DISTRIBUTOR AGREEMENT

LIEBHERR CONSTRUCTION EQUIPMENT CO.


DISTRIBUTOR AGREEMENT


THIS DISTRIBUTOR AGREEMENT is made as of this 29th day of January, 1999, between LIEBHERR CONSTRUCTION EQUIPMENT CO. ("Liebherr"), with offices at 4100 Chestnut Avenue, Newport News, Virginia 23607, and WESTERN TRACTION COMPANY ("Distributor"), with offices at:


1333 Atlantic Street Union City, CA 94587


7518 Pacific Ave. Pleasant Grove, CA 95668


2330 East Date Ave. Fresno, CA 93706


1195 East Glendale Ave. Sparks, NV 89431


1. APPOINTMENT


Subject to the terms of this Agreement, Liebherr hereby authorizes Distributor to distribute, sell, lease and service, and Distributor hereby accepts such authorization to distribute, sell, lease and service, the Liebherr machine models listed on Exhibit A attached hereto ("Machines"), all optional devices and attachments offered for use with the Machines and all repair parts for the aforesaid items (all of which are hereinafter referred to collectively as the "Products"), directly to customers located in the "Primary Area" described below.


2. AREA OF PRIMARY RESPONSIBILITY


(a) The area of primary responsibility of Distributor is:


California: All Counties North of and including Monterey, Kings, Tulare and lnyo.


Nevada: the Counties of Churchill, Douglas, Esmeralda, Humboldt, Lyon, Mineral, Pershing, Storey and Washoe


(the "Primary Area").


1 2


3. RESERVATIONS AND RESTRICTIONS ON SALES


(a) Reservations. Liebherr reserves the right to sell or lease Products to the following:


(i) Any national, state or local government or agency, or subdivision thereof;


(ii) Any national user with multiple state operations throughout the United States or Canada;


(iii) Purchasers, lessees or other users of used or demonstrated Products;


(iv) Any customer engaged in, or any Liebherr distributor serving customers engaged in, the extraction of minerals or ores, excluding the quarrying of aggregates (the "Mining Industry") or the dredging, scrap handling or logging/forestry industries;


(v) Any entity pursuant to an order accepted by Liebherr prior to the effective date of this Agreement; and


(vi) Any entity for export from the Primary Area.


(b) Restrictions. Distributor shall not sell or lease Products to the following without the prior written consent of Liebherr:


(i) Any customer engaged in the Mining Industry or the dredging, scrap handling or logging/forestry industries; or


(ii) Any entity for export from the Primary Area.


4. DISTRIBUTOR ORGANIZATION AND FACILITIES


Distributor shall, to the satisfaction of Liebherr, maintain or cause to be maintained within the Primary Area a well-trained organization with adequate facilities and capabilities for the stocking, selling, leasing, delivery, installation and service of Products to purchasers, lessees and other users (the "Customers") who are located in the Primary Area. Distributor shall use its best efforts to achieve optimum sales and profits for Distributor and Liebherr from the sale, lease and service of Products to Customers in the Primary Area.


5. SALES, DELIVERY AND SERVICE RESPONSIBILITIES


(a) Sales and Service in Primary Area. Distributor shall be responsible for soliciting business from Customers and potential Customers of the Products who operate or maintain buying offices in the Primary Area. Distributor shall be responsible for delivery, installation and service, including warranty service, of Products sold or leased by Distributor in the Primary Area, and for stocking repair parts in number and type sufficient to serve adequately the needs of Customers in the Primary Area who have purchased Products. Distributor also shall be responsible for furnishing any warranty or repair service for Products of Customers located within the Primary Area, whether or not such Product was sold by Distributor, on the same terms and at the customary rates charged by Distributor for similar service to Customers who have purchased their Product from Distributor.


(b) Sales and Service Outside Primary Area. If the Distributor sells or leases to a Customer located outside of the Primary Area a Product that is still covered under the Liebherr Warranty, Distributor shall furnish or cause to be furnished, to the satisfaction of Liebherr, the same delivery, installation and service, including warranty service for such Product, as Distributor is obligated to furnish for


2 3


Products sold or leased in the primary area. If Liebherr determines in its sole discretion that the Distributor is not furnishing the aforesaid services satisfactorily, Distributor shall pay to Liebherr, or Liebherr shall withhold from Distributor, a percentage of the applicable discount to defray the cost of providing to said user the aforesaid services, which percentage shall be specified from time to time in the service policies of Liebherr.


(c) Products Sold by Other Distributors. If a Liebherr distributor other than Distributor sells or leases to a Customer located within the Primary Area a Product that is still covered under the Liebherr Warranty and Liebherr shall have determined that the selling distributor is not furnishing satisfactory service to such Customer, Liebherr may request that Distributor furnish service, including warranty service, with respect to such Customer's Product the same as if it had been sold by Distributor. If Distributor accepts such request within thirty (30) days from the date of such request, Liebherr shall pay to Distributor an amount that Liebherr determines Distributor has earned or will earn by reason of services that have been or will be rendered, and Distributor shall be obligated to furnish service, including warranty service, with respect to such Customer's Product the same as if it had been sold by Distributor. Determinations by Liebherr as to amount to be paid to Distributor, if any, are final.


6. SALES BY MANUFACTURER


If Liebherr sells or leases to a Customer located in the Primary Area a Product that is still covered under the Liebherr Warranty, and requests Distributor to furnish service, including warranty service, for such Product, Liebherr will pay to Distributor an amount specified from time to time in the service policies of Liebherr if Distributor agrees to furnish such service. If Distributor accepts such payment, Distributor shall be obligated to furnish service, including warranty service, for such Product in the same manner as if such Product were sold by Distributor.


7. PRICES, DISCOUNTS, TERMS, POLICIES, TITLE


Prices, discounts, terms and conditions of sale, finance plans, and sales, service and parts policies are subject to change by Liebherr without prior notice, and shall be as specified in price lists, discount schedules, order confirmations, and terms of sale, sales, service and parts policies issued by Liebherr from time to time. Liebherr will endeavor to give Distributor notice of all such changes as soon as is reasonably possibl ...