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EXHIBIT 10.13
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement ("AGREEMENT") is made as of the
23rd day of February, 1995 and is by and between Hanover/Xxxxx, Inc.
("HANOVER/XXXXX"), a wholly-owned subsidiary of Hanover Compressor Company, and
Uniglam Resources Ltd., a company organized and existing under the laws of the
Province of Alberta ("UNIGLAM").
WHEREAS, Hanover/Xxxxx fabricates certain oil and gas field equipment,
including glycol type gas dehydrators, various separators, heaters, production
units, treaters, dehydrators, and a variety of other special products
(hereinafter collectively called the "PRODUCTS"); and
WHEREAS, Uniglam wishes to sell the Products throughout Canada upon
the terms set out in this Agreement; and
WHEREAS, Hanover/Xxxxx wants to appoint Uniglam as its exclusive
distributor for the purposes of carrying out direct sales of the Products in
Canada; and
WHEREAS, both parties wish to maximize the mutual benefits of the
relationship and to maintain the high reputation of Hanover/Xxxxx and its
Products; and
WHEREAS, simultaneous with execution hereof the parties are entering
into a Security Agreement ("SECURITY AGREEMENT");
NOW, THEREFORE, the parties agree as follows:
1. Definitions. In this Agreement, including this section,
(a) "AGREEMENT" shall mean this Agreement and any renewal thereof;
(b) "COPYRIGHTS") shall mean the copyrights of Hanover/Xxxxx as they
relate to the promotional, marketing, advertising materials and sales
aids relating to the Products, as well as any copyrights as may exist
in relation to the Products themselves and training manuals and
similar materials, whether or not such copyrights are registered;
(c) "EFFECTIVE DATE" shall mean February 23, 1995;
(d) "TERRITORY" shall mean the geographic area of Canada, including all
its provinces and territories and territorial waters;
(e) "TRADE MARKS" shall mean the following trade marks and tradenames of
Hanover/Xxxxx:
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(i) the SI gear logo;
(ii) the names "Xxxxx" and "Hanover/Xxxxx"; and
any specific product trade names.
2. Appointment of Representative. Hanover/Xxxxx hereby appoints Uniglam
as its exclusive distributor and agent for the purpose of making direct sales
of its Products to customers in the Territory, using the Trademarks and
Copyrights for so long as this Agreement is in force and effect, in accordance
with the terms of this Agreement. In consideration of this appointment,
Uniglam covenants and agrees during the term of this Agreement that it will not
directly or indirectly sell or promote the sale of any products which are
competitive with the Products.
3. Scope of Appointment. The appointment made under this Agreement
authorizes Uniglam:
(a) To use and publish throughout the Territory and reproduce the
promotional materials, sales aids and other works provided to it by
Hanover/Xxxxx from time to time;
(b) To use the Trade Marks exclusively throughout the Territory in support
of the sale of Products;
(c) To publish and distribute its own marketing information and sales aids
in support of the sale of the Products, only after receiving specific
approval from Hanover/Xxxxx as to the copy and content thereof, such
approval not to be unreasonably withheld by Hanover/Xxxxx;
(d) To act as a conduit between its customers and Hanover/Xxxxx for
Hanover/Xxxxx'x usual warranty, maintenance and training services; and
(e) To provide warranty service, maintenance and training in respect of
Products, subject to the provisions of Section 6.
4. Use of Rights. Uniglam shall have the right to use the Trade Marks
and the Copyrights on the following basis:
(a) Uniglam shall have the right to exclusive use in the Territory of the
Trade Marks and the Copyrights in respect of the sale and promotion of
Products, and in connection with its provision of warranty,
maintenance and training services relating to the Products;
(b) Uniglam may use materials protected by the Trade Marks and Copyrights,
including literary and artistic works provided by Hanover/Xxxxx, but
any such use shall be in strict accordance with the manner designated
by Hanover/Xxxxx and, in particular
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without limiting the generality of the foregoing, shall include an
appropriate copyright notice on all such materials.
5. Copyright, Trade Xxxx and other Intellectual Property Right
Infringement. Uniglam shall take all reasonable steps to help maintain the
validity and enforceability of the Copyrights and Trade Marks. Each of
Hanover/Xxxxx and Uniglam shall promptly notify the other of any infringement
on any the Copyrights or Trade Marks within the Territory which come to its
attention and they shall jointly review any question as to whether any action
should be taken against an infringer and the extent of any such action.
6. Support by Hanover/Xxxxx. Hanover/Xxxxx agrees during the term of
this Agreement to use reasonable commercial efforts to retain the high quality
of its Products and to provide support for the efforts of Uniglam hereunder
including by:
(a) recognizing and accepting responsibility for its standard
manufacturer's warranty made by it in respect of Products purchased by
customers of Uniglam and providing warranty service to such customers
in accordance with its usual practices, whether directly upon request
of the customer or upon request of Uniglam;
(b) providing ongoing maintenance services in support of the repair,
proper use and maintenance of the Products upon such terms as
Hanover/Xxxxx provides to its other customers;
(c) providing training for staff of Uniglam or the customers of Uniglam at
mutually agreeable times relating to the proper use of the Products.
Hanover/Xxxxx shall make no charge for the provision of such training
services to the extent they are provided at Hanover/Xxxxx'x facilities
in the Houston, Texas area. However, if such training services are
held in a mutually agreed upon location other than Houston, Texas,
then Uniglam shall pay or promptly reimburse Hanover/Xxxxx for the
reasonable accommodation, meals and travel expenses for the staff of
Hanover/Xxxxx providing such training services. In each case, Uniglam
and its customers shall be responsible for their own travel, meal and
accommodation expenses;
(d) providing to staff of Uniglam training services relating to the
provision of preliminary warranty service for the Products at no
expense to Uniglam. Uniglam shall pay or promptly reimburse
Hanover/Xxxxx for the reasonable accommodation, meals and travel
expenses for the staff of Hanover/Xxxxx providing such training
services. Uniglam shall be responsible for the travel, meal and
accommodation expenses of its staff;
(e) providing to Uniglam access to Hanover/Xxxxx'x regularly scheduled
training sessions relating to marketing of Products,
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at no expense to Uniglam. Uniglam shall be responsible for the
travel, meal and accommodation expenses of its staff attending such
sessions.
7. Consignment and Purchase of Products.
(a) In consideration for the substantial investment of Uniglam in the
development of a market for Products in the Territory, Hanover/Xxxxx
agrees that it shall not directly sell or cause to be sold or induce
others to cause to be sold Products in the Territory without the prior
written consent of Uniglam.
(b) From time to time Hanover/Xxxxx shall provide Uniglam with a price
list for the Products with all such prices being in U.S. dollars and
being identical or lower than the prices charged by Hanover/Xxxxx for
such Products to its most creditworthy customers. Hanover/Xxxxx shall
be entitled to vary its price list upon reasonable actual notice to
Uniglam. Hanover/Xxxxx shall be bound by the previous price list
provided to Uniglam (i) until Uniglam has actual notice of any price
change, and (ii) for all orders of Uniglam made until Uniglam receives
actual notice of the change, and (iii) for all sales made in respect
of quotations made by Uniglam in writing to its customers prior to
receiving actual notice of the price change for which Uniglam provides
Hanover/Xxxxx reasonably satisfactory evidence of a written quotation
made by Uniglam prior to receiving actual notice of the price change.
(c) All prices of Products sold hereunder shall be paid in U.S. dollars
and shall be F.O.B. loaded at Hanover/Xxxxx'x location in the Houston,
Texas area. Hanover/Xxxxx shall supply Uniglam with a complete Canada
Customs Invoice, a commercial invoice, and a U.S. Export Declaration
in respect of all Products purchased by or delivered to Uniglam
hereunder. Uniglam shall pay or promptly reimburse Hanover/Xxxxx for
any transportation and insurance and related charges incurred if
Hanover/Xxxxx arranges for delivery to Uniglam's facility in Calgary.
Hanover/Xxxxx shall seek and obtain at its expense all other
permissions, permits, and licenses as may be necessary or advisable
for Hanover/Xxxxx to export Products to the Territory.
(d) Uniglam shall supply Hanover/Xxxxx with blank Canada Customs Invoices
upon the request of Hanover/Xxxxx. Unless otherwise agreed in writing
with respect to any particular shipment, Uniglam shall be responsible
for securing insurance, arranging shipping and all costs related
thereto, for the Products from the loading at Hanover/Xxxxx'x location
in the Houston, Texas area. Uniglam shall be responsible for all
import charges, fees, duties, and taxes in respect of the import of
Products into the Territory.
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(e) Hanover/Xxxxx shall supply Uniglam with a certificate certifying that
Hanover/Xxxxx has obtained a comprehensive liability policy providing
coverage for Hanover/Xxxxx and Uniglam in respect of claims arising
from any use, defect or otherwise in relation to the Products (and in
particular, products liability claims) in the amount of $1,000,000.
Uniglam shall be specifically covered by the terms of this insurance
policy. Likewise, Uniglam shall supply Hanover/Xxxxx with a
certificate certifying that Uniglam has obtained a comprehensive
liability insurance policy providing coverage for Hanover/Xxxxx and
Uniglam in respect of claims arising from Uniglam's performance of
sales, service and warranty work and storage of Products contemplated
under this Agreement or any other Uniglam activity in relation to
Products in the amount of $1,000,000. Hanover/Xxxxx shall be
specifically covered by the terms of this insurance policy.
(f) Hanover/Xxxxx warrants that all Products that require ASME coding
shall be ASME code approved and appropriately marked prior to
shipment.
(g) Hanover/Xxxxx warrants that it will provide fabrication of Products
ordered hereunder in its fastest commercially reasonable time and in
no case shall deliveries to Uniglam hereunder take longer to complete
from the time of placement of an order than fabrication of similar
Products to other customers of Hanover/Xxxxx. Hanover/Xxxxx shall be
excused from this warranty to the extent of any force majeure.
(h) Uniglam shall order Products from Hanover/Xxxxx on the terms set out
in this Agreement or as otherwise specified with particularity in the
purchase order provided by Uniglam and accepted by Hanover/Xxxxx. Any
such purchase order must be in writing and actually communicated to
Hanover/Xxxxx by Uniglam and accepted by Hanover/Xxxxx in writing.
For Products ordered on consignment, Uniglam shall make payment in
full within thirty (30) days following sale by Uniglam of a Product to
its customer. Title to any such Product shall pass directly from
Hanover/Xxxxx to Uniglam's customer upon such sale. Uniglam shall
bear all risk of non-payment or underpayment by its customer and shall
be unconditionally liable to Hanover/Xxxxx for the full invoiced
amount in U.S. Dollars, plus interest, if any as described below, in
respect of each consignment sale. If Uniglam makes payment in full
for a Product, whether or not sold on consignment, within ninety (90)
days after shipment from Hanover/Xxxxx'x yard, the invoice amount
shall not bear interest. After the expiration of such ninety (90)
days, the invoice amount shall bear interest at the rate of one
percent (1%) per calendar month, pro rated on a per diem basis for any
portion of a month. If payment is not made in full within one year,
Hanover shall have the right to retake possession of the consigned
Products
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at Uniglams's expense. For products not ordered on consignment,
payment shall be made within thirty (30) days after shipment from
Hanover/Xxxxx'x yard.
(i) Products shipped on consignment shall be and remain the property of
Hanover/Xxxxx until sold to a customer of Uniglam in accordance with
this Agreement. All such Products shall be properly stored and
maintained on the premises of Uniglam in Calgary until sale and
Uniglam shall cooperate with Hanover/Xxxxx to enable Hanover/Xxxxx to
perfect and maintain its security interest therein. Uniglam shall not
cause or permit any of such Products to be removed from its yard prior
to sale or return to Hanover/Xxxxx. Hanover/Xxxxx may enter the
premises of Uniglam and retake any Products held there on consignment
immediately upon termination of this Agreement. Products held on
consignment shall be insured by Uniglam against casualty loss or theft
and Uniglam shall provide Hanover/Xxxxx with proof of such insurance.
Hanover/Xxxxx shall be an additional insured on such insurance policy.
Uniglam shall pay any and all taxes and fees assessed in respect of
Products while they are on consignment hereunder. In the event Uniglam
returns or Hanover retakes possession of any Products delivered to
Uniglam it on consignment, Uniglam shall thereupon pay to Hanover a
restock fee in the amount of fifty percent (50%) of the original
invoice amount and Uniglam shall pay freight and insurance for the
return.
(j) Hanover/Xxxxx shall provide the type and amount of testing, inspection
and other assessments for Products shipped hereunder which it
ordinarily provides its other customers with respect to such Products.
Uniglam may arrange for additional inspections, tests or assessments
at its expense. Hanover/Xxxxx shall cooperate with the reasonable
requests of any inspector authorized and provided by Uniglam.
(k) Uniglam shall be solely responsible for all other charges, fees,
payments, taxes (other than upon the income of Hanover/Xxxxx), duties,
permission fees, charges, sales taxes, goods and services taxes,
customers, duties, ad valorem taxes, or any other costs or expense
required by it to carry out its business as contemplated under this
Agreement.
(l) If either party shall default in payment of any sums required
hereunder to by paid by it to the other party, the defaulting party
covenants and agrees to pay interest on all arrears at the rate of
eighteen percent (18%) per annum from the date of default until paid.
Further, Hanover Xxxxx has the right to refuse to manufacture or ship
Products under this Agreement, if at the time such equipment would
otherwise be ready for production or shipment, Uniglam is thirty (30)
days or more in arrears on any payment due hereunder.
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(m) Uniglam shall include in its quote memoranda regarding Products
disclosure that Hanover/Xxxxx is the owner of the Product and that
Hanover/Xxxxx will retain title to such Product and a security
interest therein until the Product is fully paid for. Uniglam will
use its reasonable business efforts to request that each customer sign
a copy of such quote. In the event any customer does not timely pay
for Products, upon Hanover's reasonable request, Uniglam will perfect
the security interest of Hanover/Xxxxx by promptly making necessary
registrations, filings and recordings.
8. Maintenance of Reputation. Uniglam agrees to use reasonable
commercial efforts to maintain the reputation and quality of the
Products of Hanover/Xxxxx.
9. Verification of Compliance.
(a) Uniglam shall be entitled at any reasonable time during business hours
and from time to time to have any or all of the accounting records,
sales records and procedures of Hanover/Xxxxx relating to Products
audited or examined at Uniglam's expense by an independent chartered
or certified public accountant authorized to carry on business in
Texas and designated by Uniglam to determine whether Hanover/Xxxxx has
complied with Section 7(a) of this Agreement.
(b) Hanover/Xxxxx shall be entitled at any reasonable time during business
hours and from time to time to have any or all of the accounting
records, sales records and procedures of Uniglam relating to Products
audited or examined at Hanover/Xxxxx'x expense by an independent
chartered or certified public accountant authorized to carry on
business in Alberta and designated by Hanover/Xxxxx to determine
whether Uniglam has complied with Section 7(h) of this Agreement and
the obligations of Uniglam under the Security Agreement.
10. Term of Agreement. Unless earlier terminated pursuant to Section 11,
this Agreement shall remain in full force and effect until the third
anniversary of the Effective Date. Thereafter this Agreement shall
automatically renew for successive one (1) year periods. Notwithstanding
anything herein to the contrary, after the expiration of the third anniversary
of the effective date hereof, either party may terminate this Agreement at any
time without cause upon sixty (60) days written notice to the other.
11. Termination. If any of the following events of default occurs and is
continuing, Hanover/Xxxxx may (but shall not be obligated to) terminate this
Agreement upon written notice to Uniglam specifying the nature of the default
and Uniglam's rights hereunder shall thereupon be immediately terminated. Any
such termination shall be effective upon the date that notice of the
termination is
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received by Uniglam. Each of the following shall constitute an event of
default:
(a) By the first anniversary of the Effective Date Uniglam shall not have
sold at least $500,000 (USD) in Products in the Territory (based upon
the amount owing to Hanover/Xxxxx for such Products), and such failure
continues for thirty days after notice;
(b) In any subsequent six month (from one anniversary of the Effective
Date to the end of six months thereafter, and so on) Uniglam shall not
have sold at least $250,000 (USD) in Products in the Territory (based
upon the amount owing to Hanover/Xxxxx for such Products), and such
failure continues for thirty days after notice;
(c) Uniglam commits an act of bankruptcy, becomes insolvent, proposes a
compromise or arrangement to its creditors generally, has any petition
or has any order in bankruptcy filed against it, makes a voluntary
assignment in bankruptcy, takes any proceeding with respect to a
compromise or arrangement with creditors, takes any proceeding to have
itself declared bankrupt or to be wound up, takes any proceeding to
have a receiver appointed for any part of its assets, has any creditor
take possession of its assets, has any execution, charging order, levy
or distress warrant become enforceable or become levied upon any of
its assets, or proposes any dissolution or liquidation;
(d) failure of Uniglam to pay any amount hereunder when due, which failure
continues for at least sixty (60) days; or
(e) breach by Uniglam of any of its covenants, agreements or
representations hereunder and failure to cure the same within thirty
(30) days after written notice of such breach.
12. Consequences of Termination. Upon termination of this Agreement:
(a) Except in the case of a termination under Section 11 (c) or 11 (d),
Uniglam shall be entitled to fulfill any unfulfilled written
commitment for sale of Products which Hanover/Xxxxx received and
accepted prior to Uniglam's receipt of the notice of termination. Any
such order shall be handled by the parties as if this Agreement is
then still in force and effect, provided, however, that Hanover/Xxxxx
may demand payment upon delivery of Products to Uniglam.
(b) Except in the case of a termination under Section 11 (c) or 11(d),
Uniglam shall have a period of sixty (60) days to sell any remaining
inventory of Products held by it on consignment hereunder.
Immediately upon the expiration of such sixty (60)
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day period, Uniglam shall return all unsold Products to
Hanover/Xxxxx'x facility in the Houston, Texas area at Uniglam's risk
and expense.
(c) In the event of a termination under Section 11 (c) or 11 (d), Uniglam
shall have no further rights hereunder and shall immediately return at
it sole risk and expense all Products remaining at its facility on
consignment.
(d) If Section 12(b) applies, at the end of the sixty day period referred
to therein, and if Section 12(b) does not apply, immediately upon
termination, Uniglam shall immediately deliver to Hanover/Xxxxx all
marketing, promotional and advertising materials, and all promotional
or advertising materials and sales aids relating to the Products and
all other materials containing Copyrights or Trade Marks.
13. Confidentiality. Uniglam acknowledges that in the performance of this
Agreement it will come into possession of certain confidential and proprietary
information relating to Hanover/Xxxxx and the Products and other business of
Hanover/Xxxxx or its affiliates (collectively, the "CONFIDENTIAL INFORMATION").
Uniglam, on behalf of itself and its owners, employees and agents, warrants and
guarantees that it will use all reasonable means to safeguard and maintain the
confidentiality of the Confidential Information and will use the Confidential
Information only in fulfilling its obligations and exercising its rights under
this agreement and Uniglam will not disclose any of the Confidential
information to any third party without Hanover/Xxxxx'x prior written consent.
14. Assignment. This Agreement is not assignable by either party without
the prior written consent of the other party.
15. Governing Law. The validity, interpretation and operation of this
Agreement shall be governed by the internal laws of the State of Texas.
16. Time of the Essence. Time is of the essence in this Agreement.
17. Advertising. All Uniglam's advertising and other promotional material
relating to the exercise of its rights granted hereunder shall name
Hanover/Xxxxx and shall identify Uniglam as the exclusive Canadian distributor
for Hanover/Xxxxx, or shall include other similar identification which is
reasonably acceptable to Hanover/Xxxxx.
18. No Agency. Nothing in this Agreement creates a relationship of
agency, partnership, or employee/employer between Uniglam and Hanover/Xxxxx and
it is the intent and desire of the parties that
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the relationship be and be construed as that of independent contracting parties
and not as agents, partners, joint venturers or a relationship of
employer/employee.
19. Notice. Any notice ("Notice") given pursuant to this Agreement must
be in writing. If the Notice is sent by telecopier, it must be properly
addressed, reflecting the telecopier telephone number of the addressee(s), and
must be transmitted by a telecopier which produces a dated message completed
confirmation. If the Notice is sent by other than telecopier, the Notice must
be enclosed in a sealed wrapper, properly addressed, and either (i) deposited
with the domestic mail service of the United States Postal Service or Canadian
Postal Service at a post office or official depository under the care and
custody of the such postal Service with sufficient postage prepaid, sent by
registered mail, return receipt requested. The addresses and telecopier
telephone numbers to which any Notice is to be sent are as follows:
if to Uniglam to: 000, 000 - 0xx Xxx. X.X.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Telephone number: (000) 000-0000
Telecopier number: (000) 000-0000
if to Hanover/Xxxxx to: Hanover/Xxxxx, Inc.
c/o Hanover Compressor Company
00000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000 XXX
Attn: Xxxxxxx X. XxXxxx
Telephone number: (000) 000-0000
Telecopier number: (000) 000-0000
or to such other telecopier telephone number or address within continental
North American as any addressee(s) shall specify in writing, which change of
telecopier telephone number or address, in order to be effective, must actually
have been received not fewer than ten (10) days prior to the giving of any such
Notice. Any Notice sent by telecopier shall be timely given if transmitted by
telecopier on or before 11:59 p.m. in the recipient's time zone of the date the
Notice is to be given; any Notice sent by mail shall be timely given if
deposited with the domestic mail service on or before 11:59 p.m., three (3)
business days prior to the date the Notice is to be given. Any Notice sent in
accordance with the preceding sentence shall be deemed to have been received on
the next day after the sending of the Notice by telecopier; or on the date of
the first attempted delivery of the mailed Notice, as shown on the postal
service's return receipt. Notwithstanding any other provision of this Section
to the contrary, any Notice shall be effective from and after the date actually
received by an addressee, however addressed or delivered.
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20. Amendment. This Agreement may not be amended or modified orally.
This Agreement may only be amended or modified by an instrument in writing
executed by the parties hereto.
21. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
22. Counterpart Execution. This Agreement may be executed in two or more
counterparts or originals, each of which shall be deemed an original of one and
the same document, but all of which together shall constitute but one and the
same instrument.
23. Integrated Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and there are no agreements, understandings,
restrictions, warranties or representations between the parties other than
those set forth herein or herein provided for.
24. Arbitration. Upon the request of either party, whether made before or
after the institution of any legal proceeding, any action, dispute or
controversy of any kind between the parties relating to this Agreement (each a
"DISPUTE") shall be resolved by mandatory and binding arbitration. All
Disputes shall be resolved by mandatory and binding arbitration administered by
the American Arbitration Association ("AAA") pursuant to the Federal
Arbitration Act in accordance with the Commercial Arbitration Rules of the AAA.
If Title 9 of the United States Code is inapplicable to any such Dispute, such
arbitration shall be conducted pursuant to the Texas General Arbitration Act.
Any arbitration proceeding shall be conducted in Xxxxxx County, Texas by a
panel of three arbitrators, each having substantial and recognized experience
and recognized expertise in the filed or fields of the matters in Dispute.
HANOVER/XXXXX, INC.
By:
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Xxxxxxx X. XxXxxx, President
UNIGLAM RESOURCES, LTD.
By:
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Name:
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Title:
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