EXHIBIT 6.1
LEASING AND SERVICE AGENCY AGREEMENT
This Agreement is dated for reference the 15th day of September, 1996.
BETWEEN: ADVANCED GAMING TECHNOLOGY, INC. an entity incorporated under the
laws of the State of Wyoming, United States of America, and having
an office at XX Xxx 00000, Xxxxx 0000 - 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0.
(hereinafter refereed to as the "Manufacturer")
AND: XXXXXX XXXXXXXX GROUP, an entity incorporated under the laws of
England and having an office at Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx, XX0 0XX
(hereinafter refereed to as the "Agent")
RECITALS
WHEREAS:
A. The Manufacturer is engaged in the business of manufacturing a two-way
electronic bingo device that shall be marketed for lease to customers under
the name "PartiMAX" (the "Product"):
B. The Manufacturer wishes to appoint an exclusive agent to lease and service
the Product in the Territory and to fulfill those other duties that are set
forth in this Agreement;
C. The Agent wishes to accept the appointment as the Manufacturer's exclusive
agent on the terms set forth in this Agreement:
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements of the parties hereafter set out an in consideration of
the sum of One ($1.00) Dollar now paid by each party to the other, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
PART 1
Interpretation
1.01 Definitions
Unless the context requires otherwise the terms defined in this part have
for all purposes of this Agreement the following meanings:
Approved Budgets - "Approved Budgets" means the annual budgets that are
approved by the parties as provided in Part VIII.
Business - "Business" means the design, development, manufacture,
marketing leasing, installation and maintenance of two-way
portable electronic bingo devices to augment he play of
merchandised cash bingo in the United Kingdom.
Product - "Product" means the two-way electronic bingo device that is
manufactured by the Manufacturer under the name "PartiMAX",
the current specifications of which are appended to this
Agreement as Scheduled "A".
Revenue - "Revenue" means the gross revenue generated from the Business
in the Territory.
Territory - "Territory" means the United Kingdom.
PART II
Appointment of Agent
2.01 Appointment
The Manufacturer hereby appoints the Agent as its exclusive agent to
solicit leases of the Product in the Territory and to fulfill the other
duties that are set forth in this Agreement. The Agent hereby accepts such
appointment upon the terms and conditions contained in this Agreement.
2.02 Exclusive Agency
The appointment of the Agent is an exclusive appointment within the
Territory.
2.03 Territorial Restriction
The Agent shall not lease, install or service the Product in any location
outside of the Territory without the express written consent of the
Manufacturer.
2.04 Best Efforts by Agent
The Agent shall use its best efforts to carry out and complete all tasks
and services reasonably necessary for the marketing, leasing,
installation, training, customer service, repair service, administration
and collection functions that are directly or indirectly associated with
the Business and to obtain all necessary approvals of the Product as may
be required under the gaming regulatory structure within the Territory.
The Agency further agrees that its merchandising policies, from time to
time, shall be designed to preserve the goodwill that is associated with
the name and reputation of both the Manufacturer and the Product.
-2-
2.05 Best Efforts by Manufacturer
The Manufacturer shall use its best efforts to carry out and complete all
tasks and services reasonably necessary for the design, engineering,
development and manufacturing of the Product in order to enable the Agent
to obtain necessary approvals for the leasing and servicing of the Product
in the Territory. The Manufacturer acknowledges that the Product must
conform with EMC Directive 89/336/EMC, a copy of which is attached hereto
as Schedule "B". The Manufacturer further acknowledges that it will be
responsible for the cost of transportation and delivery, including customs
duties, if applicable, of the Product to a location designated by the
Agent in the Territory.
PART III
Facilities
3.01 Place of Business
Throughout the term of this Agreement, the Agent shall maintain within the
Territory one or more places of business, each with a display room as well
as service and installation equipment with which it can carry out its
obligations under this Agreement.
3.02 Location of Facility
The Agent shall not lease or offer to lease the Product from any location
within the Territory without first obtaining the written approval of the
Manufacturer, which approval shall not be unreasonably withheld.
PART IV
Cost and Revenue Allocation
4.01 Costs
Each party shall be solely responsible for and shall pay for the costs
that are incurred by it within its sphere of responsibility as provided in
Sections 2.04 and 2.05 of this Agreement. Without restricting the
generality of the foregoing, the parties agree that:
(a) the Manufacturer shall be responsible for paying all costs incurred
in the design, engineering, development and manufacturing of the
Product and for all transportation costs, taxes or duties relating
to the delivery of the Product to the Agents premises;
(b) the Agent shall be responsible for paying all costs in the
marketing, leasing, installation, training, customer service, repair
service, warranty and maintenance service of the Product and for all
administration and collection costs associated with the Business,
including the cost of obtaining all necessary approvals of the
Product from any regulatory authorities within the Territory, and
including the cost of preparing, registering and maintaining the
registration of leases of the Product; and
-3-
(c) the Agent shall be responsible for all travel, entertainment,
office, clerical, accounting, general leasing and service expenses
relating to the Business and for the cost of collecting and
remitting any Value Added Tax or Sales Tax applicable to the leasing
or servicing of the Product.
4.02 Pricing of Product
The Agent shall only quote such lease rates and lease terms for the
Product as the Agent and the Manufacturer shall from time to time agree in
writing. The Agent shall have no right, power or authority to represent
that the Product may be obtained on terms and conditions different from
those provided.
The Agent shall quote prices and terms for the installation and
maintenance of the Product, from time to time, as it shall consider
appropriate, provided that the prices and terms quoted by the Agent shall
be competitive with the prices and terms applicable to the installation
and maintenance of any comparable gaming devices within the Territory.
4.03 Acceptance of Orders
All orders taken by the Agent for the Product shall be subject to
acceptance or rejection by the Manufacturer in accordance with policies
and procedures established from time to time by agreement between the
Manufacturer and the Agent. Subject to the foregoing, the Manufacturer
agrees to use its best efforts to fill all orders for the product that are
placed by the Agent and to arrange for delivery of the Product to the
Agent's designed facility within thirty (30) days of its receipt of an
accepted order.
4.04 Revenue Allocation
Until such time as the Manufacturer has received aggregate Revenue equal
to the lesser of:
(a) 500,000 pounds sterling; or
(b) the Manufacturer's actual documented cost of the design,
engineering, development of the Product;
all Revenue from the Business shall be distributed 60% to the Manufacturer
and 40% to the Agent. Thereafter, all Revenue shall be shared equally
between the Manufacturer and the Agent. Revenue from the Business during
each month throughout the term of this Agreement shall be distributed by
the Agent by the 15th Day of the following month together with an
accounting for all Revenue that has been received by the Agent during the
preceding month.
-4-
4.05 Bank Accounts
All Revenue shall be collected by the Agent and deposited to a segregated
account or accounts maintained by it for those purposes.
PART V
Agent's Other Obligations
5.01 Marketing of Products
The Agent agrees to conduct its activities under this Agreement in a
lawful manner, consistent with the high standards of fair trade, fair
competition and business ethics.
5.02 Approval of Advertising
A programme for all advertising or promotion shall be prepared by the
Agent, from time to time, and the same shall be reviewed and mutually
agreed by both the parties before implementation.
5.03 Expenses
The Agent shall pay any and all of its costs and expenses under this
Agreement when the same shall be due and payable and shall be solely
responsible for the acts of its employees, agents and representatives.
5.04 Installation of Product
The Agent shall provide installation service of the Product to all
customers.
5.05 Maintenance and Servicing of Product
The Agent shall provide servicing and maintenance of the Product under the
same terms and conditions as it now supports existing electronic
installations in the United Kingdom, provided always that the Agent will
exercise its very best effort to provide services and maintenance of the
Product to all customers requesting same within two (2) business days of
the Agent's receipt of such request.
5.06 Sales Tax
The Agent shall be responsible for collecting and remitting any and all
Value Added Tax or Sales Tax applicable to the leasing, installation or
servicing of the product.
5.07 Risk of Product
All Product delivered to the Agent shall remain the property of the
Manufacturer but shall be at the risk of the Agent while in its
possession. The Agent shall maintain in force during the continuaton of
this Agreement, policies of insurance issued by carriers approved by the
Manufacturer acting reasonably and covering insurable risks in such
amounts as are specified by the Manufacturer acting reasonably. Such
insurance policies shall insure the Agent and the Manufacturer and shall
provide for at least thirty (3) days prior written notice to the
Manufacture of any material modification, cancellation or expiration of a
policy. The Agent shall provide evidence that such insurance is in effect
prior to taking delivery of Product.
-5-
PART VI
WARRANTIES
6.01 Manufacturer's Warranties
The Manufacturer shall provide a written copy of the Manufacturer's
limited warranty with each Product that is delivered to the Agent and the
Agent shall pass such limited warrant on to its retail customers. The
Agent shall make no changes to said warranty either orally or in writing.
6.02 Defects
The Agent shall notify the Manufacturer immediately of any customer
complaints or claimed defects in any Product. The Manufacturer shall be
entitled to inspect all Product which the Agent is notified is defective
and shall determine the validity of any such claim as being a
manufacturing defect.
PART VII
Trademarks and Copyrights
7.01 Trademarks and Copyrights
The Agent shall not acquire any right to any goodwill, trademark,
copyright, industrial design or other form of intellectual or commercial
property of the Manufacturer. The Manufacturer authorizes and the Agent
agrees to use the name "PartiMAX" in association with the leasing and
servicing of the Product, which authorization shall terminate upon the
termination of this Agreement.
PART VIII
Records
8.01 Books of Account
The Agent shall cause to be established and supervise the books of account
of the Business. All books of account shall be kept at the office of the
Agent and the Agent shall cause the books of accounts to be retained by it
and by the Agent's accountants or as otherwise agreed upon by the parties
for a period of two (2) years following the termination of this Agreement.
8.02 Method of Accounting
The books of accounts shall be maintained by the Agent on an accrual basis
in accordance with generally accepted accounting principles consistently
applied.
8.03 Inspection of Accounts
The Manufacturer has the right during the term of this Agreement and for
two (2) years following the termination of this Agreement, at all
reasonable time during normal business hours, to audit, examine and make
copies of or extracts from the books of account. Such right may be
exercised through an agent or an employee or
-6-
other authorized representative of the Manufacturer. The expenses incurred
in any such audit or examination shall be paid by the Manufacturer unless
any accounting irregularities are discovered, in which event the expenses
incurred shall be paid by the Agent.
8.04 Monthly Reports
The Agent shall, not more than fifteen (15) days after the end of each
calendar month, furnish to the Manufacturer a reasonably detailed
operating statement and other appropriate information for the calendar
month in question, summarizing the operations of the Business and giving a
detailed accounting for all Revenue collected by the Agent.
8.05 Annual Report
The Agent shall, within ninety (90) days after the end of each operating
year, deliver to the Manufacturer audited Financial Statements of the
Business prepared in accordance with generally accepted accounting
principles consistently applied.
8.06 Budget
Prior to October 1, 1996 and the same date of each subsequent year during
the term of this Agreement, the Agent shall cause to be prepared and shall
deliver to the Manufacturer a proposed budget for the next ensuing fiscal
year, setting forth in reasonable the number of units of the Product that
the Agent estimates will be leased during each moth of the next ensuing
fiscal year, including the projected Revenue of the Business for both the
leasing and servicing of the Product.
8.07 Approval
Each budget referred to in Section 8.06 hereof is subject to the approval
of both parties. If the parties do not mutually approve the budget for the
next ensuing fiscal year, either party may give the other party sixty (60)
days written notice of its intention to terminate this Agreement. If the
parties are unable to approve the budget within the aforesaid sixty (60)
day period, either party may terminate this Agreement and shall be under
no further obligation to the other save and except for the obligation to
account for all Product delivered to the Agent and all Revenue from the
Business up to the date of termination of this Agreement.
PART IX
Term
9.01 Effective Date
This Agreement is effective on execution by both parties.
9.02 Term
Subject to earlier termination of this Agreement as provided in Section
8.07 hereof, this Agreement shall have a term of five (5) years commencing
on the effective date and may be renewed for successive five (5) year
terms upon the terms and conditions
-7-
that are provided in this Agreement or as the parties may otherwise
mutually agree in writing.
PART X
Amendment of Agreement
10.01 Amendments
This Agreement may only be amended with the written consent of both
parties.
PART XI
ASSIGNMENT
11.01 Assignment
This Agreement may not be assigned by either of the Manufacturer or the
Agent without the prior written consent of the other party, except that
this Agreement may be assigned to a wholly owned subsidiary of the party
making the assignment. No assignment of this Agreement shall be valid
unless the assignee has given its covenant to the other party hereto to be
bound by the terms of this Agreement. In the event of any such assignment,
the Manufacturer and the Agent, as the case may be, shall remain liable to
the other under this Agreement notwithstanding such assignment unless it
is specifically released by the other party either prior to or
concurrently with the effective date of such Assignment.
PART XII
General
12.01 Proper Law and Choice of Forum
This Agreement is to be governed by and interpreted in accordance with the
laws of the United Kingdom. Both the parties hereby agree that nay
disputes arising out of this Agreement that cannot be mutually settled
shall be referred to an arbitrator who shall be acceptable to both the
parties.
If the parties cannot decide on the arbitrator, then the arbitrator of the
International Court shall be asked to appoint an arbitrator to rule on the
dispute.
12.02 Waiver
A waiver on the art of any party to this Agreement relating to the strict
compliance with any term of this Agreement will not in itself, constitute
a waiver of the rights of that party in the event of a subsequent beach of
a term or condition of this Agreement by another party.
12.03 Severability
If any provision of this Agreement is found to be unreasonable or
unenforceable, or both, by a Court of competent jurisdiction, then such
provision shall be deemed to be severed from this Agreement and the
remainder of this Agreement will not be affected
-8-
and will remain in full force to the extent permitted by law.
12.04 Execution by Facsimile and Counter Parts
This Agreement may be executed by facsimile transmission and/or in one or
more counter parts, each of which so executed will constitute an original
and all of which will constitute one and the same Agreement.
12.05 Notice
Any notice to be given under this Agreement shall be duly and properly
given if delivered, or if transmitted by fax to such Fax number as the
parties may from time to time designate, or if mailed by prepaid
registered post in Canada, or in the United Kingdom addressed as set out
at the beginning of this Agreement or at such other address or addresses
as the parties may from time to time designate by notice in writing to
each other. Any notice mailed pursuant to this Section will be deemed to
be received on the tenth (10th) business day next following the day of
mailing.
12.06 Headings
All captions contained in this Agreement are for convenience only and do
not constitute a part of this Agreement. Whenever required, the singular
will be deemed to include the plural and vice versa. Whenever required,
the masculine gender will include the feminine and vice versa.
12.07 No Partnership
The parties do not intend to form a partnership nor shall either of them
for any purpose be or be deemed or be treated in any way whatsoever to be,
liable or responsible under this Agreement as partners.
12.08 No Pledging of Credit
Neither party shall pledge the credit of or legally bind the other party
hereto without the express written consent of that party.
12.09 Successors and Assigns
This Agreement ensures to the benefit of and is binding upon the parties
to this Agreement, their heirs, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF the parties hereto set their hands and seals as of the day
and year first above written.
ADVANCED GAMING TECHNOLOGY, INC. XXXXXX XXXXXXXX GROUP
Per: /s/ Xxxxx Xxxxxxx Per:
--------------------------- ---------------------------
Authorized Signatory
-9-
