves the right to sign an Associate Dealer as a
direct MNA Authorized Dealer.
E. Associate Dealers can be approved by MAST for service by more
than one Distributor.
F. MAST reserves the right to review Distributor's records and
the Associate Dealer's place of business to confirm compliance
with eligibility criteria.
G. Distributor agrees to release MAST from any and all liability,
and to waive any and all claims, arising from MAST's acts or
omissions relating to Associate Dealers.
6. DISTRIBUTOR ALLOWANCE
A. Distributor will be eligible to earn an allowance that will be
paid MAST on Distributor's purchases of Products MAST that are
sold by distributor directly to approved Associate Dealers
("Distributor Allowance"). That Allowance will be paid on a
Distributor's monthly net purchases (i.e., net of returns)
directly from MAST which are in turn sold by Distributor to
identified and approved Associate Dealers as reported to MAST
under Paragraph 4.J.
B. The Distributor Allowance can be denied in whole or in part by
MAST if Distributor violates any provision of this Agreement.
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1998 MNA DISTRIBUTOR AGREEMENT
7. TERMINATION OR DISCONTINUANCE
A. This Agreement can be terminated by either party, with or
without cause, by giving thirty (30) days written notice to
the other party. If Distributor's Dealer Agreement is
terminated for any reason or expires, this Agreement also
terminates. Notwithstanding the foregoing, MAST also shall
have the absolute right to terminate this Agreement, or to
exclude certain MAST Products from this Agreement, without
notice to Distributor in the event of a breach by Distributor
of any provision of this Agreement.
B. Distributor acknowledges MAST's right to modify or discontinue
the Program outlined in this Agreement in whole or in part at
any time.
C. Distributor shall not have any right to assign or transfer
this Agreement to any third party without the written consent
of MAST.
D. Distributor agrees to notify MAST in writing within five (5)
days of Distributor's termination of its service to any
Associate Dealer.
The parties hereto have duly executed this Agreement as of this 1st day of
January, 1998.
DEALER BILL-TO #: 1002722 MICHELIN NORTH AMERICA, INC.
(MICHELIN AMERICAS SMALL TIRE DIVISION)
The J.H. Heafner Company, Inc.
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(DEALER'S FIRM NAME)
BY:_____________________________
(NAME AND TITLE)
Print Name:__________________
Heafner Tires & Products
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(D/B/A)
814 E. Main Street
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(ADDRESS)
Lincolnton, NC 28092
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(CITY/STATE/ZIP)
BY: /s/ DANIEL K. BROWN
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(NAME AND TITLE)
Print Name: DANIEL K. BROWN
SENIOR V.P. SALES & MARKETING
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1998 MICHELIN NORTH AMERICA AUTHORIZED DEALER AGREEMENT
EXHIBIT 1
Confidential Information Omitted.
Such information has been separately filed with the Securities and
Exchange Commission.
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1998 MICHELIN NORTH AMERICA AUTHORIZED DEALER AGREEMENT
APPENDIX A
Michelin Americas Small Tires (MAST)
Dealer's Legal Name: The J. H. Heafner Co., Inc.
Dealer's Bill-to Number: 1002722
1. DEALER'S COMMITMENT TO MNA AND AUTHORIZED MAST BRANDS AND PRODUCTS
(Write in Yes or No)
Confidential Information Omitted.
Such information has been separately filed with the Securities and
Exchange Commission.
Appendix A, Page 1 of 4
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1998 MICHELIN NORTH AMERICA AUTHORIZED DEALER AGREEMENT
2. DEALERSHIP TO LOCATIONS AUTHORIZED FOR MAST BRANDS AND PRODUCTS
SHIP-TO NAME ADDRESS ZIP CODE TEL. NO.
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See Attachment A
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3. DEALER DESCRIPTION
a. Dealer is a corporation, an individual, partnership, limited
partnership (circle one) organized under the laws of the State
of N. Carolina. The following parties are the owners of
Dealer:
Name Address Percentage of Ownership
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(See Stock Ownership Certificate)
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b. Dealer represents that the following persons shall have full
authority and responsibility for the operating management of
Dealer in the performance of this Agreement.
Name Address Title
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Bill Gaither Lincolnton President & CEO
Dan Brown Lincolnton Senior VP
Mike Gaither Lincolnton Senior VP
Don Roof Lincolnton Senior VP
Appendix A, Page 2 of 4
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1998 MICHELIN NORTH AMERICA AUTHORIZED DEALER AGREEMENT
c. Dealer represents it qualifies for and has proper
documentation to support state sales tax exemption(s) for the
following states:____________________________________________
____________________________________________________________.
/ X / Yes / / No
If yes, a copy of each state resale certificate must be
attached. Dealer agrees to furnish any supplemental sales tax
information MNA may require in support of any claimed
exemptions.
Dealer's tax resale identification numbers:__________________
____________________________________________________________.
4. MINORITY/WOMEN OWNERSHIP
MNA and many of its customers are government contractors. In order to
meet the MBE/WBE requirements imposed by federal law and some states
and utilities, we provide the purchasing agent with a list of
Authorized Dealers which are minority-owned businesses and/or
women-owned businesses. The following information will help us compile
the list. Your response is voluntary.
a. Is at least 51% of your business owned, controlled and
operated by minorities?
/ / Yes / X / No
If so, which minorities? ___________________
Dealer Bill-To Number:___________________
b. Is at least 51% of your business owned, controlled and
operated by women?
/ X / Yes / / No
Appendix A, Page 3 of 4
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1998 MICHELIN NORTH AMERICA AUTHORIZED DEALER AGREEMENT
MAST SIGNATURE BLOCK AND APPENDIX A
IN WITNESS WHEREOF, the parties hereto have duly executed this 1998 Michelin
North America Authorized Dealer Agreement, consisting of 17 printed pages (with
no alterations) and this appendix, effective the 1 day of January of 1999.
DEALER MICHELIN NORTH AMERICA, INC.
(Michelin Americas Small Tires Division)
The J.H. Heafner Company, Inc.
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(DEALER'S FIRM NAME) By: (signature) /s/ RON ENNIS
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Name: (print) Ron Ennis
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Title: (print) Director of Sales
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(D/B/A)
P.O. Box 837
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(ADDRESS)
Lincolnton, NC 28093
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(CITY/STATE/ZIP)
By: (signature) /s/ DONALD C. ROOF
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Name: (print) Donald C. Roof
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Title: (print) Senior Vice President
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Appendix A, Page 4 of 4