Dealer Franchise Agreement

Exhibit 10.2(e)


BANDAG, INCORPORATED
BANDAG DEALER FRANCHISE AGREEMENT

Franchisee Business Name: ____________________________________
Business Address: ____________________________________
Effective Date: ____________________________________


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TABLE OF CONTENTS
Section Page 1 BACKGROUND 1
2 FRANCHISE RELATIONSHIP 2 2.1. Bandag Dealership Business 2.2. Mutual Commitment
3 GRANT AND ACCEPTANCE OF FRANCHISE 2 3.1. Franchise and Territory 3.2. Term and Renewal 3.3. Initial Fee 3.4. Initial Training 3.5. Acknowledgments 3.6. Acceptance
4 FRANCHISE MANAGEMENT, EQUITY, AND SUCCESSION PLANNING 4 4.1. Dealership Management 4.2. Business Equity 4.3. Succession Planning
5 BANDAG SUPPORT SERVICES 5 5.1. Best Efforts 5.2. Bandag System Manual(s) 5.3. Training 5.4. Sales and Technical Support 5.5. Bandag Alliance Council 5.6. Additional Support
6 DEALER PERFORMANCE 6 6.1. Best Efforts 6.2. Confidentiality 6.3. Conflicts of Interest 6.4. Warranties
7 DEALERSHIP STANDARDS 8 7.1. Operating Standards 7.2. Inspection 7.3. Intellectual Property 7.4. Trademark Ownership


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Section Page 7 DEALERSHIP STANDARDS (Cont'd) 7.5. Trademark Usage 7.6. Product Purchase Requirements 7.7. Purchase Orders 7.8. Security Interest 7.9. Payment 7.10. Financial Records, Reports and Dealership Records 7.11. Indemnification 7.12. Insurance 7.13. Accounts
8 FRANCHISE TRANSFER 11 8.1. Transfer Standards 8.2. Other Conditions to Transfer 8.3. Dealer Death or Disability 8.4. Transfer by Franchisor
9 RESOLUTION OF DISPUTES 11 9.1. Notice and Mediation 9.2. Arbitration 9.3. Injunctive Relief 9.4. WAIVER OF JURY TRIAL 9.5. LIMITATION OF REMEDIES
10 TERMINATION 13 10.1. Grounds 10.2. Notice 10.3. Consequences 10.4. Operation After Termination or Expiration
11 MISCELLANEOUS PROVISIONS 16 11.1. Interpretation 11.2. Survival 11.3. Governing Law 11.4. Severability 11.5. Notice 11.6. Relationships 11.7. Review 11.8. Responsibility
Signatures 18 Glossary of Selected Terms 19 EXHIBIT A:Area of Opportunity 21 EXHIBIT B:Production Facilities 22 EXHIBIT C:Exception to Section 6.3 Conflicts of Interest Provision 23


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BANDAG DEALER FRANCHISE AGREEMENT

BANDAG DEALER FRANCHISE AGREEMENT dated ________________________, (the " Agreement" ) between BANDAG, INCORPORATED, an Iowa corporation, located at 2905 North Highway 61, Muscatine, Iowa 52761 (" BANDAG," " we," " our," or " us" ), and __________________________________________________________ located at _______________________________ (" Dealer," " Franchisee," " you," or " your" ). 1. BACKGROUND


Bandag manufactures tread, equipment, and other materials that our Dealers use in our proprietary process to manufacture retreaded tires for sale. We also provide proprietary business process consulting related to the commercial tire business and contract directly with fleet customers who desire access to Bandag products and services. Bandag identifies customers and invests in technical, marketing, and sales research for its franchisees. Bandag also advertises Bandag products and services on behalf of the Bandag Alliance. These are some of the investments that create demand for Bandag products and services and that foster our franchisees' ability to compete with other retreading systems. Our Dealers provide wheel and tire products and services to commercial customers using one or more lines of new tires as well as Bandag retreaded tires and related products and services.

This Agreement establishes and governs the relationship between us, as franchisor and supplier of proprietary materials, equipment and services, and you, as a franchised Bandag Dealer.

To make this Agreement shorter and easier to understand, the word:

" Process" means our proprietary method of retreading commercial vehicle tires using our materials and methods (certain of which may be the subject of one or more patents);

" Materials" means Bandag tread, cushion gum, repair gum, repairs (patches), and certain other proprietary materials we make or distribute, including certain equipment used in the Process;

" Products" means retreaded tires produced using the Materials and the Process;

" Marks" means all BANDAG trademarks, service marks and logos;

" Licensed Marks" means those Marks you are authorized to use under this Agreement;

" Bandag Facility" means any permanent or temporary facility or structure, owned or operated by Bandag or its Dealer, at which Bandag Products are manufactured, stored, offered for sale, or serviced;

" PSIP" means Bandag programs, services, information and products;

" System" means the Process and the PSIP, together, as used and offered by Bandag Dealers;

" Dealer" means a business or business entity that has established and operates a Bandag Dealership;

" Dealership" means the Bandag Dealership you establish and operate under this Agreement;

" Effective Date" means the date on which we signed this Agreement.


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Certain other terms which are capitalized in this Agreement are defined in a glossary at the end of the Agreement. 2. FRANCHISE RELATIONSHIP
2.1. Bandag Dealership Business . You wish to establish and operate a Bandag Dealership, using the System and the Licensed Marks, in one or more trade areas defined in Exhibit A (the " Area of Opportunity" or " AOO" ). You commit to meet or exceed Performance Expectations as outlined in the Manual(s), provide sales and service coverage and manufacturing capability to support these efforts, and fulfill all Dealer obligations specified in the Manual(s). This may include an obligation to support and service our fleet customers according to this Agreement, the terms of any other agreement between us relating to a fleet, and the Manual(s).
2.2. Mutual Commitment . This Agreement imposes responsibilities on both parties to do their best to promote and strengthen the Bandag System and brand. We will support and assist the Bandag System; you will continue to invest in your Dealership and remain committed to the Bandag System; and you and we commit to a high degree of mutual cooperation toward Bandag System objectives. Our and your respective obligations and responsibilities are also described in the Manual(s).
3. GRANT AND ACCEPTANCE OF FRANCHISE
3.1. Franchise and Territory . We grant you a non-exclusive franchise to use the System and the Licensed Marks to operate a Dealership, at a location to which we consent within the AOO, which (i) sells Products to commercial and fleet customers in the AOO (" Sales Facility" ), and (ii) if and where designated in Exhibit B, uses the System and Materials you purchase from us to produce Products which you sell to commercial and fleet customers in the AOO (" Production Facility" ). Under this Agreement, you may use certain patents we or our affiliates or subsidiaries own, and periodically designate (entirely or by individual claim) as part of the System, but you may use them only to use the System to operate your Dealership under this Agreement, and only for so long as this Agreement remains in effect and the designated patent(s) both remain in effect and are designated by us as part of the System.
ullet You may respond to specific requests from your customers for Bandag products or services at any location, but outside the AOO to which you are assigned, you may not use the Marks to identify any facility and we are not obligated to provide Dealer support services. AOOs are not exclusive territories, may overlap one another, and do not preclude us from establishing or relocating any Dealership facility in or into an AOO. ullet You may produce Products only at the Production Facility (or Facilities) listed on Exhibit B. ullet You may relocate a Production Facility only with our written consent, to a suitable site within the AOO that does not in our opinion infringe upon another Bandag business. The replacement Production Facility must open within 10 days after the prior Production Facility closes, and must conform to all requirements of this Agreement and to then current System standards.


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ullet You agree to communicate promptly to us each improvement to the Bandag Process or Bandag Products that you conceive or develop, and transfer to us, without remuneration, record ownership of all right, title and interest to the improvement and all associated intellectual property rights. ullet We will license you to use in your Dealership, any improvements in the System that we choose to license to the Bandag System, generally. ullet We reserve all rights not expressly granted to you in this Agreement.
3.2. Term and Renewal . This Agreement is for five years, beginning on the Effective Date and expiring at midnight Central Time (U.S. and Canada) on the fifth anniversary of the Effective Date. We will send you a letter at least 12 months before your term expires and again at 8 months before your term expires notifying you that your term is expiring and giving you the option to renew the franchise and providing you a copy of the standard form of Bandag franchise agreement (which may differ from this Agreement) we are then offering new franchisees in the state where your principal place of business is located. If you notify us in writing not less than six months before the then-current term expires that you intend to renew the franchise for a successor term, we will grant you a successor franchise, for five years, on the standard form of Bandag franchise agreement as described above for the type of Dealership you operate, if you satisfy all of the following requirements:
ullet You or your designated manager(s) achieve and maintain, to our satisfaction, the skills and capabilities prescribed in the Manual(s); ullet You pay us a successor franchise fee of $1,000.00; ullet You complete renovation and upgrading of your Dealership (including all Production Facilities and all Sales Facilities) to meet standards prescribed in the Manual(s) at that time; and ullet At least six months before the then-current term expires, you sign a Bandag franchise agreement for the successor term, to take effect immediately following the expiration of the then-current term.
If you do not notify us that you wish to obtain a successor franchise six months in advance of your expiration date, or if you do not qualify for a successor franchise, we may take any actions we deem appropriate, prior to expiration, to replace your Dealership or you, as Dealer.
3.3. Initial Fee . At least 15 days before initial training is scheduled to begin, you agree to pay us an initial franchise fee of $2,500.00. The initial franchise fee is non-refundable.
3.4. Initial Training . You agree to complete our initial training program to our satisfaction. Each manager of each Production Facility and Sales Facility you operate must also successfully complete all required training programs listed in the Manual(s) and the UFOC.
3.5. Acknowledgments .
ullet You understand that your Dealership includes a combination of all or some sales, service and manufacturing opportunities, and of the System, that in our opinion best suits the AOO and the commercial fleet needs therein.


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ullet We may establish, and periodically modify, one or more categories of Dealers, with different features and benefits based on specified types and levels of Dealer investment and performance. ullet Your Dealership will use only those elements of the System, produce and sell only those Products, and be identified by and use only those Marks, which we authorize periodically. ullet We developed the System at considerable expense and investment. Your disclosure or unauthorized or improper use of all or any part of the System or of our trade secrets or proprietary or Confidential Information would cause us and other Bandag Dealers irreparable harm, and you will not engage in such practices. ullet Dealer Performance and Dealership Standards, as prescribed in Sections 6 and 7 of this Agreement, are vital to the success and integrity of the System and the Bandag Alliance, and you will conform strictly to these requirements. ullet You will not directly or indirectly sublicense, delegate or transfer any of the rights licensed by this Agreement, except in accordance with Section 8, and subject to Section 4.3. ullet We and our affiliates and licensees may conduct various business activities including various tire and retreading businesses. You may be subject to competitive impact from these and other activities. ullet You understand that other Bandag Dealers operate under forms of agreement which differ materially from this one and that standards for these Dealerships may vary from those required of you.
3.6. Acceptance . You represent that you have fully and truthfully completed our franchise application. You accept this Agreement and agree to begin operating your Dealership hereunder within 90 days, unless we agree in writing to an extension. If you (or your designated manager) fail to complete our initial training program to our satisfaction, or to begin operating your Dealership on time, you will thereby voluntarily cancel this Agreement. You agree to operate your Dealership in accordance with the System, this Agreement, and the Manual(s) at all times.
4. FRANCHISE MANAGEMENT, EQUITY, AND SUCCESSION PLANNING
4.1. Dealership Management . You, or your qualified manager, must manage the day-to-day operations of your Dealership on a continuous, full-time basis.
4.2. Business Equity . We recognize that you are an independent business owner with a desire to build, protect, and pass on business equity. Although we will use our commercially reasonable best efforts to support you in accordance with this agreement (see Section 5.1), you are ultimately responsible for your performance and for building equity in your Dealership business.


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4.3. Succession Planning . We believe that continuity of Dealer management and preservation of Dealer equity from one generation to the next benefits individual Dealers and the Bandag Alliance. Therefore, subject to a succession plan that you develop conforming to the guidelines prescribed in the Manual(s), and which we approve in advance, we will waive the other transfer provisions in Section 8 of this Agreement to allow you to carry out that plan. If you deviate from a succession plan we approved, we may reinstate all of the transfer requirements in Section 8.
5. BANDAG SUPPORT SERVICES
5.1. Best Efforts . We will use our commercially reasonable best efforts to keep the Process up-to-date and competitive, to support the System in cooperation with Dealers through research, marketing, advanced training, communication and participation in the Bandag Alliance Council (see Section 5.5), and to act fairly in our dealings with our Dealers. We will use our commercially reasonable best efforts to:
ullet Develop and deliver quality equipment, information, products, programs, and services that support Dealers in promoting and increasing sales of PSIP; ullet Provide Dealers with opportunities for growth and development through the Dealer Development Process described in the Manual(s); ullet Provide personnel as we deem appropriate to support Dealer sales, service, and manufacturing efforts; ullet Protect and enhance the value of the Bandag system, generally; and ullet Maintain the value and integrity of the System for the benefit of Bandag Dealers, Bandag customers, and Bandag.
5.2. Bandag System Manual(s) . We will supply you with one copy of our proprietary and confidential Manual(s) for your Dealership. We may change the contents of the Manual(s) periodically, including adding or deleting material. It is your responsibility to place all updates in the Manual(s) provided. Manual(s) may differ for different categories of Bandag Dealers.
5.3. Training . We will develop and deliver quality training to support Dealers in using Bandag equipment, and PSIP.
ullet We will provide training at the Bandag Incorporated Learning Center, or at your Dealership or another location we designate. ullet At your request, we may provide optional supplemental training for you and/or your key personnel at a mutually convenient time and location. ullet We may, at our reasonable discretion, require periodic retraining of you and any of your managers. ullet We may charge you a reasonable fee for training.


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5.4. Sales and Technical Support . We will use our commercially reasonable best efforts to hire capable sales and technical support personnel, set appropriate performance expectations, and provide them with training and necessary resources and tools, so they can assist and support Bandag Dealers. We will advise you on the management of your Dealership, including the proper display of the Marks; procurement, maintenance, and operation of equipment; Product production; customer service; advertising, sales and local marketing; and cost control techniques.
5.5. Bandag Alliance Council . We have established and work with the Bandag Alliance Council, comprised of representatives of Bandag and selected representatives of Bandag Dealers in the United States and Canada. The Bandag Alliance Council, whose members change periodically according to its By-laws, advises us on issues affecting the Bandag business and the network of Dealers in the United States and Canada, and assists in developing strategies and tactics for the success of the Bandag System. The Bandag Alliance Council serves as a forum for sharing and acting upon concerns of the Bandag Alliance. The operating guidelines of the Bandag Alliance Council are described in the Manual(s).
5.6. Additional Support . We may make available to you any additional services, facilities, rights and privileges relating to the operation of your Dealership which we make available periodically to Dealers in the type of Dealership you currently operate.
6. DEALER PERFORMANCE.
In addition to your obligations prescribed in the Manual(s), you agree to the following:
6.1. Best Efforts . You will use your best efforts to support and promote the System, be the best tire support service provider and maximize Bandag market share in the AOO, reinvest appropriately in your Dealership, meet the tire needs of Bandag customers in the AOO, and hire, train, develop and reward the best possible employees in your Dealership. You will use your best efforts to:
ullet Promote and increase the sales of PSIP in the AOO; ullet Achieve and maintain strategic, operational, and financial health through active participation in the Dealer Development Process as defined in this Agreement and described in the Manual(s); and ullet Protect and enhance the value of your Bandag Dealership, and conduct the business at your Dealership such that you enhance (and in no way adversely affect) the reputation and goodwill of Bandag, the Marks, the System, the Bandag System and members of the Bandag Alliance.
Notwithstanding your obligations under this ...