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EXHIBIT 10.13
EQUIPMENT SALE AGREEMENT
This Equipment Sale Agreement (the "Agreement"), effective June 30,
1999, is entered into by and between AGI Distribution , Inc., dba Acres Gaming,
having a place of business at 815 N.W. 9th Street, Corvallis, OR 97330 ("Acres")
and Detroit Entertainment, L.L.C. dba MotorCity Casino, having a place of
business at 1922 Cass, Detroit, MI 48226 ("Customer").
BACKGROUND
Customer desires to engage Acres to provide the Game Hardware Kits (as
defined below) for a state of the art networked gaming, bonusing, slot
accounting, and player tracking system (the "System") at the MotorCity Casino,
located temporarily at 2901 Grand River, Detroit, MI 48201 (the "Casino
Location"), and Acres desires to provide Customer with such Game Hardware Kits.
Accordingly, the parties agree as follows:
1. DEFINITIONS
- - "Game Hardware Kits" means the components necessary to integrate Games into
the System, namely, a player tracking card reader, a bonus button, a fluro
flasher, a keypad, a VFD display, a location identifier, harness cabling,
internal game electronics, and a sufficient number of bank controllers for
operation of the System.
- - "Games" means the gaming machines, including, but not limited to, slot
machines and video poker machines, to be used by Customer at the Casino
Location.
2. DELIVERY OF GAME HARDWARE KITS
Not later than September 1, 1999, Acres will deliver 2628 Game Hardware Kits to
Customer and/or such vendors as Customer designates, at such locations as
Customer designates. Items shipped by Acres to or for the benefit of Customer
will be shipped FOB Casino Location or such other location as is designated by
Customer.
3. PRICE AND PAYMENT TERMS
(a) Price. Customer shall pay Acres [Confidential portion omitted and filed
separately with the SEC], for a total price of $3,350,700, plus applicable taxes
(the "Total Price").
(b) Payment Schedule. Not later than September 20, 1999, Customer shall pay
Acres the Total Price.
4. INSTALLATION
Acres shall install or, where applicable, supervise the installation of the Game
Hardware Kits in
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good working order, including testing and verifying that they have been
successfully installed. Customer and Acres shall cooperate fully with each other
with respect to such activities.
5. WARRANTY
ACRES WARRANTS THAT FOR A PERIOD OF TWELVE (12) MONTHS FOLLOWING "GO LIVE", THE
GAME HARDWARE KITS PROVIDED HEREUNDER WILL BE FREE FROM DEFECTS AND IN GOOD
WORKING ORDER. IN THE EVENT OF A DEFECT, ACRES WILL EXPEDITIOUSLY RESTORE THE
APPLICABLE GAME HARDWARE KITS TO GOOD WORKING CONDITION BY ADJUSTMENT, REPAIR OR
REPLACEMENT, AT ACRES' OPTION. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THERE ARE NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6. SUPPLEMENTAL REMEDIES
In the event that any of the Game Hardware Kits supplied pursuant to this
Agreement do not substantially conform to specifications or representations set
forth in this Agreement, are not suitable for use at the Casino Location, or are
not timely delivered, installed or tested, in addition to other rights and
remedies available to Customer at law or equity, Customer may elect to: (1)
receive a refund of the payment for said Game Hardware Kit(s) provided Customer
returns the applicable Game Hardware Kit(s) to Acres or (2) retain said Game
Hardware Kit(s) and have Acres procure and provide suitable alternative Game
Hardware Kit(s).
7. LIMITATION OF LIABILITY
In no event shall Acres' liability for Customer's damages under this Agreement
exceed the Total Price.
8. TITLE
Title to each Game Hardware Kit shall vest in Customer upon receipt by Customer
or its designated vendor, as applicable, of the applicable Game Hardware Kit.
9. INDEMNITY
(a) Acres at its own expense will defend, indemnify and hold Customer harmless
in any action brought against Customer to the extent that it is based on a claim
that any one or more of the Game Hardware Kits or any component(s) thereof
infringe(s) any patents, copyrights, licenses or other property rights, provided
that Acres is promptly notified in writing of such claim. Acres shall have the
right to control the defense of all such claims, lawsuits and other proceedings.
In no event shall Customer settle any such claim, lawsuit or proceeding without
Acres' prior written approval.
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(b) If, as a result of any claim of infringement against any patent, copyright,
license or other property right, Acres or Customer are enjoined from using any
one or more of the Game Hardware Kits or any component(s) thereof, or if Acres
believes that any one or more of the Game Hardware Kits or any component(s)
thereof are likely to become the subject of a claim of infringement, Acres at
its option and expense may procure the right for Customer to continue to use the
applicable Game Hardware Kits or component(s) thereof or replace or modify same
with components of equal quality and function so that they are non-infringing.
The foregoing Subsections (a) and (b) state the entire liability of Acres with
respect to infringement of any license, property rights, copyrights or patents
by the Game Hardware Kits or any component(s) thereof.
(c) Acres will defend, indemnify and hold Customer harmless from and against any
claims, demands, liability(ies) or judgments resulting from a malfunction of any
one or more of the Game Hardware Kits or any component(s) thereof because of
design or manufacturing defects, or otherwise attributable to Acres' acts or
omissions. Customer will defend, indemnify and hold Acres harmless from and
against any claims, demands, liability(ies) or judgments resulting from
Customer's breach of this Agreement, negligence in operation of the Game
Hardware Kits or any component(s) thereof, or otherwise attributable to
Customer's acts or omissions.
10. GENERAL PROVISIONS
(a) Force Majeure. Neither party shall be responsible for any failure to perform
or delay in performing any of its obligations hereunder where and to the extent
that such failure or delay results from a force majeure event, meaning: strike,
boycott, lockout or other labor trouble; storm, fire, earthquake or other Act of
God; riot, civil disturbance, or any act of war or of the public enemy;
shortage, unavailability or disruption in the supply of electrical or other
utility service; or any other cause or contingency beyond the control of the
applicable party, but only during such time as such party is unable due to a
specified reason herein to perform its obligations hereunder. Licensing delays
shall not be considered a force majeure event.
(b) Attorneys' Fees. If either party brings any legal action or other proceeding
for breach of this Agreement, the prevailing party shall be entitled to recover
its reasonable attorneys' fees and costs.
(c) Divisibility. If any provision of this Agreement is found to be prohibited
by law and invalid, or for any other reason if any provision is held to be
unenforceable, in whole or in part, such provision shall be ineffective to the
extent of the prohibition or unenforceability without invalidating or having any
other adverse effect upon any other provision of this Agreement.
(d) Licensing. Acres warrants that it holds all requisite licenses, permits
and/or approvals required for it to perform all of its obligations hereunder and
shall comply with all applicable codes, laws, ordinances, approvals, rules and
regulations. Acres understands and acknowledges that this Agreement, at
Customer's discretion, may be subject to Acres and its principals being found
suitable by Customer's Compliance Committee. Notwithstanding any other provision
in this Agreement to the contrary, Customer may terminate this Agreement without
further
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obligation or liability to Acres if, in the judgment of Customer's Compliance
Committee, the relationship with Acres or Acres' principals could negatively
impact Customer's business or the business of Mandalay Resort Group or any of
its subsidiaries or affiliates.
(e) Addendum. For additional terms and conditions, see the Addendum attached
hereto and incorporated herein by this reference. In the event of any
inconsistency between this Agreement and the Addendum, the Addendum shall
control.
(f) Entire Agreement. This Agreement, including the Addendum, constitutes the
entire agreement between the parties relating to its subject matter and
supersedes all prior or contemporaneous negotiations or agreements, whether oral
or written, relating to the subject matter hereof. No extension, modification or
amendment of this Agreement shall be binding upon a party unless such extension,
modification or amendment is set forth in a written instrument, which is
executed and delivered on behalf of such party.
(g) Counterparts/facsimile. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
a single Agreement. Each party may rely upon the facsimile signature of the
other.
The parties hereto have duly executed this Agreement the 16th day of September,
1999.
AGI DISTRIBUTION, INC. DETROIT ENTERTAINMENT, L.L.C.
By: ___________________________ By: ______________________________
Title: ________________________ Title: ___________________________
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ADDENDUM
1. This Agreement is subject to review by the Michigan Gaming
Control Board ("Board") for compliance with the Michigan Gaming
Control and Revenue Act, MCL 432.201, et. seq., as amended,
supplemented, or construed, and the rules, regulations and orders
promulgated pursuant thereto, plus other such requirements, if
any, as are imposed by the Board (collectively, the "MGCB
Requirements"). Because the Board currently requires inclusion of
the following language in every contract that Detroit
Entertainment signs, the following language, to the extent
applicable, is made a part of the Agreement (with the term
"contract" referring to the Agreement, the terms "Applicant" and
"Licensee" referring to Detroit Entertainment, and the term
"Contractor" referring to Vendor):
(a) Upon execution of this contract and in accordance with the
Michigan Gaming Control and Revenue Act ("Act") MCL 432.201, et.
seq., and the rules promulgated pursuant thereto ("Rules", as
well as Michigan Gaming Control Board ("Board") orders and
regulations, the Contractor shall cooperate with the Applicant or
Licensee and its designees and provide information on an as
needed basis, directly or, if so directed by the Applicant or
Licensee, through the Applicant or Licensee to representatives of
the Board regarding this contract and its implementation. In
addition, the Contractor shall allow the Board or its
representatives on an as needed basis, to inspect the books and
records of the Contractor regarding this contract.
(b) The Contractor and any and all subcontractors shall adhere to
and comply with the following:
(i) The Act and the Rules, orders and regulations of the
Board issued and to be issued thereunder, as may hereafter
be amended, supplemented or construed. The Contractor
further acknowledges that the Act imposes and will
continue to impose requirements upon the Contractor, and
any and all subcontractors, and the Applicant or Licensee,
and may call for the submission and approval of this
contract by the Board or its designees.
(ii) Any and all requirements imposed upon each of them by
the Act and the Board, including, but not limited to, any
licensing, notification, disclosure, or registration
requirements imposed thereby. The Contractor and all
subcontractors shall assist the Applicant or Licensee in
complying with any requirements imposed on the Applicant
or Licensee by the Act or Board by reason of the project
or work contemplated hereunder.
(iii) All applicable federal, state, county, city, local
or other statues, ordinances, rules and regulations and
other laws including, but not limited to, the aforesaid
statutes and administrative rules and regulations.
(c) The Contractor shall supervise and oversee compliance with
the requirements of the Act by the Contractor and by each of the
Contractor's associates, employees, consultants and all persons,
contractors, subcontractors and any other consultants and
engineers retained by the Contractor in connection with the
Project (as defined below). The Contractor shall prepare such
reports as shall be required by the Board.
(d) The Contractor shall qualify to do business and obtain such
license, identification number, registration and other permits as
may be required for the performance of the services required to
be performed by the Contractor under this contract.
(e) This contract shall be subject to review by the Board for
compliance with the Act and Rules and is subject to termination
if so ordered by said Board. If the Board should disapprove of or
order termination of this contract by reason of finding that the
Contractor or any person associated with the Contractor, or any
of their affiliated companies, is unsuitable or is otherwise
prohibited from doing business with Applicants or Licensees,
neither the Applicant or Licensee, nor any of its members,
partners, shareholders, officers, directors, or employees, shall
be liable in any way to the Contractor by reason of such
disapproval or termination.
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(f) If the Board should disapprove of or order termination of
this contract by reason of finding that the Applicant or Licensee
or any person associated with the Applicant or Licensee or any of
their affiliated companies, is unsuitable or is otherwise
prohibited from doing business with Applicants or Licensee, said
parties shall not be liable in any way for any consequences,
losses or damage suffered or incurred by the Contractor by reason
of such disapproval or termination.
(g) Detroit Entertainment is entitled to terminate this contract
if the Board determines that this contract does not comply with
the Act or the MGCB Requirements.
2. Detroit Entertainment is also required by agreement with the City
of Detroit to include in its contracts certain other provisions.
Accordingly, to the extent applicable, Vendor further agrees as
follows:
(a) Vendor agrees to use its best efforts in a manner consistent
with City of Detroit Executive Order 4 to purchase at least 30%
of goods, services and supplies purchased for this Project (as
defined below) from vendors who meet the definition of
"Detroit-Based Businesses", "Detroit Resident Businesses", "Small
Business Concerns", "Minority Owned Businesses" and "Women Owned
Businesses" at the time the contract is awarded. Further, Vendor
agrees to work to achieve higher participation, if possible.
Vendor agrees that it will maintain appropriate records and will
require each of its subcontractors to maintain appropriate
records to permit confirmation of compliance with the provisions
of this paragraph.
(b) Vendor and its subcontractors shall comply with all licensing
requirements established by the City of Detroit, the County of
Wayne and the State of Michigan including, but not limited to,
the licensing requirements established by the Act and the Rules.
In furtherance thereof, Vendor expressly acknowledges that the
ability of Vendor and its subcontractors to obtain licensure in
Michigan is contingent upon such parties' key persons (as those
terms are defined under applicable Michigan law, rules and
regulations) meeting applicable licensing standards and otherwise
complying with all applicable laws, rules, regulations and
restrictions. Vendor shall do all things necessary (including
complying with any licensing, notification, disclosure or
registration requirements) and shall cooperate in all respects to
allow compliance with the applicable laws, rules, regulations and
restrictions.
(c) Vendor agrees to perform its services in a manner which is
consistent with and in full compliance with the terms and
conditions of the March 12, 1998 Development Agreement entered
into by and among the City of Detroit, The Economic Development
Corporation of the City of Detroit and Detroit Entertainment, as
amended from time to time. In furtherance thereof, Vendor agrees
to include in all of its contracts relating to Detroit
Entertainment's business ("Project") a provision requiring its
subcontractors to perform services in a manner which is
consistent with and in full compliance with the terms and
conditions of the March 12, 1998 Development Agreement entered
into by and among the City of Detroit, The Economic Development
Corporation of the City of Detroit and Detroit Entertainment,
L.L.C., as amended from time to time.
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(d) In the event that any provision of this Agreement is
determined to be inconsistent with the requirements of the March
12, 1998 Development Agreement entered into by and among the City
of Detroit, The Economic Development Corporation of the City of
Detroit and Detroit Entertainment, as amended from time to time,
the Act, the Rules and/or any other applicable law, rule or
regulation, then the provisions of the Development Agreement
and/or the applicable law, rule or regulation shall prevail and
this Agreement shall be interpreted and enforced accordingly.
(e) Vendor shall include the following in all of its contracts
regarding the Project: In the event that the Board does not
approve this contract, where approval is required, and/or
requests or requires that this contract be terminated, then this
contract shall immediately terminate.
(f) Vendor expressly acknowledges that this Project is subject to
comprehensive statutory, regulatory and contractual requirements.
The failure of Vendor and/or any of Vendor's subcontractors to
comply with said comprehensive statutory, regulatory and
contractual requirements, all of which are hereby expressly
incorporated herein as a part hereof as though fully set forth
herein, may result in a termination of this Agreement and Vendor
acknowledges and agrees to this condition and restriction. All of
Vendor's contracts on this Project shall contain a like contract
provision which is consistent with the provisions of this
paragraph.
(g) If this Agreement constitutes a construction contract, then
the following provisions are included to the extent applicable:
(1) Vendor agrees (a) that the rates, wages and fringe
benefits that Vendor and its subcontractors pay to each
class of employees on this Project shall not be less than
the wage and fringe benefit rates prevailing in the City
of Detroit as established by the most recent survey by the
Michigan Department of Labor for prevailing wages
determined under Act 166, P.A. 1965 (Act 166 P.A. 1965,
MCLA 408.551 et seq., MSA 17.256(a) et seq.) and (b) to
the extent applicable, to comply with the provisions of
the Davis-Bacon Act (40 U.S.C. 276a et seq. (1997). In
furtherance thereof, Vendor agrees to hire subcontractors
(including materials suppliers) who agree (a) to include
in their construction contracts an express term that the
rates, wages and fringe benefits that the subcontractor
and each of its subcontractors pay to each class of
employees on this Project shall not be less than the wage
and fringe benefit rates prevailing in the City of Detroit
as established by the most recent survey by the Michigan
Department of Labor for prevailing wages determined under
Act 166, P.A. 1965 (Act 166 P.A. 1965, MCLA 408.551 et
seq., MSA 17.256(a) et seq.) and, (b) to the extent
applicable, to comply with the provisions of the
Davis-Bacon Act, 40 U.S.C. 276a et seq. (1997).
(2) Vendor agrees to commit to the goal of maximizing, to
the greatest extent possible, the number of Detroit
resident apprentices who advance to journeyman status by
agreeing to, and by requiring Vendor's subcontractor(s) to
agree to utilize to the greatest extent possible unions
that do or will operate apprentice programs on the Project
that are open to all Detroit residents.
(3) Vendor agrees to implement an equal opportunity
employment plan which is a voluntary plan for the
employment, recruitment, training and upgrading of women
and minorities which conforms to all applicable laws and
which is consistent with Executive Order 22 of the City of
Detroit. Vendor agrees to require each of its
subcontractor(s) and their subcontractors to implement an
equal employment plan consistent with the provisions of
this paragraph.
3. Vendor represents and warrants that all goods furnished
hereunder, whether supplied by Vendor or by someone else, will
(1) be new and of first quality, (2) be free from defects in
materials and workmanship, (3) conform to the specifications
supplied by Detroit Entertainment, (4) be free from design and
specification defects, whether or not manufactured to Vendor's
specifications, (5) be fit for the purpose for which intended,
(6) be of merchantable quality and fit
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and safe for consumer use, (7) be free and clear of all liens and
encumbrances at the time of shipment, (8) be "Y2K Compliant" as
described below. For purposes of this Addendum, a device
(software application, computer hardware, embedded chip, etc.)
that is Year 2000 compliant ("Y2K Compliant") accurately
processes date/time data (including, but not limited to,
calculating, comparing, and sequencing) from, into, and between
the 20th and 21st centuries, and the years 1999 and 2000, and
accurately performs leap year calculations for the year 2000 and
into the 21st century. In addition:
- The device shall not end operation abnormally or provide invalid
or incorrect results as a result of processing date data.
- No acceptable value for current date shall cause interruptions in
normal operations of systems using the device.
- All manipulations of time-related data (dates, duration, days of
week, etc.) shall produce the desired results for all valid date
values within the operational date range specified for the
device.
- Date elements in interfaces and data storage for the device shall
permit specifying century to eliminate date ambiguity.
For any date element represented without a century value, the device
shall unambiguously determine the correct century for all
manipulations involving that element. In addition interface
documentation clearly describes how the correct century value is
determined.
The device shall accurately process date/time data with other Year 2000
compliant devices whenever such data is exchanged in accordance with the
device's documented interface specification.
AGI DISTRIBUTION, INC. DETROIT ENTERTAINMENT, L.L.C.
By: ___________________________ By: ______________________________
Title: ________________________ Title: ___________________________
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