Exhibit 10.6
DISTRIBUTION AGREEMENT
This Distribution Agreement ("Agreement") is hereby made and entered into
this 30 day of June, 1995, by and between Game Tech International
("GameTech"), a Delaware corporation, with principal offices located at 0000
X. 0xx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000 and Trend Gaming Systems,
("Distributor"), a Texas Limited Liability Company, with principal offices
located at 00000 Xxxxxx Xxxx., Xxxxxx, XX 00000. GameTech and Distributor are
sometimes hereinafter referred to individually as a "Party" and collectively
as the "Parties".
WHEREAS, GameTech desires Distributor to act as a distributor of its
products and services within the Territory (as hereinafter defined) and
Distributor desires to be a distributor of Game Tech products and services
within the Territory, the Parties do hereby enter into this Agreement. For
and in consideration of the mutual covenants herein set forth, the Parties
agree as follows:
1. GRANT OF RIGHTS
1.1 GRANT OF EXCLUSIVITY. Subject to the terms and conditions of this
Agreement, GameTech hereby appoints Distributor as its exclusive distributor
of the products listed on EXHIBIT A hereto (the "Products") within geographic
region set forth on EXHIBIT B (the "Territory").
2. DUTIES AND RESPONSIBILITY OF GAMETECH
2.1 TRAINING. GameTech will train Distributor personnel in the sale and
operation of the Products.
2.2 INSTALLATION OF UNITS. GameTech will provide Distributor with the
installation specifications, such as dedicated phone line and electricity,
which shall be required to be provided by the customer. GameTech will provide
all equipment to operate the Products and will install the Products at the
customer's site. GameTech shall endeavor to accomplish all installations on a
timely basis.
2.3 ON-SITE TRAINING; PRODUCT SUPPORT. GameTech will provide on-site
training of customers, managers, floor clerks, cashiers and callers. GameTech
will provide 24 hour Hot-Line support for customers and will maintain
replacement parts at locations sufficient to respond adequately to customer
needs.
3. DUTIES AND RESPONSIBILITIES OF DISTRIBUTOR.
3.1 DUTY TO DISTRIBUTE AND PROMOTE. Distributor will act as GameTech's
exclusive distributor of the Products to prospective customers within the
Territory. Distributor shall promote the installation of units in the
Territory to the best of Distributor's ability. Distributor shall advertise
and/or promote the Products in a commercially reasonable manner and will
transmit GameTech product information and promotional materials to its
customers, as reasonably necessary. Distributor shall work with the customers
to assure their satisfaction with the units and shall report to GameTech
regarding customer's evaluations of the units.
3.2 SALES PROCEDURES. Upon receipt of a customer order, Distributor
will contact GameTech to schedule an installation date. Distributor will act
as liaison with the customer to assure that a dedicated phone line and
electricity are in place. Distributor will only provide GameTech approved
pricing information to prospective customers.
3.3 CONFLICT OF INTEREST. The Parties acknowledge that any efforts by
Distributor to sell competing products would constitute a conflict of
interest with respect to Distributor's obligations to market the Products. If
Distributor chooses to market, promote or distribute competitive products,
Distributor shall notify GameTech of its intent at least sixty (60) days
prior to commencing such activity, and GameTech shall have the right to
terminate this Agreement upon thirty (30) days notice to Distributor without
any liability to GameTech. Failure to so notify GameTech shall be shall be
deemed to be a material breach of this Agreement. A product shall be
deemed to be competitive if it is an electronic bingo game of any sort or is
similar to any non-bingo game product listed on EXHIBIT A.
3.4 REPRESENTATIONS. Distributor shall limit its claims and
representations concerning the Products to those made by GameTech in its
published literature, and not make any claims or representations in excess of
such claims of GameTech.
4. COMPENSATION. GameTech shall pay Distributor commissions at the
following rates, as a percentage of net revenue received from the
installation caused by the Distributor.
Fixed Units and Hand Held:
(a) Installation at each Customer: 1st year = 10% Beginning
December 1, 1997 = 12%
5. CUSTOMER PRICING, ACCOUNTING AND PAYMENTS. GameTech will establish
customer pricing arrangements and handle all customer collections, except
where collection by Distributor is required by law or requested by GameTech
in writing. GameTech will wire transfer to Distributor all commissions due on
a weekly basis out of the funds paid to GameTech by the customers. GameTech
shall have no obligation to pay commissions to Distributor in advance of the
receipt by GameTech of payment from the relevant customer; however, GameTech
will inform Distributor of any past due customer accounts. GameTech will
provide a monthly accounting summary, no later than the twentieth (20th) day
of the following month. The Parties agree that all accounting summaries shall
be considered correct if not questioned in writing within sixty (60) days of
receipt of each summary. Distributor shall be entitled to audit, at
Distributor expense, the books and records of GameTech no more than once per
calendar year. Any such audit shall be limited to only such information as
shall be specifically required to verify the gross receipts received by
GameTech, from customers governed by this Agreement.
6. PROPRIETARY RIGHTS AND CONFIDENTIALITY.
6.1 PROPRIETARY RIGHTS. Distributor agrees that GameTech owns all
right, title, and interest in the Products and in all of GameTech's patents,
trademarks, trade names, inventions, copyrights and trade secrets relating to
the design, manufacture, operation or service of the Products. The use by
Distributor of any of these proprietary rights is authorized only for the
purposes herein set forth, and upon termination of this Agreement for any
reason such authorization shall cease.
6.2 NO RIGHT TO MANUFACTURE OR COPY. The Products are being installed
and/or sold by GameTech subject, in every case, to the condition that such
installation and/or sale does not convey any license, expressly or by
implication, to manufacture, duplicate or otherwise copy or reproduce the
Products. Distributor shall take appropriate steps with the customers, as
GameTech may request, to inform them of and assure compliance with these
restrictions. Distributor acknowledges that any violation of these provisions
is a material breach of this Agreement that shall entitle GameTech to obtain
equitable relief to terminate such unauthorized activities, including but not
limited to, preliminary and permanent injunctive relief, as well as money
damages.
6.3 CONFIDENTIALITY. The Parties acknowledge that by reason of their
relationship to each other hereunder each will have access to certain
information and materials concerning the other's business, plans, customers,
technology, and/or products that is confidential and of substantial value to
that Party, which value would be impaired if such information were disclosed
to third parties. Each Party agrees that it will not use in any way for its
own account or the account of any third party, nor disclose to any third
party, any such confidential information revealed to it by the other Party and
shall take every reasonable precaution to protect the confidentiality of such
information. Upon request by either Party, the other Party shall advise
whether or not it considers any particular information or materials to be
confidential. Distributor shall not publish any
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technical description of the Products beyond the description published by
GameTech. Upon termination of this Agreement, there shall be no use or
disclosure by a Party of any confidential information of the other Party, and
neither Party shall manufacture or have manufactured any devices, components
or assemblies utilizing any of the other Party's confidential information.
7. TRADEMARKS AND TRADE NAMES. During the term of this Agreement,
Distributor shall have the right to indicate to the public that it is an
authorized distributor of GameTech Products and to advertise the Products to
potential customers under the trademarks, marks, and trade names that
GameTech may adopt from time to time ("GameTech's Trademarks"). Distributor
shall not alter or remove any of GameTech's Trademarks applied to the
Products at the factory. Nothing herein shall grant to Distributor any right,
title or interest in GameTech's Trademarks. At no time during or after the
term of this Agreement shall Distributor challenge or assist others to
challenge GameTech's Trademarks or the registration thereof or attempt to
register any trademarks, marks or trade names confusingly similar to those of
GameTech.
8. GENERAL PROVISIONS.
8.1 ASSIGNMENT. A mutually agreed consideration for GameTech's
entering into this Agreement is the reputation, business standing, and
goodwill already honored and enjoyed by Distributor under its present
ownership, and accordingly, Distributor agrees that its rights and
obligations under this Agreement may not be transferred or assigned directly
or indirectly without the prior written consent of GameTech. Subject to the
foregoing sentence, this Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and assigns.
8.2 NOTICES. Any notice or other communication shall be sufficiently
given if sent by registered or certified mail, or by facsimile transmittal
if receipt is electronically confirmed or by courier, postage prepaid (with
confirmation of receipt), or hand delivery (with confirmation of receipt) to
the respective address of the Parties provided above, or such other addresses
as shall be noticed during the term of this Agreement.
8.3 RELATIONSHIP OF THE PARTIES. The relationship of GameTech and
Distributor established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to (i) give either
party the power to direct and control the day-to-day activities of the other,
(ii) constitute the parties as partners, joint ventures, co-owners or
otherwise as participants in a joint or common undertaking, or (iii) allow
Distributor to create or assume any obligation on behalf of GameTech for any
purpose whatsoever. All financial obligations associated with Distributor's
business are the sole responsibility of Distributor. Distributor shall be
solely responsible for, and shall indemnify and hold GameTech free and
harmless from, any and all claims, damages or lawsuits (including GameTech's
reasonable attorney's fees) arising out of the acts of Distributor, its
employees or its agents.
8.4 TERM AND TERMINATION.
(a) TERM. This Agreement shall continue in force for a team commencing
on the date first written above until December 31, 1998, unless terminated
earlier under the provisions of this Agreement. The term of this Agreement
shall automatically be extended for an additional one year. Any extension
after such additional one year shall only be by mutual agreement of the
Parties.
(b) TERMINATION FOR CAUSE. If either party defaults in the performance
of any provision of this Agreement, then the non-defaulting party may give
written notice to the defaulting party that if the default is not cured
within thirty (30) days the Agreement will be terminated. If the
non-defaulting party gives such notice and the default is not cured during
the thirty (30) day period, then this Agreement shall terminate immediately
upon notice by the non-defaulting party.
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(c) TERMINATION FOR INSOLVENCY. This Agreement shall terminate
automatically, without notice, (i) upon the institution by or against
Distributor of insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of Distributor's debts, (ii) upon
Distributor's making an assignment for the benefit of creditors, or (iii)
upon Distributor's dissolution.
(d) RETURN OF MATERIALS. All trademarks, marks, trade names, patents,
copyrights, designs, drawings, formulas or other data, photographs, samples,
literature, and sales aids of every kind shall remain the property of GameTech.
Within thirty (30) days after the termination of this Agreement, Distributor
shall prepare all such items in its possession for shipment, as GameTech may
direct, at GameTech's expense. Distributor shall not make or retain any
copies of any confidential items or information which may have been entrusted
to it. Effective upon the termination of this Agreement, Distributor shall
cease to use all trade-marks and trade names of GameTech.
(e) SURVIVAL OF CERTAIN TERMS. The provisions of Sections 1, 3, 4, 5,
6, 7 and 8 shall survive the expiration or termination of this Agreement for
any reason. Except as otherwise provided in this Agreement, all other rights
and obligations of the Parties shall cease upon termination of this
Agreement. In the event that of an acquisition of GameTech should occur, the
provisions of this Agreement shall remain in effect.
8.5 WAIVER; TERMINATION. A waiver by either party of any of the
terms or conditions of this Agreement in any instance shall not be construed
to be a waiver of such term or condition in the future, or any subsequent
breach thereof; all remedies, rights, undertakings, obligations and
agreements contained in this Agreement shall be cumulative, and none of them
shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of either Party.
8.6 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the Parties hereto relating to the subject matter herein
contained, and this Agreement cannot be changed, rescinded or terminated
except in writing signed by both Parties.
8.7 HEADINGS. The subject headings of the sections and
subsections of this Agreement are included for convenience of reference only
and shall not affect the construction or interpretation of any of its
provisions.
8.8 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the intent
of the parties that all other provisions of this Agreement be construed to
remain fully valid, enforceable and binding on the partiesment construed as
if such unenforceable provision had never been contained herein.
8.9 ATTORNEY'S FEES. The prevailing party in any legal action
brought by one party against the other and arising out of this Agreement
shall be entitled, in addition to any other rights and remedies it may have,
to reimbursement for its expenses, including court costs and reasonable
attorneys' fees.
8.10 APPLICABLE LAW AND VENUE. This Agreement shall be construed
according to the internal laws, and not the law of conflicts, of the State of
Arizona. The Parties hereto irrevocably consent that any legal action or
proceeding involving this Agreement shall be brought and enforced in any
state or federal court in Maricopa County, Arizona. By its execution and
delivery of this Agreement, each Party hereby submits to and accepts
generally and unconditionally the jurisdiction of the foregoing courts.
8.11 AUTHORIZED SIGNATORY; COUNTERPARTS. Each Party represents to
the other that the person signing on its behalf is authorized to sign on
behalf of and to bind such Party to this Agreement. This
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Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first above written.
"GameTech" "Distributor" Trend Gaming Systems, LLC
GameTech International, Inc. /s/ [Illegible]
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By: /s/ Xxxx X. Held By: /s/ [Illegible]
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Authorized Officer Authorized Officer
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EXHIBIT A
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PRODUCTS
GameTech Fixed Bingo Unit
GameTech Hand Held Units upon availability
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EXHIBIT B
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TERRITORY
State of Texas
--Except where jointly agreed and documented by the GameTech Vice
President of Sales and the Distributor.
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