Compaction America Heavy Equipment Distribution

COMPACTION AMERICA


HEAVY EQUIPMENT
DISTRIBUTOR AGREEMENT


CONTRACT FOR CALIFORNIA


WESTERN TRACTION COMPANY
--------------------------
DISTRIBUTOR (FIRM NAME)


1333 ATLANTIC STREET
ADDRESS


P.O. BOX 1649
P.O. BOX


UNION CITY, CALIFORNIA 94587
CITY, STATE, ZIP CODE


(510) 487-3100
AREA CODE TELEPHONE


ALAMEDA
COUNTY


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COMPACTION AMERICA, INC., whose principal place of business is at 2000 Kentville Road, Kewanee, Illinois 61443 (hereinafter called "COMPANY"), and the undersigned distributor (hereinafter called "Distributor") hereby agree as follows:


Distributor Appointment Sales and Service Area


1. Company hereby appoints Distributor as its heavy distributor and grants the non-exclusive right to sell and service Products (as hereinafter defined) in the territory specified on Exhibit A which is hereinafter referred to as the "Area of Primary Sales and Service Responsibility." Distributor acknowledges and agrees that Company may, upon ninety (90) days written notice to Distributor, enlarge, reduce or otherwise change the Area of Primary Sales and Service Responsibility. Distributor agrees that this Agreement applies only to the authorized locations specified on Exhibit B.


Term


2. Unless earlier terminated as herein provided, this Agreement shall expire on the 31st day of December, 1994. Company may choose to renew this Agreement for an additional term by sending a renewal notice to Distributor. This Agreement shall no longer be in force or effect if Distributor fails to execute and return to Company said renewal notice within sixty (60) days after receipt thereof.


Products


3. The products to which this Agreement applies are the complete machines (wholegoods) specified on Exhibit C, together with the attachments, accessories and service parts therefor, all of which are hereinafter collectively referred to as the "Products."


Sales and Service Responsibilities


4. Distributor hereby agrees as follows:


A. To adequately capitalize the distributorship and to maintain it on a financially sound basis, and to maintain an adequate source of inventory financing.


B. To promote and sell Products sufficient to achieve sales objectives and market share satisfactory to the Company.


C. To employ, develop, train and maintain a competent marketing organization for the purpose of selling, leasing, renting and servicing Products.


D. To maintain an inventory of Products that is adequate for the sales and service potential in the Area of Primary Sales and Service Responsibility.


E. To report operating results if and when requested to do so, including without limitation annual financial statements which have been reviewed by an independent accountant and quarterly inventory status reports.


F. To carry a minimum of One Million Dollars ($1,000,000) of comprehensive general liability coverage and to submit to Company, upon request, evidence of such insurance and its effective term.


G. To meet the Company's service policy standards including pre-delivery, delivery and after delivery requirements for all Products.


H. To render and provide sufficient, prompt and satisfactory service of said Products and to fulfill Product warranty obligations in accordance with Company's service policies, terms and conditions.


I. To meet such other reasonable standards of performance as may be established from time to time by the Company.


2 3 Sales and Service Fee


5. If Distributor sells Products (other than attachments, accessories and service parts sold separately) outside the Area of Primary Sales and Service Responsibility, Company may assess a sales and service fee not to exceed five percent (5%) of the list price of such Products.


Planning Conferences


6. In the interest of reviewing performance and developing future plans to maximize market share and profits, Company shall conduct periodic performance reviews in cooperation with Distributor.


Orders, Delivery


7. A. No order submitted to Company by Distributor shall become effective unless and until it shall be formally accepted by written acknowledgment to Distributor from Company, and Company, in its sole discretion, may refuse to accept any order. Once an order has been accepted by Company, the Distributor shall not cancel said order without the prior written consent of Company. The Company, in its sole discretion may deem it necessary to ship Products on a COD basis, and in such event, Distributor agrees to pay all such charges.


B. Upon termination of this Agreement, all orders submitted hereunder to Company by Distributor shall be cancelled, except orders accepted by Company prior to the effective date of termination.


C. Delivery of Products by Company to any carrier for transportation to Distributor shall constitute delivery to Distributor and Distributor shall bear all risk of loss or damage thereafter.


Liability for Delays


8. No liability shall attach to Company for direct, indirect, incidental, or consequential damages or expenses due to loss, damage or delay in delivery of Products resulting from or caused by acts of God, strikes, riots, fires, insurrection, war, sabotage, floods, explosions, order of government, other catastrophe or other acts or delays beyond Company's control, and Distributor shall not make any claim of loss or damage against Company which may be occasioned by any such delay in delivery.


Price


9.A. Company has issued and will continue to issue to Distributor price lists, sales and service bulletins and finance plans which state Company's sales and service policies with respect to Products which may include suggested list prices, Distributor cash, net and floor plan prices, and terms of sale. Any price, discount or terms which deviate from the price sheets, programs and finance plans published by Company from time to time shall require the prior written approval by an officer of Company


B. Distributor agrees to pay Company for Products in accordance with the prices and terms of sale specified by Company from time to time.


Sale, Rental, Lease or Direct Bid by Company


10.A. Company may sell, rent or lease any Products to such major accounts and rental yards in Distributor's Area of Primary Sales and Service Responsibility as Company may, from time to time identify, as well as governmental agencies and sub-divisions thereof.


B. In addition, Company, may from time to time, sell, rent or lease discontinued or used Products wherever and to whomever Company chooses.


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C. Company further may sell, rent or lease any Products to such other customers located within the Area of Primary Sales and Service Responsibility as Company and Distributor may deem necessary.


Warranty


11.A. Distributor shall abide by Company's warranties and warranty instructions as modified from time to time by Company. COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE), EXCEPT THOSE SET FORTH IN COMPANY'S CURRENT, APPLICABLE PUBLISHED WARRANTY POLICIES.


B. During normal business hours, Company may inspect Distributor's warranty records and Distributor shall furnish copies thereof to Company upon request.


C. In the event Distributor extends any additional warranty (such as by enlarging the scope or period of warranty or undertaking a warranty of merchantability or fitness for any particular purpose) or any other obligation whatsoever, Distributor shall: (i) be solely responsible therefor; (ii) have no recourse against Company; and (iii) defend, indemnify and hold Company harmless against any claim or cause of action whatsoever arising out of, or occasioned by, the Distributor's extension of said additional warranty or obligation.


D. Distributor is not authorized to change the Company's warranty in any way or grant any other warranty unless such change is authorized in writing by an officer of Company.


Termination


12.A. The parties to this Agreement may by mutual consent terminate this Agreement at any time.


B. Unless Company after discovery of relevant facts, promptly notifies Distributor to the contrary (in accord with Section 27), this Agreement will terminate immediately for any one of the following causes: (i) insolvency or bankruptcy of Distributor, (ii) assignment or attempted assignment of Distributor's assets for the benefit of creditors, (iii) sale of secured property out of trust or any fraudulent transfer of secured property, (iv) change in control or ownership of Distributor, (v) default in payment of moneys due Company, or (vi) Distributor's falsification of any records or reports required by Company under this Agreement.


C. Company may, at its option, terminate this Agreement by written notice to Distributor if: (i) Distributor is in default under any security agreement or any other agreement with Company, or (ii) Distributor breaches any material provision of this Agreement, including specifically the requirement to maintain a source of inventory financing.


D. If either party hereto is dissatisfied with the other party's performance under this Agreement and wishes to terminate this Agreement (for reasons other than those causes enumerated in Sections 12B and 12C), the party wishing to terminate this Agreement (the "Terminating Party") may initiate the following termination procedure: (i) The Terminating Party shall notify the other party hereto in accordance with Section 27 of its intent to terminate this Agreement stating the reasons for dissatisfaction with the other party's performance under this Agreement (said notice shall hereinafter be referred to as the "Termination Notice");


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Effect of Expiration or Termination


D. (ii) Within the thirty (30) day period after the Termination Notice (unless such period is extended by Company), the alleged deficiently performing party shall meet with the Terminating Party to discuss the areas of alleged deficiency and ways to cure any such deficiency;


(iii) The Terminating Party shall give the other party hereto not less than an additional ninety (90) days (the "Cure Period") to correct, to the satisfaction of the Terminating Party, any deficiency alleged in the Termination Notice; and


(iv) If the Terminating Party decides, in its sole discretion, after the termination of the Cure Period that the deficiencies alleged in the Termination Notice have not been cured to the Terminating Party's complete satisfaction, Terminating Party may notify the other party hereto in accord with Section 27 hereof of the termination of this Agreement effective not less than thirty (30) days from the giving of such notice.


Effect of Expiration of Termination


13.A. Upon expiration or termination of this Agreement, Distributor shall promptly return all remaining promotional material, catalogs, price lists, service manuals, bulletins, owner's manuals and current advertising material, and any other literature which was furnished to Distributor by Company.


B. Distributor shall deliver to Company copies of all sales records, ownership lists, service history records and any other material of any kind relating to the sale, operation or servicing of Products.


C. Expiration or termination of this Agreement shall not release either party from the payment of any sum then owing to the other.


D. The provisions of 'Sections 21 and 22 shall survive the expiration or termination of this Agreement.


F. The Company, after notifying Distributor of termination as provided in Section 12, shall have the right to consummate arrangements with a replacement distributor.


Return of Products on Expiration or Termination of Agreement


14.A. Company shall, if notified in writing by Distributor within thirty (30) days after the expiration of termination of this Agreement by Company, repurchase within ninety (90) days after such notice from Distributor new, current, unused, undamaged, and saleable Products purchased by Distributor from Company, it being expressly understood that the Company does not undertake to repurchase any other asset, tangible or


intangible, from Distributor.


B. If Company notifies Distributor within thirty (30) days of the expiration or effective date of termination of this Agreement of Company's desire to repurchase Products referred to in Subsection


C. The purchase price paid by Company to Distributor for Products repurchased from the Distributor under this Section 14 shall not exceed the price paid to Company by Distributor. All amounts owed by Distributor to Company will be netted against any repurchase of the Products. Distributor shall return Products to be repurchased within thirty (30) days after Company notifies Distributor of the exercise of its intent to repurchase Products.


Credit for Returned Products


15.A. Products returned pursuant to Section 14 hereof shall be subject to inspection by Company and if Company shall find such Products to have been returned in compliance with this Agreement, the same shall be credited to Distributor at the prices described in Section 14.


5 6 B. If Company shall find, in its sole discretion, Products returned by Distributor not to be in conformity with Section 14 hereof, such Products will be held for a period of thirty (30) days for disposition as Distributor may direct for Distributor's account. If Distributor fails to give Company such direction within said thirty (30) day period, Company may thereafter dispose of such Products at its discretion without liability to Company and Distributor hereby waives any rights or interest in such Products.


C. Distributor shall be responsible for proper identification of all repair parts to be repurchased by Company.


D. Distributor shall not be entitled to payment or credit for returned Products until Distributor has provided Company with satisfactory evidence that Distributor has complied with all applicable laws and that such returned Products are free and clear of all claims, liens and encumbrances except those existing in Company's favor.


E. Notwithstanding any other provision contained in Sections 14 and 15 hereof, all indebtedness of Distributor to Company covering Products not returned and accepted for credit shall become immediately due and payable on the expiration or effective date of termination of this Agreement.


Application of Distributor's Credit


16. While this Agreement is in effect or following its expiration or termination, Company may apply any amount which it or its divisions, subsidiaries or affiliates owes Distributor to any obligations of Distributor to Company or to any division, subsidiary or affiliate thereof.


Transactions After Expiration or Termination


17. In the event the parties hereto have any dealings after expiration or termination of this Agreement, such dealings shall not be constr ...