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EXHIBIT 10.34
TECHNICAL ASSISTANCE and SALES AGREEMENT
AGREEMENT BY AND BETWEEN INTERNATIONAL LOTTERY, INC., A CORPORATION
ORGANIZED UNDER THE LAWS OF DELAWARE, USA ("Interlott"), LOCATED AT 0000
XXXXX XXXX, XXXXXXXXXX, XXXX, 00000 XXX AND XXXXX AGRENTINA, S.A., A
COMPANY ORGANIZED UNDER THE LAWS OF ARGENTINA ("Xxxxx"), LOCATED AT
INGENIERO XXXXXXX 2280, PARQUE INDUSTRIAL BURZACO, (1852) BURZACO, BUENOS
AIRES, ARGENTINA, ENTERED THIS 22nd DAY OF NOVEMBER, 1996.
WITNESSETH:
WHEREAS, Interlott is a manufacturer of equipment and technology related
to the dispensing of lottery and credit cards;
WHEREAS, Interlott has certain rights (the "Technology"), including
patent no. 5335822, and has applied for patent protection in the United
States for an "Apparatus for Dispensing Tickets, Cards, and the Like"
(serial no. 08/377,182), which Technology is an essential element of an
apparatus (hereinafter the "DC2") with the capability of dispensing
telephone calling cards;
WHEREAS, Interlott has also applied for patent protection in Argentina
for such "Apparatus for Dispensing Tickets, Cards, and the Like" (serial
no. 335,159);
WHEREAS, Xxxxx desires to develop telephone booths in Argentina, and
elsewhere, which incorporate the DC2 and related technology;
WHEREAS, Xxxxx plans to make DC2 units in Argentina, using the technology
gained from Interlott and with certain parts purchased from Interlott; and
WHEREAS, Xxxxx desires to reimburse Interlott for the privilege of
sharing Interlott's expertise pursuant to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. TERMS OF SALE. (a) For the Term of this Agreement, Xxxxx shall
purchase through Interlott from Interlott or its suppliers, all of its
requirements for coin and currency acceptors, dispensers, and electronics for
installation in the DC2 units to be manufactured by Xxxxx. The purchase price
shall be billed to Xxxxx by Interlott's suppliers, or Interlott if manufactured
by Interlott. The parties may add additional products to those set forth
above, and all such products including the coin and currency acceptors,
dispensers, and electronics are hereinafter referred to as the "Products".
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(b) All Products sold to Xxxxx hereunder will be sold FCA Cincinnati,
USA. Risk of loss shall pass to Xxxxx upon shipment of the products from
Cincinnati.
(c) Xxxxx shall place orders for Products through the issuance of
purchase orders. In the event of a conflict between this Agreement and any
purchase order, the terms of this Agreement shall take precedence.
(d) Xxxxx shall pay Interlott for Products by letter of credit, issued
by a bank satisfactory to Interlott, payable upon receipt by Interlott.
Xxxxx shall provide Interlott with forecasts of purchases it intends to make
for twelve months in advance of such purchases; Xxxxx may make modifications to
such forecasts as necessary. Xxxxx shall submit orders at least ninety (90)
days prior to desired shipment. And shall submit letters of credit five (5)
days prior to desired shipment. Interlott shall ship all Products on or before
the date of desired shipment, as set forth in the preceding sentence. Should
Interlott fail to timely ship an order, Xxxxx may, in its sole discretion,
cancel the delayed order without liability, provided Interlott receives written
notice of the cancellation prior to the shipment of the order.
(e) Xxxxx shall be responsible for payment of all import duties and
taxes resulting from the importation of the Products.
2. GRANT. (a) Interlott hereby grants to Xxxxx the exclusive
right to use and employ Interlott's Technology rights in the manufacture, use
and sale of the DC2 in Argentina and the exclusive right to avail itself of
Interlott's know-how in the said manufacture, use and sale of DC2 units in
Argentina. Xxxxx may not transfer, assign, or sublicense the rights granted
hereunder to any third party without the express written consent of Interlott,
which consent may be withheld at Interlott's sole discretion, except that Xxxxx
may cooperate with its part-owner, Ind. Viauro, S.A. ("Viauro") in the
manufacture of DC2 units.
(b) Although the rights granted hereunder relate solely to rights in
Argentina, the parties agree to explore expanding these rights into other
territories where Xxxxx or its affiliates have existing contacts and where
there is no conflict with other licensees or agents of Interlott.
(c) In addition to the grant set forth herein, Xxxxx may produce DC2
units for shipment outside Argentina as directed by Interlott. It is
anticipated that the parties will negotiate for Xxxxx to manufacture DC2 units
for sale outside Argentina; without such direction or the conclusion of an
agreement relating to shipments outside of Argentina, Xxxxx shall not ship
outside Argentina.
3. IMPROVEMENTS. (a) Interlott agrees to immediately communicate
to Xxxxx any improvements, further invention or design it may discover, make or
develop with respect to the industrial property rights or know-how pertaining
to the manufacture, use and sale of the DC2 and shall fully disclose to Xxxxx
the nature and manner of utilizing such improvements, further invention or
design.
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(b) Xxxxx agrees to immediately communicate to Interlott any
improvements, further invention or design it may discover, make or develop with
respect to the industrial property rights or know-how pertaining to the
manufacture, use and sale of the DC2 and shall fully disclose to Interlott the
nature and manner of utilizing such improvements, further invention or design.
(c) If either party hereto shall discover, make or develop any
improvement, further invention or design required to be disclosed as aforesaid,
Interlott may at its own expense file application for letters patent or take
other necessary legal steps to protect such improvements, further inventions or
designs in any territory as it shall determine.
(d) Interlott shall grant to Xxxxx the right to utilize any improvement,
further invention or design required to be disclosed hereunder, in accordance
with the terms of this Agreement and without additional charge or royalties.
4. ROYALTY. (a) In consideration of Interlott providing
technical assistance to Xxxxx in the areas of its expertise ("Technical
Assistance"), Xxxxx agrees to pay to Interlott royalties as set forth herein:
(i) For the first five hundred (500) DC2 units manufactured by
Xxxxx, Xxxxx shall pay Interlott a royalty of US $350.00 per DC2
unit;
(ii) For all DC2 units manufactured after the first five hundred
(500) units by Xxxxx, Xxxxx shall pay Interlott a royalty of US$
700.00 per DC2 unit; and
(iii) For all DC2 units manufactured by Xxxxx for sale outside
Argentina, Xxxxx shall pay Interlott a royalty as the parties may
agree.
Xxxxx shall advise Interlott no less frequently than monthly of its sales of DC2
units, and shall make payments pursuant to this paragraph, by check or wire
transfer, in U.S. Dollars, within 30 days after the end of the month in which
each sale was made.
(b) In addition to the royalties set forth above, Xxxxx shall
reimburse Interlott for all direct expenses incurred by Interlott for Technical
Assistance requested by Xxxxx and mutually agreed upon.
(c) Xxxxx shall pay all stamp taxes and all taxes of Interlott
with respect to royalties, and may withhold from the gross royalty payment due
Interlott that which it is obligated to withhold under Argentine law.
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4. CONFIDENTIALITY. (a) All information disclosed by Interlott to
Xxxxx or to Xxxxx'x shareholder, Ind. Viauro, S.A., whether by means of
written or oral disclosure or otherwise, shall be deemed "Proprietary
Information" and subject to the terms of this Agreement, unless (i) identified
in writing by Interlott to Xxxxx as non-confidential or (ii) excluded from the
class of Proprietary Information pursuant to subsection (b).
(b) Information shall not be considered Proprietary Information if it is
established by Xxxxx that such information (i) was known to Xxxxx or Viauro at
the time of receipt from Interlott (so long as such information was not acquired
directly or indirectly form Interlott); (ii) is or becomes publicly known
through no act or fault of Xxxxx or Viauro; or (iii) is or becomes part of the
public domain through no act or fault of Xxxxx or Viauro.
(c) Xxxxx agrees to use the Proprietary Information only for the purposes
set forth herein. Xxxxx agrees it will not use the Proprietary Information for
its own benefit, or the benefit of others or for any commercial purposes except
as set forth herein. Xxxxx shall disclose the Proprietary Information only to
its personnel or advisors that require to receive it, in order to reach the
collective business objectives of the parties hereto, and Xxxxx will take the
necessary precautions to ensure that such persons will be bound by the
provisions of this Confidentiality provision. Xxxxx further agrees not to use
the Proprietary Information to obtain a competitive advantage in any way or to
prepare or implement a product, item, program, or concept that is competitive
with, or similar to, anything owned, produced, marketed, offered, or planned to
be produced, marketed or offered by Interlott or any affiliate thereof.
(e) The terms of this Confidentiality provision shall survive the
termination of this Agreement.
5. TERM. (a) This Agreement shall be for five (5) years from the date
hereof, and shall continue in force thereafter for further periods of five (5)
years unless notice is given by either party of its desire to terminate within
six (6) months of the date of expiration of the then current period of operation
of this Agreement. Either party may terminate this Agreement for any reason
upon one year written notice to the other.
(b) In the event of any of the following:
i. any breach of this Agreement not cured within thirty (30) days
after notification thereof;
ii. insolvency or bankruptcy of either party; or
iii. appointment of a trustee or receiver for either party;
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then, and in addition to all other rights and remedies which either party may
have in law or equity, the party not in default may at its option terminate this
Agreement by written notice, effective no less than thirty (30) days from the
date of notice.
(c) Termination of this Agreement for any cause whatsoever shall not
affect or prevent payment of any and all royalties and payments then due
hereunder or which will become due with respect to any sales then in process.
6. AUTHORITY. Xxxxx X. Xxxxx represents that as Vice Presidente of
Xxxxx he has full power to execute this Agreement on behalf of Xxxxx. Within
thirty (30) days of the date hereof, Xxxxx shall produce a power of attorney or
certified minutes of a meeting of the board of directors of Xxxxx, satisfactory
to counsel for Interlott, verifying Xx. Xxxxx'x authority to commit Xxxxx to
this Agreement, including submission to foreign arbitration.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto in connection with the subject
matter hereof and supersedes all agreements entered into prior to the date
hereof.
8. ARBITRATION. Any disagreement or dispute which may arise with
respect to the interpretation or application of this Agreement, or the breach
thereof, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Said arbitration
shall be held in Cincinnati, Ohio, U.S.A. and he conducted in the English
language. Judgment upon the award rendered by the Arbitrator may be entered
into in any court having jurisdiction thereof.
9. GOVERNING LAW. The terms and conditions of this Agreement, the
interpretation thereof and the rights and obligations of the parties thereunder
shall be interpreted and construed as though jointly written and shall be
governed and determined by the laws of the State of Ohio, U.S.A., as such laws
may from time to time exist.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives.
INTERNATIONAL LOTTERY, INC.
/s/ X. Xxxxxx Xxxxx, Jr.
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X. Xxxxxx Xxxxx, Jr., Chairman & CEO
XXXXX ARGENTINA, S.A.
/s/ Xxxxx x. Xxxxx
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Xxxxx x. Xxxxx, Vice Presidente
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