EXHIBIT 10.12
EXCLUSIVE SALES AGREEMENT
1. Outwest Unlimited, or it's assigns, shall have the exclusive rights to
the Farmington, NM area for selling Rotary Gas Systems compressor
units. This area will encompass a 300 mile radius. In the event
Outwest Unlimited purchases a rental fleet they shall have the
exclusive rental rights as well. A rental fleet shall be defined as a
minimum of 50 units on rental or available for rental.
2. This area shall remain exclusive as long as Outwest Unlimited
purchases from and/or sells a minimum of 12 Rotary Gas Systems units
the first year and shall have sold a minimum of 72 units by the end of
second year. This two year period shall start January 11, 1996.
3. Following the first year, Outwest Unlimited must buy at least 36 units
per year to maintain exclusive territory rights. After 180 units have
been purchased the territory shall remain exclusive regardless of
sales unless there are no further purchases for a two year period.
4. Outwest Unlimited will provide Rotary Gas Systems with their call
sheets so that Rotary Gas Systems is aware of whom they are working
with. This will help eliminate the customer from trying to "go
around" Outwest Unlimited.
5. Outwest Unlimited may sell and/or rent units outside of the exclusive
area as well, and shall have the same agreement of exclusively should
a customer attempt to deal directly with Rotary Gas Systems after
having been introduced to the units by Outwest Unlimited.
6. The selling price per unit to Outwest Unlimited shall be provided by
Rotary Gas Systems and will be exclusive of sales tax,
F.O.B. -- Midland, Texas.
7. Rotary Gas Systems delivered to Outwest Unlimited on October 11, 1995
an initial unit for a period of 90 days at no charge. At the end of
the 90 day period Outwest Unlimited is to either purchase the unit for
the sum of $43,000 or return the same to the Rotary Gas Systems
Midland, Texas facility. Outwest Unlimited will be responsible in all
regards for the unit including maintenance and repairs.
8. Rotary Gas Systems warrants its units to be free from defects in
material and workmanship for a period of 90 days. All warranties by
Rotary Gas Systems are F.O.B. -- Midland, Texas. In addition Rotary
Gas Systems receives additional warranties from its suppliers (i.e.:
compressor 1 year; panel 2 years; cooler 1 year). All of these
respective warranties are F.O.B. the point of origination (i.e.:
compressor Sydney, Ohio; panel Tulsa, Oklahoma). Rotary Gas Systems
will use its best efforts to assist Outwest Unlimited in any warranty
claim. Outwest Unlimited will provide any on site service and freight
expense necessitated to fulfill warranty claims.
9. To insure warranties, all applications must be approved by Rotary Gas
Systems prior to putting the unit in service. Any change in
application after unit is in service must be approved by Rotary Gas
Systems.
10. All information obtained by either party shall be confidential
information. Outwest Unlimited or its associates will be made aware of
privileged information in regard to packaging rotary screw
compressors. Therefore Outwest Unlimited and/or its principals agree
they will not package rotary screw compressors.
11. Rotary Gas Systems shall name Outwest Unlimited as an additional
insured on their product liability insurance policy.
12. A representative from Rotary Gas Systems shall be on hand for the
initial start up of any unit type not previously purchased by Outwest
Unlimited.
Agreed and accepted this 5th day of
December, 1995
/s/ XXXXX X. XXXX
XXXXX X. XXXX FOR OUTWEST UNLIMITED
/s/ XXXXX X. XXXXXX
XXXXX X. XXXXXX FOR ROTARY GAS SYSTEMS
SAN XXXX COMPRESSION, INC. 0000 XXXXX, XXXXX 000 XXXXXXX, XXXXX 00000
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May 29, 1996
Via Certified Mail
Return Receipt Requested
Rotary Gas Systems
0000 X. Xx. Xxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Gentlemen:
Please be advised that Outwest Unlimited has assigned all of its interests
under the Exclusive Sales Agreement dated December 5, 1995 between Outwest
Unlimited and Rotary Gas Systems, to San Xxxx Compression, L.L.C. The same
principals who owned Outwest Unlimited own San Xxxx Compression, L.L.C. The
transfer is being done merely for business and corporate reasons. In accordance
with Section 11 of the Exclusive Sales Agreement concerning the product
liability insurance policy of Rotary Gas Systems, please furnish us with a copy
of the certificate naming San Xxxx Compression, L.L.C. as an additional insured.
If you have any questions, please contact me.
Very truly yours,
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: Chair of the Managers
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SAN XXXX COMPRESSION, L.L.C.
(000) 000-0000 FAX: (000) 000-0000
