ADVERTISING SERVICES AGREEMENT
This Agreement is entered into this 17th day of July, 2003, by and between Laser
Lock Technologies, Inc., a Nevada corporation ("LLT") and GMR Marketing Inc., a
Wisconsin corporation ("GMR").
BACKGROUND
LLT owns the exclusive right to sell advertising on all slot tickets
manufactured by Translucent Technologies, LLC, ("Translucent") for use with
coinless slot and gaming machines utilized in the casino and gaming industry
pursuant to a Marketing and Supply Agreement between Translucent and LLT dated
October, 2002 _(the "Translucent Agreement"). GMR and LLT have agreed that,
subject to the terms and conditions of the Translucent Agreement, GMR shall be
the exclusive sales agent of LLT during the Term (as defined below) for all slot
ticket advertising that LLT has the right to sell or solicit for sale pursuant
the terms of the Translucent Agreement within the Territory (as defined below).
All rights of LLT for the sale or placement of advertising on slot tickets,
pursuant to the Translucent Agreement or otherwise, are referred to collectively
in this Agreement as "Ticket Advertising."
NOW THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. Grant of Exclusive Sales Agency.
a. Pursuant to the terms of this Agreement, LLT hereby appoints GMR as the
exclusive agent for the sale of all Ticket Advertising on a worldwide
basis (the "Territory") during the Term (as defined below) for the purpose
of generating, negotiating and otherwise exploiting and entering into
business opportunities for the solicitation, sale and placement of Ticket
Advertising.
b. During the Term, LLT agrees that it shall (i) not, directly or indirectly,
sell, assign or grant any other party the right to solicit, sell,
distribute, market or advertise Ticket Advertising within the Territory,
and (ii) refer to GMR all inquiries or referrals relating to the sale or
prospective of Ticket Advertising within the Territory.
c. GMR shall during the Term have the right to use the name, logos,
trademarks, copyrights, and other property of LLT in association with the
sale of Ticket Advertising and the right to represent that GMR is the
exclusive representative of LLT within the Territory for all Ticket
Advertising.
GMR shall have the right to sublicense sales of Ticket Advertising within
the Territory subject to the written approval of LLT, which such approval
shall not be unreasonably withheld or delayed.
2. Obligations of LLT and GMR.
a. LLT and GMR shall work cooperatively to maximize all opportunities for
the sale of Ticket Advertising within the Territory. GMR and LLT will
consult on a periodic basis regarding the sales initiatives and strategies
in place or contemplated for Ticket Advertising. GMR will make
commercially reasonable efforts to promote and sell Ticket Advertising
within the Territory, however, GMR shall have no obligation to sell any
minimum amount of Ticket Advertising during the Term.
b. LLT shall provide GMR with such information and resources as reasonably
necessary to assist GMR in the promotion and sale of Ticket Advertising,
including, without limitation, the provision of sales promotional
materials related to Ticket Advertising.
c. GMR shall be responsible for negotiating and entering into advertising
agreements with respective advertisers for all Ticket Advertising sold
within the Territory. ("Advertising Agreements"). GMR shall also be
responsible for the processing of xxxxxxxx to, and payments from
advertisers for Ticket Advertising sold within the Territory. GMR shall
forward to LLT payments received from advertisers and cleared by GMR for
Ticket Advertising sold, less commissions payable to GMR pursuant to
Section 3, below. GMR and LLT shall reconcile respective amounts due the
parties for Ticket Advertising sold on a periodic basis, as mutually
agreed between GMR and LLT, but no less frequently than on a quarterly
basis.
d. LLT shall coordinate with GMR to provide pricing applicable to all
Ticket Advertising marketed by GMR and shall be responsible for the
provision of the manufacturing, printing and delivery of all slot tickets
required with respect to Ticket Advertising sold. LLT shall also be
responsible for, and bear all liability associated with, the manufacture,
supply and distribution of all branded slot tickets as required by, and
pursuant to, the terms of each Advertising Agreement. GMR and LLT shall
enter into an agreement governing the manufacture, supply, distribution
and other deliverables to be provided by LLT and necessary to fulfill each
order for Ticket Advertising sold by GMR as required pursuant to the terms
of the applicable Advertising Agreement between GMR and the Advertiser.
3. Compensation; Expenses.
a. In consideration of its services under this Agreement, LLT shall pay
GMR a commission equal to _________________________ of the "net sales" of
all Ticket Advertising sold. For purposes of this Agreement, "net sales"
shall mean the gross revenue generated by the sale of all Ticket
Advertising within the Territory by GMR, LLT their sub-licensors, or any
other party, less any returns or allowances relating to such sales and
less applicable "agreed manufacturing costs" but before any other
deduction from sales revenue. For purposes of this Agreement, "agreed
manufacturing costs" means the direct out of pocket manufacturing costs
incurred by LLT for the printing of tickets for applicable Ticket
Advertising sold, without markup and net of any rebate or discount. Agreed
manufacturing costs applicable to any order of Ticket Advertising shall be
provided by LLT to GMR upon request in advance of the placement of any
order by GMR for Ticket Advertising and no increase in such agreed
manufacturing costs applicable to any Ticket Advertising order shall be
allowed unless agreed in writing by GMR prior to such costs being
incurred. Commissions due GMR shall be credited against payments due from
GMR to LLT for Ticket Advertising sold.
b. While GMR is responsible for the billing, collection and administration
of Ticket Advertising sold by GMR pursuant to applicable Advertising
Agreements, for the avoidance of doubt, it is understood that any payments
due to LLT hereunder for Ticket Advertising sold by GMR shall be based on,
and "net sales" of GMR shall be deemed to include only payments actually
received by GMR from Advertisers for Ticket Advertising sold. In the event
of any delay or failure of an Advertiser to pay amounts due with respect
to purchased Ticket Advertising (a "Payment Default"), GMR shall
exclusively have the right to direct and manage the collection of amounts
due and LLT agrees that it shall not, without the prior written consent of
GMR, contact any Advertiser client of GMR or take any action, directly or
indirectly, regarding collection of any amounts due for Ticket Advertising
sold. In the event a Payment Default, any amounts actually received shall
first be allocated between GMR and LLT on a pro-rata basis based upon the
percentage each party's costs bears to the total amount due for such
Ticket Advertising, and the remainder, if any, shall then be allocated
based on the Commission percentages described in 3(a), above.
c. GMR shall be responsible for its marketing, travel, administrative and
overhead expenses related to the sale of Ticket Advertising by GMR. LLT
shall be responsible for all costs related to the printing, manufacturing,
shipping, handling, distribution, market placement and all other costs
incurred with respect to branded slot tickets required for Ticket
Advertising sold.
d. LLT and GMR each agree that they shall, upon request, provide the other
with access to business records necessary to review and verify costs and
payments received or due with respect to all Ticket Advertising sold and
agree to provide each other with such other reasonable assistance as may
be necessary to carry out the intent of this Agreement.
4. Term; Termination.
a. The term ("Term") of this Agreement shall begin as of the date hereof
and shall continue for an initial period expiring on the date of
expiration of the initial term of the Translucent Agreement in October,
2004, provided, however, that GMR shall have the option to renew, and LLT
grants GMR the exclusive right to renew, this Agreement for an additional
two (2) year period if the "total sales" attributable to Ticket
Advertising sold or committed to advertisers within the Territory is at
least ____________ during the initial Term of this Agreement. For purposes
of this Agreement, "total sales" shall mean the net sales attributable to
Ticket Advertising sold or committed to during the applicable period
without deduction for any agreed manufacturing costs applicable to such
Ticket Advertising. Notwithstanding the Term, this Agreement is subject to
earlier termination as described in this Section 4.
b. Either party shall have the right to terminate this Agreement in the
event of a material default by the other party of this Agreement upon
thirty (30) days prior written notice to the defaulting party stating with
specificity the alleged default. During such 30-day period, the defaulting
party shall have an opportunity to cure any such default or present to the
non-defaulting party a plan acceptable to the non-defaulting party for
cure of any default which cannot reasonably be cured within the 30-day
period. Failure to cure the alleged default within the 30-day period or to
comply with the plan for cure may result in immediate termination of this
Agreement at the non-defaulting party's discretion.
c. This Agreement may be terminated immediately upon notice to the other
party, if GMR or LLT is prohibited by law, regulation or order from
engaging in or utilizing the services or activities described or referred
to in this Agreement.
d. This Agreement may be terminated by GMR or LLT, if lawful, if the other
party makes a general assignment for the benefit of creditors, shall have
been adjudicated bankrupt, shall have filed voluntary petition for
bankruptcy or for reorganization, or effectuated a plan or other similar
arrangement with creditors, shall have filed an answer to a creditor's
petition, or if a petition is filed against it for an adjudication in
bankruptcy or reorganization, or if the other party shall have applied for
or permitted the employment of a receiver or trustee or custodian for any
of its property or assets.
e. This Agreement shall terminate automatically, without notice, in the
event of any material default by LLT of the terms of the Translucent
Agreement or in the event of termination of the Translucent Agreement for
any reason.
f. GMR shall have the right to terminate this Agreement, in its sole
discretion, for any reason upon sixty (60) days prior notice.
g. GMR may terminate this Agreement, in its reasonable discretion, applying
reasonable business standards, upon thirty (30) days notice if GMR
determines that LLT is unlikely to be able to fulfill its obligations
hereunder, under the Translucent Agreement or under any subsequent
agreement between GMR and LLT for the manufacture, supply or delivery of
tickets required for any order for Ticket Advertising or if GMR otherwise
determines that the financial standing or credit of LLT has been impaired
or is, in GMR's opinion, unsatisfactory. for any reason.
h. Upon termination pursuant to the terms hereof, (i) the rights granted
hereunder shall, except as otherwise set forth in this Agreement, revert
to LLT, (ii) each party shall return all materials and property in its
possession or under its control belonging to the other party, and (iii)
GMR shall, except as otherwise set forth in this Agreement, refrain from
further efforts to promote or sell Ticket Advertising. Notwithstanding the
foregoing, in the event this Agreement is terminated by GMR due to (i) the
default of LLT pursuant to Section 4 (b), above, (ii) a default by LLT of
the terms of the Translucent Agreement, (iii) termination of the
Translucent Agreement for any reason (other than non-renewal of the term
of Translucent Agreement due to non-achievement of required sales targets
specified in Section 7(a) thereof), or (iv) any of the provisions of
Section 4 (g), above, GMR shall have the right to assume all rights of LLT
under the Translucent Agreement.
i. Termination of this Agreement for any reason shall not relieve either
party of their respective obligations to any advertisers for Ticket
Advertising accrued prior to termination under any Advertising Agreement
or otherwise, or relieve either party of their obligation to pay the other
any amounts due, including, without limitation, commissions for Ticket
Advertising sold, that accrue under this Agreement, or any other agreement
between the parties, prior to the effective date of termination.
5. Warranties of GMR and LLT.
a. LLT represents and warrants that (i) it is in compliance with, and will
continue throughout the term of this Agreement to comply with, all
applicable federal, state and local laws, rules, regulations, ordinances
and orders, (ii) it is a corporation duly organized, validly existing and
in good standing under the laws of Nevada, (iii) no consent, approval,
authorization or order of any other person, including, without limitation,
Translucent, is required to be obtained in connection with the execution,
delivery and performance of this Agreement by it, (iv) the execution,
delivery and performance of the Agreement are not prohibited by, and do
not violate, any provision or result in any material breach of, the
articles, bylaws or any contract, agreement, permit or license to which it
is subject, (v) this Agreement has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of the LLT,
enforceable in accordance with its terms, (vi) it has all right title and
interest with respect to Ticket Advertising rights and other rights or
licenses granted by it to GMR hereunder, and has the full power and
authority, without further action, consent or approval, to grant all such
rights, and (vii) it has not granted to any other person or entity other
than GMR the right to promote, exploit, sell or represent Ticket
Advertising within the Territory.
b. GMR represents and warrants that (i) it is in compliance with, and will
continue throughout the term of this Agreement to comply with, all
applicable federal, state and local laws, rules, regulations, ordinances
and orders, (ii) it is a corporation duly organized, validly existing and
in good standing under the laws of the state of Wisconsin, (iii) no
consent, approval, authorization or order of any other person or is
required to be obtained in connection with the execution, delivery and
performance of this Agreement by it, (iv) the execution, delivery and
performance of the Agreement are not prohibited by, and do not violate,
any provision or result in any material breach of, the articles, bylaws or
any contract, agreement, permit or license to which it is subject, and (v)
this Agreement has been duly executed and delivered by it and constitutes
the legal, valid and binding obligation of GMR, enforceable in accordance
with its terms.
6. Confidential Information.
a. GMR and LLT acknowledge and agree that each will have access to, or
become acquainted with, Confidential Information of the other. For the
purposes of this Agreement, "Confidential Information" shall mean any
information of either party, whether or not developed by the other, that
is communicated as confidential or proprietary or is information, that by
its nature should reasonably be considered confidential to the other party
to the extent it is not readily available to the general public, including
but not limited information which relates to ideas, designs, methods,
discoveries, improvements, products, trade secrets, product data and
specifications, proprietary rights, business affairs, product
developments, customer information or employee information.
b. Confidential Information does not include any information that (i)
either party can prove was known prior to the date of this Agreement,
without an obligation of confidentiality, (ii) either party can prove was
lawfully obtained from a third party without any obligation of
confidentiality, (iii) is or becomes part of the public domain through no
act or violation of any obligation of either party, or (iv) is required to
be disclosed by court order or operation of law.
c. The parties acknowledge and agree that the respective Confidential
Information of the other constitutes valuable trade secrets. GMR and LLT
each agree that they shall keep all Confidential Information of the other
in confidence and shall not, at any time during or after the term of this
Agreement, without the other's prior written consent, disclose or
otherwise make available, directly or indirectly, any item of the other's
Confidential Information to anyone. The parties shall use the Confidential
Information only in connection with this Agreement and for no other
purpose.
7. Indemnification; Limitation of Liability.
a. GMR agrees to indemnify, defend and hold harmless LLT, its successors,
assigns, parents and subsidiaries and the officers, directors and
employees of each of them, from and against any and all claims, losses,
actions, damages, expenses and all other liabilities, including, but not
limited to, costs and attorneys' fees (collectively, "Claim(s)") arising
out of or in connection with (i) the inaccuracy or breach of any
representation, warranty, covenant or other terms or conditions of this
Agreement by GMR or any of its agents, assigns, contractors or their
employees, or (ii) the negligence or misconduct of GMR or any of its
agents, assigns, contractors or their employees.
b. LLT agrees to indemnify, defend and hold harmless GMR, its successors,
assigns, parents and subsidiaries and the officers, directors and
employees of each of them, from and against any and all Claims arising out
of or in connection with (i) the inaccuracy or breach of any
representation, warranty, covenant or other term or condition of this
Agreement by LLT or any of its agents, assigns, contractors or their
employees, (ii) the negligence or misconduct of LLT or any of its agents,
assigns, contractors or their employees, or (iii) any claim related to the
manufacture, distribution or use of slot tickets with respect to Ticket
Advertising sold.
c. The obligations of GMR and LLT to indemnify, defend and hold harmless
the other will survive the termination or expiration of this Agreement.
Except for third party claims for which a party may be required to provide
indemnification hereunder, NEITHER PARTY SHALL, UNDER ANY CIRCUMSTANCES,
BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES,
LOST PROFITS, LOST OPPORTUNITIES OR LOST REVENUES OR PUNITIVE OR EXEMPLARY
DAMAGES, HOWSOEVER ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
8. Insurance.
a. Each party shall, at its own expense, secure and maintain commercial
general liability insurance acceptable to the other in the amount of not
less than Five Million Dollars ($5,000,000) to insure against liability
arising from personal injury, death or property damage, and advertiser's
liability insurance in an amount not less than Five Million Dollars
($5,000,000).
b. Each party shall provide the other with certificates of insurance
naming the other as an additional insured, evidencing the existence of
such insurance upon request. In addition, each party shall also carry
worker's compensation insurance in the amount required by applicable law.
9. Miscellaneous
a. Neither party shall be liable for any default or delay in such party's
performance if such default or delay is caused by any event beyond the
reasonable control of such party, including but not limited to: act of
God; war or insurrection; civil commotion; destruction of essential
facilities or materials by earthquake, fire, flood or storm; labor
disturbance; epidemic; terrorist activity or other similar event;
provided, however, that the party so affected will give prompt notice of
such event, and shall use its best efforts to avoid, remove, or alleviate
such causes of nonperformance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed.
b. This Agreement sets forth and constitutes the entire agreement and
understanding between the parties with respect to the subject matter
hereof, and supersedes any and all prior agreements, understandings,
promises and representation, whether written or oral, between the parties
with respect to the subject matter hereof. This Agreement may not be
released, discharged, amended or modified in any manner except by an
instrument in writing, making specific reference to this Agreement, and
signed by duly authorized representatives of both parties.
c. The relationship hereby established between GMR and LLT is solely that
of independent contractors. This Agreement shall not create an agency,
partnership, joint venture, or employer-employee relationship, and nothing
hereunder shall be deemed to authorize either party to act for, represent
or bind the other except as expressly provided in this Agreement.
d. If and solely to the extent that any provision of this Agreement shall
be invalid or unenforceable, or shall render this entire Agreement to be
unenforceable or invalid, such offending provision shall be of no effect
and shall not affect the validity of the remainder of this Agreement or
any of its provisions; provided, however, the parties shall use their
respective reasonable efforts to renegotiate the offending provisions to
best accomplish the original intentions of the parties.
e. Neither party may assign any right or obligation hereunder without the
written consent of the other party. This Agreement shall be binding upon
and inure to the benefit of the parties' respective successors and
assigns. Any attempted assignment in violation of this provision shall be
void and of no effect.
f. This Agreement is deemed to have been entered into in the state of
Wisconsin, and its interpretation, construction, and the remedies for its
enforcement or breach are to be applied pursuant to and in accordance with
the laws of the state of Wisconsin.
g. No waiver of any right under this Agreement shall be deemed effective
unless contained in writing and signed by the party charged with such
waiver, and no waiver of any right shall be deemed to be a waiver of any
future right or any other right arising under this Agreement. All rights,
remedies, undertakings, obligations, and agreements contained in this
Agreement shall be cumulative and none of them shall be a limitation of
any other remedy, right, undertaking, obligation, or agreement.
h. Any notice, consent, or approval permitted or required under this
Agreement shall be in writing and shall be deemed to be effective upon
receipt and shall be sent by registered or certified mail, postage
pre-paid, or by overnight courier, or by facsimile or telex (confirmed by
mail), to the addresses set forth below or to such other address in the
United States that the parties may hereafter specify:
If to GMR: GMR Marketing Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxxx, XX 00000
Attn. Xxxx X. Xxxxxxxx
Fax (000) 000-0000
With a copy to: General Counsel
GMR Marketing Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxxx, XX
Fax (262) 786-579
If to LLT: Laser Lock Technologies, Inc.
000 Xxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attn. Xxxxxx X. Xxxxxxx
Fax:
With a copy to: Xxxx X. Xxxxxx, Esq.
Gross, Pinsky
2 Place Alexis Nihon, Ste 1000
Xxxxxxxx, Xxxxxx X0X0X0
i. Neither party shall issue any press release or other publicity materials,
or make any presentation with respect to the existence of this Agreement
or the terms and conditions hereof without the prior written consent of
the other party, which consent shall not be unreasonably withheld. This
restriction shall not apply to disclosures required by law or regulation,
including as may be required in connection with any filings made with the
Securities and Exchange Commission or by the disclosure policies of a
major Stock Exchange.
j. This Agreement may be executed in counterparts each of which when so
executed and delivered shall be deemed to be an original and all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year first written above.
Laser Lock Technologies, Inc. GMR Marketing Inc.
By: Xxxxxx Xxxxxxx By: Xxxx X. Xxxxxxxx
------------------------------- ------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxx X. Xxxxxxxx
------------------------------- ------------------------------
Date: July 10, 2003 Date:
------------------------------- ------------------------------
Title: Title:
------------------------------- ------------------------------
