Exclusive Distribution Agreement

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/Smith, Inc. ("HANOVER/SMITH"), 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/Smith 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/Smith 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/Smith 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/Smith 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/Smith: (i) the SI gear logo;



(ii) the names "Smith" and "Hanover/Smith"; and

any specific product trade names.



2. Appointment of Representative. Hanover/Smith 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/Smith 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/Smith as to the copy and content thereof, such

approval not to be unreasonably withheld by Hanover/Smith;



(d) To act as a conduit between its customers and Hanover/Smith for

Hanover/Smith's 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/Smith, but

any such use shall be in strict accordance with the manner designated

by Hanover/Smith and, in particular







without limiting the generality of the foregoing, shall include an

appropriate copyright notice on all such materials.



5. Copyright, Trade Mark 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/Smith 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/Smith. Hanover/Smith 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/Smith 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/Smith shall make no charge for the provision of such training

services to the extent they are provided at Hanover/Smith's 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/Smith for the

reasonable accommodation, meals and travel expenses for the staff of

Hanover/Smith 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/Smith for the reasonable accommodation, meals and travel

expenses for the staff of Hanover/Smith 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/Smith's regularly scheduled

training sessions relating to marketing of Products,











at no expense to Uniglam. Uniglam shall be responsible for the

travel, meal and accommodation expenses of its staff attending such



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/Smith

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/Smith 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/Smith for

such Products to its most creditworthy customers. Hanover/Smith shall

be entitled to vary its price list upon reasonable actual notice to

Uniglam. Hanover/Smith 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/Smith 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/Smith's location in the Houston,

Texas area. Hanover/Smith 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/Smith for

any transportation and insurance and related charges incurred if

Hanover/Smith arranges for delivery to Uniglam's facility in Calgary.

Hanover/Smith shall seek and obtain at its expense all other

permissions, permits, and licenses as may be necessary or advisable

for Hanover/Smith to export Products to the Territory.



(d) Uniglam shall supply Hanover/Smith with blank Canada Customs Invoices

upon the request of Hanover/Smith. Unless otherwise agreed in writing

with respect to any particular shipment, Uniglam shall be responsible ...