87
CASINOVATIONS INCORPORATED
EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
This agreement is entered into effective June 1, 1997 (the "EFFECTIVE DATE")
between Casinovations, a U. S. Corporation having its registered address at
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 XXX
("MANUFACTURER") and II. Xxxx Xxxx (Company name to be designated) having
its registered address at 0000 Xxxxxx Xxxx., Xxxxx 000X, Xxxxx Xxxxx Xxxxx,
XX 00000 ("DISTRIBUTOR").
WITNESSETH
WHEREAS, MANUFACTURER develops, manufactures, and sells various types of
casino equipment for lawful markets worldwide; and
WHEREAS, DISTRIBUTOR desires to obtain the exclusive distributorship (as
defined hereinafter) of all the Casino Equipment (as defined hereafter) from
MANUFACTURER for sale in certain territory (as defined hereinafter),
NOW THEREFORE,, it is agreed between the parties as follows:
I DISTRIBUTOR APPOINTMENT AND TERRITORY
a. MANUFACTURER hereby appoints DISTRIBUTOR, upon the terms and
conditions of this Agreement as an exclusive distributor of its Casino Card
Shuffler Equipment Product line. Prices will be set for equipment so
provided will be at a DISTRIBUTOR price discount as specified in Section 5.b.
herein. The exclusive TERRITORY granted to the DISTRIBUTOR is specified in
Schedule 'A'.
b. DISTRIBUTOR agrees not to buy, sell or otherwise deal in within the
TERRITORY, any products which may be competitive with the PRODUCTS unless
otherwise authorized by MANUFACTURER in writing,
2. DEVELOPMENT OF TERRITORY, SALES AND SERVICE
a. DISTRIBUTOR hereby accepts such appointment and agrees at its own
expense to devote its best efforts to promote the distribution and sale of
the PRODUCTS in the TERRITORY to its maximum potential.
b. From time to time special promotion measures may be taken by either
party such as magazine advertisement, exhibitions, etc. Such joint sales
promotion can be entered into upon approval of both parties, but will require
prior written approval by both parties.
c. MANUFACTURER agrees to provide technical training to DISTRIBUTOR's
staff and/or customers at DISTRIBUTOR's facility without compensation.
DISTRIBUTOR or DISTRIBUTOR's customers shall bear round trip airfare costs to
DISTRIBUTOR's facility. MANUFACTURER will provide reasonable accommodation
and meals for DISTRIBUTOR's technician(s) to be dispatched in this regard.
3 . WARRANTY
a. The commencement date of the warranty of MANUFACTURER'S PRODUCT'S
shall be the date of installation at facility of end user.
b. MANUFACTURER warrants the PRODUCTS have no defects in their design
material and workmanship. Immediately after the discovery of any defects in
the PRODUCTS, DISTRIBUTOR shall give MANUFACTURER a written notice to such
effect together with clear evidence thereof. If in MANUFACTURER's opinion
the defects are not due to its fault or not attributable to MANUFACTURER by
any reason, then it shall promptly notify DISTRIBUTOR of its denial of
responsibility thereof. In such cases, both parties shall use their best
efforts to solve the problem amicably in good faith.
c. The obligation of the MANUFACTURER under this warranty shall be
limited to the supply, repair and/or replacement parts for the defective
PRODUCTS in accordance with the provisions set forth hereafter. The warranty
period after installation of PRODUCTS is twelve (12) months.
4. SPARE PARTS
a. Together with the first shipment of the PRODUCTS after the execution
of this Agreement, MANUFACTURER will provide DISTRIBUTOR with an appropriate
number of spare parts at no cost, so that DISTRIBUTOR may supply the same to
its customers in the TERRITORIES. Terms and conditions of the supply of said
spare parts such as quantity, prices, payment term shall be negotiated within
a reasonable period of time after the effective date of this Agreement.
MANUFACTURER agrees price of spare parts shall allow
for reasonable xxxx-up by DISTRIBUTOR consistent with other discounts on
MANUFACTURER'S PRODUCTS.
b. DISTRIBUTOR may keep all faulty parts replaced and maintain updated
proper stock records and provide them to MANUFACTURER, if it so desires, so
as to keep adequate stock level of spare parts.
88
5. PAYMENT, PRICE, AND DELIVERY
a. The DISTRIBUTOR shall pay MANUFACTURER in United States Dollars
(USD), for all PRODUCTS ordered and shipped at the prices as set per Section
5.b. herein. Terms of payment shall be fifty percent (50%) upon order, the
balance on delivery.
b. The MANUFACTURER agrees to offer to the DISTRIBUTOR a minimum
discount of twenty-five percent (25%) less than the promoted retail price in
Nevada. The MANUFACTURER agrees to negotiate in good faith purchase prices
for quantity and accelerated payments. In the event of increase in the
Nevada retail price MANUFACTURER agrees to honor all orders received thirty
(30) days before and after notice to DISTRIBUTOR of such price increase.
c. All PRODUCT'S shall be delivered FOB Las Vegas, Nevada.
6. ORDER AND SHIPMENT
2. All purchase orders for the PRODUCTS placed by DISTRIBUTOR with
MANUFACTURER shall be subject to the provisions of this Agreement. Any
provision of any "special" order that is inconsistent with this Agreement or
that may seek to impose any additional obligations upon MANUFACTURER shall be
null and void unless approved in writing by both parties. MANUFACTURER will
endeavor, so far as it may be practicable for it to do so, to fill such
order, but shall be under no liability to DISTRIBUTOR for any omission to do
so, irrespective of the reason, nor shall any partial shipment or shipments
against any order impose any liability upon MANUFACTURER with respect to the
undelivered balance of any order.
b. All sales made under this Agreement shall be in accordance with and
interpreted under U.S. law.
c. MANUFACTURER shall not be responsible or liable for any loss, damage
detention, or delay caused by fire, strike, civil or military authority,
governmental restrictions or controls, insurrection or riot railroad, marine
or air embargoes, lockout, tempest, accident, breakdown of machinery, yield
problems, delay in delivery of materials by other parties, or any cause which
is unavoidable or beyond its reasonable control, nor in any event for
consequential damages.
7. RELATIONSHIP OF THE PARTIES AND WARRANTIES
DISTRIBUTOR is an independent contractor and in no way an agent of
MANUFACTURER, its being expressly agreed that the only relationship created
by this Agreement is that of Manufacturer and Distributor. DISTRIBUTOR
agrees not to make any representation, promise, guarantee or warranty on
MANUFACTURER's behalf. DISTRIBUTOR further agrees that it has no authority
to assume or create any obligation on MANUFACTURER's behalf, express or
implied, regarding MANUFACTURER's PRODUCTS or otherwise. MANUFACTURER
only warrants the PRODUCTS sold by it to DISTRIBUTOR indicated herein. In no
event shall MANUFACTURER be liable for damages by reason of failure of any
products to function properly or for consequential or special damages.
8. RECORDS AND REPORTS
The DISTRIBUTOR shall maintain a complete record of all PRODUCTS sold by the
DISTRIBUTOR and furnish such data to MANUFACTURER upon its request.
9. CUSTOM PRODUCTS
Custom products, for purpose of agreement, are defined as products which have
specific function unique to a customer. All orders for custom products must
be approved in writing by MANUFACTURER prior to acceptance by DISTRIBUTOR.
Thereafter, DISTRIBUTOR will promptly notify MANUFACTURER of any
circumstances which may affect that order and MANUFACTURER will keep
DISTRIBUTOR notified of its progress in fulfilling such order.
TERM AND TERMINATION
a. This Agreement shall remain in full force and effect for a period of
five (5) years from the EFFECTIVE DATE hereof, or until such earlier date as
of which it may be terminated as hereinafter provided. If for any reason
whatsoever the relations between the parties shall continue beyond the said
term hereof without written formal agreement as to the terms and conditions
thereof, such continuance of relations shall not be deemed a renewal or
extension of said term beyond the said expiration date and the same shall be
subject to immediate termination upon notice by either party to the other,
but shall in all respects be deemed to be subject to terms and conditions
identical with those contained herein.
b. If either party hereto shall fail to perform any of the obligations
imposed upon it hereunder, the other party shall have the right as its
option, to terminate this Agreement by giving thirty (30) days' written
notice. The party alleging breach of' this Agreement shall have thirty (30)
days from the date of receipt of notice to cure such breach. Failure to cure
shall cause this Agreement to terminate within thirty (30) days of receipt of
notice. In the event of a termination due to DISTRIBUTOR breach,
MANUFACTURER
89
reserves the right to purchase from the DISTRIBUTOR and the DISTRIBUTOR shall
sell to MANUFACTURER any PRODUCTS not sold which the DISTRIBUTOR may
have on hand, at the time of such termination.
c. Independently of any violation of the provisions of this agreement,
either party hereto may terminate this Agreement at any time and without
cause, by giving the other party at least thirty (30) days notice of its
election to do so. In the event of such termination by MANUFACTURER
without cause, MANUFACTURER may at its option repurchase DISTRIBUTOR's
inventory of the PRODUCTS at Fair market value to be determined at
MANUFACTURER'S sole discretion.
d. Upon termination or expiration of this Agreement for any cause
whatsoever, MANUFACTURER will, subject to all the terms hereof, complete its
obligations hereunder as to any orders received from the DISTRIBUTOR and
accepted by MANUFACTURER prior to the termination or expiration of this
Agreement. One year thereafter, MANUFACTURER or a new Distributor may
complete any transaction inaugurated by DISTRIBUTOR but not therefore
resulting in an accepted order. Upon such termination or expiration the
DISTRIBUTOR shall immediately discontinue all promotion and advertising with
respect to CASINOVATIONS PRODUCTS.
e. Neither the expiration nor the termination of this Agreement shall
release either party from the obligation to pay any sum then may be owing or
from the obligation to perform any other duty or to discharge any other
liability that has been incurred prior thereto. Subject to the provisions of
the immediately preceding sentence, however, neither party shall by reason of
the expiration or termination of this Agreement shall be liable to the other
for compensation or damage on account of the loss of present or prospective
profits on sales or anticipated sales, or expenditures, investments, or
commitments made in connection therewith or in connection with the
establishment, development or maintenance of DlSTRIBUTOR's or MANUFACTURER's
business or goodwill.
f. Either party shall be entitled to immediately terminate this Agreement by
notice in writing to the other for any of the following events:
1. A filing of petition of bankruptcy or insolvency,
2. Any adjudication of any bankruptcy or insolvency;
3. The filing of any petition seeking reorganization or readjustment or
arrangement of the business under any law relating to bankruptcy or
insolvency;
4. The appointment of a receiver for all or substantially all of the
property of either party;
5 . The making of any assignment or attempted assignment for the benefit of
creditors;
6. The institution of any proceeding for the liquidation or winding up of
business or for the termination of its corporate charter.
11. EXTRA-TERRITORIAL, SALES
Without prior written consent of MANUFACTURER in each instance, DISTRIBUTOR
shall not, directly or indirectly, offer for resale, sell or ship PRODUCTS
and/or replacement parts outside of the TERRITORY. Inquiries from customers
or potential customers outside the TERRITORY shall be promptly referred to
MANUFACTURER, who will reply in writing if the DISTRIBUTOR may pursue.
Likewise, MANUFACTURER agrees that inquiries received from customers or
potential customers in the TERRITORY shall be referred to DISTRIBUTOR.
12. PRODUCT CHANGES
MANUFACTURER reserves the right, from time to time, without incurring any
obligation to DISTRIBUTOR to discontinue any PRODUCTS or type thereof, to
alter the design or construction thereof, and/or add new and additional types
thereof to its line and in the event of any such action on MANUFACTURER's
part, it shall give DISTRIBUTOR no less than thirty (30) days notice thereof.
Any product change shall not affect any pending orders placed by DISTRIBUTOR.
13. MARKET REPRESENTATIONS
DISTRIBUTOR acknowledges and agrees that MANUFACTURER has made no
statements
or representations as to the size of the market for the PRODUCTS or as to the
amount of profits to be received by DISTRIBUTOR. DISTRIBUTOR acknowledges
that in entering into this Agreement it is relying entirely on its own
estimate as to the market for the PRODUCTS, but warrants no level of sales
upon which MANUFACTURER may rely.
14. CONFIDENTIALITY
DISTRIBUTOR agrees to hold all marketing, sales, business and technical
information regarding MANUFACTURER or its customers in the strictest
confidence and disclose no such information to any third party during the
term of this Agreement and for three (3) years after its termination or
cancellation.
90
15. NON ASSIGNMENT AND NOTICE OR CERTAIN CHANGES
Without MANUFACTURER's prior written consent, neither this Agreement nor any
interest therein shall be transferable or assignable by DISTRIBUTOR, by
operation of law or otherwise. DISTRIBUTOR shall immediately notify
MANUFACTURER in writing of any substantial change in the ownership,
financial interests or active management of DISTRIBUTOR. MANUFACTURER may
assign this agreement to a subsidiary or successor in interests.
16. GOVERNMENTAL, PERMITS AND LICENSES
DISTRIBUTOR shall obtain at its own expenses all necessary governmental
permits/licenses for but not limited to the importation, sale , installment,
operation, repair, maintenance and bear the cost such as, but not limited to
import duty and any other related taxes imposed into the TERRITORY of
the PRODUCTS purchased by DISTRIBUTOR. MANUFACTURER shall pay for any
permits, licenses or taxes specifically applicable to MANUFACTURER.
17. RELEASE FROM CLAIMS
In consideration of the execution of this Agreement by MANUFACTURER,
DISTRIBUTOR hereby releases MANUFACTURER from all claims, demands or other
liabilities, pending as of the date of entering this Agreement by
DISTRIBUTOR, except indebtedness due under a written contract with
MANUFACTURER or a written warranty issued by MANUFACTURER.
18. USE OF NAME AND TRADE-MARKS
DISTRIBUTOR shall not use in its corporate firm or business name or allow to
be used by others, insofar as it may have any power to prevent such use the
name "CASINOVATIONS" or any other trade name or trade-xxxx adopted by
MANUFACTURER or any words or names or combination of words or names closely
resembling any of them provided, however, that during the term hereof
DISTRIBUTOR shall have the right to and shall indicate to the public and to
the trade by names of advertising, pamphlets, letterheads or other media for
the purpose of selling the PRODUCTS in and for the TERRITORY that the
DISTRIBUTOR is the authorized distributor of the PRODUCTS. Upon the
expiration or termination of this Agreement, DISTRIBUTOR, forthwith shall
discontinue the use of the name "CASINOVATIONS" and of any other name or
names or any combination of words or design or trade-xxxx or trade names that
would indicate or tend to indicate that DISTRIBUTOR was or is a distributor
of the PRODUCTS.
19. NO LICENSES IMPLIED OR GRANTED
No licenses are granted or implied by this Agreement under any intellectual
property owned or controlled by MANUFACTURER or under which DISTRIBUTOR has
any rights except the right to buy, sell and deal in the PRODUCTS furnished
by MANUFACTURER. No rights to manufacture are granted by this Agreement.
DISTRIBUTOR agrees that it will not remove or alter MANUFACTURER's patent
number or other marks affixed to the PRODUCTS or permits the same to be done.
20. WAIVER
The failure of either party at any time to require performance by the other
party of any provisions hereof shall in no way affect the full to require
such performance at any time thereafter. Nor shall the waiver by either
party or a breach of any provisions hereof be a waiver of any succeeding
breach of the same or any other such provisions or be a waiver of the
provision itself.
21. BINDING VERSION
The official and binding version of this Agreement shall be English
irrevocable of the language into which it may be translated.
22. NOTICES
Any notice herein required or permitted to be given shall be in writing and
may be personally served or sent by facsimile or mail and shall be deemed to
have been received if personally served when served, if mailed on the fifth
business day after deposit in the U.S. mail, as the case may be, with airmail
postage prepaid and properly addressed. For purposes hereof the address of
the parties hereto (until a change thereof is given as provided in this
Section) will be as follows:
MANUFACTURER: DISTRIBUTOR:
CASINOVATIONS INCORPORATED
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000 0000 Xxxxxxxx Xxxx., Xxxxx 0X0X
Xxx Xxxxx, Xxxxxx 00000 XXX North Xxxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxx Attn: H. Xxxx Xxxx
Phone: 0-000-000-0000 Phone: 0-000-000-0000
Fax: 0-000-000-0000 Fax: 0-000-000-0000
23. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the laws of
the State of Florida excluding any law or principle which would apply the law
of any other jurisdiction. The rights and obligations of the parties shall
not be governed by the provisions of the U.N. Convention on Contracts for the
International Sale of Goods.
91
24. ARBITRATION
Both parties herein agree to the following method of the arbitration:
a. Any dispute, issue, or difference of opinion arising from parties
hereto out of or relating to this Agreement, or the breach thereof, shall be
finally settled by arbitration in the United States in accordance with the
Commercial Arbitration Rules of The American Arbitration Association, unless
otherwise agreed between the parties. The award rendered by arbitrator(s)
shall be final and binding upon both parties.
b. If applicable, the parties shall have the right to conduct
discovery, provided that the arbitrator(s) may order that any particular
discovery initiated by a party be taken if the arbitrator(s) determine that
such discovery is reasonably necessary for the presentation of the requesting
party's case.
c. The language of the arbitration shall be English.
d. In the event of arbitration concerning this Agreement, the prevailing
party in such Proceeding shall be entitled to reimbursement from the other
party for all reasonable attorneys fees arid costs incurred with respect to
such Proceeding.
e. This provision 24 shall survive the expiration or termination of this
agreement for a period of three (3) years.
25. EXECUTION
This Agreement shall not be binding upon either its behalf by an authorized
officer, nor shall any modification, renewal, termination or waiver of any of
the provisions herein contained, or any future representation, promise
condition or waiver in any connection with the subject matter hereof be
binding upon either party unless made in writing and executed by such party
in the same manner.
26. INTEGRATION
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges all prior writings and
discussions between them and neither party shall be bound by any terms,
renditions, definitions, warranties or representations other than as
expressly provided herein or as duly set forth on or subsequent to the date
hereof in writing signed by the party to be bound thereby.
27. INFRINGEMENT OF THIRD PARTIES/COMPLIANCE WITH ALL LAWS.
MANUFACTURER represents and warrants that the products do not infringe upon
any Patents, Trademarks, or Copyrights in the US. or elsewhere, or third
parties ("third party right"). MANUFACTURER shall defend, indemnify, and
hold harmless DISTRIBUTOR from claims, demands, liabilities, actions and
expenses associated with MANUFACTURER'S defense thereof, (or DISTRIBUTOR'S
defense thereof in the event MANUFACTURER does not assume such defense) that
may be brought against DISTRIBUTOR, but only to the extent that the same
allege the products infringe third party rights and further provided
MANUFACTURER is given prompt notice of such claim by DISTRIBUTOR upon
DISTRIBUTOR'S learning of the claim and is permitted to control the
defense settlement of the legal action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized representatives.
MANUFACTURER: DISTRIBUTOR:
CASINOVATIONS, INC.
------------------- -------------------
(Signature) (Signature)
By: Xx. Xxxxxx X. Xxxx By: Owner
Title: Pres. and COO Title:
Date: 6/2/97 Date: 6/2/97
The Territory shall consist of South America, Central America, the Caribbean
Islands, the State of Florida and Cruise Ships worldwide, excluding Cruise
Ships based in Malaysia, Singapore and Hong Kong. The Territory consisting
of the Bahamas shall be non-exclusive,
