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EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
This Agreement is entered into effective April 23, 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 Sodak Gaming, Inc., ("SODAK") a U.S.
Corporation having its registered address at 0000 X. Xxxxxxx 00, Xxxxx
Xxxx, Xxxxx Xxxxxx ("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:
1. 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 sales of the PRODUCTS in the TERRITORY.
b. From time to time special promotion measures may be
taken by either party such as magazine advertisement, exhibitions, etc.
Expenses of such joint sales promotion shall be borne on a fifty-fifty
(50-50) basis, to a maximum amount of U.S. $5,000.00 each per annum, 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 in Rapid City, South Dakota without
compensation. DISTRIBUTOR or DISTRIBUTOR's customers shall bear round trip
airfare costs to Rapid City, South Dakota. MANUFACTURER will provide reasonable
accommodation and meals for DISTRIBUTOR's technician(s) to be dispatched in this
regard.
d. All service of warranted products shall be performed by
MANUFACTURER pursuant to Section 3.c.
3. WARRANTY
a. The commencement date of warranty of MANUFACTURER's
PRODUCTS 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 of parts for
the defective PRODUCTS in accordance with the provisions set forth
hereafter. The warranty period after installation of products is twelve
(12) months.
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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.
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
set as per Section 5.b. herein. DISTRIBUTOR shall make payment to
MANUFACTURER within thirty (30) days after delivery to customer.
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 PRODUCTS shall be delivered FOB Las Vegas, Nevada.
6. ORDER AND SHIPMENT
a. 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.
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 an in no way an agent
of MANUFACTURER, it 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 or otherwise. MANUFACTURER only warrants the PRODUCTS sold by
it to DISTRIBUTOR indicated herein.
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 informed of its progress in
fulfilling such order.
10. 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
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said term beyond 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
obligation 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
specifically state the nature of said breach. The notified party 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 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. If MANUFACTURER breaches, it shall fully refund all
payments for products and spare parts.
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 shall re-purchase DISTRIBUTOR's inventory of the
PRODUCTS for the same price paid by DISTRIBUTOR and shall not sell, solicit or
market in any way in the TERRITORY for a period of six (6) months after
termination.
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 CASINOVATION PRODUCTS.
e. Neither the expiration nor the termination of this
Agreement shall release either party from the obligation to pay any sum
then that 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 be liable to the other for compensation or
damage on account of the loss of prospective profits on anticipated
sales, or expenditures, investments or commitments made in connection
therewith or in connection with the establishment, development or
maintenance of DISTRIBUTOR'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. Filing a 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 there of any product change shall not
affect any pending orders placed by DISTRIBUTOR.
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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 one (1) year after its
termination or cancellation, The obligations of this section in no way
hinder or prevent Sodak from competing with MANUFACTURER upon
termination of this Agreement.
15. NON ASSIGNMENT AND NOTICE OF 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 expense 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
or 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 is 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 of 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.
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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 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 SODAK GAMING, INC.
0000 X. Xxxxxxxx Xxxx., Xxx. 000
Xxx Xxxxx, Xxxxxx 00000 XXX 0000 X. Xxx. 16
Attn: Xx. Xxxxxx X. Xxxx Rapid City, S.D. 57701
Phone: 0-000-000-0000 Attn: Xx. Xxxx X. Xxxx
Fax: 0-000-000-0000 Phone: 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 South Dakota 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.
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 attorney's fees
and 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 effective nor binding upon either
party until signed on 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 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, conditions, definitions, warranties or
representations other than as expressly provided herein or as duly forth
on or subsequent to the date hereof in writing and signed by the party
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 U.S. or
elsewhere, of third parties ("third party rights") MANUFACTURER shall
defend, indemnify and hold harmless SODAK from claims, demands,
liabilities, actions and expenses associated with MANUFACTURER'S defense
thereof, (or SODAK's defense thereof in the event MANUFACTURER does not
assume such defense) that may be brought against SODAK, but only to the
extent that the same may be brought against SODAK, 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
SODAK upon SODAK's learning of the claim and is permitted to control the
defense settlement of the legal action.
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28. INDEMNIFICATION
MANUFACTURER shall defend hold harmless and indemnify
DISTRIBUTOR, its directors, officers, employees or agents from any and
all third party claims arising from or related to product defect or the
negligent conduct of MANUFACTURER's directors, officers, employees,
agents or assigns.
MANUFACTURER warrants and represents that it is in compliance with all
local, state, and federal laws of the United States and shall comply
with all laws and regulations of any applicable jurisdictions. In the
event there is any reason to know or suspect that MANUFACTURER is in
violation or alleged violation of any law or regulation, MANUFACTURER
shall notify SODAK of said violation or allegation as soon as is
reasonable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their authorized representatives.
MANUFACTURER: DISTRIBUTOR:
CASINOVATIONS INC. SODAK GAMING, INC.
By: By:
---------------- ---------------------
Xxxxxx X. Xxxx Xxxxxx Xxxx
President Vice Pres.
4/23/97 0/0/00
XXXXXXX "X" XXXXXXXXX
All Indian lands of the United States and First
Nation/Aboriginal Lands in Canada, Deadwood, South Dakota and Xxxx
Xxxxxxxxx Riverboat and Casino, Marquette, Iowa.
