1
EXHIBIT 10.1
DISTRIBUTOR AGREEMENT
Dated as of this __ day of ______ 1997 (the "Effective Date")
BETWEEN: ADVANCED GAMING TECHNOLOGY, INC.
PO Box 11610
Suite 2482-650 West Georgia Street
Vancouver, BC, Canada V6B 4N9,
hereinafter referred to as
"AGT",
AND: BINGO TECHNOLOGIES CORPORATION
295 Highway 50, Suite 20
PO Box 3256
Stateline, Nevada,
hereinafter referred to as
"BTC",
WHEREAS:
A. AGT has a family of interactive electronic gaming devices
which it produces and markets and AGT desires to appoint a sales agent to act
on its behalf in the distribution of its MAXPlus/TurboMAX Bingo Systems; and
B. BTC has an electronic bingo marketing department, and BTC has
held itself out to AGT as competent, with knowledge and experience in the
marketing of electronic bingo products in the United States and desires to act
as a sales agent for AGT in the distribution of the MAXPlus/TurboMAX Bingo
Systems in those locations which are currently BTC customers and such other
locations as BTC and AGT may agree; and
C. AGT has agreed to appoint BTC, and BTC has agreed to accept
such appointment, on the terms and subject to the conditions set forth below,
to act as a sales agent for AGT in the distribution of MAXPlus/TurboMAX Bingo
Systems.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereinafter set out, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1.0 APPOINTMENT OF BTC
1.1 Subject to the terms and conditions of this Agreement, AGT
hereby appoints BTC as its sales agent in connection with the
marketing and distribution of MAXPlus/TurboMAX Bingo Systems (the
"Products") in halls now using products sold by BTC or its affiliate,
Bingo Card Minder Corporation ("BCM"), that are not serviced by an
existing exclusive distributor appointed by AGT, and such other halls
on which AGT and BTC may agree in writing from time to time, and BTC
agrees to act in that capacity; provided that, if any hall that now
uses products manufactured and sold by BTC or BCM is so serviced by an
existing exclusive distributor appointed by AGT, AGT shall use
commercially reasonable efforts to induce such exclusive distributor
to amend its agreement with AGT so as to permit BTC to market and
distribute Products to such hall.
1.2 For each installation of a Product at a customer initially
identified by BTC or that BTC otherwise is responsible for securing
for AGT (a "Customer"), AGT shall pay to BTC, in consideration of
services provided herein, a commission
2
equal to twenty-five percent (25%) of the gross revenues received by
AGT from such Customer in connection with such installed Product (the
"Commission").
2.0 WARRANTIES AND COVENANTS OF BTC
2.1 BTC will provide the first line of support for the Products
consisting of, at a minimum, providing advice and assistance to
Customers in connection with their use of Products and using
commercially reasonable efforts to assist Customers in diagnosing and
remedying problems in the use and operation of the Products. BTC will
use reasonable commercial efforts to provide sufficient service
technicians to perform such support of the Products in accordance with
the foregoing. Any problems in the use or operation of Products that
are not readily resolvable by BTC's trained staff shall be referred to
AGT for resolution.
2.2 BTC will stock such spare parts as AGT may supply BTC from
time to time at AGT's sole cost and expense, and BTC will, on a monthly
basis, provide AGT an accounting of all such parts.
2.3 BTC will be responsible for compiling and completing, and
providing to AGT promptly upon request, but in no event in more time
than is necessary to permit filing thereof as required by applicable
law and as described in such request, any and all required gaming
commission monthly reports relating to the Products leased by AGT to
Customers as a result of BTC's efforts hereunder and any other filings
or required regulatory reports relating to such Products.
2.4 BTC agrees that, with respect to all matters relating to this
Agreement, BTC shall be deemed to be an independent contractor and
shall bear all of its own expenses in connection with this Agreement.
BTC shall have no authority, whether express or implied, to assume or
create any obligation on behalf of AGT, nor shall BTC issue or cause
to be issued any quotations or draft any letters or documents over the
name of AGT.
2.5 AGT will train the personnel of BTC involved with the sale of
Products. BTC also will make such personnel available for training
with respect to upgrades in or to the Products released by AGT after
the Effective Date. BTC, upon completion of such training by AGT,
will be responsible for providing any required training for each
Customer for which BTC is responsible.
2.6 BTC will use reasonable efforts to work closely with charities
and their advertising and promotion agents to ensure aggressive
promotion of the Products and will provide to Customers promotional
material relating to the Products that will be supplied by AGT to BTC,
at twenty-five percent (25%) of AGT's direct, out-of-pocket cost. In
the event BTC elects to develop promotional material, then such
material must have prior written approval from AGT.
2.7 BTC will be solely responsible for all billing and collections
from all Customers and will remit to AGT all monies with deduction of
Commissions due in respect thereof by wire transfer as set out in
Schedule A. BTC also agrees to provide AGT copies of all weekly usage
reports. All payments made by Customers to BTC, net of the Commission
owing to BTC in respect thereof, shall be held in a segregated account
in which BTC will not commingle any of its own funds.
2.8 BTC hereby agrees to uphold highest standards of integrity in
its
3
representation of AGT, and conform to all rules and regulations of the gaming
commission and any and all laws.
2.9 BTC hereby agrees to structure the AllTrak system with AGT
programs, thereby allowing AGT any benefits that may be
derived from the AllTrak system, for Products placed by BTC
with Commissions paid to BTC.
2.10 BTC represents and warrants to AGT that
(i) it is a corporation duly organized, validly existing and
in good standing under the laws of Nevada;
(ii) BTC has the corporate power to enter into and carry out
its obligations under this Agreement;
(iii) this Agreement has been duly authorized by BTC and, when
executed, this Agreement will be a valid and binding
obligation of BTC; and
(iv) Neither the execution and the delivery of this Agreement
nor the consummation of the transactions contemplated
hereunder will violate or constitute a default under any
agreement or instrument to which BTC is a party.
3.0 WARRANTIES AND COVENANTS OF BTC
3.1 AGT represents and warrants to BTC as follows:
(i) AGT is a corporation duly organized, validly existing
and in good standing under the laws of Wyoming. AGT has the
corporate power to enter into and carry out its obligations under this
Agreement;
(ii) this Agreement has been duly authorized by AGT and, when
executed, this Agreement will be a valid and binding obligation of
AGT; and
(iii) Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated
hereunder will violate or constitute a default under any agreement or
instrument to which AGT is a party or by which its right, title and
interest in the Products may be affected.
3.2 The Products shall be leased by AGT directly to Customers,
identified by BTC, in accordance with a standard lease agreement in the
form attached hereto as Schedule B (the "Lease Agreement"), and the
Pricing for Lease Agreement or Lease to Purchase, attached hereto as
Schedule C, as each may be modified from time to time. Any change in
the lease rates of the Products shall not affect leases negotiated by
BTC that were accepted by AGT before the price change was communicated
or put into effect, unless mutually acceptable by AGT and BTC.
Subject to BTC's obligations to AGT to provide first level support to
Customers on AGT's behalf, AGT shall be solely responsible for
performing all of AGT's duties and obligations to Customers under the
Lease Agreement (or any other duties or obligations of AGT not assumed
by BTC hereunder) and AGT agrees to defend, indemnify and save
harmless BTC, its agents, officers, directors, employees,
shareholders, successors and assigns, and each of them, from and
against any and all claims, actions and suits, whether groundless or
otherwise, brought by or on behalf of any Customer relating in any way
to the Products or this Agreement, other than for claims, actions or
suits arising as a result of the bad faith or gross negligence of BTC,
its agents, officers, directors, employees, shareholders, successors
and assigns, and from and against any and all liabilities,
4
judgments, losses, damages, costs, charges, attorneys' fees, and other
expenses of every nature and character by reason of any such claims,
actions and suits.
3.3 AGT warrants that the distribution and sale of Products, as
provided for in this Agreement, shall not violate or infringe any
trademarks, patents, trade secrets and/or copyrights held by third
parties and AGT agrees to defend, indemnify and save harmless BTC, its
agents, sub-distributors, officers, directors, employees,
shareholders, successors and assigns, and each of them, from and
against any and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, judgments,
losses, damages, costs, charges, attorneys' fees, and other expenses
of every nature and character by reason of any such claims, actions
and suits.
3.4 AGT hereby agrees to install fixed base units in a timely
manner not exceeding twenty-one (21) days after date of receipt of all
information required, including but not limited to programming, hall
layout, electrical, etc. A complete Install Information Package will
be supplied for each order by BTC to AGT.
3.5 AGT hereby agrees to ship to each Customer's facility, at
AGT's own expense, Products.
4.0 [Intentionally Omitted]
5.0 TRAINING
5.1 BTC and AGT hereby agree that training of any employees of
BTC by AGT will be at AGT's Distribution Centre, which is currently
located in Denver, Colorado. AGT will not be responsible for any
costs incurred by BTC in connection with the training of BTC
employees. BTC will not be responsible for any amounts paid by AGT in
connection with the training of BTC employees.
6.0 MAXPlus/TurboMAX PRICING
6.1 AGT will provide to BTC a price list for the Products which,
at BTC's option, may be altered by BTC by up to ten (10%) percent of
the applicable price shown thereon without receiving prior written
approval from AGT. However, in the event BTC offers a price lower
than ten (10%) percent of any price set out in the price list, then
prior written approval must be obtained from AGT.
7.0 CONFIDENTIALITY; INTELLECTUAL PROPERTY
7.1 Confidential Information (as defined below) disclosed by a
party to the other party shall not be used, disclosed or copied by
such other party except as reasonably necessary in connection with the
performance of any obligations or the exercise of any rights
hereunder, any such disclosure to be made on terms and conditions
reasonably necessary to ensure the continued confidentiality of the
disclosed Confidential Information. Each party shall take reasonable
care to prevent the unauthorized use, dissemination or publication of
the Confidential Information belonging to the other party, provided,
without limitation to the foregoing, no Confidential Information shall
be disclosed to any third party which has not executed and delivered a
confidentiality agreement pursuant to which such third party agrees to
maintain the confidentiality of Confidential Information disclosed to
such third party on substantially the same terms and conditions as
this Section 7.1, such confidentiality agreement to be for the benefit
of, and a copy of such confidentiality agreement shall be immediately
provided to, the party whose
5
Confidential Information is to be disclosed to such third party.
Confidential Information does not include information which: (i) is
known by the receiving party prior to disclosure hereunder (other than
by reason of disclosure by a third party that, in so disclosing such
information, breached an obligation of confidentiality owing to the
disclosing party), as evidenced by the books and records of the
receiving party existing at the time of disclosure by the disclosing
party; (ii) is or becomes in the public domain other than through a
breach of this Agreement; or any other agreement or obligation between
the parties hereto; (iii) is disclosed to the receiving party by a
third party (other than by reason of disclosure by a third party that,
in so disclosing such information, breached an obligation of
confidentiality owing to the disclosing party); or (iv) is
independently developed by the receiving party, as evidenced by the
books and records of the receiving party. Neither party shall be
liable for disclosure of any Confidential Information when such
disclosure is required by law provided that the disclosing party shall
provide prompt notice to the disclosing party, where possible prior to
the disclosure and shall cooperate with the disclosing party in an
effort to minimize the scope of the information to be disclosed. For
the purposes hereof, "Confidential Information" shall mean any
information, in whatever form provided, disclosed by a party to the
other party that relates to such party's business, finances,
operations, strategic planning, research and development activities,
forecasts, products, investments, data, know-how or other technology,
as well as any other materials and information which, from the
circumstances in which they are made available to the other party
ought, in good faith, to be treated as confidential or proprietary
(including, without limitation, by designation by the disclosing party
to the receiving party that such disclosed information is confidential
information). Anything to the contrary appearing in this Agreement
notwithstanding, (i) this Agreement shall not be construed to amend or
otherwise modify any confidentiality agreement or confidentiality
obligation existing between the parties hereto on the Effective Date,
and (ii) without limitation to any other restriction on the use of
Confidential Information, in no event and at no time shall either
party hereto use any Confidential Information of the other party in a
manner adverse to the interests of such other party.
7.2 BTC hereby acknowledges AGT's exclusive right, title and
interest in and to the trademarks and tradenames set forth on Schedule
D hereto (the "Trademarks") and to the copyrights (the "Copyrights")
in any software embodied in the Products, to the extent such software
constitutes an original work of authorship for which copyright
protection is available there under applicable law. BTC further
acknowledges that BTC shall not acquire any ownership or other
interest in the Trademarks, the Copyrights or any patents owned by AGT
(the "Patents") by reason of the rights granted by AGT hereunder or
any action taken by or behalf of BTC in connection with BTC's
performance hereunder.
7.3 BTC acknowledges that AGT claims a copyright in any and all
written material and/or packaging to which AGT has filed a claim for
copyright protection. Additionally, BTC recognizes AGT's exclusive
right to seek copyright protection for and/or the restoration of
copyright of any translation of any and all
6
product literature, promotional or descriptive material furnished by
AGT to BTC for which copyright protection is available under
applicable law and of which AGT is the author or the author's rights
in which have been assigned to AGT.
7.4 BTC acknowledges that AGT has represented to BTC that AGT holds
valid patents that cover the Products.
7.5 AGT hereby authorizes BTC to use the T trademarks in connection
with the marketing of the Products under this Agreement. BTC agrees
that, when referring to the Trademarks, Patents and Copyrights, it
will comply with any and all applicable federal, state and local law
and regulations pertaining thereto. BTC further agrees that it will
use its best efforts to comply with all applicable marketing
requirements pertaining to the Trademarks, Copyrights or Patents of
which it receives written notice from AGT. BTC shall provide
reasonable notice to AGT in the event it cannot market the Products in
compliance with the marketing requirements. BTC further agrees that
it shall not, by use of any apparent authority of BTC hereunder which
may reasonably be expected to create any defense of estoppel, "unclean
hands" or other defense, impair or take, or cause to be taken, any
action which may be reasonably be expected to tend to impair, any
right, title or interest of AGT in or to any Copyright, Patent or
Trademark.
7.6 BTC shall promptly notify AGT, in writing, of any and all
infringements, imitations, illegal use or misuse of the Trademarks,
Patents and/or Copyrights which shall come to BTC's attention. BTC
further agrees that it shall not, at any time, take any action in and
before any courts, administrative agencies, or other such tribunals,
or otherwise attempt to prevent the infringement, imitation, illegal
use or misuse of the Trademarks, Patents and/or Copyrights. BTC
understands that such action falls wholly within the authority of AGT
as the sole owner of the Trademarks, Patents and Copyrights.
7.7 Each party agrees that at no time during the term of this
Agreement nor at any time after this Agreement's expiration or
termination shall such party adopt, register or use in any manner
whatsoever, without the other party's prior written consent, any word,
symbol or combination thereof which is confusingly similar to the
other party's trademarks, nor shall such party, in any manner
whatsoever, infringe the patents and/or violate the copyrights that
are owned by the other party.
8.0 TERM AND TERMINATION
8.1 This Agreement is effective and binding as of the Effective
Date, and its term shall extend for twelve (12) months and,
thereafter, for consecutive additional periods of twelve (12) months
each, unless terminated earlier pursuant to Section 8.2 or either
party shall notify the other in writing of its desire to discontinue
this Agreement not later than ninety (90) days prior to the end of the
applicable term.
8.2 This Agreement shall be terminable or shall terminate, as the
case may be, prior to the expiration of the term hereof if and when
any of the following events occur:
(a) either party materially breaches this Agreement and the
non-breaching party provides written notice of termination to
the breaching
7
party; provided, however, that this agreement will not
terminate if the breach is cured within the minimum period of
time necessary to cure the breach (assuming the breaching party
uses its best efforts), but in no event in more than thirty
(30) days after the delivery of written notice by the
non-breaching party.
(b) This Agreement shall be terminated automatically upon
either party's cessation of business, election to dissolve,
dissolution, insolvency, failure in business, commission of an
act of bankruptcy, general assignment for the benefit of
creditors, or filing of any petition bankruptcy a for relief
under the provisions of the bankruptcy laws.
(c) AGT may terminate this Agreement if (i) BTC challenges
the validity of the Trademarks, Copyrights or Patents or
otherwise takes any action, the purpose or effect of which is
in or to any way to impair AGT's right, title and interest in
any of the Trademarks, the Copyrights or the Patents; (ii) BTC
fails to comply with all applicable marketing requirements
pertaining to the Trademarks, Copyrights or Patents of which it
receives written notice from AGT; or (iii) BTC shall at any
time market one or more additional products or technologies
which are similar to any Product or the technology contained
therein (including, without limitation, by becoming a
distributor, agent, broker or the like of any third party.
(d) In the event this Agreement is terminated or becomes
null and void, for any reason, BTC will continue to receive
Commissions for as long as the Customer continues to use the
Product leased by the Customer as a result of BTC's efforts.
This provision shall survive the termination of this Agreement.
9.0 OTHER PRODUCTS
AGT acknowledges that BTC may in the future develop or acquire from
third parties additional products or technologies that may be similar
to the Products and the technology contained therein. Nothing in this
Agreement shall be construed as a presentation or promise that BTC will
not continue to market or to develop or have developed products or
technologies that compete with the Products or are similar thereto and,
BTC shall not be restricted in any way from, without use of AGT's
intellectual property, independently developing any products or
intellectual property rights and no rights to any such independently
developed products or intellectual property rights are transferred
pursuant thereto.
10.0 TIME
10.1 Time is of the essence.
11.0 ENTIRE AGREEMENT
11.1 This Agreement contains the entire understanding between the
parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous written or oral negotiations and agreements
between them regarding the subject matter hereof. This Agreement may
only be amended in writing signed by each of the parties.
12.0 NOTICE
12.1 All notices given pursuant to this Agreement must be in writing
at the
8
address set forth below and shall be deemed to have been duly given
when personally delivered, or when mailed by certified mail, return
receipt requested, postage prepaid, to the addresses of the parties
hereto as follows. Any party hereto may, by notice so given, change
its address for any future notices:
If to AGT: PO Box 11610
Suite 2480 - 650 West Georgia Street
Vancouver, BC, Canada V6B 4N9
Attention: Robert C. Silzer, Sr., Chairman, CEO
with a copy to: Firoz Lakhani, President, COO
If to BTC: 295 Highway 50, Suite 20
PO Box 3256
Stateline Nevada 59449
13.0 If any provision of this Agreement is determined to be invalid or
unenforceable, the provision shall be deemed to be severable from the remainder
of this Agreement and shall not cause the invalidity or unenforceability of the
remainder of this Agreement.
14.0 Neither party may not transfer or assign this Agreement or any part
thereof to any person other than a wholly-owned subsidiary of the assignor
without the other party's prior written approval. This Agreement shall be
binding upon and shall inure to the benefit of AGT's and its permitted
assignees, and shall be binding upon and inure to the benefit of BTC and its
permitted assignees.
15.0 Pursuant to the Federal Arbitration Act, any controversy or claim
arising out of or relating to this Agreement shall be settled by arbitration
conducted in the State of Nevada in accordance with the rules and regulations
of the American Arbitration Association and judgment upon any award rendered
in such arbitration may be entered in any court having jurisdiction thereof.
Either party requesting arbitration under this Agreement shall make a demand
therefor on the other party by registered mail.
16.0 This Agreement shall be governed by the laws of the State of Nevada.
IT WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and day first above written.
ADVANCED GAMING TECHNOLOGY, INC. BINGO TECHNOLOGY CORPORATION
By: By:
--------------------------------- --------------------------------
Authorized Signatory Authorized Signatory
SCHEDULE "A"
To the Distributor Agreement
entered into between
Bingo Technologies Corporation and Advanced Gaming Technology, Inc.
the ___ day of 1997.
WIRE TRANSFER INSTRUCTIONS
BANK: The Toronto Dominion, Bank
9
Address: Toronto Dominion Tower
700 West Georgia Street
Pacific Centre
Vancouver, BC, Canada V7y1A2
Transit No.: 94000 004
Account: 0902 7301 390
Currency: US Dollar
Contact: Helga(604.654.3484)
Account Name: Advanced Gaming Technology, Inc.
SCHEDULE "B"
To the Distributor Agreement
entered into between
Bingo Technologies Corporation and Advanced Gaming Technology, Inc.
the day of, 1997.
STANDARD LEASE AGREEMENT
SCHEDULE "C"
To the Distributor Agreement
entered into between
Bingo Technologies Corporation and Advanced Gaming Technology Inc.
the day of, 1997.
PRICE LIST
SCHEDULE "D"
To the Distributor Agreement
entered into between
Bingo Technologies Corporation and Advanced Gaming Technology Inc.
the day of, 1997.
TRADEMARKS AND TRADENAMES
10
approval. This Agreement shall be binding upon and shall inure to the benefit
of AGT's and its permitted assignees, and shall be binding upon and inure to
the benefit of BTC and its permitted assignees.
15.0 Pursuant to the Federal Arbitration Act, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration conducted
in the State of Nevada in accordance with the rules and regulations of the
American Arbitration Association and judgment upon any award rendered in such
arbitration may be entered in any court having jurisdiction thereof. Either
party requesting arbitration under this Agreement shall make a demand therefor
on the other party by registered mail.
16.0 This Agreement shall be governed by the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and day first above written.
ADVANCED GAMING TECHNOLOGY, INC. BINGO TECHNOLOGIES CORPORATION
By: /s/ BOB MAKAY By: [SIG]
---------------------------- ---------------------------
Authorized Signatory Authorized Signatory
9