Agent Distribution Agreement (Gas Products)

SIHI Pumps, Inc.

303 Industrial Dr., P.O. Box 460, Grand Island, NY, 14072

Phone: (716) 773-6450 Fax: (716) 773-2330

AGENT DISTRIBUTION AGREEMENT (GAS PRODUCTS)

THIS AGENT DISTRIBUTION AGREEMENT IS MADE BETWEEN SIHI PUMPS, INC., 303 INDUSTRIAL DR., GRAND ISLAND, NY, 14072 (SUPPLIER), AND FALCON PUMP & SUPPLY CO., P.O. BOX 2750, MILLS, WY, 82644 (AGENT). WHEREAS THE SUPPLIER WISHES TO MARKET PRODUCTS DESCRIBED IN SCHEDULE A (THE PRODUCTS) THROUGH THE AGENT FOR THE MARKETS DESCRIBED IN SCHEDULE B (THE MARKETS). FOR THE PURPOSES OF THIS AGREEMENT, AN AGENT IS DEFINED AS EITHER A DISTRIBUTOR OR A REPRESENTATIVE. SCHEDULE A (THE PRODUCTS) INDICATES THE APPROPRIATE DISTRIBUTION CATEGORY (DISTRIBUTOR - BUY & RESELL BASIS OR REPRESENTATIVE - COMMISSION BASIS) FOR EACH PRODUCT AND APPLICABLE MARKET. IT IS AGREED AS FOLLOWS:

1.0  AGENT ACTING AS A DISTRIBUTOR (BUY & RESELL BASIS):

1.1  DISTRIBUTION RIGHTS:

1.1.1  The Agent shall use its best efforts to develop a market for, and sell the Products as described in Schedule A. At the time of order placement, the Agent shall provide the name, address and SIC Code of each Customer (and other information relating to the Customer reasonably requested by Supplier) to which products were sold.

1.1.2  The Supplier hereby appoints the Agent to sell the Products as described in Schedule A, within the Primary Area described in Schedule D.

1.1.3  The Agent shall have full responsibility for all of its sales, billing its customers and collecting its accounts.

1.1.4  The Agent will remit to the Supplier pursuant to this Agreement without regard to its collections from its customers.

1.1.5  The Agent may describe itself as an authorized Distributor of the Supplier, but shall not characterize itself, or enter into any transaction in the name of the Supplier.

1.1.6  Unless otherwise agreed by the supplier in writing, all projects involving a Consulting Engineering Firm will be handled as a Representative (commission basis).

1.2  PRODUCT PRICES:

1.2.1  The Supplier shall sell its Products to the Agent at a price determined by applying the applicable discount rate as specified in the current Distributor Discount Schedule to the price specified in the retail price list. Discounts for some products are published in the product price list. Prices and discounts may be amended by the Supplier from time to time.

1.2.2  For Products not listed in the retail price list, Supplier shall (at Agent’s request) advise Agent of the recommended list price and discount.

1.2.3  The Agent shall pay the Supplier for the Products subject to the terms and conditions listed in Schedule H.

1.2.4  The terms and conditions set forth in Schedule H shall be applicable to all orders placed by the Agent hereunder.

1.3  SECURITY:

1.3.1  The Agent hereby grants to the Supplier a purchase money security interest in any and all Products provided to the Agent by the Supplier and authorizes Supplier as Agent to sign and record any documents necessary to perfect that security interest.

1.4  INSURANCE:

1.4.1  Agent agrees to maintain liability insurance, including product liability, with minimum limits of $1,000,000 per person and $2,000,000 per occurrence for bodily injury or death and $500,000 per occurrence for property damage.

1.4.2  Agent shall furnish Supplier with a certificate of insurance showing this coverage, naming Supplier as an additional insured.

2.0  AGENT ACTING AS A REPRESENTATIVE (COMMISSION BASIS):

2.1  DISTRIBUTION RIGHTS:

2.1.1  The Agent shall use its best efforts to develop a market for, and sell the Products as described in Schedule A.

2.1.2  The Supplier hereby appoints the Agent to sell the Products, as described in Schedule A, within the Primary Area described in Schedule D.

2.1.3  The Supplier shall have full responsibility for all of its sales, billing its customers and collecting its accounts.

2.1.4  The Supplier will remit commission to the Agent pursuant to this Agreement upon collection from its customers. Commission shall be computed on the net amount of the Supplier’s invoice to the Purchaser, after deducting all sales taxes, trade discounts, rebates, returns, allowances, insurance, transportation charges, attorney and legal fees, as well as costs of collection.

2.1.5  The Agent may describe itself as an authorized Representative of the Supplier, but shall not characterize itself, or enter into any transaction in the name of the Supplier.

2.2  PRODUCT PRICES:

2.2.1  The Agent shall sell the Supplier’s Products at a price determined by the retail price list, as amended by the Supplier from time to time. The Agent Commission shall be determined from the Published Representative Commission Schedule or published price list.

2.2.2  For Products not listed in the retail price list, Supplier shall (at Agent’s request) advise Agent of the recommended list price and commission

2.2.3  The Agent commission for products sold above or below the Supplier’s recommended list price shall be adjusted in accordance with the Published Representative Commission Schedule.

2.2.4  In the event of retention or withholding of payment from the Purchaser, commission payments to Agent(s) shall be proportionately reduced based on the percentage of payment received. Notwithstanding, at the sole discretion of the Supplier, commission payment to the Agent may be withheld - in whole or in part - pending receipt of payment in full from the Purchaser.

2.2.5  The Agent shall sell the Products subject to the terms and conditions listed in Schedule H.

2.3  COMMISSION SPLITS:

2.3.1  Commission splits with respect to Agent commissions on Custom Packages and other Supplier products sold on a Representative basis (i.e., Supplier takes the billing and pays the Representative a commission) shall be paid in accordance with Schedule F. Notwithstanding any other provision of this Agreement, the Supplier’s determination of a commission split, after its consideration of the factors set forth in Schedule F, shall be final and binding on the Agent.

3.0  GLOBAL AND DIRECT ACCOUNTS:

3.1  Schedule C lists Global and Direct Accounts and determines if the account shall be managed as a direct Supplier account on a representative basis.

3.2  In addition to the global and direct accounts set forth on Schedule C, the Supplier reserves the right to sell to the United States government; national buyers, engineering contractors, public utility companies and their contractors; political divisions or their contractors engaged in construction of public works; original equipment manufacturers, packagers and/or house accounts in the Primary Area described in Schedule D.

4.0  PACKAGING POLICY:

4.1  The Agent shall comply with the Policy in Schedule E.

4.2  The Agent shall not fabricate or market systems or skids utilizing the Supplier‘s equipment without written consent from the Supplier.

4.3  The Agent shall not assist a third party packager in the fabrication or marketing of systems or skids utilizing the Supplier‘s equipment without written consent from the Supplier.

5.0  ADVERTISING AND INFORMATIONAL MATERIALS:

5.1  The Supplier shall furnish the Agent with reasonable quantities of catalogues, retail price lists, Distributor discount and Representative commission schedules, all of which are subject to change by the Supplier from time to time.

6.0  CONFIDENTIALITY:

6.1  The Agent shall comply with the Policy in Schedule G.

7.0  NO COMPETING PRODUCTS:

7.1  Unless otherwise agreed by the supplier in writing, the Agent shall not sell, or in any way assist anyone else to sell, any products that compete with the Products of the Supplier.

8.0 WEB PAGES / TERMS OF USE / TERMS OF TRADE:

8.1 The Supplier is actively moving towards the use of Internet based on-line transactions to support Agents and to transact business.

8.2 As new functionality is released to increase the scope of on-line services supplied, the Supplier will encourage its Agents to convert to these new services as their preferred way of doing business

8.3 Terms of Use and Terms of Trade for the Suppliers web based initiatives will be contained online and Supplier will reserve the right to modify, amend or replace such Terms of Use and Terms of Trade from time to time in Supplier’s sole discretion. The Web Store Terms of Use and Terms of Trade are in addition of this agreement.

9.0 SALES GOALS:

9.1 The Agent agrees to accept annual sales goals for its territory and will review the results with Supplier on a quarterly basis.

10.0 AFTER SALES SUPPORT

10.1 Each Agent is expected to provide post sales support to customers within their primary area including, but not limited to, start-up assistance for Suppliers product shipped into their primary area.

11.0 TERM OF AGREEMENT:

11.1 This Agreement shall commence on the date on which this Agreement is signed and dated by both parties and shall continue for an original term of one year, unless terminated earlier by either party. This Agreement shall automatically be renewed for successive one year terms unless either party provides a 30 day written notice of their intention not to renew the agreement.

12.0 TERMINATION OF AGREEMENT:

12.1 This agreement may be terminated by either party with 30 days written notice.

12.2 Should the Supplier terminate this agreement, the Supplier will purchase the inventory provided the Supplier determines the products are unused, in excellent condition and have not become obsolete. Should the Agent terminate the agreement, it is the Supplier’s option to purchase the inventory.

12.3 Should an Agent acquire a competitive line of equipment, the Supplier may terminate this Agreement immediately.

12.4 On termination of this agreement, the Agent shall immediately cease to describe itself as an authorized Agent of the Supplier. All advertising and informational materials must be returned to the Supplier immediately upon termination.

13.0 OEM BUSINESS

13.1 Unless otherwise agreed in writing, all OEM Business will be handled on a Representative basis.

EACH OF THE ATTACHED SCHEDULES A THROUGH H IS HEREBY INCORPORATED INTO THIS AGREEMENT AND IS AN INTEGRAL PART HEREOF.

THIS IS THE ENTIRE AGREEMENT BETWEEN THE TWO PARTIES RELATING TO THIS SUBJECT MATTER AND IT CANNOT BE AMENDED EXCEPT IN WRITING BY BOTH PARTIES.

THIS AGREEMENT MUST BE SIGNED AND RETURNED 30 DAYS FROM NOTICE OF WEBSITE POSTING.

Agent: / SUPPLIER:
Name Roxanne Sienkiewicz / Name Michael J. Pastore
The individual checking this box and accepting this Agreement on behalf of the Agent acknowledges that he/she is duly authorized to enter into this Agreement on behalf of the Agent. / The individual checking this box and accepting this Agreement on behalf of the Supplier acknowledges that he/she is duly authorized to enter into this Agreement on behalf of the Supplier.
Signature Roxanne Sienkiewicz / Signature
By checking this box (signer) acknowledges that the above signature expresses (signer's) approval or authorization of this agreement in its entirety, and (signer's) intention that it have legal effect. / By checking this box (signer) acknowledges that the above signature expresses (signer's) approval or authorization of this agreement in its entirety, and (signer's) intention that it have legal effect.
Title VP-Operations / Title Vice President, Sales and Marketing
Company: Falcon Pump & Supply, Co. / Company SIHI Pumps, Inc.
Date: January 22, 2009 / Date

SCHEDULE A (THE PRODUCTS)

Gas Products & Markets
Product Description / Markets
(Refer to Schedule B) / Distribution
Category
1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Close Coupled LRVP LEM & LEME Series / E / E / E / E / E / E / E / E / Distributor
LRVP * < 2500 ACFM LEH & LPH Series / E / E / E / E / E / E / E / E / Distributor
LRVP ** > 2500 ACFM LPH Series / E / E / E / E / E / E / E / E / Representative
Specialty Liquid Ring Vacuum Pump / NE / NE / NE / NE / NE / NE / NE / NE / Representative
SIHI Dry (pumps & spare parts) H, & M Series / NE / NE / NE / NE / NE / NE / NE / NE / Representative
Liquid Ring Compressors < 2500 ACFM
KEH & KPH Series * / E / E / E / E / E / E / E / E / Distributor
Liquid Ring Compressors > 2500 ACFM
KEH & KPH Series ** / E / E / E / E / E / E / E / E / Representative
Specialty Compressors & Spare Parts / NE / NE / NE / NE / NE / NE / NE / NE / Representative
Air Ejectors GPV & GPH Series / E / E / E / E / E / E / E / E / Distributor
Std. Ind. LRVP Packages XBA Series / E / E / E / E / E / E / E / E / Distributor
Std. Oil Seal Packages ENV Series / E / E / E / E / E / E / E / E / Distributor
Specialty LRVP & Compressor Packages / NE / NE / NE / NE / NE / NE / NE / NE / Representative
Custom Liquid Ring Packages / E / E / E / E / E / E / E / E / Representative
Custom Compressor Packages / E / E / E / E / E / E / E / E / Representative
Custom Blower/LRVP Packages / E / E / E / E / E / E / E / E / Representative
Custom Steam Jet/LRVP Packages / E / E / E / E / E / E / E / E / Representative
SIHI Dry Packages (NOTE 1) H, M & AS Series / NE / NE / NE / NE / NE / NE / NE / NE / Representative
Service & Repair (NOTE 2) / NE / NE / NE / NE / NE / NE / NE / NE / Representative
Draft Tube Sludge Mixers MFS Series / NA / NA / NA / NA / NA / NA / NA / NA / Direct
Other ______
CODES
E / Exclusive
* Through 75000 series, including 80557 model. / NE / Non Exclusive
** 80000 series & larger, except 80557 model. / NA / Not Applicable

NOTE 1: Unless otherwise negotiated, the commission basis for SIHI Dry is based on the Published Representative Commission Schedule.